If You’re A Pig, Now’s The Time To Get Out The Lipstick
It’s Friday desk clearing time for this blogger. “The first three months of 2016 were not a good time to list your $15 million East Hampton home. A cool wind is blowing through the elite enclave, as Wall Street fears send a chill through a real-estate market that, until recently, has been white hot. The market was hit by a swift one-two punch at the start of the year: a slowdown in China and anemic oil prices caused the S&P 500 to suffer its weakest start to a year since 2009, and Wall Street bonuses—a major source of funding for high-end home purchases—took a blow, too. Hedge funds were coming off a dismal year and continued to bleed well into the first quarter, while lay-offs in the banking sector have continued apace.”
“All of this led the number of Hamptons home sales to tumble 19.2 percent in the three months through March year-over-year, according to a report published Thursday by real-estate company Douglas Elliman and appraiser Miller Samuel. At the same time, the median sales price fell 2.8 percent to $895,000 from a year earlier. Sales of luxury homes—anything listed for at least $4.05 million—fell 30 percent to 45 deals in the first quarter, according to the report.”
“Short sales and foreclosures increased in the Pittsburgh region through the first three months of 2016 and contributed to a slide in overall home prices in March according to Realty Trac. Pittsburgh banks may have wanted to unload them while interest rates remain low and the market heats up, said Daren Blomquist, vice president of Realty Trac. ‘I think banks have jumped through the regulatory hoops to make sure they’re proceeding with foreclosure correctly and now that they see the market is booming, they’re making hay while the sun shines,’ Blomquist said.”
“Pittsburgh banks seemed to be eager sellers. Bank-owned homes in the region sold for 61 percent below market rate, compared to an average discount nationwide of 40 percent. Many cities that saw increases in distressed sales were in judicial foreclosure states, including Pennsylvania, where foreclosures are handled in the court system and can take longer to complete. New York City, Buffalo and Boston also had more distressed sales from a year ago.”
“The Southwest Florida housing market continued to cool in March, as home sales declined by 8 percent over the year. It was the fifth month in the past six in which sales of existing single-family homes and condominiums failed to keep pace with the prior year, according to the Florida Realtors trade group. ‘Overall, statewide inventory levels essentially held steady in March,’ said Brad O’Connor, chief economist at Florida Realtors. ‘The active inventory of homes listed for over $1 million was up 18.3 percent year-over-year among single-family homes and 38.6 percent among condos and townhouses.’”
“While the multi-family market in Baton Rouge remains strong for now, a staggering number of new apartment units completed in 2015—with many more on the way in 2016 and 2017—will likely cause vacancy rates to rise and lease rates to fall. ‘All of the new inventory on the market is forcing property owners to offer more concessions to their tenants, including high-end amenities like the lazy rivers, rec rooms and golf simulators in some of the student housing complexes near LSU. It’s also prompting the owners of older complexes to start renovating them. ‘If you’re a pig, now’s the time to get out the lipstick,’ said Craig Davenport of Cook, Moore and Associates.”
“Calgary’s condominium sector has taken the hardest hit in a housing market gutted by the plunge in oil prices. The city’s condo sales are down 17% through 2016’s first quarter compared with a year ago, and average prices have plunged 12% from the 2014 peak to around $290,000. Meanwhile, nearly a fifth of Calgary’s downtown office towers have gone dark, condo starts have fallen 60% and residential foreclosures have soared 30% from two years ago.”
“Yet, from his Vancouver office, Mohammed Esfahani confirms he has pre-sold 140 condominiums at his luxury Park Point tower in Calgary in the past year, 10 in the past month, at an average of $610 per square foot. And it will be completed, Esfahani said, even in a city where panicked condo developers have slammed on the brakes. Calgary condo starts are down 60% from the 2014 peak, with about 4,800 units expected to start this year. ‘We have always completed everything we have started,’ Esfahani said.”
“The super-prime market in London may seem unreal and disconnected from the needs of Londoners, but it is completely reconfiguring the city, with over 300 towers under or awaiting construction across the city. Many of these are luxury apartments going up in privatised, gated enclaves, stretching from Nine Elms, around the huge new Battersea Power Station development and US Embassy quarter, to Southwark and Blackfriars.”
“Who is going to live in these places? Who are the figures populating the developers’ hoardings? Who can afford to live in these fantasy worlds? Particularly unpalatable is the link between local authorities, who should serve the public interest, and the gilded lifestyles these properties promise. This is where the PR companies who oil the wheels of this new globalised property industry come in, hosting champagne receptions for councils, developers and foreign investors property industry shindigs. At last autumn’s event at London’s Olympia, sessions aimed at local authorities included: ‘Are you sitting on an untapped goldmine?’ and ‘London – from social housing to super-prime.’ You couldn’t make it up.’”
“Hong Kong’s housing sales hit a 25-year low in February. The March figure, which came in early this month, doesn’t look good either. Prices are plummeting too. Centaline Property’s Centa-city Leading (CCL) Index, which tracks used-home prices in Hong Kong, has dropped 13% from September’s historical peak to its lowest level since 2014.”
“New home sales will continue to gain market share, Standard & Poor’s Esther Liu wrote in a February research note, because there is ‘ample supply in the pipeline’ and developers are cutting prices to get rid of inventory. New home sales accounted for 29% of total sales in Hong Kong’s home market in 2015, the highest since the SARS epidemic decimated the city’s housing market in 2003.”
