The Process Of A Bubble Coming To Some Normalcy
A weekend topic on the economy starting with the Canadian Free Press piece by By Dr. Bruce Smith. “It was my great good fortune to be a son of depression parents. My mother and father were born in the early 1920s. They were observant, sensitive, thoughtful parents who took the time to tell stories. They reflected on and spoke of their early years often to their sons, sharing the hopes and fears of their upbringing as we grew up ourselves. They showed us how to observe the world around us. I began to read widely to understand how such a national calamity and such a brutal war could have happened. I wanted to know how my parents came to be the way they were, and how my world came to be.”
“Most of the accounts I read over the years attributed the depression to the ‘business cycle’ and the overproduction of goods in the 1920s. That didn’t explain much to me. Why was there overproduction of goods? Then there was a farm depression that started immediately after the First World War and worsened all through the 1920s. For my undergraduate work I read widely in historic newspapers from the Civil War era, the 1870s, the 1890s, the 1930s, and the 1940s. I looked for evidence of economic depressions in daily life in those eras, and I found it. Wars and financial panics often preceded the economic depressions of the past.”
“Because a depression develops gradually, people don’t realize it is upon them for some time, even years. Hardships filter through the levels of society at different rates. Certain sectors and regions feel the effects almost immediately, while others take longer, or never feel them at all. There is usually very little use of the term ‘economic depression’ in the press, and there is no definition circulated among economists or politicians to make it a topic of discussion. At best, media may focus on symptoms during an economic storm, occasionally pointing a finger of blame at a target of choice.”
“We have been told that the recession that began in 2008 ended in April of 2009. Everyone has noticed how the economy has been roaring back since then! But look around, and you will see, if you look past the clutter, that all of the indications of major depressions of the past are present in the United States today. One of the easiest ways to spot the failure to thrive is in strip malls and plaza shopping centers. It’s easy to find empty commercial property now. Depending on the surrounding area, vacancy rates of 10-40% are common.”
“Posh housing developments in popular retirement areas sit with their gates complete, but their weedy lots remain idle. Families struggle to maintain standards. Kids move back in with parents, or parents with kids. The dream of a vacation home or even a paid-for primary residence evaporates. Young couples keep renting as the demand for housing drives rental prices upward. In some areas, fine homes offered at a bargain go unsold, while nearby farmland is sky-high.”
“At the same time, there are parts of the country where boom times are manifest. Five of the six wealthiest counties in the United States border the District of Columbia, which shows that the federal government is doing quite well. Vast suburban stretches in Massachusetts, Connecticut, Pennsylvania, New Jersey, Maryland, Virginia, Kansas, Illinois, California, and around other major urban areas show every appearance of prosperity. Property values are at record highs, retail stores are booming, and traffic is heavy.”
“But it’s still a depression out there. The depression we’re currently experiencing is actually far worse than the depression of the 1930s. When that depression turned to an economic storm in 1931 and 1932, there were few methods for providing aid for those hardest hit. Some programs for ‘relief’ as it was called then, began under the New Deal, but even those were spotty. If a breadwinner lost a job, the family began to suffer the loss of income in very short order. There was no unemployment check, food stamp program, welfare, or SSI payment. There were no rent subsidy apartment programs, no FHA loan program, no food pantries, no chain of Goodwill stores.”
“Vast programs now exist to provide support for those in poverty, and they have been growing since the 1960s. Today, 45 million recipients use food stamps to help feed themselves and their families. Five million receive rent subsidies through HUD grants. Social Security old age, survivor, and disability payments are paid each month to nearly 60 million individuals. These did not exist in the 1930s. Try to imagine the visual impact of seeing these 110 million individuals on the streets, looking for food or a place to stay for the night. Support programs don’t mean that there’s no depression, they serve instead to mask the depth of the crisis we’re in, to hide it from us.”
From Business Day in South Africa. “A little tube of splendid colour could prove to be the hero when Statistics SA releases its retail sales data for the month of February. The ‘lipstick effect,’ coined by Estée Lauder chairman Leonard Lauder, is an unofficial indicator that in times of recession consumers will shy away from spending on big luxuries, such as new cars and designer dresses, and will splurge instead on less expensive indulgences, such as lipstick. Those who endorse this indicator trace it back to the Great Depression, when cosmetics sales jumped 25% in the US, despite the economy’s collapse.”
“At current prices, January’s retail data showed an 11.8% year-on-year rise in sales of pharmaceuticals, medical goods, cosmetics, and toiletries. This grouping of goods has shown steady year-on-year growth since August last year, never falling below 7.2%. Estée Lauder says it saw powerful growth in its make-up and luxury brands for its financial year ended-June 2015. Sales in emerging markets, excluding China, rose 26%, led by Turkey, Brazi,l and SA.”
“‘We saw strong growth in lipstick sales across our brands,’ says Estée Lauder.”
“Whether there is an actual economic correlation in SA between lipstick sales and the economy remains to be seen. A number of local economists were hesitant to confirm or deny the possibility of a link. ‘What I can say is that retail sales are unlikely to show a pick-up this year, regardless of how hot lipsticks sales are. My lips don’t lie,’ one economist says.”
The Tioga Tribune in North Dakota. “The news about jobs sounded pretty grim at the last Tioga City Commission meeting. Dennis Lindahl, economic development coordinator for the city, discussed how 30 rigs translates into only about 3,600 direct and indirect jobs in drilling for the entire oil patch. Meanwhile, rents continue to stay high, Lindahl said. This is hampering the growth of other businesses outside oil drilling and production, which can afford to pay workers much higher wages than a lot of other industries.”
“As that industry shrinks, there is a widening gap between wages and rents in Tioga. ‘We need the rents that are commensurate with a person’s wages,’ he told the commission.”
“Speaking after the meeting, Lindahl expressed some optimism about the economic outlook for the area. Opportunities are springing up in the wake of the slowdown that would not have arisen if oil prices were still at $100 a barrel. As an example of this, Lindahl pointed to 42 Grill, which will soon move to a new location with the new name 42 Bistro. The restaurant had been operating in a building that was thrown up in the early days of the boom and didn’t meet codes.”
“The owner found it difficult to afford the inflated prices of available commercial space. That all changed when the Bucking Buffalo abandoned its recently built space, and the company that manages it offered much more reasonable terms. Now a long-time Tioga establishment will continue to operate.”
“Recently, representatives of apartment developers asked the Tioga Commission to close down RV parks to help support tenancy rates at apartments, which have fallen considerably over the past year. Many expressed potentially dire financial situations as a result of their low occupancy rates. Lindahl said the area could see some foreclosures and boarded-up properties, but this is part of the process of a bubble coming to some normalcy. ‘The market has to figure itself out,’ he said.”
“While the collapse of rents and possibility of foreclosures looms, Lindahl said in discussions after the meeting this isn’t entirely a bad thing. While production has leveled out, it still hovers around 1 million barrels per day. Unemployment remains low. The demand for apartments is low among oil workers, but other businesses will find it easier to establish and grow if rents do fall to levels that meet area wages for more industries. ‘It’s what I call Bakken 2.0,’ Lindahl said.”
“This not only makes it easier for employers to reduce labor costs since employees can afford to live on less, it also means more affordable commercial space, such as the case for the 42 Grill. Lindahl said the new economic landscape will mean greater ‘local participation’ in the market. and possibly less out-of-state investment. This could pan out to a better quality of life for residents as businesses will be more invested in the communities they operate in. ‘It’s a great outlook,’ Lindahl said.”
