What Feels Like Déjà Vu
A weekend look at the housing bubble, starting with this MarketWatch opinion piece by Michael Brush. “Back when the 2005-07 housing bubble was brewing, photos of impossibly small houses selling for insanely high prices famously made the rounds. It was one of those signals that you look back on and say, ‘Hmmm … that was a clear indictor of trouble ahead.’ So in what feels like déjà vu, it’s worrying now to see a glorified ‘tool shed’ on the market in New York for a cool $500,000. In Brooklyn, no less. Not even in Manhattan.”
“Here are some other troubling anecdotal signals on the housing market: 1. A major financial website recently ran a guide to the best cities to ‘flip’ houses in. (I don’t want to encourage the behavior.) Real estate speculation via house ‘flipping’ was another early sign of trouble ahead. 2. A few days later, news arrived that home prices in the Bronx had shot up by an astonishing 30% in the first quarter. Crazy advances in home values were, a decade ago, also a signal of trouble ahead. 3. Ads, then as now, were running on TV for ‘quick mortgages.’”
“‘No money down’ was one of the big problems contributing to the housing bubble 10 years ago. Unlike the 20% down payment of yore, the availability of zero-money-down loans encourages people to buy homes beyond their means. It also means from Day 1, buyers are underwater, taking closing costs into account. So it’s disconcerting to see that first-time home buyers now put just 3.5% down on their homes, or $8,500, according to numbers from Stephen Oliner of the American Enterprise Institute.”
“A lot of people are taking out mortgages with dangerously high monthly payments relative to their incomes. And the problem is getting worse. Here’s how we know: Government regulators say the debt-to-income ratio (DTI) for home buyers can go up to 43% before they risk running into trouble. The DTI measures all monthly loan payments — for things like credit cards, cars and mortgages — against monthly income. Three years ago, 22% of home buyers were above this limit. In March, that number was up to 28%.”
“For context, back in the early 1990s, when the fear of housing-market blowups wasn’t yet a ‘thing’ thanks to more conservative lending standards, only about 5% to 10% of loans were at or above the 43% cutoff. ‘Many of the mortgages being taken out now don’t make sense in terms of the likelihood of people being able to repay the loans,’ observed Oliner.”
“Part of the problem here is that the various federal agencies tasked by Congress with promoting home ownership — the Federal National Mortgage Association, the Federal Home Loan Mortgage Corp. and the Federal Housing Administration, for example — are competing with one another for business. This can contribute to a loosening of lending standards, said Tobias Peter of American Enterprise.”
“Another problem is that Dodd-Frank rules meant to encourage banks to better vet borrowers simply don’t apply to government-guaranteed loans. That’s a big loophole because those loans make up about 80% to 85% of the mortgage market.”
From Highlands Today in Florida. “Even though 6,716 forecloses followed the boom, Sebring and Avon Park are still among the most overleveraged cities in the nation, according to an analysis from WalletHub, an online financial advisor. Using information from the U.S. Census and TransUnion credit reporting agency, WalletHub identifies cities where mortgage debtors are most under water. WalletHub analysts compared the average mortgage debts to the median income and median home value in each of 2,521 U.S. cities.”
“The most overleveraged cities included Beverly Hills, Calif. and Brooksville, Fla. The least overleveraged cities included Scarsdale, N.Y. and Naples, Fla. Miami Beach, Stuart and North Fort Myers also appeared on the overleveraged top 15.”
“‘It is interesting that the debt-to-income ratio is above 100 percent for virtually every city,’ said David Leidel, a former banker who is now a financial management counselor in Sebring. ‘I believe the rule of thumb is to be below 38 percent. Cities like Sebring and Avon Park, which have 597 and 466 percent respectfully, illustrate the continuation of the financial crisis.’”
“‘Poorer areas will take longer to recover,’ Leidel said. ‘And I would think that real estate values would follow the recovery path. I am not sure how long one can survive financially where their debt payments exceed their income, but that could be a reflection of people who are awaiting foreclosure, have lost their job and have no income, or have bills they just are paying.’”
