November 9, 2015

The Potential For A Bubble Burst Is Certainly Real

The San Francisco Business Times reports from California. “It’s official: San Francisco’s luxury housing market is cooling, according to Paragon Real Estate Group. ‘The luxury home market hasn’t ‘crashed.’ There are still high-end homes selling very quickly for very high prices and competitive bidding,’ Paragon said. ‘But it has markedly cooled and the number of luxury home listings in San Francisco hit a new high in October, so correct pricing has become increasingly vital.’”

“And when it comes to ‘correct pricing,’ think lower, much lower. Paragon says it remains to be seen whether the cooling market is going to be a ‘blip … or the beginning of a longer-term reality.’”

MarketWatch on New York. “It may seem improbable, but the Manhattan condo craze could be actually slowing down, at least for a few months. CityRealty, a Manhattan-based real estate research firm that looks at home sales in the city, estimates that the median price per square foot of the top 100 condo projects in Manhattan actually fell 3% in the six months between April 1 and September 30 of this year to $2,121 a square foot. When the average is used, instead of the median, the price per-square-foot decline was even sharper year-over-year, down 8% over the same six-month period.”

“‘It looks like the very top end of the market has softened a little bit,’ said Gabby Warshawer, a research analyst with CityRealty. Still, she expected it to be a temporary lull as closing prices in mega-projects such as 432 Park Avenue haven’t become public record and might not do so until early 2016. ‘Just one of these expensive buildings can have an outsized effect on the market,’ she said.”

Boise State Public Radio in Idaho. “One of the emerging issues in the Treasure Valley over the last few years is the shrinking number of affordable housing units. As the housing market has improved and people continue to move to the area, rents have gone up and the number of available units has also declined. I talked with Nicolas Davidson, an asset manager with Kennedy Wilson Multifamily Management Group, which owns rentals in several western states. The company recently bought a big complex on Main and Whitewater, its first investment in Boise.”

“‘It’s a really interesting market. It’s an up and coming market. There’s a lot of job growth and migration. I think Boise is starting to be more well-known,’ Davidson says. The company is now remodeling apartments and will raise rents as a result.”

The Greeley Tribune in Colorado. “Within the next two years, more than 560 new multifamily housing units are expected to be available in Greeley. By comparison, there are 357 single-family lots under construction in town. Some are worried Greeley won’t be able to sustain a healthy housing market with the influx of so many apartments and townhomes. Others are more optimistic.”

“The addition of 560 new units over the next two years is substantial. And with the downturn of the oil and gas industry barreling toward its second year, Greeley’s economy will soon start to feel the squeeze. So the potential for a real estate bubble burst is certainly real. With so many moving parts to the issue it’s certainly difficult to predict what the future will bring. That said, we’re excited about the prospect of relaxing the market here in town and hopefully bringing prices back down to the point of affordability. As long as they don’t drop too far.”

The Star Tribune in Minnesota. “In the years leading up to the Great Recession, B.J. Gugat shared the same belief as many Americans: The equity in her house was safe. That’s why a decade ago she invested a $100,000 windfall from a home sale into a bigger house she built in Farmington, only to watch that equity evaporate when the housing market crashed a couple of years later. Today, with her daughter about to go off to college, Gugat’s expenses are rising faster than her income. It’s a stretch to pay the mortgage every month, so she’s ready to sell.”

“Trouble is, although the value of her house has increased and it’s now worth more than her mortgage, she still doesn’t have enough equity to cover the cost of downsizing to a less-expensive house. ‘I’m stuck between a rock and hard place,’ she said.”

“By nearly every indication, the housing market in the Twin Cities now is humming along and, in some parts of the metro area, prices are breaking records. But one-third of all Twin Cites-area homeowners are effectively underwater on their mortgage, meaning they have enough equity to cover their mortgage, but not enough to sell their house and move to a different one. That’s why so many would-be sellers are staying put.”