“Auditor PricewaterhouseCoopers became the latest to sound the warning against debt risks at China’s banks. PwC noted that net profit growth at the country’s five main commercial banks fell to 0.69 percent last year, compared to growth of more than 6.5 percent in 2014. Cuts in interest rates, lowered six times over the past 18 months by the government to encourage lending and boost the overall economy — particularly the property sector — were seen as one factor in reducing banks’ revenues. But the potential risks of higher lending were highlighted by the fact that nonperforming loans (NPLs) at China’s 18 major listed banks rose by more than 48 percent, or some $146 billion, in 2015, PwC said.”
“PwC analysts warned there was a ‘high possibility that bad loans will surge further,’ with the significant growth in past-due loans likely to lead to more turning into NPLs, Chinese media reported. In January, new loans rose by a record 60 percent year-on-year, while the nation’s total outstanding loans — all those already issued — were up 14.7 percent by the end of March compared to a year earlier, at around $15.2 trillion, the Xinhua News Agency reported Thursday. Relaxation of rules governing housing loans and downpayments has led to a particular boom in the country’s property sector, with total property loans up 22.2 percent by the end of March, and those for individual home purchases up 25.5 percent at 15.8 trillion yuan (around $2.4 trillion).”
“Fraud is rife in the banking system as banks systematically fudge the numbers on loan applications to make borrowers look more creditworthy than they really are, according to an explosive submission to a Senate inquiry on white collar crime. The economists Lindsay David and Philip Soos argue that the practice, together with a dramatic lowering of lending standards, is responsible for a massive housing bubble and threatens the stability of the entire financial system.”
“But at some stage, they argue, an economic shock will expose the decline in lending standards and cause a loss of confidence in international markets, undermining Australian banks’ access to the cheap offshore funds they rely on to maintain their lending. ‘I don’t think that Australians realise the risks the banks have taken in order to get house prices as high as they are,’ Mr David said.”
‘Their analysis draws on the work of criminologist and consumer activist Denise Brailey, who has received and examined more than 2,000 loan applications and related documents from aggrieved bank customers.’
“We see incomes exaggerated, that’s extremely common. We see signatures forged,” said Ms Brailey, who runs the Banking and Finance Consumers Support Association. “In all cases,” she said, “[the loans are] unaffordable, unsustainable and unverified.”
‘Jeff Morris, the whistleblower who exposed the Commonwealth Bank financial planning scandal that led to calls for a Royal Commission into financial services, also believes that the practice of banks artificially boosting borrowers’ income and assets in order to make loans is common.’
“You’ve got [mortgage] brokers and lenders, who are remunerated on the number of loans they write, simply massaging the figures to put it through the computer system, and then it spits out an approval,” he said.’
‘Australia has the highest levels of household debt in the world and residential property prices have continued to soar despite the lowest wages growth on record. “The banks employ lenders who are bonused on the number of loans they write. They put them under enormous pressure to meet sales targets so if they don’t meet their targets, they’ll be sacked,” he said.’
‘But Mr David and Mr Soos argue that it is not merely a matter of individual loan officers inflating figures to make loans and meet targets. They describe it as a form of “control fraud” that goes to the top of organisations.’
‘They argue bank executives have a direct interest in exaggerating the credit worthiness of loans in order to secure cheap funding. The economists also argue that it not possible that banks could have maintained credit quality while property prices have soared relative to incomes.’
Read that last sentence again jingle.
Institutionalized fraud or free-lance fraud. They’re a distinction without a difference.
“In all cases,” she said, “[the loans are] unaffordable, unsustainable and unverified.”
As long as the taxpayers are on the hook keep flipping those shacks!
Australia appears not to have a government guarantee on mortgages.
Until the bankers threaten to collapse the economy. Economic terrorism works.
And it’s perfectly legal!
FYI, Akerlof is Yellen’s husband. Also co-authored Phishing For Phools (very interesting reading) by Shiller and Akerlof.
Looting: The Economic Underworld of Bankruptcy for Profit
by: George A. Akerlof, UCal-Berkeley
Paul Romer, UCal-Berkeley
Our theoretical analysis shows that an economic underground can come to life if firms have an incentive to go broke for profit at society’s expense (to loot) instead of to go for broke (gamble on success). Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations.
Bankruptcy for profit occurs most commonly when a government guarantees a firm’s debt obligations. The most obvious such guarantee is deposit insurance, but governments also implicitly or explicitly guarantee the policies of insurance companies, the pension obligations of private firms, virtually all the obligations of large banks, student loans, mortgage finance of subsidized housing and the general obligations of large or influential firms.
[...]
Bankruptcy for profit can easily become a more attractive strategy for the owners than maximizing true economic values.
Once owners have decided that they can extract more from a firm by maximizing their present take, any action that allows them to extract more currently will be attractive - even if it causes a large reduction in the true economic net worth of the firm.
http://pages.stern.nyu.edu/~promer/Looting.pdf
FYI, Akerlof is Yellen’s husband. Also co-authored Phishing For Phools (very interesting reading) by Shiller and Akerlof.
Interesting. I didn’t realize he was married to Yellen. He and Shiller also co-wrote Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism.
The U.S. also didn’t appear to have a government guarantee on mortgages until the GSE bailout in fall 2008 made clear that there was one.
As long as the taxpayers are on the hook keep flipping those shacks!
Ever since 2008, taxpayers have willingly grabbed their ankles for the banksters by voting for the Republicrat duopoly’s Wall Street-captured “choices” like Obama, McCain, and Romney.
I read it three times. I understand it and completely agree. This behavior is exactly what lead to the U.S. housing bubble and bust.