‘Because a depression develops gradually, people don’t realize it is upon them for some time, even years. Hardships filter through the levels of society at different rates. Certain sectors and regions feel the effects almost immediately, while others take longer, or never feel them at all. There is usually very little use of the term ‘economic depression’ in the press, and there is no definition circulated among economists or politicians to make it a topic of discussion. At best, media may focus on symptoms during an economic storm’
I thought these three articles complemented each other and brought out some bigger points.
‘a depression develops gradually’
I had never thought about the lipstick thing until I heard about it on the radio a few months ago. Where I live, there is a 40% commercial vacancy rate, but they do a good job of hiding it.
‘There is usually very little use of the term ‘economic depression’ in the press’
Note how we see meetings, protests even about how expensive rents are. There are large numbers of homeless people in most cities. But no one ever says it’s a sign of economic recession. Rather, it’s painted as even part of the strength!
‘Meanwhile, rents continue to stay high, Lindahl said. This is hampering the growth of other businesses outside oil drilling and production, which can afford to pay workers much higher wages than a lot of other industries.’
‘As that industry shrinks, there is a widening gap between wages and rents in Tioga. ‘We need the rents that are commensurate with a person’s wages,’ he told the commission.’
See, the first thing that the city officials are trying to do in North Dakota is to take action to keep rents higher. And that’s exactly the wrong way to go. But it was their first, knee-jerk reaction to the oil bust. The rest of our government does the same thing. Banks might fail? Move heaven and Earth to keep them alive. Not only wrong, it’s self-defeating like trying to keep rents high..
If wealth is expressed as equity and this equity is a function of price then prices must be kept up else this wealth will take a hit.
This means that the price of rents must be kept up because rents act to support the prices, to justify the prices; If the rent/buy ratio gets out of whack then prices will get out of whack.
So it’s the schmuck who can’t afford to buy that support the rents, and these rents are what support the prices, and these prices are what keeps the value of equity intact - equity that translates into wealth.
If you can get the schmuck to commit to buying instead of remaining a renter then you will be able to support prices (and supporting prices supports wealth).
If you are an owner then this schmuck’s efforts (and large chunks if his income) will help support the value of what you own. If you can get the schmuck to up the price of what he commits himself to buy then so much the better for you, for you an owner.
I recall you were discussing imputed rent, that phantom economic activity that’s used in GDP calculations. I was considering that and wondered who they trying to fool.
My concern is nowadays, they see so many rigged numbers and wind up fooling themselves (not really a concern I suppose - reality exists independently of their perceptions, at a macro level at least).
What was Bernake’s big plan? Create a wealth effect with higher stock and house prices. Well stock and house prices are certainly high, where’s the wealth effect? Remember how Bernanke complained he couldn’t refinance his house? The media ran with that one. “Oh, credit is too tight!” Are you telling me a guy who can make $150,000 for a 15 minute speech even needs to refinance his house, much less doesn’t qualify? That’s just balderdash, but the media ate it up with a spoon. The media and government is pushing this rent “crisis” as a way to stampede people into buying houses. I can prove it:
‘Under The Microscope: Questioning Low-Income Housing Tax Credit’s Impact And Future’
‘With amenities galore and an aesthetically pleasing environment, it’s not surprising that Rosie Shields Manor is completely full – and has a waiting list. People like Miles are able to live there for around $500 a month. Beyond Housing executive director Chris Krehmeyer says the low rent wouldn’t be possible without the tax credit.’
‘Lamping said the fact that so many projects come before MHDC shows how lucrative the incentive could be. “The fact that there’s 90 projects that are trying to get this credit speaks to the financial advantage this credit brings to these projects,” Lamping said. “It’s a very profitable venture to go into.”
“While some families in suburban areas are recovering much quicker at a quicker rate, families that live in high-poverty areas, it’s taking a longer time to recover,” Chappelle-Nadal said. “And because families are doubling and tripling up in many cases, we’re trying to find avenues where we can help families start all over again. And part of that is to have a low-income tax program that give families a second chance.”
http://news.stlpublicradio.org/post/under-microscope-questioning-low-income-housing-tax-credits-impact-and-future
This LIHTC is being used to buy apartments, rehab them and jack up rents. But because it’s subsidized, it fly’s under the “affordable housing” thing when it’s exactly the opposite. Here’s the real clincher; the rent levels are set using incomes of all households. That means single family house owners are included. If you only counted the incomes of the renters, it would be much lower. This is how you end up with subsidized “affordable housing” projects eating up 40-50% of peoples income. And that isn’t considering the majority who are on the “waiting list”!
Do you think the government doesn’t know how this rent level is being manipulated? They wrote the darn thing! Big rich syndicates are fighting to get on this gravy train because they have wealthy partners who have incomes to be off-set by the tax credits.
See, the first thing that the city officials are trying to do in North Dakota is to take action to keep rents higher.
US government to buy wild blueberries to help prop up prices
By PATRICK WHITTLE April 14, 2016 4:32 pm
AP
PORTLAND, Maine (AP) — The U.S. Department of Agriculture will buy up to 30 million pounds of wild blueberries to help stabilize prices and supply in one of Maine’s signature industries.
The members of Maine’s congressional delegation told The Associated Press on Thursday that the agency will pay up to $13 million for the wild blueberries.
The bailout could help spell the end of low prices to consumers on wild blueberries, which are harvested commercially in Maine and Canada.
http://wtop.com/food/2016/04/apnewsbreak-usda-to-buy-wild-blueberries-amid-price-drop/
Grrr!
Ben Jones: Note how we see meetings, protests even about how expensive rents are. There are large numbers of homeless people in most cities. But no one ever says it’s a sign of economic recession. Rather, it’s painted as even part of the strength!
Depends on who’s paying for the article.
Sellers believe low prices for their product are disastrous, a weakness. Buyers see it as beneficial.
The less populated areas in any state are constantly in a depression, and this has been so since the 1980s. Jobs are for the low skilled mostly. There are some people who telecommute and do live out in the boonies and still make as much money as the urban people. I know some. For the most part, people from the country who never had higher education will stay in their economic brackets. The city is the place of opportunity.
Some people have been saying doom will happen and the riots will take out everyone. Well guess what? The same riots will take out the doctors that will bother to go out in the country to set your broken elbow and you will get gangrene and die.
I don’t buy the doom and gloomers saying you have to move all your gold overseas, or the doom and gloomers saying you have to get out of the city.
A depression in a large city and ideas of how to overcome it. Well in Orange County, heavily urban but very park like in my area. A single family home community. My boss has solar energy and several others do around here. It is a big deal, advertised. Plus people want to think of themselves as progressive and drive prious, cmax, volt, or Tesla cars. I don’t mind them as they are being less dependent. I don’t think lots are big enough to collect rainwater and it does not rain often enough here. There are some nice creeks in the area such as Aliso Creek that also are mostly dry. But nearby residents who are enterprising might every now and then sneak down to the creek in darkness for a few Pauls of water after a storm. People with space can store canned foods and dry foods.
I pretty much like this area and would consider buying one of those auction houses that pop up for auction at a big discount. Some of these are in my own guideline of 1/6 my net worth, but I expect to put another $100k in fixes and improvements as these “for auction” types usually are mentioned of “as is.”
Uh oh, sounds like Bill is going full Cali commie. Soon to be smoking dope, turning in his guns and applying for a realtor license.
It’s one thing to be a socialist or commie. It’s another thing to be a statist. That I’m not. Smoking dope is not statist. Owning firearms is not statist.
