The Housing Bubble

Buying a house is undeniably financial suicide

But what nobody talks about is how buying and owning a house is NO FUN

The “opportunity cost” of time wasted on housing related nonsense is incalculable

CraterRage® Photo Of The Day

http://goo.gl/8xRbx1

Are we in the 9th inning of the stock market bubble?

Key points: (1)) flat prices (2) Actual surge in luxury home sales and increasing prices, from China Daily not to be confused with the People’s Daily which is China’s official paper. China Daily is based in the U.S.:

SHANGHAI — Luxury properties are making a comeback in China’s first-tier cities as eased property curbs have prompted developers to launch new residential complexes for March sale.

In China, March usually witnesses a surge in home sales after a subdued market during the first two months, as people postpone buying before and during the Lunar New Year, which fell on Feb. 19 this year.

More than 246,000 homes were sold in January across the 54 major Chinese cities monitored by real estate service firm Centaline Group, down 20 percent from a month ago. The drop is steeper in first-tier cities, at 30 percent.

But a flurry of luxury homes is leading an across-the-board surge of new home supply in China’s housing market. According to real estate information service firm Soufang, more than 4,000 new homes will hit the Shanghai market in March. In Guangzhou, capital of south China’s Guangdong Province, the number of new homes hitting the market rose to a 12-week-high of 4,238 in the week ahead of the Lunar New Year.

Though home prices in the country’s 70 large and medium-sized cities monitored by the National Bureau of Statistics extended a downward trend in January, those in first-tier cities are holding up well.

Prices in southern metropolises Guangzhou and Shenzhen edged up 0.2 and 0.3 percent in January. Prices in Shanghai stayed flat, while those in Chinese capital Beijing were pared less than 0.2 percent in the same period.

A development in which homes are priced at 145,000 yuan per sq meter became the first luxury residential complex to be approved for sale in Beijing in 2015, when regulators gave it the nod shortly before the Lunar New Year.

No surprise here, Obama’s war on Russia is biting us in the azz, both by a slowdown in the oil patch and as a result of the rising dollar:

http://www.bloomberg.com/news/articles/2015-02-27/u-s-gdp-grew-less-than-previously-estimated-in-fourth-quarter

Paging 2-fruit, Adan;

Federal funds accounted for the largest share of state revenues in Mississippi and Louisiana, nearing 43 percent in the former and 42 percent in the latter. In fact, the seven states most reliant on federal dollars for revenue all voted for Romney in 2012….

http://link.washingtonpost.com/5483d0d93b35d046478bdbf72bsfj.4iv/VO9fhcPoINZoQV1gA1c8b

Update: Oil Fails To Close Above $50; Sinks Through $48 Floor

http://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic

“‘They’re both in a fragile and strange condition and then you get these data points coming out of China that you do a double take. People who are more confident about it say that since the Chinese government has full control of everything, full control of every aspect of the credit supply and access to money and all that, if there’s anyone in the world who can engineer what they call a soft-landing it would be the Chinese government.’”

“Colvin: ‘That does assume that the economy is one of those machines with levers and pipes and wires and things that you can control all of and that’s another long-standing economic argument. Where do you stand on that?’”

” ‘There seems to be a profound human impulse to believe that we can control things we can’t and the fact that the sheer complexity of all human interactions together, which is what an economy is, the fact that you can accurately model and control it is just very obviously, I mean to the non-economist which is what I am, it’s just very obviously a glaring piece of hubris.’”

Paging Mr. Herman, Mr. Pee Wee Herman.

wall street journal - financial anxiety is a constant for many families

http://blogs.wsj.com/totalreturn/2015/02/27/financial-anxiety-is-a-constant-for-many-families/?mod=WSJ_hpp_sections_yourmoney

no surprises here, that’s what you get for being a mortgage debt slave

There seems to be a profound human impulse to believe that we can control things we can’t and the fact that the sheer complexity of all human interactions together, which is what an economy is, the fact that you can accurately model and control it is just very obviously, I mean to the non-economist which is what I am, it’s just very obviously a glaring piece of hubris.’”