“In 2006, Michele Whaylen and her husband paid $452,900 for an award-winning Parade of Homes model house in New Prague. Because of a job relocation, they were forced to move. They listed the house in late July for $379,900, a full $73,000 less than they paid for it. Since then, they’ve had only one showing. Whaylen blames the situation on the availability of inexpensive lots new in the area. This summer alone, two houses have been built on their cul-de-sac.”

“Because they haven’t been able to draw any equity and aren’t sure it will be possible, they bought a house in Iowa using a VA loan with low down-payment requirements. And to save enough for their 5-percent down payment, Whaylen has picked up several part-time jobs to supplement the income from her full-time job. ‘I am not sure what we will do for the long term,’ she said. ‘I realize we are in a much better position than most, but the stress is off the chain.’”




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54 Comments »

Comment by Professor Bear
2015-11-09 04:04:40

“And when it comes to ‘correct pricing,’ think lower, much lower. Paragon says it remains to be seen whether the cooling market is going to be a ‘blip … or the beginning of a longer-term reality.’”

Sounds like the stages of grief which accompany a crash are underway:

Denial <=
Anger
Bargaining
Depression
Acceptance

Comment by Ben Jones
2015-11-09 05:13:31

‘San Francisco homes are still some of the priciest in the nation, but sales of those houses are showing significant weakness. September sales were down 19.5 percent in the city from a year ago, according to the California Association of Realtors.’

“We’re going through a kind of correction, as we have a lot of new developments being built right now. The supply is definitely on the rise,” said Justin Fichelson, an agent at Climb Real Estate Group in San Francisco. “The market is not going to continue going up like we’ve seen in the past two years, because prices are already high.”

Comment by Professor Bear
2015-11-09 07:24:05

Falling prices, steadily rising supply…sounds familiar.

Oh yeah — oil!

 
Comment by taxpayers
2015-11-09 08:21:52

you can still watch million dollar listing LA while they tell buyers they’ll get rich as prices/demand are dropping

 
Comment by Ben Jones
2015-11-09 14:42:17

‘While doomsayers have believed there was no end in sight to the white-hot home sale market in San Francisco, at least at the luxury end of the spectrum, the market appears to finally be cooling. New figures from Paragon Real Estate Group, just published on Curbed, show that over the last three months, the supply of properties on the market at the high end — defined as single-family homes north of $2 million, and condos/TICs priced above $1.5 million — has jumped dramatically, officially creating a buyer’s market for the first time in several years.’

http://sfist.com/2015/11/09/at_high_end_sfs_housing_market_fina.php

 
 
 
Comment by Professor Bear
2015-11-09 04:08:04

“‘It looks like the very top end of the market has softened a little bit,’ said Gabby Warshawer, a research analyst with CityRealty. Still, she expected it to be a temporary lull as closing prices in mega-projects such as 432 Park Avenue haven’t become public record and might not do so until early 2016. ‘Just one of these expensive buildings can have an outsized effect on the market,’ she said.”

Perhaps so on the mean, but not on the median, which is also down.

 
Comment by Professor Bear
2015-11-09 04:19:18

“But one-third of all Twin Cites-area homeowners are effectively underwater on their mortgage, meaning they have enough equity to cover their mortgage, but not enough to sell their house and move to a different one. That’s why so many would-be sellers are staying put.”

Can’t say I’ve seen that definition before.

I guess it’s not enough for some homeowners that Uncle Sam instituted policies to deliberately prop up the values of their homes in order to end the underwater positions on their mortgages. These folks also expect a low-cost house for them to buy with their financially engineered home equity wealth gains.

 
Comment by Jingle Male
2015-11-09 04:25:04

“….Since then, they’ve had only one showing….”

“…..Because they haven’t been able to draw any equity and aren’t sure it will be possible, they bought a house in Iowa using a VA loan with low down-payment requirements…..”