I rarely met a person who was born and raised in a happy household in California by wonderful parents who hates California. I guess I can say some trash about the state where you others grew up. I think most of you negatives never visited southern Orange County, La Jolla, Santa Monica, Redondo Beach, Santa Barbara, Monterey, San Rafael, Walnut Creek, San Anselmo, Big Sur.
Instead you read about meth labs in Victorville, criminal gangs in Fresno, and so on.
Guess I have to get my rear end on my bike, should head on from Irvine to Newport Beach before it gets too hot. Dedicated bike path, great people on the path, what’s not to like?
‘I rarely met a person who was born and raised in a happy household in California by wonderful parents’
‘who hates California’
That reminds me of the bathroom writing in Austin years ago; “I hate this part of California”.
‘I guess I can say some trash about the state where you others grew up’
I don’t really like to go back to Texas because all the Yankees and Californians have ruined it. The developers won. Giant mega-metropolises growing until they touch each other, garage-majals stuck on tiny lots costing a fortune. In the 90’s you could buy a decent little house in Austin under 100k.
Just a little good natured ribbing. I’ve visited 7 of those 10 places plenty of times and been to 3 of them in the last 8 months. Lived on the west side of LA and in OC.
It works temporarily if you are single and make a decent income and can somehow avoid traffic too much. But they will tax you into oblivion to support the social welfare state. It is one of the most nanny statist places on earth. The fascist left will regulate your feelings soon.
Oh, and it will soon collapse with the tech fraud bubble.
I can imagine those with California municipal bonds, gold, and Roth 401ks/IRAs couldn’t care less about living in the highest taxed state. I was thinking retirement in e states where all the old people go would be a good idea because the taxes are low. However young people are good to have around. And they are where the high taxes and best paying jobs are. They make you want to stop being grumpy. In 30 months I will have the ability to take distributions from my IRAs and those are all Roths. My tax rate is going to go way down at that point. Why leave one of the top ten safe areas in California if you pay low taxes?
Interesting point, Bill—and an interesting strategy: convert all of your pre-tax dollars to post-tax prior to moving to a high-tax state. Of course, with significant pre-tax investments, one would pay a steep tax hit (in terms of higher federal brackets) in order to do so, or it would take many years at the lower-bracket cut-offs.
Thanks. 2010 was the big conversion tax break. The S&P 500 finished around 1300, which is about 800 points lower than now. It was a slam dunk on paying the taxes then, even at the federal level.
“top ten safe areas”
In California they include Aliso Viejo, Rancho Santa Margarita, Laguna Hills, and Laguna Niguel.
Rancho Santa Margarita tops that list in OC. And its’ 37th in the national top 100 safest communities.
Bring on urban riots. We are armed here.
And what if your net worth were $15 million? Would you still pay $2.5 for a $20k shack in CA?
Most likely. In that case it would be Big Sur with ocean view and a chopper pad.
Housing Analyst, you are limited to one new internet handle per month.
Irrelevant
Some of these are in my own guideline of 1/6 my net worth
Why is 1/6th the magic number, Bill? My guideline is to buy what my family and I need, at a historically-reasonable price.
That vague gyration of a standard makes as much sense as 1/6 of net worth.
‘RBC Capital Markets Tax Credit Equity Group announced the closing of a $263.2 million low-income housing tax credit (LIHTC) fund. It is the firm’s largest LIHTC fund to date.’
‘RBC Tax Credit Equity National Fund—23 is investing in 25 family and senior apartment communities with 3,257 affordable housing units. The properties are in 15 states.’
‘Thirteen institutional investors, including four new investor clients, are participating in the fund. RBC Capital Markets Tax Credit Equity Group has raised $6.8 billion of equity for affordable multifamily and senior housing, historic, and New Markets Tax Credit developments, and has more than 830 assets and nearly 70,000 housing units under administration.’
http://www.housingfinance.com/finance/rbc-closes-263-million-lihtc-fund_o
‘Hunt Mortgage Group recently provided a $5 million Fannie Mae loan to refinance a 194-unit multifamily community in Dallas. The borrower, St. James Redevelopment Ltd., acquired Casa Place Apartments in 2004 and has invested significant funding to extensively renovate the property.’
“The borrower is a repeat Hunt Mortgage Group and Fannie Mae customer,” said Steven Cox, managing director at Hunt Mortgage Group, in prepared remarks. “Casa Place is performing well and in excellent condition due to the recently completely renovation.”
https://www.multihousingnews.com/post/hunt-mortgage-group-provides-5m-refinance-loan-for-casa-place-apartments-in-dallas/
‘Luxury apartments in Rockville begin leasing’
‘The 48-unit luxury apartment building at 1628 East Jefferson St. in Rockville is part of the mixed-use Congressional Plaza shopping center, which already includes a 147-unit apartment house known as the Crest.’
‘The Stories has hired a former concierge for luxury hotels to be the “lifestyle ambassador” to coordinate services, amenities and activities for the multi-generational residents. The complex includes a fitness center, a clubroom with a catering kitchen, office space and outdoor gardens with patios and grill stations. Residents will also have access to a swimming pool, theater room and guest suite at the Crest.’
‘The one-, two- and three-bedroom apartments, which have from 746 to 1,429 square feet, rent from $2,500 and up.’
https://www.washingtonpost.com/news/where-we-live/wp/2016/04/14/luxury-apartments-in-rockville-begin-leasing/
Why not build something less fancy and more affordable? Oh, the land prices have skyrocketed, that’s right.
Rockville is not bad. I was in Gaitherburg on business a couple of weeks ago. It reminded me of Columbia. Havent been in Maryland for about six or seven years. It was kind of an eerie feeling as if I have never left.
I don’t remember how I got to that ratio 1/6. But if I had five times that amount in the Vanguard 500 index fund, the average annual gain and dividends would provide me with an amount such that I would not need a job to maintain the house, eat, buy clothes, buy a new economy car every ten years, and go on vacations.
I think I had the idea in Phoenix based on a net worth of $1,200,000. Buy a house at $200,000 and leave $1,000,000 in the 500 index fund. Some years the gain would be negative and some years the gain would be 20%. Since August 31 1976 the average annual gain was 10.81% and that is through various crises in the economy and foreign policy.
The house value could go down substantially. I watched what happened to my parents’ house. A “mansion” by most standards today. Would be around $2,000,000, maybe much more if in my current neighborhood but I sold it for $75,000 in 2001. So that is another reason why I would not want to put a substantial part of my net worth in real estate. You cannot depend on the stock market. Nor real estate, but you can dollar cost average into the stock market. Real estate is a far bigger gamble than many stock index funds, plus I took a 20% loss on my house in 1996 while my net worth at that time was $50,000. I owed far more than my net worth.
In California real estate is a religion. But the truth is that you have to be in certain locations to take advantage of it. Not the high desert, not the Central Valley, not most of the remote parts of California. Not in one company towns and there are a few like that in California.
“One of the easiest ways to spot the failure to thrive is in strip malls and plaza shopping centers. It’s easy to find empty commercial property now. Depending on the surrounding area, vacancy rates of 10-40% are common. Some plazas are completely closed except for a lingering restaurant or deep discount store.”
The above describes Stockton, Modesto, Merced, Fresno and Bakersfield… all in California’s drought-stricken and over-leveraged central valley.
“Look in Amity Schlaes’ book The Forgotten Man to see that unemployment stood between 11% and 25% every year from 1932 to 1940.”
Heck, that’s the central valley right now… on the good side of town!
What is the difference today? Are there more opportunities to hide the numbers? 11%-25%- does anyone know where the data came from and how that compares to how unemployment is “calculated” now? I have read enough articles on unemployment figures to understand that people fall in and out of the the label, and like so many I question what is being presented.