However, the quote is perfect for Obama. He thought he could control the oil market for a protracted period of time. By ordering the spiking of the dollar and the selling of paper barrels on the future markets and getting the Saudis to empty out their storage and increase production, he thought he could beat Putin. Perhaps that is another reason to fight auditing the Fed, did they sell the paper barrels? No matter, a real economy needs real oil not paper barrels, shale oil producers cannot produce at the paper barrel price, he cannot control the oil market. Obama and hurbris go together like Obama and bathhouses.

Buy a new electric car and you will lose alot of money (ALOT of money)

http://www.wsj.com/articles/resale-prices-tumble-on-electric-cars-1424977378

I rolled coal on a Prius this morning, that’s my primary source of self-esteem

Wall Street Journal - Coming Labor Force Squeeze Could Push Up Wages, But Also Inequality

“only about one-fifth of the workforce is likely to see rapid wage growth as new technology continues to hollow out the middle class and demand for workers eases with waning global growth prospects”

http://www.wsj.com/articles/BL-REB-31022

This confirms my prediction that within a few decades, less than fifteen percent of Americans will live at or above a middle class lifestyle

A nation of broke @ss loosers

“As China slows down, leaders in Beijing are understandably turning to one of their favored growth stabilizers: housing. A record decline in new-home prices in January has, as my Bloomberg News colleagues reported this week, prompted Chinese officials to contemplate additional stimulus measures, including reducing the required down payments on second homes and eliminating sales tax after only two years of ownership instead of five. And why not? To this point, various price-boosting schemes have helped China ward off the kind of downturn that befell America in the late 2000s and Japan two decades earlier. Unfortunately, though, they’re no longer likely to have the same impact today.

That’s because of a little-recognized shift in the nature of China’s property bust – from the demand side to the supply side. As research done by Rosealea Yao of Gavekal Dragonomics shows, China’s real problem is that new construction is evaporating no matter what sales and prices do. That means the knock-on effects of additional stimulus – on cement, steel and so on – will necessarily be limited. “This is a supply-side correction in property,” Yao writes in a new report. “While housing sales will likely improve this year, construction and all the industrial activity that depends on it will not. Therefore an upturn in housing sales will not deliver as much of a boost to growth.”

I checked in with Yao about which data series should frighten Beijing most: “It is floor space started,” she says. Property starts (measured in area of floor space) declined 26% year-over-year in December following a 35% plunge in November. That marks a dramatic deepening of the 5.5% plunge seen between January and October 2014. Also last year, parcels of land allotted for new projects slid 25%, a blow for highly-indebted local governments that rely on such sales. It gets worse. Even with contingency plans to stabilize the market, “we believe China’s underlying housing demand is peaking and will soon start declining,” Yao says. That’s a problem given the current oversupply – all those ghost cities – which Yao estimates will require “at least another two years” to work through.

In the meantime, “the traditional correlation between housing sales and indicators like steel use and construction starts will break down.” In Yao’s rosiest scenario, new stimulus measures would only pump up sales 2% and limit the fall in housing starts to 10%. One has to wonder at what cost, too. In the short run, it’s easy to understand why the government is targeting housing prices. As the experiences of Japan, the U.S. and now parts of Europe demonstrate, housing busts take entire economies down with them. But such measures ultimately make China more vulnerable to a crash. A $328 billion surge in new credit in January – the third straight monthly jump – adds to a debt pile that has grown to frightening proportions.”

Just flip a switch and all will be well.