“Leidel’s principal work is with retirees and those working toward retirement. ‘The new trend that I see more now than I did 10 years ago are the number of retirees facing debt issues,’ Leidel said. ‘In the past, when people retired, they retired their debt and didn’t exceed their monthly income. Today, they are going into debt in retirement and facing many of the financial challenges they had when they were working.’”
“Leidel attributes that trend to retirement income remaining the same or less while prices have inflated. At the same time, their children need financial help, health care costs aren’t covered by insurance, and retirement savings aren’t working the way they planned.”
KRON 4 in California. “There is a construction boom happening in the Bay Area. New numbers from Dodge Data and Analytics suggest that housing construction is up 92 percent over last year. But it might not be enough to give the middle class some relief. You can forget about gridlock if you decide to move to the old naval yard in San Francisco. The streets are so empty that when Robert Knigge drives around he uses a golf cart.”
“Robert is one of the first people to buy a townhouse at the San Francisco Shipyard. It is one-half of a massive new development at the old naval yard and Candlestick Park that will create 12,000 homes when it’s finished. To put it in perspective, that’s the same number of new homes built in all of San Francisco in the last five years.”
“‘Developers have jumped back in, in a very big way,’ Patrick Carlisle of Paragon Real Estate said. Carlisle said there are 60,000 new homes in the pipeline right now in San Francisco alone. Even if they all get built, that falls short of the huge demand for housing. So, projects like the shipyard that start out as relatively affordable don’t stay that way for long. ‘If the supply and demand dynamic are out of whack, it jumps back up. So, the housing that was affordable is no longer affordable,’ Carlisle said.”
“The townhouse is actually Robert’s second property out there. Last year, he bought a two-bedroom for about $750,000. In April, he sold it for 14 percent more. ‘I didn’t think it would be this quick. But the time is right,’ Knigge said. “
‘It is one-half of a massive new development at the old naval yard and Candlestick Park that will create 12,000 homes when it’s finished. To put it in perspective, that’s the same number of new homes built in all of San Francisco in the last five years. Even if they all get built, that falls short of the huge demand for housing. So, projects like the shipyard that start out as relatively affordable don’t stay that way for long. ‘If the supply and demand dynamic are out of whack, it jumps back up. So, the housing that was affordable is no longer affordable,’ Carlisle said.’
‘The townhouse is actually Robert’s second property out there. Last year, he bought a two-bedroom for about $750,000. In April, he sold it for 14 percent more.’
Five years worth of housing and this guy is riding around in his golf cart flipping them brand new. You can’t build your way out of a bubble without a bust. Speculators will run prices right back up. If you started them off at 100k, (not 700k), it would still get flipped up to some ridiculous price as long as the credit market and appraisers went along.
Bayview and Hunters Point were miserable ghettos back in my repo days.
“Another problem is that Dodd-Frank rules meant to encourage banks to better vet borrowers simply don’t apply to government-guaranteed loans. That’s a big loophole because those loans make up about 80% to 85% of the mortgage market.”
Why the double standard? Seems like a fatal flaw in legislation that was doomed to fail by design.
A simple way to end the bubble might be to get Uncle Sam out of the home lending business. But the recent trend has been in the opposite direction.
Chris Dodd and Barney Frank should be sharing the same prison cell for their role in causing the 2007 housing bubble bust.
I believe Barney would like that.
“Chris Dodd and Barney Frank should be sharing the same prison cell”
Will they have to put Women’s rooms in Men’s prisons and vice versa or gender neutral bathrooms to comply with federal transgender laws?
Feds tell UNC it must not follow state law on bathroom access for transgender people
By Emma Brown
May 5 2016
The U.S. Department of Justice has told the University of North Carolina system that it must stop complying with the state’s controversial law requiring transgender people to use bathrooms corresponding to their birth certificates, arguing that the state law violates federal civil rights protections.
Money Magazine
Everyday Money Savings
23 Reasons Why You’ll Always Be Broke…even though you make good money
Elyssa Kirkham / GoBankingRates
May 6, 2016
Many Americans are clearly not experts at managing their own finances and end up broke month after month. The cycle of overspending leaves them poor, even if their income means they are considered well above the poverty line. A third of higher-income households — those that bring in $75,000 or more a year — live paycheck to paycheck, found a recent survey from SunTrust Banks.