The housing collapse seems so innocent, in that it was pretty easy to point to the sources once anyone was forced to point. In this next wave it seems it will be a different combination, a greater number of sources and so more opportunities to try to point elsewhere. I think we are seeing that already, the Central Banks, the financial institutions, governments, smaller fish on down the line. Ultimately most want someone else to experience any pain changes can inflict.
Unemployment in double digits has been like that in the Central Valley for at least four decades. It’s a seasonal farm economy still. There are bankers, doctors, university professors, but their numbers don’t do anything to outdo the farm economy. To lower the unemployment rate the economy has to change, and it won’t. The land is too valuable for food for the world.
My dad told me that there should not be large towns in the valley. That they should move into the Sierra foothills. It would be better for everyone involved. More land for growing. And people would be above the fog belt, which in some years is such that you won’t see sunshine for several weeks. The daytime high temperatures are generally warmer at higher elevations out of the fog.
UC Merced is an attempt to change the structure of the valley and incubate different industries. But the same attempt was made with UC Davis. It did not make a big difference. The main industry in Sacremento is tyrants controlling the state.
The above describes every small town in America.
and big town. coming to cities near you soon.
The more interference in this, the longer and deeper this mess will proceed.
Labor Force Participation Rate Falls To 38 Year Low; Joblessness At Record High
http://data.bls.gov/timeseries/LNS11300000
“Labor Force Participation Rate Falls To 38 Year Low; Joblessness At Record High”
Peanuts! Popcorn! Ice Cold Beer Heah! Getcha Fiction!
We got Fiction Heah! Get it while it’s hot!
By Peter Schroeder - 01/12/16 09:19 PM EST
President Obama gave a full-throated defense of his economic record in his State of the Union address, accusing his critics of “peddling fiction.”
“Anyone claiming that America’s economy is in decline is peddling fiction.”
If you change the “From” to 1980, the labor participation rate looks even more dramatic! Dramatically LOW!
How far would student loan borrowers go to erase their debt
February 17, 2016 6:26 PM
Students were asked how far they would go to pay off their student loan debt. The answers are surprising.
57.89 percent would give up social media for life.
57.11 percent would give up coffee for life.
56.73 percent would take a punch from Mike Tyson.
56.14 percent would abstain from alcohol and drug use for life.
40.35 percent would take one year off of their life expectancy.
35.67 percent would give up texting for life.
28.07 percent would name their first born daughter Sallie Mae.
20.47 percent would wear the same outfit, every day, for life.
6.47 percent would cut off their pinky finger.
4.68 percent would move to Syria for life.
4.09 percent would contract a random sexually transmitted disease (STD) for life.
http://www.greenwichtime.com/ - 244k -
The millennials are not going to pay-off their debts or fund previous generation’s retirement liabilities.
A system of debt financed grossly inflated and rigged prices destroys an economy.
Remember….. Nothing accelerates the economy and creates jobs like falling prices to dramatically lower and more affordable levels. Nothing.
Boston Metro Housing Housing Prices Crater 11% YOY
http://www.zillow.com/ma/home-values/
The FSA can stay plenty clear of my 401K. GoFund yer own!
Sorry, but the DNC has a mandate from the FSA to redistribute the wealth. Those votes-for-benefits patronage schemes don’t fund themselves, you know. So don’t be greedy…this is all about “fairness.”
A recent study found that Millennials who actually hold a full time job do not espouse “wealth redistribution” when it comes to paying taxes. They become much less liberal when it comes to “paying their fair share”.
Vote socialist and screw up the country to get off the hook
Better to screw the country so I can get off the hook than screw the country so the banks can get off the hook.
Screwing is going to happen.
Why can’t the Fed simply buy up the bad student loans and bury them on its balance sheet, the same way it did with the toxic mortgage debt?
Still better, why should any securitized debt ever need to be repaid going forward, given the Fed’s unlimited capacity to extinguish bad debt? This saves the borrower from suffering to repay debt, and doesn’t cost anything to the taxpayer if executed through expansion of the Fed’s electronic balance sheet.
and doesn’t cost anything to the taxpayer if executed through expansion of the Fed’s electronic balance sheet.
Doesn’t the taxpayer WIN, since the assets that are bought up generate some yield, and that money ends up being returned to the Treasury as a surplus—after the Fed pays itself handily of course.
(and yes, I’m being facetious, of course)
Best. Scam. Ever. Invented.
100% of them originally said they would actually pay back their student debt.
We have it in writing. So guess what?….it really happened!
Millennials LOLZ.
There’s another option. Vote straight “D” and those student debts will be transferred to the taxpayers.
400,000 will be doing this yr. just in time for eleccion.
Obama already did it for them. Because “It’s not right that people with disabilities should have to repay their student loans.” So by that rationale anyone who is a dependency voter shouldn’t have to repay their debts or bills either. Forward, mighty FSA! Our glorious permanent Democrat Supermajority awaits!
Cloward-Piven is real.
The babies just come with the scenery.
2.03 percent would actually find a job and go to work and budget to pay it off in 4 years or less.
Let’s wrap this troupe in a diaper, give ‘em a bottle.
“56.73 percent would take a punch from Mike Tyson.”
Ouch!
Ugh my generation annoys me to no end with the student debt debacle. I chose to go to my local university, work a part time job, commute, and decided on a 4 yr degree that would (hopefully) land me a job, engineering. Well I graduated in 2011 and certainly got a job, no loan debt, and now all I hear about is how my brethren should be forgiven of their stupid financial decisions? UGHHHHH, as if community college wasn’t available to them to waste their intellect getting a criminal justice “degree”. Yep, gotta live the “experience”. My “experience” came out when I was being paid to travel to cities on ship projects after college. 4 years of sacrifice paid off, but hey, who knew that would happen?
Comment by rms
2016-04-16 03:55:20
No shear walls in hurricane country?
You were looking at stilts. The floor starts 14ft above the ground.
http://picpaste.com/image1.JPG
“A Drone Flies Through A Rotting, Abandoned $17.5 Million Vancouver Mansion; This Is What It Saw”
http://www.zerohedge.com/news/2016-04-15/drone-flies-through-rotting-abandoned-175-million-vancouver-mansion-what-it-saw
Reminiscent of 1950’s Detroit. San Francisco, this is your future.
Yep, any instant everybody is going to abandon the bay area for flyoverland.
That is the cycle and its a reality. Get over it and get on with your life.
Your reality doesn’t extend beyond the walls of your command center in mom’s basement in Cleveland.
Don’t take it personal my friend. Don’t take it personal.
Mom hates it when we argue. So does redmondJP.
I’m Redmond. I run a realtor funded blog.
Your trolling is really getting old, HA. The lies too.
You’ll find many lies on my realtor funded blog.
Actually the domestic population gets replaced with darker skin tones who are willing to live dorm style so the population flight is masked for a while. For those paying attention, it’s already happening. The bay area will become a broken hell hole and even the mansions won’t be worth anything. It’s the wonderful process of land monopolization.
Minorities get to live downtown for less than $50 sq ft.
Like HA
Control your contempt VA_Donk.
“37% Of The Governments Total Reported Assets Are Student Loans”
http://www.zerohedge.com/news/2016-02-26/us-government-releases-2015-financial-statements-keeps-getting-worse
“This sucker could go down” — George W. Bush
“37% Of The Governments Total Reported Assets Are Student Loans”
Great, that means 37% of the Governments assets are Bernie Sanders supporters of which 40.35 percent would take one year off of their life and 28.07 percent would name their first born daughter Sallie Mae to have their student loan debt paid off for them.