The Drudge Report has a link titled “Undercover Video Shows Medical Marijuana Being Sold to Children Near Schools”

OMFG! The children! Somebody think of the children

It’s a good thing Sheldon Adelson spent $5,000,000 to defeat a medical marijuana ballot initiative in Florida in 2014

F*ing hypocrites and liars

“China’s New Year celebrations took place last week. The event is a moveable feast, and can fall anywhere between 21 January and 20 February. As a consequence, most monthly measures of economic activity in China during the first two months of the year are combined and released in March. That means January is something of a black hole as far as the official statistics are concerned. What little data we do have, however, continue to support the view that a hard-landing in China is now in train. In particular, house prices have continued to fall.

Data published on last week showed that house prices have now fallen for nine months in a row – the longest run on record, under this relatively new measure. Mudanjiang, one of the 67 Chinese cities that registered house prices falls over the past twelve months for second-hand residential buildings, experienced a 13.9% fall. The US entered recession around two years after house price inflation had peaked. After nine months of recession, Lehman Brothers collapsed. As our chart illustrates, house price inflation in China has slowed from its peak in January 2014 at least as rapidly as it did in the US. ”

Tick tock tick tock.

How to destroy a billion dollar new faculty and the thousands of jobs that went with it.

Elect a democrat governor.

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Wolf tax proposal puts Beaver County Shell plant at risk
Pittsburgh Tribune Review | Feb. 25, 2015 | David Conti

Royal Dutch Shell warned Gov. Tom Wolf that policies which hurt gas production could affect the company’s decision on whether to build a multibillion-dollar plant in Beaver County to turn ethane into plastics, the head of a gas industry group said Wednesday.

Spigelmyer said Wolf’s proposal to collect 5 percent of the money producers get from wells and 4.7 cents for every thousand cubic feet coming from wells threatens investments and could slow production of gas and related liquids, such as ethane.

Shell said it determined in April it would have enough ethane to operate the plant if it builds, with 10 contracts lasting up to 20 years. The company said the plant could employ 400 people and outside projections put the number of related jobs in the thousands.

“I’ve been warning that the greatest threat to the global economy is the bursting of China’s real estate bubble. It’s the largest and most extreme in the world. Prices for Shanghai real estate have gone up 650% since 2000 and 86% since the last peak in 2007.

Here’s my question… what’s driving this bubble?

The answer lies in the movement of 220 million people from rural to urban areas over the last 12 years — the greatest and fastest urbanization rate in history.

And what do these new unskilled people do for a living? They build condos for no one.

China has massive ghost cities with little or no residents. It has 27% of its condos in urban areas that are standing there… vacant.

221 million people are unregistered citizens of these cities with no social benefits from education to health care.

The Chinese government is walking a tight rope…

They’re curbing their runaway shadow banking system and then encouraging bank lending.

But the recent surge in bank lending only caused a temporary bounce in housing prices, which is already failing again.

Home prices in the first tier, which consists of the largest cities, has already seen the biggest decline yet — from more than 19% in late 2013 down to -4% recently — a swing of 23% points. That compares to the decline from slightly above 12.5% in late 2007 to -7% in early 2009, a swing of 19.5% points.

The second and third tier cities are now down 5%, even more than the first tier.

Out of 70 markets, 64 of them fell in January after 67 out of 70 fell in December. This is looking very serious.

The key thing to remember is that the Chinese have 75% of their net worth and savings in real estate versus 28% in the U.S.

These condos are not only overvalued but they’re often empty and not owned by the developers that couldn’t sell them. They’re bought by Chinese investors… especially the top 10% that control 60% of the income in the Chinese economy.

When the wealth of these investors and consumers implodes, so will the Chinese economy and the huge portion that comes from building real estate, infrastructure and factories for no one.

One thing to note is that the affluent Chinese are also the most aggressive buyers of high-end real estate in the leading English-speaking cities around the world now. The Russians and Middle-Eastern buyers are receding due to the crash in oil prices and the drop in the Russian ruble.

We’ve been warning about this for years… the crash of the Chinese bubble will be the biggest factor in the next great global crash and the central banks in the U.S. and Europe will be able to do little about it. China’s real estate implosion will set off a global crash in all of the cities that have thus far managed to defy the 2008 crash.