Four New Yorkers Charged With Falsifying Mortgage Docs
Friday, April 22, 2016
http://nationalmortgageprofessional.com/news/58433/four-new-yorkers-charged-falsifying-mortgage-docs
“….four New York City people were indicted this week in Buffalo on charges of using falsified documents to obtain inflated mortgages on eight homes in the Bronx from June 2008 to February 2009, according to the indictment…..”
Again, I do not see this behavior in the market today like I saw it in the housing bubble years.
You don’t want to see it Jingle_Fraud.
It’s beginning to look like 2007 again.
Sacramento Homebuyers Seeing Stiff Competition, Going Past Asking Price:
The Sacramento area is experiencing a rise in housing prices seen in other parts of the country, forcing buyers into bidding wars and paying over the asking price…..
http://sacramento.cbslocal.com/video/3389899-sacramento-homebuyers-seeing-stiff-competition-going-past-asking-price/
We need to build more housing.
The Sacramento area is experiencing a rise in housing prices seen in other parts of the country, forcing buyers into bidding wars and paying over the asking price…” which these buyers are quite willing to do since the money they are using in these bidding wars is money that they do not actually have, instead it is money that belongs to somebody else - strangers even.
If these people were sharp enough to save the money that they were spending in bidding up prices then most likely they would be sharp enough to just say no, just say no to these prices that have gone nuts.
But these people don’t need to be sharp enough to save the money that they are spending, they only need to be dumb enough to sign a dotted line or two.
When places in inland California, like Sacramento, become hot, you know the party is just about over…
Actually when Bakersfield becomes hot - that’s the sign of the market top. And it’s not yet at any rate.
Bakersfield has the dirtiest air in the country.
I prefer Belize.
Theres nothing stopping you Jingle_Fraud. Get building.
The Capitol of statism always flourishes as statism flourishes. Same thing happens around Washington D.C.
https://en.wikipedia.org/wiki/Stefan_Molyneux
“Molyneux theorizes that peaceful parenting and the pursuit of virtue in our personal lives could bring about a stateless society that abhors the initiation of force (see Non-Aggression Principle).[51] In addition, the free market (see anarcho-capitalism), poly-centric legal systems and private “dispute resolution organizations” (DRO’s) could be empowered to find new and more peaceful ways of adjudicating Common law infractions and contractual disputes”
See, Bill, here’s the thing. Your Utopia depends on the presence of virtue in society, across the boards. Until that happy state of affairs exists, someone or something has to provide a framework for agreements and preventing the vicitimization of others. As far as I know, the only organization that ever came close to this was the Quakers.
Anyhoo, I find people like Molyneux to be much more reasoned in their approach than, say, Barkin’ Larkin. To be sure, Molyneux is an academic, and I’m not overly fond of academics. However, I’ve had the opportunity to watch some of his videos, and he is excellent at presentation and explanation, as dry as the material sometimes is. In other words, he manages to get my attention without gimmicks, and doesn’t put me to sleep. And he doesn’t foam at the mouth. Nor does he talk down to his audience. Oh, also he has a sense of humor.
Therefore, it might be advisable for you, instead of going all Cotton Mather on people, to pursue the idea of spreading virtue across society, as this would be the precursor to your stateless Utopia.
Excuse me, I meant Larken with an E.
to pursue the idea of spreading virtue across society, as this would be the precursor to your stateless Utopia.
Back to Plato and Aristotle. Some things never change.
The common supposition that anarchy will be pure violence is - nothing but conjectural.
However the murders by the State, 262 million in the 20th century alone, the kidnappings of millions for victimless crimes (drug laws in the USA) and the takings - the thefts (16th amendment income tax) are FACTS.
You statists have drunk the kook-aid and cannot see the obvious because of your years of being trained to not ask the questions you’ve been afraid of asking.
I was a statist in my past life and I know what you are going through, but read Lysander Spooner’s “No Treason, the Constitution of No Authority” 36 years ago and I could see he is right.
Stateless Utopias tend to be nasty, brutish, and short.
The real utopia is your ideal of statism itself, that it prevents chaos and violence.
Yet governments in the 20th century murdered over 262 million people. Hundreds of millions of civilians. Look it up. You got a search engine.
How many people have anarchists killed?
Where are the anarchists who blow themselves up in crowded areas? They don’t.
The funniest thing is YOU practice anarchy 99% of the time. There is no cop following you around to stop you from killing your neighbor or kid, yet you do not kill your neighbor or kid.
And I suppose you will become a serial killer if our government abolishes itself overnight?
You are the crazy ones. Indoctrinated by your government schools into suppressions about statelessness. The biggest superstition is the state itself.
See, Bill, here’s the thing. Your Utopia depends on the presence of virtue in society, across the boards.
If I am not mistaken, Marx believed in the very same thing. He believed that under ideal communism there would be no need for government.
Sure, and the state would just “wither away” when it realized it was no longer needed due to the innate altruism of the New Communist Man. How any thinking adult could actually buy into this hokum is beyond me.
It’s an ideal to aspire to. We can cull those that don’t .
To be sure, Molyneux is an academic
A quick read of that Wikipedia page doesn’t show any academic employment. Based on some links that people left here a few months ago, he would be better described as a YouTube white supremacist.
I said he was an academic, not academically employed at this time. Also he’s Canadian, if he was a white supremacist he’d be in jail for espousing his views on YouTube.
Canadian censorship laws must not work the way that you think.
It was few months ago that someone posted a link to one of his YouTube videos. I recall a number of rants about black Americans and Arabs in Europe. I remember thinking that it was a great endorsement of Canada on his part. Everything is so wonderful up there that he has nothing to complain about and is able to turn his attention elsewhere. In Heaven nothing ever happens.