How obtuse to refer to a liability as an “asset”.
That’s what they call it.
loans receivable
An asset account in a bank’s general ledger that indicates the amounts owed by borrowers to the bank as of a given date.
http://www.accountingcoach.com/terms/L/loans-receivable - 36k -
Countries with vast holdings of US debt have Congress by the shorties. If they dump that debt, Yellen will have to jack up interest rates to attract new buyers.
http://www.zerohedge.com/news/2016-04-16/saudi-arabia-threatens-us-it-will-liquidate-its-treasury-holdings-if-congress-passes
Thanks for posting this, it’s an excellent piece. If you didn’t, I was going to. This whole situation stinks like 10 day old fish, and a good dose of 9/11 truth is what’s needed, pow, right in the kisser.
As noted in the article, it is unusual that the curtain is finally being pulled back from this disgusting farce, even by the MSM via 60 Minutes, no less. Mideast war and arms sales, there’s a bubble that desperately needs a process of coming to some normalcy, to use Ben’s post title.
Let ‘em dump it, and break off diplomatic relations. And bring the Bush crime family to justice.
Nothing irregular here….
http://www.bloomberg.com/news/articles/2016-01-22/u-s-is-hiding-treasury-bond-data-that-s-suddenly-become-crucial
A 9/11 widow blasts “Obama of Arabia” for failing to “follow the money” and hold the Saudis accountable for their role in the killing of 3,000 Americans.
http://www.huffingtonpost.com/kristen-breitweiser/obama-of-arabia_b_9557136.html
Seems like that should have been the Shrub’s job, happening on the beginning of his watch as it did… but is still needs doing. I wonder for how long.
Drone strike a few dozen yachts and they’ll snap back into line.
This is nothing more than shaking down rich sheiks using the fraudulent Amerikkan court systems. I am glad Saudis are fighting back.
…or placing blame for funding the whackjobs that slaughtered 3000 of our people. Not that anything will come of it, but the truth needs to be acknowledged.
These people are our enemies, no matter how many George II played kissyface with.
We were told that it was Al-Qaida who was behind 9/11. AQ is not funded by any group, its more like an organic collection of misfits who may have been directly or indirectly benefited from some rich Sheiks’ generosity. The bigger questions should be how did AQ started and who fostered it along the way and what actions from our own government pushed them to retaliate against us. I don’t think most Amerikkans have the intellectual capacity or honesty to examine those things. Instead we look for the scary looking guy with full beard. Yep, that’ll do it.
If you don’t want them to kill you, don’t bomb their people.
“We were told that it was Al-Qaida who was behind 9/11″
Did anyone ever hear of A-CIA-Duh before 9/11? I personally don’t recall, but maybe I just wasn’t paying attention. Goodness, I can barely keep track of all these Middle Eastern factions, anymore, but for the record, I seem to recall that “I was told” by the lying press that Osama Bin Laden was behind 9/11. And that the Taliban was sheltering him, hence the reason for going into Afghanistan. And then there was Saddam Hussein in Iraq, hence the reason for going into Iraq.
Also, for the record, the US doesn’t bomb any countries in the Saudi coalition, that I know of. Just their enemies. You know, like Iraq, Syria, Libya, etc. And you know, it’s almost like the US is the Saudi bitch in this sort of thing, but whatever the case, let’s see those 28 redacted pages. Because I sure am curious why Saudis and members of the Bin Laden family were the ONLY ones allowed to fly out of the US after 9/11.
‘According to the Washington Post, the Carlyle Group met at the Ritz Carlton Hotel in NYC one day before 9/11. In attendance at this meeting were former president George H. W. Bush and Shafiq bin Laden, the brother of Osama: ‘The Carlyle Group is a large private-equity investment firm, closely associated with officials of the Bush and Reagan administrations, and has considerable ties to Saudi oil money, including ties to the bin Laden family.’
http://www.globalresearch.ca/george-w-bush-and-the-bin-laden-family-meet-in-new-york-city-one-day-before-911/5332870
ED ZACHARY!
“In attendance at this meeting were former president George H. W. Bush and Shafiq bin Laden, the brother of Osama:”
But, not all terrorist muslim’s brothers are terrorists!
NPR covered OBL’s 1996 declaration of war: http://www.pbs.org/newshour/updates/military-july-dec96-fatwa_1996/
I know this stuff is so boring for the TL;DR crowd.
palmetto: Did anyone ever hear of A-CIA-Duh before 9/11?
Bin Laden was known to us pre-9/11. Clinton launched cruise missiles at him in 1998 was an attempt to get OBL. It was also characterized as an attack on a pharmaceutical factory:
http://www.cnn.com/US/9808/20/us.strikes.02/
Ramzi Yousef’s uncle is Khalid Sheikh Mohammad: http://www.cnn.com/2013/11/05/us/1993-world-trade-center-bombing-fast-facts/
Regarding the first mention in the US press about the name Al Qaeda - that would require some research.
I do remember Islamic terror and Bin Laden being presented in the mid 90s as some sort of major new threat. My first instinct was to think that this was the government and the press needing some new bogeyman now that the Cold War was over. Turns out though that he was indeed a tremendously nasty character. They did want a new bogeyman, for ratings and leading the people, but they actually got one in reality.
And Bin Laden was mentioned WAY back in the 1980s by Ollie North in congressional hearings - something about why he had spent money on a security system or something - in order to protect himself from people like Bin Laden - I think North mentioned that Bin Laden was one of the only people that he was really afraid of.
Nothing to see, nothing hide, just keep moving, folks…and don’t ask any inconvenient questions of your “representatives.”
http://www.nytimes.com/2016/04/16/world/middleeast/saudi-arabia-warns-ofeconomic-fallout-if-congress-passes-9-11-bill.html?_r=0
Actually, it seems the issue finally has the attention of Congress, so I’ll be front and center on Monday, encouraging my Senators to the pass the bill. I suspect that Nelson will do, Rubio maybe not so much.
Something must have happened for this to be an issue now. A year ago, not so much. I think I know why this is gaining traction now. It seems some members of Congress are doing a sort of CYA.
Even the MSM is starting to admit that national insolvency lies ahead. With the Fed intent on printing away all government and corporate debt, you might want to read the book “When Money Dies” for a foretaste of what’s coming.
http://time.com/4293549/the-united-states-of-insolvency/?xid=homepage&pcd=hp-magmod
Good stuff!
How the Fed saved Main Street.
http://www.theburningplatform.com/2016/04/15/how-the-fed-saved-main-street/
Debt serfs will be the next big dependency bloc to join the FSA/DNC co-dependency alliance.
http://wolfstreet.com/2016/04/15/revolt-of-the-debt-slaves-millennials-gen-xers-consumer-spending/
Top 1% pay nearly half of federal income taxes
This is why government has no interest in making a more equitable society as long as the money keeps on rolling in.
Think about it, purely from tax collection perspective, what would the government rather have under current progressive tax rate? One person making 1 million salary, 10 making 100,00 or 20 making 50,000?
‘You know, Paul, Reagan proved that deficits don’t matter. We won the mid-term elections, this is our due.’
Remarks on Paul O’Neill (January 9, 2004)
https://en.wikiquote.org/wiki/Dick_Cheney
‘The aide said that guys like me were “in what we call the reality-based community,” which he defined as people who “believe that solutions emerge from your judicious study of discernible reality.” I nodded and murmured something about enlightenment principles and empiricism. He cut me off. “That’s not the way the world really works anymore.” He continued “We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality—judiciously, as you will—we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors … and you, all of you, will be left to just study what we do.”