As for cities like New York, L.A., London, Vancouver, Singapore, Sydney and many more? Don’t think they won’t fall.”

If only Chicago were controlled by far-left wing democrats for the last 50 years, had a total/complete gun ban and has been in the total control of public unions - these things wouldn’t happen.

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‘Gestapo’ tactics at US police ‘black site’ ring alarm from Chicago to Washington
The Guardian | 2/26/2015 | Multiple Authors

The US Department of Justice and embattled mayor Rahm Emanuel are under mounting pressure to investigate allegations of what one politician called “CIA or Gestapo tactics” at a secretive Chicago police facility exposed by the Guardian.

Politicians and civil-rights groups across the US expressed shock upon hearing descriptions of off-the-books interrogation at Homan Square, the Chicago warehouse that multiple lawyers and one shackled-up protester likened to a US counter-terrorist black site in a Guardian investigation published this week.

As three more people came forward detailing their stories of being “held hostage” and “strapped” inside Homan Square without access to an attorney or an official public record of their detention by Chicago police, officials and activists said the allegations merited further inquiry and risked aggravating wounds over community policing and race that have reached as high as the White House.

As long as they are voting for the right party - all is good.

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Crime Does Pay…Illegals With Three Kids Will Collect $35,000
Red Statements | 2/26/2015 | Stephen Ahle

The old adage that says “Crime Doesn’t Pay” is no longer operable. Illegal aliens who have invaded the country will be the beneficiaries of your tax dollars once their work permits and Social Security cards are approved. The IRS in their infinite wisdom (My tongue is planted firmly in my cheek) has decided that illegal aliens will be able to collect a fortune from US taxpayers even though they haven’t paid a penny in taxes themselves. A family of three would be eligible for just over $35,000.

The IRS has determined that these illegal aliens can take advantage of both the Child Tax Credit (CTC) (1,000 per child) and the EITC. (Earned Income Tax Credit) A family with three children earning $22,000 per year would be eligible for the maximum amount of $35,521. Nice non work if you can find it.

“This is basic economics: if you want more of something, you subsidize it. By subsidizing illegal entry with four years’ worth of new tax credits, the IRS would promote lawlessness,”

$18,387 taxpayer spending per student and 178 schools in the state of NY are failing.

American exceptionalism at its finest.

http://www.syracuse.com/news/index.ssf/2015/02/cuomo_more_than_half_of_syracuse_schools_have_been_failing_kids_for_too_long.html

Net Neutrality: FCC Takes First Step in Federal Control over Internet

Friday February 27, 2015

In his dissent, Pai accused the FCC of ceding to President Obama’s support for reclassifying the Internet. “We shouldn’t be a rubber stamp to political decisions made by the White House,” he said.

Pai said that the action “marks a monumental shift toward government control of the Internet” and predicted it would lead to higher prices for Internet service, slower speeds, less innovations and less choice.

O’Rielly called it a “monumental and unlawful power grab.”

Read Latest Breaking News from Newsmax.com http://www.newsmax.com/Newsfront/fcc-net-neutrality-approved/2015/02/26/id/627076/#ixzz3SxdyEJnZ
Urgent: Rate Obama on His Job Performance. Vote Here Now!

Cincinnati DC lost destroyed found what does it matter, we have already been told there is not a smidgen of corruption and these are phony scandals.

Forward

IRS Watchdog: ‘Potential criminal activity’ in Email Scandal

Investigators quickly recovered tapes Lerner claimed irretrievably destroyed

by Stephen Dinan | Washington Times | February 27, 2015

The IRS’s inspector general confirmed Thursday it is conducting a criminal investigation into how Lois G. Lerner’s emails disappeared, saying it took only two weeks for investigators to find hundreds of tapes the agency’s chief had told Congress were irretrievably destroyed.