Tribe politics 101: if you oppose the destruction of the nation state, culture, and economy - accuse them of white supremacy. I expect no less from the head Krugman on this board.
No, as I wrote, someone linked to his YouTube videos a few months ago. I listened to his rants and heard him express white supremacist views. By the way, I think that he’s the one who would like to destroy nation states.
Molyneux has some good points and some hypocritical points. For instance, his and his wife’s views on parenting include some ridiculous views - I have not read them but I heard. Some of his psychological points are nutty. Larsen is the more consistent.
I don’t think high prices are entirely a function of lack of supply. There’s also the issue of Bay Area equity locust trash (can you tell I don’t like people from the bay?) , out of area (and local) specuvestors, and ofc garbage loans being handed out to people barely fit to work the 3rd shift at am/pm. Lots of the demand is artificial.
I’d really like to be able to buy a place at non artificially inflated prices, but it doesn’t look like that’s gonna happen any time soon. At this point I’m rooting for everything to crash and burn.
Ditto. Was sent info today on a “contemporary” shack here in Portland, in a not-so-top-of-the-line neighborhood. Price? $785k.
This is in a neighborhood that 7-10 years ago was $250-350 max. Knockdowns, empty lots replaced with new houses at premium prices (that are drawing bids). Gag.
In addition to building more housing, the banks need to start foreclosing, short selling and basically releasing more of the homes their holding back from the market!
‘build more housing’
As I mentioned to rental watch, this approach to mania’s results in foreclosure. How much have lot prices gone up there in the past 7 years? That means only expensive houses can be built, expensive apartments and condos. It doesn’t match demand and somebody, the developer or the buyers, will most likely go into default. A much preferable way would be to cap loans at a sane level and keep them there. But our government and central bank have gone the opposite direction. The artificial pricing sends incorrect messages to the market. Look at the Louisiana article.
Land prices are driven by home prices.
Home prices are not driven by land prices.
If the buyers can only get loans for $200,000 houses, the developers won’t pay $500,000 house prices for the land. They won’t be able to sell them.
‘The U.S. consumer might be the engine of global growth — just not the roaring V12 it used to be. In an economic letter published by the Federal Reserve Bank of Dallas, economists John Duca, Anthony Murphy, and Elizabeth Organ identify one reason why this American muscle car has lost its nitrous oxide.’
‘The researchers found that the wealth effect from real estate — that is, the extent to which home price appreciation juices consumer spending — has been cut in half since the mid-2000s. The chart shows that around the middle of 2005, households would spend an extra $3.40 in the event that their home gained in value by $100. Near the end of 2015, households would increase outlays by just $1.70 if real estate values rose by the same amount.’
“In other words, home prices in 2015 need to rise double as fast as in 2005 in order to generate the same impact on consumer spending,” writes Torsten Slok, chief international economist at Deutsche Bank AG. “This weaker wealth effect is a key reason why the recovery since 2009 has been so weak.”
Sounds like the appropriate government agencies need to get busy making home prices rise twice as fast as before 2007, in order to restore the wealth effect to its former healthy level.
“…. an economic shock will expose the decline in lending standards and cause a loss of confidence….”
It is deja vu all over again. When I first read the post, I thought I was in 2007 in the US. The fact Australia is just getting this awareness likely means they are in for an even bigger fall.
Maybe it is time to short the Australian dollar. It has dropped from U$ 1.07 in 2012 to U$ .77 today. It is had a nice 10% rally off the U$ .69 bottom a few months ago. Maybe they think the worst is over. It sounds like it may be just beginning.
With the staggering levels of fraud since 2007, it’s a distinction without a difference.
I lived on the beach in Australia from 2012-2014. My next door neighbor claimed he got his money by closely watching what was happening in the US and betting that the Australian markets would follow in 7-10 years.
Are you a surfer?
The fact Australia is just getting this awareness likely means they are in for an even bigger fall.
When you consider that their economy is a one trick pony (commodities) you can count on their fall being monumental.
It could be interesting. They haven’t had a recession in something like 23 years. Or course, that’s been a period of high growth in China.
Yeah, society is just going to shrivel up and blow away in the wind any day now. Good thing it doesn’t take resources to maintain society either.
Aus is in a bubble that will burst at some point, but having a lot of natural resources that the world needs to run is not generally a curse.
“Pittsburgh banks seemed to be eager sellers. Bank-owned homes in the region sold for 61 percent below market rate”
A 61% reduction is necessary to get prices back to trend unless we’re talking about areas where fraud is most egregious and then it’s an 85% reduction necessary to get back to long term historical price trend.
Once again, the Keynesian fraudsters running our central banks are going to cause yet another crash.
http://wolfstreet.com/2016/04/22/a-total-illusion-from-qe-and-financial-engineering/
Sunnyvale, CA Housing Prices Crater 7% YoY
http://www.zillow.com/sunnyvale-ca-94086/home-values/
It’s a bubble. 4 co-workers are actively looking/talking about building their own houses. One of them already bought a plot and hired a builder. $hit they talk about are just amusing to say the least.
It can’t be any more comical than the braying from the donkey herd here.
You mean, like you and all of your alter egos, braying about prices that you paid per s.f. back in 1962? When there was no Agenda 21 growth management rules in place, Before the EPA and the Clean Water Act, and permits were a wink and a smile?
+1962
$hit they talk about are just amusing to say the least.