Suskind, Ron (2004-10-17). Faith, Certainty and the Presidency of George W. Bush. The New York Times Magazine.
https://en.wikiquote.org/wiki/Karl_Rove
All this redistributing wealth stuff is theater. I’m sending a big check to the government today. How long will it fuel a jet some general is flying on this morning? An hour? They don’t need our money, they can just print it. They do need us engaged in the theater.
They don’t need our money, they can just print it. They do need us engaged in the theater.
I agree it’s a theater and they can just print. Last 8 years have also proven that the more they print, more it goes to the 1%ers and results in higher tax collections from the government. This is why there will be NO helicopter money for the masses.
From the first link:
‘Oil remains fundamentally a government business. While many regions of the world offer great oil opportunities, the Middle East with two thirds of the world’s oil and the lowest cost, is still where the prize ultimately lies, even though companies are anxious for greater access there, progress continues to be slow.’
Speech delivered at the London Institute of Petroleum, 1999
‘G20 worried by ‘modest’ global growth, commodities weakness’
‘Financial leaders from the Group of 20 nations said on Friday they were heartened by a recent recovery in financial markets, but warned that global growth was “modest and uneven” and threatened by weakness in commodities-based economies.’
http://www.reuters.com/article/us-imf-g-idUSKCN0XB2O3
Notice how much attention is being given to collusion to make oil prices higher. These eggheads talk a lot about jobs, but what really bothers them is we might have cheap gasoline or steel. It’s completely ass-backward.
‘Oil remains fundamentally a government business’
‘Five of the six wealthiest counties in the United States border the District of Columbia, which shows that the federal government is doing quite well.’
And if oil is a government business, war is a monopoly. How many of the high paying jobs in these 5 counties are tied to the military industrial complex? And when you can justify military spending to protect oil fields, double plus good!
Think about this:
‘Five of the six wealthiest counties in the United States border the District of Columbia’
CA = POOR
MD = RICH
10 richest neighborhoods in US
Robert Frank
Wednesday, 26 Feb 2014 | 1:13 PM ET
CNBC.com
Sorry, New York and California. The state with the richest neighborhoods is little ole’ Maryland.
A new ranking of the 100 richest neighborhoods in America finds that three of the top five are in Maryland, all of them close to Washington, D.C.
This follows another recent study that found that Maryland also has the highest population of millionaires per capita than any other state, suggesting that the D.C.-area is becoming one of the nation’s leading centers of wealth.
…
“Top 1% pay nearly half of federal income taxes”
They also own nearly half of everything in the country.
This is why when you find an area you really like, it generally gets found out by others and gentrifies. I don’t know what kind of jobs are here, but sure as heck, they are not probably meant to support these prices:
http://www.citizen-times.com/story/news/2016/04/11/asheville-rents-most-expensive-and-climbing-fastest-nc-housing-sector-affordable-housing-home-ownership/82509140/
Following the herd results in MT Pockets.
What pretext will the Fed use to impose NIRP?
http://www.zerohedge.com/news/2016-04-16/first-denmark-then-belgium-now-netherlands-negative-mortgage-rates-spread-across-eur
???!?
We’ve talked about this idea before—but paying customers to borrow is just plain crazy-pills!! It doesn’t seem like it makes any sense at all…
When all asset classes are as risky as they are now, accepting more assets of any kind carries a risk premium.
Losing a home in a foreclosure or short sale IS bankruptcy.
And usually omitted… her legs are “welded-shut.”
Cal cuts construction jobs
No more unicorn corals required
The Financial Times of London
Global Economy
G20 top nations warn against reliance on low interest rates
Finance chiefs call for broader solution to balanced growth in global economy
…
Growing up is hard to do in a FSA world.
$100/mo from the age of 24 will grow to 2.1Million invested in a Growth MF by age 65.
But how much will $2.1M buy in 41 years??
Far more than it does today.
LOL—boy, do I hope you are right!
But the reality is that the Federal Reserve has a proven, unbroken record of steadily REDUCING the buying power of the dollar over their 102yr history. I expect them to continue to succeed in their intentional debasement of the currency.
They have a proven record of collapsing demand for all items.
US Housing Demand Plummets To 20 Year Low
http://2.bp.blogspot.com/-yX5B5Hn95bQ/VYC3Wr6ihBI/AAAAAAAAj7I/alOslZa-cK8/s1600/MBAJune172015.PNG
I haven’t noted any significant change in demand for potatoes or eggs when I’m at the grocery store—but there certainly has been a significant change in the prices over the past century:
http://inflationdata.com/articles/2013/03/21/food-price-inflation-1913/
The Fed apparently has some rather unusual definition of “price stability”, if they believe that they have achieved it.
2% inflation per year = a doubling of prices every 36 years.
Precisely, PB—but the data on the link that I sent suggests that most essentials have gone up WAY faster than that.
Doubling every 36yrs would suggest almost 3 doublings since the Federal Reserve was created, and thus prices should be about 800% of the 1913 prices. A few items (eggs, butter, rice) have tracked roughly that rate. But most things have gone up way faster.
That’s called price fixing and rigging but it’s not inflation.
The State Department wants to expedite the settlement of Syrian refugees in the US.
http://thehill.com/policy/defense/276441-state-seeks-to-pick-up-pace-on-bringing-syrian-refugees-to-us
I would rather expedite the settlement of the State Department into Syria.
If you need a co-signer for a Mortgage it’s not affordable nor can you afford it.
Cut the apron strings take off the training wheels and pay cash.
Girlfriend of British lecturer admits murdering him in China following an ‘emotional dispute’ amid reports his body was dismembered
Besides the lecturer’s likely multiple other girlfriends, real estate may have been involved. A friend of Bower, Richard Charles, told the South China Morning Post he believed it could be related to a recent property sale for which Bower was due to receive HK$9 million ($1.2 million). Mr. Charles described police on both sides of the border as ’shoddy and shambolic’ in their handling of the case so far. Mr Charles suggested the death could have been over a ‘complicated’ deal, which was reportedly over a property in an industrial district in Shenzhen. He said: ‘I do know that after buying at the bottom of the property market a good few years ago, he was expecting to be paid somewhere in the region of £821,000.’
Never tell a girlfriend how much net worth you have. If you live a lavish lifestyle, be sure to live it well below your means. Drive a BMW I8? Your net worth better be 100 times that but your girlfriend does not have to know it.
Better to have a girlfriend who has her own money.
Once again, Blue hits it out of the park with some practical simplicity.
Remember when rigged elections only happened in banana republics? Oh, right….
https://ca.news.yahoo.com/ted-cruz-poised-win-wyoming-republican-presidential-primary-180512831.html
Oh let the man have his delegate. He’ll get trampled to death soon enough.
‘This Week in Car Buying: A buyer’s market looms’
‘A new report from Moody’s Investors indicates that more than 70 percent of subprime car loans that occurred last year were originated by small lenders, the opposite of 2010 when that share was held by just two of the largest subprime lenders, Santander Consumer USA and AmeriCredit. “With the more recent transactions, the cumulative losses have been getting higher each year — it’s indicative that…performance has been weakening,” Moody senior analyst Peter McNally told the Wall Street Journal.’
http://www.kbb.com/car-news/all-the-latest/this-week-in-car-buying-a-buyers-market-looms/2100000564/
Cars are made so well these days it’s a wonder how Ford, which did not take handouts from the 2008 crash, survived. In my neighborhood, though you see lots of new economy cars, you see some new yuppie scum cars too. I think what keeps my neighbors going for a new car every four or five years is their long distance commutes. For me, like I mentioned a couple of weeks ago, my commute is 8 miles. It’s within 200 miles of 100,000 and eight years old. I have a lot of pride in keeping that car going. My sister’s is the same make, model, and year. Hers is running well too. Her mileage is about like mine.