…
10. You’re Spending Too Much on Housing
It might be time to consider moving to a smaller place. “Spending too much money on rent or a mortgage,” is the biggest reason people struggle financially, said Andy Josuweit, CEO of Student Loan Hero. “After living in New York City for a few years, I met dozens of young people who were ‘house poor.’”
“These were people who make above-average incomes but end up spending too much on rent,” he said. “As a rule of thumb, you should try to keep housing costs under 20% of your income, as opposed to the 28% to 30% limit that most banks allow.”
…
“A lot of people are taking out mortgages with dangerously high monthly payments relative to their incomes. And the problem is getting worse. Here’s how we know: Government regulators say the debt-to-income ratio (DTI) for home buyers can go up to 43% before they risk running into trouble. The DTI measures all monthly loan payments — for things like credit cards, cars and mortgages — against monthly income. Three years ago, 22% of home buyers were above this limit. In March, that number was up to 28%.”
Renters generally don’t have this problem.
The hollowing out of the American middle class is feeding quiet desperation.
http://www.businessinsider.com/americans-facing-poverty-with-no-name-2016-5
” Breaking the bank for your kids’ education is, to an extent, perfectly reasonable: In a deeply unequal society, the gains to be made by being among the elite are enormous, and the consequences of not being among them are dire. ”
Upper class or bust! The new American Dream.
“At its core, this relentless drive to spend any money available comes not from a desire to consume more lattes and own nicer cars, but, largely, from the pressure people feel to provide their kids with access to the best schools they can afford (purchased, in most cases, not via tuition but via real estate in a specific public-school district).”
That’s our situation in a nutshell, except it will end after two more years of paying high rents in a good school district, after which we can relocate to an area with lower rents and worse schools.
except it will end after two more years of paying high rents in a good school district,
It ends when they go away for college?
Yep.
Of course we will then be substituting tuition bills for a rent reduction, so our tight budget will persist…
we will then be substituting tuition bills for a rent reduction
Yeah, that was my semi-cruel point.
It’s a tough call on how much to help your kids after they reach adulthood. My parents were very generous and supportive of me and my siblings, and we provide similar largess to our kids, especially in this era of limited entry level opportunity.
By contrast, my daughter’s ex-beau was kicked out of his mom’s place to fend for himself when he turned eighteen. And she has a well-paying job plus alimony checks, so it’s not about the money. There is nothing illegal about her approach, but it seems mean-spirited. The son dropped out of college and can’t even afford to earn an associate’s degree because he needs to work 40+ hours to survive.
We had a little disappointment lately. My daughter finally managed to control her anxiety and seemingly landed a job. Two interviews, all smiles, discussion of scheduling, I’ll call you this weekend to tell you when to come in - then, nothing. Went to the place, left messages - no reply. She’s convinced she did something wrong, no matter how many times we tell her people can be jerks.
Sorry about your daughter. This is where parents can really help, by offering unlimited emotional support and encouragement to get out there and try again.
Thanks. She’s concerned about pulling her weight, money-wise, in the household. We told her to take that off her too long list of worries, and find something she can handle and finds interesting.
“We told her to take that off her too long list of worries, and find something she can handle and finds interesting.”
We had a similar conversation with my daughter recently. She was worried about having a job while going to college, and we encouraged her to just focus on doing well and graduating. The graduation ceremony is in two weeks, and she will have finished her degree in under four years.
It really doesn’t pencil out on the margin to have your kid working a low wage job that takes away from the opportunity to build the skills necessary to compete in today’s market for career track jobs.
“The graduation ceremony is in two weeks, and she will have finished her degree in under four years.”
Congrats!!
My daughter is wrapping-up her first year, and I’m rolling with it 100% as it occurs; no loans.
It doesn’t matter how much money you earn if you’re poor.
It also doesn’t matter how much you earn if you blow it all on overpriced housing.
Or on a F350 4×4 Crew Cab diesel with a lift kit and $6K of financed wheels and tires . . .
A co-worker is shopping for a Ford pickup. He said that it isn’t too difficult to hit $60k these days adding options to an F150, half-ton 4×4. I told him to buy a used Toyota Tacoma that he can sell later on for the same price, but he’s from a “Ford” family. Sigh.