Stupid is as stupid does. Bubba Gump

They can’t sell the house the bought 10 years ago at the bubble peak…..so they choose to buy another one!

Comment by Mafia Blocks
2015-11-11 03:51:10

Just like you Jingle_Fraud.

 
 
Comment by Get Stucco
2015-11-09 04:27:01

“In 2006, Michele Whaylen and her husband paid $452,900 for an award-winning Parade of Homes model house in New Prague. Because of a job relocation, they were forced to move. They listed the house in late July for $379,900, a full $73,000 less than they paid for it. Since then, they’ve had only one showing. Whaylen blames the situation on the availability of inexpensive lots new in the area. This summer alone, two houses have been built on their cul-de-sac.”

They got stucco.

What is the price of a lot in the frozen north?

Lot price + $55 × 2000 sq ft = ?

Comment by AmazingRuss
2015-11-09 07:44:00

“award winning”

Here’s your sign.

 
 
Comment by Ben Jones
2015-11-09 05:21:55

‘Apartment vacancy rates across metro Denver rose in the third quarter and rent increases moderated as more new units came onto the market, according to the Apartment Association of Metro Denver’s quarterly Vacancy and Rent Report.’

‘Vacancy rates jumped from 4.5 percent in the second quarter to 5 percent in the third and are up from 3.9 percent in third quarter last year. While 5 percent is still a low rate, vacancies typically dip in the third quarter. That didn’t happen this year.’

“The increase is somewhat surprising but understandable due to all the new units being delivered,” said Mark Williams, executive vice president of the Apartment Association, in a statement.’

There were 2,022 new apartments that hit the market in the third quarter, part of 19,400 new units in the past three years. Although developers continue to add inventory, much of it comes with higher rents, reflecting the preference given to building in urban areas with higher construction costs.’

‘Back in 2001, it cost $100,000 per unit to build an apartment building. That cost is now closer to $250,000 per unit, according to the report.’

From 100k to 250k in 14 years. It’s a good thing Denver renters incomes have more than doubled in that time, or there might be some kind of bubble there.

 
Comment by Ben Jones
2015-11-09 05:28:07

‘which owns rentals in several western states…recently bought a big complex …its first investment in Boise. “‘It’s a really interesting market. It’s an up and coming market. There’s a lot of job growth and migration. I think Boise is starting to be more well-known,’ Davidson says.’

‘The company is now remodeling apartments and will raise rents as a result.’

I included this because I had mentioned it the other day; these companies, big and small are running all over the country, selling/refinancing and buying even more because of the tax code and the bubble. They have a capital gain; do a 1031 exchange to a larger property, and “add value” = raise rents! This add value is the buzz word. A little paint, some new hardware on the cabinets, that kind of thing. And good ol’ Mel Watts and the federal government is funding the bulk of it.

Comment by Professor Bear
2015-11-09 07:28:44

Who’s gonna be left holding the bag when this bubble pops? I know it won’t be taxpayers, as laws have been passed since 2008 against too big to fail firms like Fannie Mae and Freddie Mac dumping losses on taxpayers.

Comment by Neuromance
2015-11-09 19:16:21

The law is very fluid when it comes to the FIRE sector.

For example, in Hank Greenberg’s (of AIG) suit against the Fed, it turned out he was right, and he won, but there was no consequence as no punitive action was taken against the Fed.

And then of course, there are Messrs. Holder and Breuer’s philosophy on prosecuting financial crime.

To be fair, the government did see a revenue-enhancement opportunity in attacking the companies, the ‘legal fictions’, as Bernanke termed them.

However, legal fictions don’t commit crimes, people do. And raining down holy terror on the legal fiction mostly impacts the retail grunts, not the ones who made money on the various schemes.

 
 
Comment by scdave
2015-11-09 08:11:13

This add value is the buzz word ??

Also known as “repositioning”…

Comment by Ben Jones
2015-11-09 08:16:37

I hadn’t heard that. I did read the other day that the GSE’s had “redefined affordability” when considering multi-family loans so the deals could flow.