Use synthetic oil and pump the trans more often than the manual says= long life
And don’t let your blinker fluid run low Va_Donk.
“Eight years old…” Oops. It is 13 years.
My HS sophomore son wanted a first car, small p/u truck actually. To avoid the high insurance premiums it needed to be a cash purchase, no collision policy, liability only, which also means no 4×4 or v6 engine.
Enter a 2001 Toyota Tacoma (ext cab) 4×2 with a 2.4-liter engine, which has a timing chain, no belt. Clean, rust free, and it came with a set of spare OEM wheels and studded snow tires. Okay, now take a seat or hold on to something… ODO = 193,000 for $5,500 cash. Insanity?
Never let them “flush” your transmission. Just change the fluid and filter.
And ALWAYS use the tranny fluid called for in the owners manual. Don’t let the yahoo at the tranny shop or 30 minute quick lube talk you into anything else. If you gotta go to the dealer and get it, then do so.
If you want to be on a first name basis with the tranny shop, then by all means go ahead and put a quart or two of the old Dexron or “type F” in it…..
Copy that.
“If you want to be on a first name basis with the tranny shop, then by all means go ahead and put a quart or two of the old Dexron or “type F” in it…..”
No, I’m asking how much the repairs are?
And I’m asking how much you got?
Look I don’t have time to play around so how much is it?
All of it boy.
I’m from out of town - YouTube
http://www.youtube.com/watch?v=tXpx21Uf7hs - 242k -
Have to disagree with you on the tranny fluid - I’ve been running the cheapest generic Dextron III in my 2001 Honda Odyssey for 60K miles now, with Lubegard black friction modifier, and it is holding up far better than the $9/quart Honda fluid that they put in the third replacement transmission that was installed shortly before I bought the van. Using the factory fluid didn’t help keep the first two transmissions from failing, that’s for sure.
I wasn’t intending on leaving the Dex III in there - I was just going to do multiple drain & fills with it, to clean out the old fluid (didn’t want to use $9/quart fluid for that). But then I added some Lubegard and it’s been great so far. Fluid is still clean, pink, with normal odor, after 60K miles and the factory fluid was really dark after 50K.
YMMV
A man walks into a bar with an alligator on a leash and asks the bartender… Do you serve Realtors here?
The bartender replies…. No, a Realtor sold me a house in 2005, said I had better buy now or I would be priced out forever and told my wife she had done all the research.
The man says… Oh, I see. Well do you serve alligators here?
The bartender replies…. Sure, I have no problem with alligators.
The man says… OK, I’ll have a beer and give me an alligator for my alligator.
http://www.youtube.com/watch?v=JwTzIukSUkY - 186k - Cached - Similar pages
3 days ago
A Cuban, a Canadian, and a Goldman Sachs puppet walk into a bar. Bartender says, “What’ll it be, Senator Cruz?”
A guy goes into visit the doctor. The doc says he needs a sperm specimen for tests.
They take him to a nice room where he watches a porno on the big screen, while a good looking nurse assists him, then collects the sample and takes it to the lab.
As he is walking out of the office, they pass an open door. Inside, a dozen guys are furiously wacking it, while trying to hold dog-eared old copies of “Playboy”.
The guy asks “WTF?”
Nurse says: “They belong to an HMO/PPO…..”
Washington Post article from April 15th.
An excerpt:
I was in the house with an agent and two hours after that I made an offer. My offer was accepted by 5 p.m. that day after the home had been shown 17 times.”
What’s different about Sellars’s experience is that she opted for an on-demand agent service that doesn’t charge commissions. She paid $25 for email alerts so she could find a property, $50 for the property showing, $100 for an agent to present her offer and $800 for a transaction coordinator. SoloPro will give her a rebate of 3 percent of the purchase price — the equivalent of a typical buyer’s agent commission — at her closing, which she estimates to be about $5,700.
A number of alternative real estate broker models are included in the article. Maybe a more palatable option with realtors. Living in a non disclosure state without any signs of clearer thinking as regards the industry that is real estate leeches, it’s a glimmer of “better”.
The following is what I copied as the article link but it looks to be a long address. If interested and it doesn’t work it is easy to find on WP
search.
https://www.washingtonpost.com/realestate/commissions-of-6-percent-for-home-sales-are-the-norm-but-that-is-changing/2016/04/13/91bb758c-fb55-11e5-886f-a037dba38301_story.html?hpid=hp_hp-cards_hp-card-realestate%3Ahomepage%2Fcard
SoloPro will give her a rebate of 3 percent of the purchase price — the equivalent of a typical buyer’s agent commission — at her closing, which she estimates to be about $5,700.
The problem is that the buyer’s agent’s incentives are aligned with the seller, not the buyer, in that the buyer’s agent receives more money the higher the price of the house. So there’s no one representing the buyer who shares his incentives, namely, a lower price. He’s got two salespeople working against him instead of just one. And the one (his agent), if he’s not informed, is purely a fifth column.
The conflict of interest in this system seems at best fraudulent, at worst, criminal.
“Something has to give” in San Francisco’s housing bubble.
http://www.businessinsider.com/san-francisco-house-prices-slowdown-2016-4
Right. The tech companies, instead of moving out of California, have been moving down to L.A., San Diego, and O.C. L.A. Mainly. They have this “Silicon Beach” region. The housing costs are much lower than Silicon Valley and the hipsters can be convinced they will be surfer Gods within a week.
Did I mention I love my new corner office in Irvine? Second floor and view of the busy parkway. Now I know I jinxed myself by bragging and I will be demoted to the basement. Swing line stapler…
I was talking to a startup founder that was trying to get me to come back to the bay area to work. When he balked at the salary I wanted, I told him he shouldn’t have located his business in an area were a studio rents for $3000/month. His response was “but it’s the best place in the world!”
He wasn’t even in the city… just somewhere down on the peninsula.
Yeah. They are dumb to open companies up there. There are plenty of bright engineers in the south land. I know a couple of millenial software stars, but one moved up to the Bay Area. The other is in Culver City. If you surf and write code the south land is the place. UCLA and UC Irvine produce some good engineers (and some not so good ones). Many don’t want to go to the Bay Area because the salaries don’t really go up in the Bay Area.
San Francisco, CA Housing Market Implodes; Prices Crater 7% YoY As Prices Decline Statewide
http://www.zillow.com/san-francisco-ca/home-values/
Sunday funnies from TBP. Enjoy!
http://www.theburningplatform.com/2016/04/17/sunday-funnies-108/
Greece and the Eurozone still un-fixed.
http://www.telegraph.co.uk/business/2016/04/15/imf-could-back-away-from-greek-bailout-if-debt-deal-is-not-agree/
“Greece and the Eurozone still un-fixed.”
And somehow CalSTRS sees opportunity there. Got kool-aid?
With Keynesian fraudsters and serial currency debasers running the Fed, how much longer before the dollar loses its reserve currency status?
https://mishtalk.com/2016/04/16/hungary-issues-sovereign-bonds-denominated-in-yuan-another-nail-in-us-reserve-currency-status/
And Hungary chooses to sows the seeds of future default; any government borrowing in a currency that they do not control (and thus cannot print), and also do not generate from internal economic activity—they’re rolling the dice. It usually ends one way, in default, and only the timing is difficult to predict.