My coworkers are convinced that Denver is “different” and that mile high prices can only continue to rise. Mention bubbles and how there will be another crash and you will see plenty of eyes roll.
As one of the few HBB posters who is interested in actual houses, please tell me that they are building well-designed unique homes, and not cookie-cutter McMansions.
Speaking of homes, there was a lot of news coverage about poor Prince
being found in his home in Paisley Park in Minneapolis, with plenty of footage of the home. Was that really a “home?” It looks like a small biotech start-up factory with a planetarium on the side. Very confusing.
biotech start-up factory with a planetarium on the side.
Kind of like his music, eh?
I think it was his studio and production facility too. He was a famous DIYer.
It was his studio house is a few miles away
They are all cookie-cutter Donk. There is nothing unique.
There is nothing unique. I will settle for “well-designed” and “appropriate for the intended use.” The artsy-fartsy type of home construction is not for me.
Flower Mound, TX Housing Craters On Plunging Oil Demand; Prices Tank 6% YoY
http://www.zillow.com/flower-mound-tx/home-values/
“Relaxation of rules governing housing loans and downpayments has led to a particular boom in the country’s property sector, with total property loans up 22.2 percent by the end of March, and those for individual home purchases up 25.5 percent at 15.8 trillion yuan (around $2.4 trillion).”
It’s a hair-of-the-dog hangover cure laced with steroids!
With prices falling in high-end markets like San Francisco, Hong Kong and The Hamptons, can San Diego be long to follow?
San Diego, CA Housing Market Caves; Prices Crater 10% YoY As Housing Inventory Balloons
http://www.zillow.com/san-diego-ca-92101/home-values/
It’s not a matter of if, but when! Overpriced crap shacks anywhere, especially San Diego, makes no sense. Hopefully buyers will open their eyes and refuse to pay these inflated prices to what amounts to 30-40 year old stucco, chickenwire and styrofoam!
China stocks facing worst weekly performance in three months
By Chao Deng
Published: Apr 22, 2016 2:39 a.m. ET
Chinese stocks are headed for their worst weekly performance since late January, as investors take recent signs of economic improvement to mean that authorities will hold off from rolling out immediate easing measures.
…
“Fraud is rife in the banking system as banks systematically fudge the numbers on loan applications to make borrowers look more creditworthy than they really are, according to an explosive submission to a Senate inquiry on white collar crime. The economists Lindsay David and Philip Soos argue that the practice, together with a dramatic lowering of lending standards, is responsible for a massive housing bubble and threatens the stability of the entire financial system.”
Wrong! The massive housing bubble creates a massive amount of equity which means it creates a massive amount of wealth.
If the relationship between the cost buying houses and the cost of renting houses holds then the cost of rents will increase as the bubble prices increase and this increase will translate into increased rental income, whether actual or imputed, and this increased rental income will then translate into an increase in GDP.
The bubble is good on two fronts: It creates wealth and it creates income. The wealth it creates can be cashed out and spent and the income, the imputed income, although it may not be spendable it nevertheless goes into the computation of GDP.
So the bubble will not threaten the stability of the financial system as these two idiots proclaim; The bubble is what is saving the financial system.
(sarc)
Report: America’s Boom Towns Revealed;
http://newsletter.rismedia.com/tracking/view/22919/1030457/18869123/86485
When it’s a realtor funded article, it’s worthless.
The one on Chicago’s loooooooop is hilarious with its prognostications on employment - Chicago is a hell hole and becomes more so every day. Pension bomb gonna blow and the twits buying there in the Looooop will be holding the bag. Yea this place is happenin…….
this……
“Dan Proft is joined by Illinois Policy Institute Vice President of Policy Ted Dabrowski for a discussion on public sector salaries and pensions in the City of Chicago and the State of Illinois in K-12 education, at the collegiate level–like explaining why an U of I administrator makes $900k–and for public safety personnel.
Dabrowski frames the choices Illinois families and policymakers alike face and suggests the way back from the fiscal abyss for the worst-run, worst-rated major city and state in America.”
Linky here:
http://www.upstream-ideas.com/ideas/atc-math-opinion-il-policys-ted-dabrowski-public-sector-salaries-pensions/
The suburbs and the rest of Illinois are sinking, but Chicago IS booming economically.
What that shows is that unlike, say, Detroit the economy is not causing the social and fiscal problems in Chicago.
What may follow is the opposite — social and fiscal problems killing what had been a booming economy.
Larry
The thing that most fail to understand with the ‘boom’ in Chicago is it is ALL debt financed. There is little manufacturing left. The merc is toast, the only thing supporting this place now is debt financing of some dubious start ups attracting alot of tech talent - that was poached from the surrounding suburbs.
I was there last year, and have to admit that parts of the city looked much better than I remembered. Even the el train was better than I remembered; I liked the extension to Midway airport. But I was largely on the north side of town. That’s the thing about this country in general — when you’re in any area of concentrated wealth, you forget how badly the rest of the country is doing. And even some of the areas of concentrated wealth are a debt-driven illusion.
One last one for Prince. Watch him turn this rather pedestrian group tribute to George Harrison into a rock classic with an amazing, perfect-for-the-song guitar solo at the end, followed by a great guitar drop. Best guitarist since Hendrix, amongst his many talents?
https://www.youtube.com/watch?v=6SFNW5F8K9Y
His guitar playing did have the same kind of sensuality about it. It took an outrageous charisma to pull off his style, but he had no trouble at all.
Is anyone feeding the squirrels today in honor of Earth Day?
“Is anyone feeding the squirrels today in honor of Earth Day?”
I wouldn’t.