Comment by scdave
2015-11-09 08:42:53

when considering multi-family loans so the deals could flow ??

I have come to know a executive at a major development company here in the valley…Both apartments & commercial retail but mainly apartments…

They build with there own cash…Once completed and pro-forming at 94% or so, they turn to wall street for long term financing (typically 10-Yr money) at incredibly low rates…Just a small bump above the 10 year bond…

In these good times, they pull out most if not all their initial cash and go do it again…They sell Nothing !! They hold and manage everything they aquire

(Comments wont nest below this level)
Comment by Ben Jones
2015-11-09 09:07:44

When prices are skyrocketing, why not? There’s any number of ways to play a booming market. The advantage to selling and rolling into a bigger complex is this; once you’ve used up most or all of the depreciation and you sell, the 1031 basis will transfer. To avoid more taxes you need the extra depreciation a larger complex will give you.

 
Comment by scdave
2015-11-09 09:11:17

When prices are skyrocketing, why not ??

Along with very cheap long term borrowing costs…There is one thing that has changed at least around here…Construction and development costs have increased significantly in the past two years especially the past year…

 
Comment by Ben Jones
2015-11-09 09:19:39

‘costs have increased significantly in the past two years’

And as I’ve documented, in Omaha Nebraska, Bozeman Montana and Perrysburg Ohio, among others. Land prices have doubled or tripled.

 
Comment by Mafia Blocks
2015-11-09 10:09:06

“Construction and development costs”

Labor down
Materials down

How can this be?

 
Comment by snake charmer
2015-11-09 11:27:59

Ben, the new thing in my neighborhood is to build two McMansion houses on one large lot, perhaps for that reason.

We have to be getting close to the end, but then again, I called a top last year when I saw activity at the former Trump Tower Tampa site.

 
Comment by redmondjp
2015-11-09 12:12:46

Land available to develop limited by government, thus driving up the price. Just like your argument about grocery prices.

 
Comment by Mafia Blocks
2015-11-09 14:04:00

“It’s the land!” Nope

“It’s the labor!” Nope

“It’s the materials!” Nope

 
 
 
 
 
Comment by Mr. Banker
2015-11-09 05:52:34

“And to save enough for their 5-percent down payment, Whaylen has picked up several part-time jobs to supplement the income from her full-time job. ‘I am not sure what we will do for the long term,’ she said. ‘I realize we are in a much better position than most, but the stress is off the chain.’”

The stress is off the chain that is attached to her leg but nevertheless the chain will always be attached to her leg because, at root, she has the mentality of a debt slave.

And I am so glad; Some people work, other people reap.

God’s Plan.

Comment by Ben Jones
2015-11-09 06:09:19

‘Mary Lee Wegner, a 54-year-old Los Angeles lawyer, is among investors eschewing money funds for higher-yielding choices as her financial adviser tells her rates will remain low even after the Fed begins tightening.’

“The Fed has forced me to become a more willing investor, because if I decided to keep a large portion of my money in savings with the level of inflation and zero interest rates, I’m losing money,” Wegner said. “I don’t have much of a choice but to be less risk averse.”

Comment by Mr. Banker
2015-11-09 06:13:20

Bahahahahahahahahaha … clone her, and send me the copies.

 
Comment by Professor Bear
2015-11-09 07:34:52

The prudence of the conferred advice will depend in retrospect on whether the Fed’s experimental efforts to engineer 2% inflation get out of control., and if so, in which direction.

 
Comment by Fang nu
2015-11-09 07:58:57

I particularly hate this.
The idea is to live a financial life where the gambling on equity or stock market are not part of the plan.

Go to any site but here, but and you’ll be hear how the lotto is as strong of an investment strategy as any.

If stock market, or ANY returns are essential to your plan… You’re not being sensible.
Cut back or get a second job. Anything else is a radical dream achieved by few.