The MarketWatch editorial has a lot of stuff worth reading.
‘Many of the mortgages being taken out now don’t make sense in terms of the likelihood of people being able to repay the loans,’ observed Oliner.’
Like the Fedex immigrant with three teenage girls who buys a New Jersey house between 500-600k. He might make payments, for now. Can he pay back half a million with interest? His plan, admitted or not, is he’ll be able to refinance here and there and sell long before 30 years are up. (He’s a speculator). And reality over 30 years just might interrupt his ability to make payments or desire to do so.
Hilary will help u share
You’ll be paying off smelly Mel loans of q 1213,14,15,16
Many renters DO have affordability problems where I live in northern Calif. as rents are up about 40% over the last 4 years. Buying is not an option for the great majority with the median house price at about $550K. I’ve been in the same place for 7 years and have only had one 5% increase…but if I had to move something comparable would likely be waaay more expensive.
“Many renters DO have affordability problems…”
The problem I was referring to was not a lack of affordability. Rather it was the option to do something to mitigate it. If rents continue going up dramatically, I plan to downsize to a smaller place in a less desirable area in a couple of years. And prices and rents are likely to decline in the next recession. Those buying now to avoid unaffordable rents will find themselves owning and underwater at the point when their best buying opportunity presents itself.
I feel lucky that my rent in a good part of Orange County, near great biking trails and close to my office, is about 10% to 12% of my salary and compensation. With the idea of staying debt free and buying stocks slowly, I get to where my NAV is well above my cost basis and then realize long term gains to reduce my effective tax rate. I don’t mind renting a one bedroom place while I can do great biking. This morning I was at Corona Del Mar State Beach, a 16 mile bike ride from my office, mostly (Except in CDM) on dedicated paved bike paths. It is exercise, fresh air, and fun. See, living below your means does not mean you cannot have fun and fresh air.
Nothing whatsoever was learned in the last episode, as the same mistakes are being repeated in a race to the bottom on steroids.
Posted 02/24/2016
6 Low or No Down Payment Mortgage Options for 2016
100% financing and low-downpayment loans for today’s mortgage borrowers
No Down Payment Mortgage
A no down payment mortgage allows first-time home buyers and repeat home buyers to purchase property with no monies required at closing. Other options, including the FHA loan, the HomeReady™ mortgage and the Conventional 97 loan offer low down payment options with a little as 3% down. Mortgage insurance premiums typically accompany low and no down payment mortgages, but not always.
Is A No Down Payment Mortgage Right For You?
It’s a terrific time to buy a home.
Sales are rising, supply is dropping, and prices have increased in many cities and neighborhoods. As compared to next year, today’s market may look like a bargain.
Furthermore, mortgage rates are down.
Rates for 30-year loans, 15-year loans, and 5-year ARMs are cheap, which has lowered the monthly cost of owning a home.
However, it’s not the monthly payment that scares off new buyers these days — it’s the prospect of having to put 20% down.
Buyers are earning good incomes, but few have much saved in the bank.
The good news is that there are a bevy of mortgage programs requiring little or no money down and they’re available to the general public — no hoops required.
Want to buy a home with little or nothing down? You can.
…
As compared to next year, today’s market may look like a bargain.
Translation: “Buy now, or be priced out forever!!”
Financial Times
Barclays
Barclays launches first 100% mortgages since crisis
Relief for ‘bank of Mum and Dad’ in return to riskier lending
Homebuyers will no longer have to rely on parents to supply a deposit/b>
May 3, 2016
by: Emma Dunkley
Barclays has become the first high street bank since the financial crisis to launch a 100 per cent mortgage in the latest sign of a return to riskier lending.
The bank is allowing some buyers to take out a mortgage to 100 per cent of the value of the property, without needing a deposit. Most banks require at least a 5-10 per cent lump sum.
Barclays said the mortgage only needed to be supported by a family member or guardian, who must set aside 10 per cent of the purchase price in cash for three years in return for interest. It said the new mortgage was designed to remove the issue of borrowers drawing from the “bank of Mum and Dad” to stump up a deposit.
…
“Barclays said the mortgage only needed to be supported by a family member or guardian, who must set aside 10 per cent of the purchase price in cash for three years in return for interest.”