Investigators have already scoured 744 backup tapes and gleaned 32,774 unique emails, but just two weeks ago they found an additional 424 tapes that could contain even more Lerner emails, Deputy Inspector General Timothy P. Camus told the House Oversight Committee in a rare late-night hearing meant to look into the status of the investigation.

“There is potential criminal activity,” Mr. Camus said.

He said they have also discovered the hard drives from the IRS’s email servers, but said because the drives are out of synch it’s not clear whether they will be able to recover anything from them.

Portlandia season 4 - the History of Hip Hop

http://m.youtube.com/watch?v=ERw-Frq6knI

Why Does the FBI Have to Manufacture its Own Plots if Terrorism and ISIS Are Such Grave Threats?

By Glenn Greenwald

Yesterday at 7:19 AM

The FBI and major media outlets yesterday trumpeted the agency’s latest counterterrorism triumph: the arrest of three Brooklyn men, ages 19 to 30, on charges of conspiring to travel to Syria to fight for ISIS (photo of joint FBI/NYPD press conference, above). As my colleague Murtaza Hussain ably documents, “it appears that none of the three men was in any condition to travel or support the Islamic State, without help from the FBI informant.” One of the frightening terrorist villains told the FBI informant that, beyond having no money, he had encountered a significant problem in following through on the FBI’s plot: his mom had taken away his passport. Noting the bizarre and unhinged ranting of one of the suspects, Hussain noted on Twitter that this case “sounds like another victory for the FBI over the mentally ill.”

In this regard, this latest arrest appears to be quite similar to the overwhelming majority of terrorism arrests the FBI has proudly touted over the last decade. As my colleague Andrew Fishman and I wrote last month — after the FBI manipulated a 20-year-old loner who lived with his parents into allegedly agreeing to join an FBI-created plot to attack the Capitol — these cases follow a very clear pattern:

UPDATE: The ACLU of Massachusetts’s Kade Crockford notes this extraordinarily revealing quote from former FBI assistant director Thomas Fuentes, as he defends one of the worst FBI terror “sting” operations of all (the Cromitie prosecution we describe at length here):

If you’re submitting budget proposals for a law enforcement agency, for an intelligence agency, you’re not going to submit the proposal that “We won the war on terror and everything’s great,” cuz the first thing that’s gonna happen is your budget’s gonna be cut in half. You know, it’s my opposite of Jesse Jackson’s ‘Keep Hope Alive’—it’s ‘Keep Fear Alive.’ Keep it alive.

That is the FBI’s terrorism strategy — keep fear alive — and it drives everything they do.

https://firstlook.org/theintercept/2015/02/26/fbi-manufacture-plots-terrorism-isis-grave-threats/

I am listening to Rand Paul on CPAC and I like what I hear.

I will vote for him

I am agnostic but I am praying for a rapture today.

The Kardashians have signed a record-breaking, $100 million-plus deal to remain with E! for another four years, sources have exclusively confirmed to Page Six.

Spock got beamed up.

Leonard Nimoy, known for his iconic character Mr. Spock on “Star Trek,” has died, ABC News has confirmed via the actor’s granddaughter. He was 83.

On July 3, 2008, presidential candidate Barack Obama said this:

“The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents — #43 added $4 trillion by his lonesome, so that we now have over $9 trillion of debt that we are going to have to pay back — $30,000 for every man, woman and child. That’s irresponsible. It’s unpatriotic.”
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December 03, 2014

By Akash Chougule

The national debt has eclipsed $18 trillion.

More than $7 trillion has been added to the debt under the six years of President Obama’s leadership – a 70 percent increase – with little to show for it. In that time, average household incomes have fallen, food stamp dependency has skyrocketed, and labor force participation has plummeted to its lowest point since the 1970s.