Signed,
A reaper.

 
 
 
Comment by Ben Jones
2015-11-09 06:18:22

‘On stage only a short time after the United Arab Emirates said it would increase its oil production despite low worldwide prices, the oil and gas minister of neighboring Oman didn’t pull any punches. “This is (a) man-made crisis in our industry we have created. … And I think all we’re doing is irresponsible,” Mohammed bin Hama al-Rumhy said.’

“It’s a movement of an era of scarcity to one of abundance; it’s a movement from a world of unexpectedly strong demand and tight supplies to a world of ample supplies — even oversupplies — and weaker demands,” said Daniel Yergin, vice chairman of IHS and the author of a Pulitzer Prize-winning book on the history of oil. “OPEC’s not the only balance of the market. The United States is back in the role of swing producer, a role it hasn’t exerted in six decades.”

“We are hopeful that we will see in 2016 … a correction,” Emirati Energy Minister Suhail Mohamed al-Mazrouei said. “Don’t ask me how big, that’s for the market to decide. Don’t ask me who is going to play that role. It’s not going to be OPEC only. This is an international effort. Everyone has a role to play.”

‘Oman has been highly skeptical of OPEC, led by Saudi Arabia, which has kept its own production high, further depressing prices. “It’s like you and your wife at home, cooking for 10 people and you eat a little bit and the rest of it you throw it in the dustbin,” al-Rumhy said. “I cannot justify that, that this loss is by the grace of God. This loss is because we are not responsible. … We are waiting for the cyclone that is hitting us to change course. And it will not happen.”

You know Mohammed, I feel your pain. While I’d sure like to pay a whopping larger amount out of my pocket so you can fly around in jumbo jets and cruise in gold plated limo’s, something tells me it ain’t gonna happen soon.

Example

Comment by Professor Bear
2015-11-09 07:41:30

“It’s a movement of an era of scarcity to one of abundance; it’s a movement from a world of unexpectedly strong demand and tight supplies to a world of ample supplies — even oversupplies — and weaker demands,”

This is the normal way bubbles end, with over abundant supply and collapsed demand. There but by the grace of God goes the U.S. rentership market, and only for a little bit longer.

Comment by Ben Jones
2015-11-09 07:50:04

‘Some are worried Greeley won’t be able to sustain a healthy housing market with the influx of so many apartments and townhomes’

So much for the shortage. Why anyone ever believed this country can’t build (or over-build) housing is beyond me. The SF article mentions all the condos on the way, ie future apartments.

One has to see the Denver area construction to believe it. Even on a back road from Colorado Springs to Denver, there were subdivisions all over the place. And where there aren’t houses going up, it’s townhouses or apartments. Downtown, condo towers springing up.

Comment by scdave
2015-11-09 08:24:08
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Comment by dwkunkel
2015-11-09 10:07:00

The Vallco Mall described in the link has been a loser for at least the last 25 years. It’s been completely re-modeled and changed ownership at least 2 times that I know of.

This latest proposal has to be some kind of bell-ringer.

 
Comment by scdave
2015-11-09 13:48:44

This latest proposal has to be some kind of bell-ringer ??

A 3 Billion dollar bell-ringer next to a 6 billion dollar Apple development….

 
Comment by Mafia Blocks
2015-11-09 18:13:32

When you’ve got nothing but debt, what’s another 6 billion?

 
Comment by ProxyServer
2015-11-09 19:40:28

Let me try this

[img]http://i.imgur.com/f91h46l.jpg[/img]

 
Comment by TBoom
2015-11-09 21:44:45

Let me try this
This works; on Imgur, I copied the code under HTML (website / blogs) on the right.

Rorschach - Roar for short

 
Comment by TBoom
2015-11-10 09:45:52

Never mind. The photo did appear within the post on Joshua Tree’s preview.

 
 
 
 
Comment by ProxyServer
2015-11-09 07:57:59

Are we allowed to post pics?