The mortgage needs to be supported by a family member or guardian. Check.
‘It said the new mortgage was designed to remove the issue of borrowers drawing from the “bank of Mum and Dad” to stump up a deposit.”
This mortgage that needs to be supported by a family member or guardian nevertheless is designed to remove the issue of borrowers drawing from the “bank of Mum and Dad” to stump a deposit.
Got it.
To be fair, it is a substantive change; instead of borrowing from Mum&Dad, potentially long-term, Barclays is now setting the terms of the parental loan: it shall be 3yrs in length, with interest paid to Mum&Dad by Barclays—certainly at a much _lower_ rate than they will be charging the kiddos for the now-larger mortgage.
So you see, it is distinctly different, and substantially better—for the banksters.
Posted 04/21/2016
Typical Home Buyer Making Smaller Mortgage Down Payment
Ellie Mae: Home buyers are making smaller down payments
Homebuyers’ Down Payments Shrink
U.S. home buyers are putting down less to purchase homes anymore.
According to Ellie Mae, whose mortgage software handles more than 3.7 million applications annually, the average downpayment is shrinking as first-time home buyers continue to popular (SIC) the market; and, mortgage guidelines ease.
Low- and no-down payment loans remain prevalent.
In addition to FHA loans, and Fannie Mae’s Conventional 97 and HomeReady™ home loan, today’s buyers also have access to USDA loans and VA loans — both of which require no downpayment whatsoever.
Furthermore, piggyback mortgages have made a comeback with buyers — and this time, they’re not subprime.
With mortgage rates still below 4% and home values rising in many U.S. markets, it’s an excellent time to be a buyer. The market may be less favorable to buyers in 2017.
…
Oil Markets
Oil-Field-Equipment Makers Need Oil Prices Above $60 a Barrel
$63 a barrel is average forecast at industry gathering for price to signal upturn is taking hold
A view of the 2016 Offshore Technology Conference in Houston on Tuesday.
Photo: Aaron M. Sprecher/Bloomberg
By Dan Molinski
May 6, 2016 3:09 p.m. ET
Small and medium-size oil-field-equipment companies attending an energy conference this week in Houston said oil prices need to go much higher before their corner of the industry starts seeing a meaningful recovery.
Estimates from a Wall Street Journal survey of 50 equipment companies with exhibition booths at the OTC, or Offshore Technology Conference, showed an average forecast of $63 a barrel as the price that would signal the upturn is taking hold.
On Friday, the U.S. benchmark oil price was trading at $45 a barrel. That is 12% higher from the beginning of the year but less than half what it was fetching in mid-2014 when the downturn began.
…
Too bad AlbuquerqueDan isn’t around to inform us when oil will climb back to above $60/bbl.
Oil could easily go back over $60 a bbl, due to geopolitical factors or internal upheaval. Countries like Saudi Arabia, Venezuela, or Nigeria aren’t exactly bastions of stability.
And just as easily and more likely to plunge to $15/barrel.
Remember….. there is a globe full of oil and demand is falling.
Oil use increasing 1-2% a year and it takes ? A million years to make
Problem is demand is down. And more oil is formed every day.
Geology my friend.
Your meds, my friend Housing Analyst. Get back on them. You are only allowed one new pretend name per week.
You are only allowed one new pretend name per week ??
Yeah…We must be up to 10 now…
“You are only allowed one new pretend name per week.”
But I will never escape who I really am.
‘The most overleveraged cities included Beverly Hills, Calif. and Brooksville, Fla. The least overleveraged cities included Scarsdale, N.Y. and Naples, Fla. Miami Beach, Stuart and North Fort Myers also appeared on the overleveraged top 15.’
‘It is interesting that the debt-to-income ratio is above 100 percent for virtually every city,’ said David Leidel, a former banker who is now a financial management counselor in Sebring. ‘I believe the rule of thumb is to be below 38 percent. Cities like Sebring and Avon Park, which have 597 and 466 percent respectfully, illustrate the continuation of the financial crisis.’
Here’s a question; what is more likely to directly affect your life? That a person you will never meet has changed a username on a blog, or that people in this country are over-leveraged by multiples from historic norms?