SQUIRREL!
http://www.youtube.com/watch?v=1K6zcloUmCU - 228k -
I shoveled a dead baby squirrel out of the lawn yesterday. Does that count?
“I shoveled a dead baby squirrel out of the lawn yesterday. Does that count?”
I think that’s a great way to honor Earth Day.
Thanks Obama
U.S. Suicide Rate Surges to a 30-Year High
By SABRINA TAVERNISEAPRIL 22, 2016
WASHINGTON — Suicide in the United States has surged to the highest levels in nearly 30 years, a federal data analysis has found, with increases in every age group except older adults. The rise was particularly steep for women. It was also substantial among middle-aged Americans, sending a signal of deep anguish from a group whose suicide rates had been stable or falling since the 1950s.
“There was a consistent pattern,” he said, which held for all ages between 25 and 64. “When the economy got worse, suicides went up, and when it got better, they went down.”
“When the economy got worse, suicides went up, and when it got better, they went down.”
Take away Social Security and watch suicides skyrocket.
Lola,
SS was already halved deliberately as a resulted of rigged markets and prices fixed at grossly inflated levels.
You wanted socialism, you got it.
Also with interest rates set so, so low, savers are getting slaughtered and not getting any returns on their investments.
Your best investment is cash.
Take away Social Security and watch suicides skyrocket.
Not to mention the economic impact of having to care for penniless parents.
FAOMS just can’t live with the knowledge that each of them isn’t a special, special snowflake.
Just go all Logan’s Run on their arses.
Renew! Renew!
Logan’s Run? More like Soylent Green.
FAOM Crackers
Fair Oaks, Sacramento, CA Housing Market Craters; Prices Plummet 13% YoY
http://www.zillow.com/fair-oaks-ca-95628/home-values/
for those who don’t know: Fair Oaks is a fairly upscale established suburb of Sacramento.
Serving ‘em up left and right. Drink up.
http://goo.gl/oikLRe
I don’t know if people saw this article, about an otherwise responsible and decent guy who has overspent, made bad real estate and other decisions, and ended up broke and working seven days a week approaching what might otherwise be retirement.
http://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/
I look at it this way. He took the bait. I didn’t, but had to have an alternative set of values and buck tremendous social pressure to do so. Anyone who just swam in the social/media/cultural/political stream ended up broke, and often with a broken family, in the era of Generation Greed.
His said he is writing about his personal shame because most people wouldn’t know he was broke, and most broke people are living in share themselves. He notes that most people would not assume he had a problem — lifelong marriage, strong relationship with parents and kids, successful career — I know him as the guy who introduces Saturday Night movies on public television in NY. But he does.
This is a wonderfully written piece and highly telling, but as I was reading it, I kept wondering what the author’s ROI might be. In trying to find out, I came across this:
http://www.theatlantic.com/national/archive/2013/03/lucrative-work-for-free-opportunity/273846/
The American middle class is a credit-card middle class. From the article:
“Wolff also examined the number of months that a family headed by someone of “prime working age,” between 24 and 55 years old, could continue to self-fund its current consumption, presuming the liquidation of all financial assets except home equity, if the family were to lose its income—a different way of looking at the emergency question. He found that in 2013, prime-working-age families in the bottom two income quintiles had no net worth at all and thus nothing to spend. A family in the middle quintile, with an average income of roughly $50,000, could continue its spending for … six days. Even in the second-highest quintile, a family could maintain its normal consumption for only 5.3 months. Granted, those numbers do not include home equity. But, as Wolff says, “it’s much harder now to get a second mortgage or a home-equity loan or to refinance.” So remove that home equity, which in any case plummeted during the Great Recession, and a lot of people are basically wiped out. “Families have been using their savings to finance their consumption,” Wolff notes. In his assessment, the typical American family is in “desperate straits.””
Oddie:
See the Debt Donkey clock I posted below…..
“an otherwise responsible and decent guy”
Responsible except for spending a mountain of money he did not have for stuff he did not need.
Decent except for borrowing what he could not repay.
It’s like saying he was otherwise sober except that he was a drunk.
Unfortunate choices for sure.
Right? Talk about gyrations.
It wasn’t mentioned, but he’s also the world’s tallest midget.
his fave pet: the world’s fastest sloth
“Decent except for borrowing what he could not repay. It’s like saying he was otherwise sober except that he was a drunk. Unfortunate choices for sure.”
Here’s my point. He had a successful marriage, was a successful parents, had friends, had a career he could be proud of.
And enough money there was no need to starve. Enough for a lifestyle people 60 years ago, writers 60 years ago, would have been happy with.
And yet he felt the need to keep up with the Joneses, and it screwed up his life. Why did he feel he needed whatever the Joneses had? Why did he care? What drove him (and it seems everyone else) to do all this?
Compulsive spending and borrowing is self destructive behavior. Whatever causes it is not the Jones’ fault.
I appreciate that he was a decent guy. It’s sad. But it is not true that he was driven to do it. It’s not just wrong values either. Basically most people are clueless about financial markets. They are especially clueless about how things can go wrong.
A large number of Americans don’t think for themselves. Their television does their thinking for them. They see depictions of young families living the middle class dream. It may be happening in Tulsa, but to equal that in Orange (a decent but less expensive town in Orange County than Irvine), they have to be in serious debt. They are thinking if they don’t go into debt, their peers might think they are doing something wrong.
For most of us, you can’t have it all. That is the grim reality.