Is it the “[img][/img]” tag?

Thought I’d ask before I try.

Comment by Ben Jones
2015-11-09 08:12:09

Sure, let’s see what happens. I don’t know about the tag tools as I use HTML directly.

 
Comment by Professor Bear
2015-11-09 08:19:18

Good question, as I may soon be tempted to post some pics documenting the local manifestation of the most recent frenzy to build unaffordable subdivisions.

 
 
 
Comment by taxpayers
2015-11-09 08:23:09

mort rate over 4%
Ben Dover

 
Comment by taxpayers
2015-11-09 08:34:47

banker broker says stock going up SEC shoots him
realwhore says buy and get rich and gets tv show

 
Comment by BigSky
2015-11-09 09:06:08

loan_limit_banner.png
Loan Limits Stifling New Home Sales in California and Arizona
by Adam Artunian

The pool of qualified new home buyers appears to be running thin in California. The median new home price now:

far exceeds the current GSE and FHA loan limits in Orange County, San Jose, the San Francisco East Bay, and San Diego;
exceeds the FHA limits in Riverside-San Bernardino, where so many potential buyers have poor credit and limited savings after the tremendous recession; and
almost exceeds both the FHA and GSE limits in Los Angeles and Sacramento.

In other words, more than half of new home buyers have to qualify for a jumbo mortgage, which is much more difficult than qualifying for FHA or FSE financing. Jumbo loans require high incomes and high down payments, or at least outstanding credit with mortgage insurance.

The chart below shows the relationship between median new home prices and loan limits in the major housing markets in California. Only Los Angeles and Sacramento currently have a median new home price below both the GSE and FHA loan limits.

New-Home-Prices_vs_GSE-FHA-Loan-Limits-1.png

For many of our home builder clients, the January 2014 decline in FHA limits hurt sales dramatically, particularly in Phoenix and Riverside-San Bernardino. FHA limits are 115% of the median resale price, as determined by FHA, and thus should increase slightly next year. GSE loan limits are determined annually by FHFA, the GSE’s regulator, and are not expected to change.

In summary, home sales depend heavily on government mortgage policy, and new homes are more impacted since new homes are usually priced above the median resale price. We have been working with builders and developers to develop strategies to maximize profits on homes below the FHA and GSE limits, which is much more difficult than simply building a smaller, simpler home. Today’s home buyers are highly discerning, which means builders should:

Not put any costs into the home that the majority of target consumers do not value and
Include all of the features that they do value and can afford, within the constraints of today’s mortgage policies

Comment by Ben Jones
2015-11-09 09:27:11

‘the January 2014 decline in FHA limits hurt sales dramatically, particularly in Phoenix and Riverside-San Bernardino’

October 6, 2014

‘Builders in Phoenix and areas from Sacramento, California, to Orlando, Florida, are sweetening offers as sales slow in some of the country’s most volatile housing markets. Buyers, suffering from sticker shock after large price gains in 2013, are pulling back after the U.S. government cut the maximum size for mortgages with low down payments. In Phoenix, the Federal Housing Administration’s loan limits dropped well below the median price for a new home.’

“Phoenix is very slow, Sacramento is spotty,” said John Burns, a housing consultant based in Irvine, California. “The investors came in and pushed prices a little too high. And then FHA rocked the new-home market really hard.”

“Phoenix is a cautionary tale about raising prices too aggressively and opening up communities too aggressively,” said Alex Barron, senior research analyst at Housing Research Center LLC in El Paso, Texas. “It’s a bad combination where affordability got out of control and the FHA limit went down. Homes are unaffordable now, and all of a sudden there’s a ton of supply.”

“The issue in Phoenix is the market got away from itself, so everybody is offering some level of concession,” said Joel Shine, chief executive officer of Salt Lake City-based Woodside Homes. “Frankly, in a master plan with 10 other builders, and all offering concessions and you choose not to, then you need to make sure you buy your salesperson a high-quality TV set so they have something to do while they’re sitting alone.”