HA, changing his user name will never effect my life, because just about everything he says has no basis in fact! I just try to let others know, so they don’t base their decisions on his erroneous diatribe.
Clearly, housing markets ebb & flow, and have for centuries. Learning that, both first hand and with the HBB, has been an important financial lesson and a source of information for making solid financial decisions. I would be much worse off today without this Blog!
False.
The current ongoing asset bubble has no precedence. Never in recorded history has the been such a bubble of this scope and depth. And it’s all fraud driven.
The lack of precedence implies there is no way to predict how it will go from here on out.
Hmmm, you mean…..
“This time, it’s different!”
Where have I heard that before???
There is no this time jingle fraud. Hence it’s unprecedented.
2016 Dry Bulk Rates Will be Lower than Last Year, Says Drewry, as Baltic Dry Index Continues to Slide
Friday May 6, 2016
The Baltic Dry Index (BDI) fell for the fifth consecutive session Thursday, shedding 10 points to land at 642, as Drewry Shipping Consultants Limited (Drewry) said it believes dry bulk freight rates in 2016 will be, on average, lower than last year as market fundamentals are set to “remain challenging.”
The news comes as market participants who, after a historically poor start to the year that saw the sector’s key barometer bottom out in February at 290, had their sprits buoyed in recent months as the BDI by last week recovered to 715.
News of a fifth straight session of declines that has wiped some 10 percent / 73 points from the BDI will presumably be equally unwelcome news.
…
Off to Home Depot.
Very sore today… spread 5 cubic yards of 3/4 crushed shell by myself. Great workout.
Crushing.Driveway.Material.
Your life belongs to the house now.
Nah, don’t get crazy now.
We have some things that have been ignored that need to be dealt with. I need to revive the yard and do some landscaping. A few other things like gutters and replace some old windows and we’re good. The pipe in 5-10 years…
So far putting the uncertainty of renting behind me has been a good thing.
Glad to hear it, Muggy!
I planted some lilies (free) in my yard today and have spent the past week and will spend the next week painting the boat. Buying a couple cans of epoxy paint at $10 a pop is almost like making a mortgage payment. And those foam brushes are $1 each. I’m not entirely irresponsible, just leaning that way.
“Buying a couple cans of epoxy paint at $10 a pop is almost like making a mortgage payment. And those foam brushes are $1 each. I’m not entirely irresponsible, just leaning that way.”
Good on ya for keeping those payments in an affordable range!
That’s alotta shells! I aggravated a disc 2 winters ago spreading 600 lbs. Of pecan shells as mulch, now I use my new best friend javier for those things.
today it’s me against the blue jays. They’re back and they’re after my peaches. I have 60 sq. Yards of netting that should slow them down!.
“today it’s me against the blue jays. They’re back and they’re after my peaches”
Failure to Launch (6/10) Movie CLIP - To Kill A Mockingbird (2006 …
http://www.youtube.com/watch?v=UPu0PU6sLxo - 382k -
Instead of Home Depot I exercised my quads and hamstrings on a 32 mile bike ride. Had zero maintenance to do unless you consider it checking up on my asset allocation and net worth.
While you shovel shells I daydream of the next AUY and the next ASGN (bought over 1000 shares of each under $2).
While you shovel shells I daydream of the next AUY and the next ASGN (bought over 1000 shares of each under $2) ??
Some people dream of money and that drives there daily life…Others dream of the weekend in the backyard with their wife, children & pets….
Others dream of the weekend in the backyard with their wife, children & pets….
Truth.
But that necessitates a J-O-B.
My older sisters saved very little. One earns in the six figures and she’s been in that range several years but saved very little. She’s 61 and says she will work until she drops.
I was thinking of working to 67 (in ten years) but health issues may force me to quit earlier so that I can focus on health. That would mean either working part time or not at all and the prescription is more biking, more stress relief. That requires none of the weekly grind. I saved for this and am glad.
She’s 61 and says she will work until she drops.
Easier said than done—OTHERS decide whether you work into your dotage or not.
Bro, that’s chains not gonna oil itself….keep it wet!
The secret shame of middle-class Americans (or how a disturbingly high percentage of middle-class households can’t come up with $400 for an emergency expenditure).
http://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/
I read through that whole article and some of the comments yesterday.