And now back to our sponsor, Toll Brothers…
Bulletin
Microsoft’s sharp decline Friday wipes out $38 million in market capitalization
Microsoft’s stock plunge wipes away $38 billion in market cap, cuts Dow’s gain in half
By Tomi Kilgore
Published: Apr 22, 2016 10:17 a.m. ET
Microsoft Corp.’s stock (MSFT, -7.62%) plunged 8.5% in active morning trade, wiping away about $38 billion in market value and cutting the Dow Jones Industrial Average’s (DJIA, -0.32%) gain in half, in the wake of disappointing quarterly results. Volume topped 35 million shares within the first 45 minutes after the opening bell, compared with the full-day average of of 26.4 million shares. The stock on course to suffer the biggest percentage decline since it tumbled 9.3% on Jan. 27, 2015, which also followed disappointing quarterly results. With about 7.91 billion shares outstanding, according to FactSet, the price decline of $4.75 was erasing $37.57 billion from its market cap. The decline was also shaving off about 33 points from the Dow, which was recently up 22 points.
…
Kind of funny: The bulletin says $38 million while the headline says $38 billion. I wonder which is correct?
I note that $38 billion is a significant fraction of Bill Gates’ personal wealth; $38 million is not.
The Plunge Protection Team has its hands full today!
This stock-market rally is running into a wall
By Victor Reklaitis
Published: Apr 22, 2016 9:25 a.m. ET
Critical information before the U.S. market opens
…
I think this is related to Intel’s pending shrinkage and public expectations that the large footprint PC market is on a long term decline. “Large footprint” = anything that won’t fit in a pocket. I am looking for a replacement laptop with decent performance, a pointing stick on the keyboard & the ability to carry a 2.0TB HDD or SSHD. Haven’t found anything like that on the market.
The only factor keeping me in the Microsoft system is its OneNote software, which works extremely well for the type of research & writing I do. Without that, I’d already be using Linux.
Home » Wells Fargo pledges $220 billion for minority, low-income mortgages
INVESTMENTSLENDING
Wells Fargo pledges $220 billion for minority, low-income mortgages
Commitment part of 5-year ‘corporate social responsibility’ plan
Aiming to use its place as one of the nation’s largest banks to address “global social, economic, and environmental challenges,” Wells Fargo announced an ambitious five-year plan that includes massive investments in diversity and social inclusion efforts, environmental causes, and billions of dollars for mortgages in “underserved” communities.
The investments are part of the bank’s “corporate social responsibility strategy,” which establishes goals for the company to achieve by the year 2020, including significant commitments in home and small business lending, community investment, operational efficiency and corporate philanthropy.
Wells Fargo’s plan is broken into three separate “key commitments,” which include social, economic and environmental commitments.
Included in the economic commitment is a sizable focus on “economic empowerment,” which includes the bank working on strengthening individual financial knowledge and improving economic opportunities in underserved communities through products, services and financial tools.
As part of the bank’s economic goals for 2020, Wells Fargo said it plans to provide $500 million in “philanthropic giving” to “critical economic needs,” like financial education and affordable housing.
A spokesperson for Wells Fargo told HousingWire that part of that $500 million will include housing grants to Habitat for Humanity, grants to Neighborworks to provide down payment assistance, providing funds for counseling programs for first-time homebuyers, and home repair programs to help low-to moderate-income households folks remain in their homes, among other efforts.
Additionally, Wells Fargo pledged to provide $150 billion in mortgage originations to minority households and $70 billion in mortgage originations to low-to moderate-income households through the bank’s retail and correspondent networks.
Wells Fargo also committed to helping to build and improve 1,000 homes by 2020 in support of affordable housing initiatives serving low-and moderate-income households, including for seniors, veterans, and families.
“To continue to succeed as a global bank, Wells Fargo must help address these social, economic, and environmental challenges and strengthen the communities in which we operate for current and future generations,” Wells Fargo Chairman and CEO John Stumpf said. “Our efforts to integrate CSR strategies across all aspects of our business, products, and culture position us to have a positive and critical impact on people, industries, and the broader global economy when and where it matters most.”
Oh, boy, it’s deja-vu all over again.
Gotta get lots of low income folks onto the mortgage treadmill ahead of the next crash, so that the Democrats can use “Save Our Homes” bailouts to rescue them in a few years after price declines leave the hapless victims underwater and angry.
Eight years of Federal Reserve subsidy leaves them with hundreds of billions that they can afford to give/throw away!
This is all corporate BS.
“strengthening individual financial knowledge and improving economic opportunities in underserved communities” <— Put our name out there so that The Poors sign on our dotted line and not someone else’s.
“provide $500 million in “philanthropic giving”” <— tax writeoff
“part of that $500 million” <— How much? Just enough to make the news; not enough to make a difference.
“provide $150 billion in mortgage originations to minority households and $70 billion in mortgage originations” <—- Originations. Which you will then sell to Mel Watts within 30 days for juicy fees.
“build and improve 1,000 homes by 2020″ <—- $10 million over 3 years. Big whoop. You can probably find that in the CEO’s couch cushions.
“Wells Fargo must help address these social, economic, and environmental challenges and strengthen the communities in which we operate for current and future generations,”” <—- ran out of rich customers so we need to cultivate The Poors.
And I would bet that most of this goodwill has some government backing.
‘Qatar residential market softens in Q4 amid oil slump’
‘A wave of new apartment supply is expected to enter the market on the Pearl Qatar during 2016, which may lead to a potential reduction in rental rates in this area.’
‘MELBOURNE could have Australia’s worst performing property market by the end of 2018, an ominous new report has predicted. It predicts that the “untimely collision” of car manufacturing job losses and rampant overbuilding of homes will cause property prices to plunge, sales volumes to fall and vacancy rates to rise.’