‘In January, the federal government, which is reducing its share of the mortgage market to lure back private capital, cut FHA loan sizes in 652 high-cost U.S. counties. In Phoenix, the limit dropped to $271,050 — about $24,000 below the median prices of a new home — from the previous maximum of $346,250. The limit shrunk by 28 percent in the Las Vegas region, and 18 percent in the Sacramento area.’

“We were having a nice robust recovery and then that happened,” said Buddy Satterfield, president of the Arizona division for Shea Homes, which has two communities in The Bridges and is opening one in Eastmark. “When you take the FHA limit down to $271,000, you hit us right in our sweet spot.”

I’ll make this point again; isn’t it interesting that where ever these limits are set, Alaska or Hawaii or Colorado, prices run right up to the max. Almost magical.

Comment by Ben Jones
2015-11-09 09:52:51

Just got this in an email. Cue Darth Vader soundtrack:

‘The Mortgage Partnership Finance® (MPF) Program and the Government National Mortgage Association (Ginnie Mae) today announced a new feature available to program participants under the MPF Government MBS product.’

‘The MPF Government MBS product now offers a servicing released option from Nationstar Mortgage in addition to the already existing servicing retained execution. This option provides greater flexibility for local community lenders that want to originate and sell their government loans into the secondary market. In addition, the product is available to lenders in more communities from coast to coast .’

 
 
 
Comment by Mafia Blocks
2015-11-09 10:15:31

Given the mild tenor this morning, lets wind things up in classic HBB fashion….

http://reactionimage.org/img/gallery/1148490216.jpg

http://reactionimage.org/img/gallery/1148490216.jpg

 
Comment by Senior Housing Analyst
2015-11-09 10:22:27

Boston Metro Housing Prices Dive 5% YoY

http://www.zillow.com/ma/home-values/

 
Comment by snake charmer
2015-11-09 11:34:10

“With so many moving parts to the issue it’s certainly difficult to predict what the future will bring. That said, we’re excited about the prospect of relaxing the market here in town and hopefully bringing prices back down to the point of affordability. As long as they don’t drop too far.”
_________________________________/

Affordable, but not too affordable. Excited, but not overly excited. What a wonderful metaphysical balance we’re futilely trying to engineer, and in a town best known for feedlot odor.

 
Comment by trader jack
2015-11-09 12:24:51

““The issue in Phoenix is the market got away from itself, so everybody is offering some level of concession,” said Joel Shine, chief executive officer of Salt Lake City-based Woodside Homes. “Frankly, in a master plan with 10 other builders, and all offering concessions and you choose not to, then you need to make sure you buy your salesperson a high-quality TV set so they have something to do while they’re sitting alone.”

What in hell is this? Cooperating builders? In a master plan?

Some new form of setting prices on homes among competitors?

Illegal, or just common practice?

 
Comment by Mafia Blocks
2015-11-09 12:38:58

Update: Dow Jones Craters 230 Points Intraday

http://www.marketwatch.com/investing/index/DJIA

 
Comment by Mafia Blocks
2015-11-09 16:06:21

“The End Of The Fed’s Self-Deluding Feedback Loop Of False Information”

“The latest installment of the disinformation game was Friday’s employment release from the US Bureau of Labor Statistics. It was a “blockbuster,” implying blue skies everywhere from Montauk to Malibu. Except that no one with a remaining shred of critical faculty can be expected to believe it. 80 percent of the new jobs numbers were attributed to the mystical birth-death model, a pseudo-scientific fantasy of hypothetical new business starts and associated hypothetical new hires. Demographically, the most new jobs went to the over-55 age cohort — grocery baggers and Walmart greeters —”

http://www.zerohedge.com/news/2015-11-09/end-feds-self-deluding-feedback-loop-false-information

 
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