Santa Monica, CA Housing Market Caves; Prices Plunge 8% YoY As State Loses Population
http://www.zillow.com/santa-monica-ca/home-values/
“Fundamental transformation” comes to Paris.
http://www.theguardian.com/cities/2016/apr/15/paris-changed-permanently-mayor-anne-hidalgo
3,200 thousand homeowners underwater, 33 thousand homeowners “helped”.
What special qualifications had to be met to become part of the 1.1% that got a personal bailout?
Home Equity Gains Uneven, 3.2 Million Homeowners Still Underwater
By Christine Layton -
Apr 5, 2016
Home prices have been rising rapidly over the last year. The number of homeowners underwater on their mortgage declined by 31% or 1.5 million people in 2015. Despite this, 3.2 million homeowners were still underwater on their mortgages at the end of 2015, according to a new report by Black Knight Financial Services.
That number brings the average negative equity rate to 6.5%. While this is a significant improvement from the height of the housing collapse, it is still well above the historical norm. The report found that negative equity is mostly concentrated at the lower end of the price tier. Over 16% of borrowers with a home at the lower end of the price tier are still underwater and unable to sell their home.
According to Ben Graboske, senior vice president of Black Knight Data & Analytics, more than half of the country’s underwater borrowers are in the lowest 20% of the market, which is the highest share on record.
The report found that, if home prices continue their current rate of appreciation, it would still take over 5 years for the negative equity rate at the low end of the market to hit 2005 levels, or twice as long as properties at the top end of the market.
In Nevada, home prices are still 34% below their 2006 peak. The state currently has the largest percentage of underwater homeowners at 14%. In Cleveland, Memphis, Detroit, and St. Louis, negative equity rates are at more than 40%. Florida, which was hit hard by the housing collapse, had just 500,000 underwater borrowers at the end of the year. Missouri was the only state to have its underwater borrower number increase in 2015.
The negative equity at the lower end of the market is helping to spur price growth across the middle tiers of the market due to a lack of supply. Borrowers who are underwater on their mortgage are far less likely to move because they cannot sell without taking a loss. Home builders are not focused on the low end of the market, either, as they cannot make enough on low-priced homes to offset the increasing costs of labor and land. This has led to a drastically low supply of starter homes.
…
Taxpayers shafted yet again. Forward, FSA! Our glorious collectivist permanent Democrat Supermajority awaits!
so how do we get that Chinese laundry money into places like cleveland memphis detroit st louis???..they sure came to long island city by the droves
The camel’s nose is inside the tent.
Washington Bureau
Principal reduction finally offered for a few underwater homeowners (and other news from Washington today)
Apr 14, 2016, 3:57pm EDT
Kent Hoover Washington Bureau Chief
Remember all those homeowners who owed more on their mortgages than their houses are worth? Fannie Mae and Freddie Mac will finally offer principal reduction to a few of them.
Underwater borrowers who are 90 days or more delinquent on mortgages that are owned or guaranteed by the housing finance giants are eligible for this one-time offer, and conditions do apply. The Federal Housing Finance Agency said the deal will help an estimated 33,000 borrowers avoid foreclosure and stay in their homes.
Mel Watt, director of the Federal Housing Finance Agency, says there are still many areas of the U.S. where housing values haven’t recovered and negative equity remains a problem for homeowners.
The timing seems a little odd, since the housing market has largely recovered and the financial crisis is now just replayed in movies like “The Big Short,” not on Main Street.
But said FHFA Director Mel Watt, “There are still areas of the country where home values have not recovered and negative equity remains a real problem.”
Sen. Mark Warner, D-Va., said the principal reduction program was “long overdue,” but he welcomed “this tailored approach.”
The deal has its critics, however. Carrie Hunt, vice president of government affairs for the National Association of Federal Credit Unions, said “principal reduction sets a dangerous precedent.” Plus, it won’t “do anything to strengthen the housing market.”
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Real Time Economics
Fannie Mae and Freddie Mac: If You Can’t Kill Them, Merge Them?
A proposed government corporation to replace Fannie Mae and Freddie Mac would be required to sell to investors most of the risk that a mortgage defaults.
Photo: CHIP SOMODEVILLA/GETTY IMAGES
By Joe Light
Mar 23, 2016 2:15 am ET
A group including some of the chief architects of the Obama administration’s housing policy released a paper Wednesday outlining a new proposal for how to deal with mortgage-finance giants Fannie Mae and Freddie Mac.
The key takeaway: Instead of winding down Fannie and Freddie, the companies would be merged into a government-owned corporation that would take over the responsibilities of buying mortgages, wrapping them into securities and guaranteeing investors against default. That’s the core of the housing finance system that helps to make 30-year fixed-rate mortgages possible in the U.S. but not elsewhere.
The paper is an important shift for some of the five authors, who include Jim Parrott, a former Obama White House housing adviser; Moody’s Analytics chief economist Mark Zandi; Barry Zigas, director of housing policy at the Consumer Federation of America; and Lewis Ranieri of Ranieri Strategies, who co-invented the mortgage-backed security. The fifth author is Gene Sperling, former director of the National Economic Council for presidents Barack Obama and Bill Clinton and a close adviser to Hillary Clinton, though the paper says “the ideas expressed are purely his own.”
The new government corporation, which the authors call the National Mortgage Reinsurance Corporation, would be required to sell to investors most of the risk that a mortgage defaults, though the government would ultimately guarantee that mortgage bonds got paid on time.
To be sure, legislative housing-finance reform isn’t on the horizon, and nothing is likely to happen until well after the election. But the new proposal does attempt to address some of the biggest criticisms of prior legislative efforts and attempts to set a path that future policy makers could get behind.
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would be required to sell to investors most of the risk that a mortgage defaults, though the government would ultimately guarantee that mortgage bonds got paid on time.
How can both of those be true? Either the investor is taking the risk by not having a guarantee, or the government is taking the risk by making the guarantee. Having both seems inherently contradictory.
From the article:
The new company would need to sell mortgage credit risk to private investors equal to at least 3.5% of the first losses of the mortgages it guarantees, plus build cash equal to 2.5% to handle losses after that was exhausted.
So… this model works _great_for a 6% loss in mortgage bonds. How well does it work for a 30% housing decline like we just had—with worse to come, IMO, since the government meddling prevented the purging of the excesses that should have occurred.
“The camel’s nose is inside the tent.”
Buying votes used to be a chicken in a pot. Now that same vote also includes the house!
“Vast suburban stretches in ……..Kansas”
I guess it depends on what your definition of “vast stretch” is.
“Vast stretches in Kansas” means south Johnson County. Lawrence in Douglas county. And to a lesser extent Maize, Derby. Andover, Augusta, and Goddard in Sedgwick county
Interesting stuff, a 10 minute video on magnets.
https://m.youtube.com/watch?v=IANBoybVApQ
Why Hillary Clinton will never release the transcripts of her speeches to the banksters.
http://www.zerohedge.com/news/2016-04-17/real-reason-hillary-clinton-refuses-release-her-wall-street-transcripts
Our “lawnmower” economy (if you’re a member of the 99%, you’re the lawn).
http://www.oftwominds.com/blogapr16/lawnmower-economy4-16.html
Chinese freight index collapses.
http://wolfstreet.com/2016/04/17/china-ocean-freight-index-collapses-to-record-low/
Yet-another-example of how ultra-cheap cash causes mal-investment; specifically, it stimulates investment in a great many places, looking for yield—but unfortunately, the flood causes overinvestment, and ultimately price declines.
Ironic, that the Fed doesn’t apparently “get” this.
crushing.housing.losses.