Billions of dollars spent in corporate welfare through bailouts and President Obama’s failed “Stimulus” has benefited people who profit off the growth of government (note that several of the nation’s wealthiest counties are now those surrounding Washington DC, where the primary industry is government), but the rest of the country has not been so lucky.
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U.S. National Debt Clock : Real Time
http://www.usdebtclock.org/ - 116k -

Is the price of oil enjoy due to enjoy another sleigh ride down the mountain once the cotango traders run out of closet space?

10-reasons-the-housing-market-could-go-ballistic-this-spring

The U.S. housing market could get a major boost this year, specifically for single-family homes—especially among first-time buyers. Here’s why.

I’m guessing here. My forecasts aren’t any better than anyone else’s, so don’t trade on this. But my gut is telling me that the U.S. housing market could go ballistic this spring, specifically for single-family homes—especially among first-time buyers.

A few reasons:

1. Everyone sees that the zero interest rate party is coming to an end. If you’ve been waiting to borrow, it’s getting close to “now or never” time. Fear of missing out (what the kids call “FOMO”) is as powerful a motivator as anything.

2. Demand is pent-up, and pent-up things eventually get un-pent, sometimes all at once. The number of people between ages 35 and 39 is critical to household formation, and we are currently seeing an uptick in this demographic category, back to prior peaks.

3. The notion that millennials want to stay home forever is not accurate. They’re ready to bust out, and rental prices are comparably high in several key regions.

4. Employment among college-educated people (read: potential home buyers) is as tight as a drum.

5. In January, average hourly earnings jumped 0.5% for all American workers. This is just one month’s worth of data, of course, but it is significantly above trend (average hourly earnings have grown at an annual average of just 2% in the post-crisis recovery period). When people get one-time tax cuts or bonuses, they save them. When people get raises, however, they buy stuff and improve their standard of living.

6. At the low end of the income spectrum, things are brightening. Wal-Mart, Aetna, and TJ Maxx are giving a million minimum-wage earning Americans a raise this year. These companies are the tip of the spear. Others will be forced to follow. Twenty-nine states have unilaterally hiked minimum wages in the last two years. If the federal government acts this year on a proposed 40% national wage hike to over $10 an hour, look out above.

7. If you believe, as I do, that the stock market acts as a discounting mechanism and foreshadows the near future, then you may want to take a glance at the iShares US Home Construction ETF ITB. It’s just broken out above major resistance dating back to the May 2013 “taper tantrum,” when the Fed first raised the specter of rising rates. The homebuilding stocks within this ETF are now trading higher than their peak prior to those fears, which signals better fundamentals to come, in my view.

8. Animal spirits in the stock market have finally, truly taken hold and participation is broadening out from just the wealthiest 20% of investors.

9. The Federal Reserve’s survey of senior loan officers says that credit standards are easing.

10. I’m actually cheating a little because a housing market uptick is already in progress. Last month’s ground-breaking on new homes hit the equivalent of a 1.07 million annual run-rate. According to Bloomberg data, this is a jump of over 6.4% from 2014.

http://fortune.com/2015/02/27/10-reasons-the-housing-market-could-go-ballistic-this-spring/?xid=yahoo_fortune

ummmmmm don’t miss out again like you mist out in 2009-2014 when homes have been dirt cheap. Alot of my relatives & friends and business partners are buying homes or rental homes. Alot of you clowns are expecting to buy homes for $0.50 cents lmaoooo like housing anaylist

http://www.theglobeandmail.com/life/home-and-garden/real-estate/price-slashed-to-move-calgary-penthouse-condo/article23233738/

Taking that ‘low ball’ offer may turn out to be the smartest thing the seller ever did. That condo still has a long way to drop.

I’m in SWFL and we’re seeing an influx of these types of buyers and have since the bubble burst.

Hard landing for the Chinese housing bubble. Coming soon to a Fed-blown housing bubble near you.

http://wolfstreet.com/2015/02/26/housing-crash-in-china-steeper-than-in-pre-lehman-america/

Is this deflation?

http://www.cnsnews.com/news/article/ali-meyer/another-record-4235-pound-ground-beef