‘“The housing supply pipeline exceeds population demand in Melbourne to the tune of approximately 12,000 dwellings per year — more than enough to turn the property temperature gauge right down to a gentle simmer,” the Propertyology report says. “Of even bigger concern is the impact on as much as six per cent of the city’s households from car manufacturing plant closures from late-2016 … through 2017. “One would have to anticipate there’d be a significant knock on affect to consumer and business confidence across the entire city.”
‘The report states that not only is Melbourne’s apartment sector burdened by oversupply, but 16 of the city’s 31 local government areas have approved 50 per cent more dwellings than normal, despite population growth remaining the same.’
Debt Donkey clock….
http://www.theburningplatform.com/2016/04/22/watch-u-s-consumption-numbers-in-real-time/
And the msm continues being nothing more than paid shills for the RE fraud industry:
http://www.msn.com/en-us/money/realestate/as-home-prices-soar-buyers-cant-make-the-down-payment/ar-BBs57ob?li=BBnbfcN
There is not one bit of real reporting in this article.
“Home prices rose 6.8% in February as compared to the previous year and home data and analytic firm, CoreLogic sees no end to the increase in sight.
…most of her clients are writing love letters to sellers and some are having to take big risks…
Reviewing options through Zillow is a safe and easy way for the borrower to determine which lenders they should contact…
How to Set Yourself Up for Success
Banfield says Quicken offers a variety of options…
The point is to talk to a skilled lender before making any decisions…
Sinha adds that working with a trusted Realtor…can mean the difference between getting a good deal on a solid home versus a money pit.”
But nobody could see this coming (they will say a few years down the road.)
Well, you can’t commit fraud by telling the truth so the first thing the fraudster does is lie. There’s a whole article of lies there.
Dayum. That really is one big advertisement.
Felons for Hillary just delivered another 200,000 dependency votes. Criminals have to stick together.
http://www.zerohedge.com/news/2016-04-22/virginia-governor-allows-convicted-felons-vote-boost-hillarys-election-odds
OT:
Convenience store clerks’ lives matter…poor, brave kid, only 24, protected his co-worker.
Lee’s Liquor cashier’s silence may have saved pregnant co-worker’s life
A brave man who deserves respect. The gunmen would probably have killed everyone in the store whether or not he gave up his secret, that doesn’t diminish what he did.
“A brave man who deserves respect.”
+1
Calling Rio!!!…..
This…..
BRASILIA, April 22 (Reuters) - Factories, farms and services companies shed a net 118,776 payroll jobs in March, the latest evidence of massive job destruction caused by the country’s worst recession in decades.
Economists surveyed by Reuters expected 90,000 job dismissals last month, according to a median poll estimate. It was the 12th consecutive month of job losses in Brazil, according to the Labor Ministry’s report. (Reporting by Silvio Cascione, editing by G Crosse)
The used bookstore in my neighborhood is scrambling to find other rental space because they can’t afford their proposed rent hike.
They should sell online instead.
Many of them already do, often on Amazon or ebay.
Every time I look at a used book section, my house dust allergy flares up amazingly. An NP95 dust mask would probably prevent the reaction, but I look weird enough even without wearing one.
Supposedly moldy old books can also cause hallucinations in some cases too…
http://articles.chicagotribune.com/1996-09-21/news/9609210090_1_fungus-books-hallucinogenic
Yup. It’s more likely a mold allergy than a dust allergy. I am strongly sensitive myself. My grandma’s old books, stored in the farmhouse, all had that same “old book” smell. Especially the paperbacks.
I like to buy new books, create jobs.
This happened this week.
Section 8 renter who pays $142 a month on a $1,400 a month town home tells the landlord she talked to someone who said she would never own a home this way so she wanted to know if she could rent to own.
That’s an interesting idea. Maybe it’s a good way to avoid taking on mortgage debt.
“That’s an interesting idea. Maybe it’s a good way to avoid taking on mortgage debt.”
Have the government buy you a house?
That’s one way to look at it. We need Haystacks to weigh in here. Is it better for the government to buy a house for a person or rent a house for a person?
You’re gonna have to sweeten the pot for the landlord.
As I understand it, a portion of the rent money is put into an escrow account over a certain number of years for a rent to own deal. He is already getting his $1,400 like clockwork and he isn’t going to put a portion that into an escrow account for the renter.
There is another problem these people are not thinking of. If they owned the place free and clear their taxes and insurance would cost more than $142 a month and that doesn’t take any maintenance into consideration.
So if you’re going to start buying houses for section 8ers you will be needing another government program to handle the repairs.
I know. I was making a little joke. Do you know how big that townhouse is? It sounds expensive. I have some family up in 32940. I know of a nice little townhouse community where two-bedroom townhouses go for about $900 a month.
It’s a 3 bed 2 1/2 bath and I would guess about 1200 sq ft AC
The 2 beds rent for $1,200
“It sounds expensive.”
It is expensive, in the early 2000s those units rented for $650 for a 3 bed and $600 for a 2 bed.
In Northern Palm Beach County $1,100 for a 2 bed 2 bath is about the best you can do now unless you go into the hood.
Traffic — Shouldn’t Have Took More Than You Gave:
“time to change the script for this whole place
reading and not feeling what you say”
https://www.youtube.com/watch?v=JweZ_wzmifw
My Old School- Steely Dan- 1973 - YouTube
http://www.youtube.com/watch?v=Sq8OU-7JDFA - 239k -