The commenters noted that the author could have made some better decisions, not living in New York, sending his kids to state schools, asking his wife to get a job, but that doesn’t script the victim narrative.
“but that doesn’t script the victim narrative.”
Is the author claiming victim status or is he just showing how a seemingly comfortably middle class family could not have $400 for an emergency?
There seems to be a view among many posters here that what the PTB is doing to the American middle class is a great crime, but whenever any individual worker bee’s bad economic situation is examined, the same posters will assign the blame to the worker bee.
Sort of a spin on Selective Outrage: In the big picture our economic system is a terrible crime, but individually every so-called victim of it deserved what they got.
Are those two views compatible? If so, what conclusion can be drawn?
“Middle class” lifestyles were a historical aberration, 1945-1973.
Some of the older callers on yesterday’s C-SPAN call in show explained that. My college roommate was the first in his family to graduate college, paid for by a single earner household with a GM line worker’s salary.
Those days are over now, and people need to adjust their expectations.
Those days are over now, and people need to adjust their expectations.
So all this “the PTB did this and that to destroy the middle class” is just pointless grousing? Housing, health care, education aren’t affordable for the middle class because the middle class was an historical aberration, not because of anything the government or banks have done?
‘that what the PTB is doing to the American middle class is a great crime, but whenever any individual worker bee’s bad economic situation is examined, the same posters will assign the blame to the worker bee…not because of anything the government or banks have done’
IMO, your confusion lies in how you see the world. When I say the PTB, I mean the individuals who make it up. When I say government, I mean the individuals in the government. In truth, terms like middle class are abstract. This class never gets together or is even aware of the others lumped together because they are all individuals. If individuals in the government or greedy speculators have screwed up, they are all due some blame.
There is danger is viewing the world in collective terms because we will do things as a perceived group that we would never do alone.
The women all control their men
With razors and with wrists
And the princess squeezes grape juice
On a torrid bloody kiss
What will you be wearing there
The lion or the raven hair?
The flesh will all be tearing
But the tail will be my own
In the colosseum tonight
This one’s for the balcony
And this one’s for the floor
As the senators decapitate
The presidential whore
The bald headed senators
Are splashing in the blood
The dogs are having someone
who is screaming in the mud
In the colosseum tonight
Now it’s raining and it’s pouring
On the pillaging and goring
The constable is swinging
From the chains
For the dead there is no story
No memory no blame
Their families shout blue murder
But tomorrow it’s the same
In the colosseum
A slowly acting poison
Will be given to the favorite one
The dark horse will bring glory
To the jailer and his men
It’s always much more sporting
When there’s families in the pit
And the madness of the crowd
Is an epileptic fit
In the colosseum…
No justice here, No liberty
No reason. No blame
There’s no cause to taint the sweetest taste of blood
And greetings from the nation
As we shake the hands of time
They’re taking their ovations
The vultures stay behind
In the colosseum tonight…
But if the middle class was an historic aberration, then yeah, some individuals here and there, some in government, some in banks, some Joe 6packs, did this or that to help screw it up, but it was all coming to an end anyway, so really it was no big deal.
So what are people complaining about?
Maybe if you spent some time outside of California you could understand.
Regards,
Flyover
Fear of the last frontier in flyover.
Taken on descent into LAX in February:
http://www.picpaste.com/20160212_084830_1.jpg
Got brown cloud?
“Got brown cloud?”
Actually, that’s not a “bad” view. Back in the seventies it was so smoggy that you couldn’t read the large signs along the freeway from a distance.
It’s probably about the same as Denver’s brown cloud.
Irrelevance.
LA has cleaned up a lot, even since the 90s. Still, no place I would want to live. Denver, however…
By facilitating risky borrowing to purchase of homes at high multiples of income, the PTB are encouraging behaviors that create a high risk of household financial ruin.
the PTB are encouraging behaviors that create a high risk of household financial ruin.
Yeah, that’ll happen. A few individuals in the PTB may have caused or exacerbated some problems, but the whole middle class thing was doomed from the get go.
No big deal, just how it goes when your an historic aberration.
“just how it goes when your an historic aberration.”
How is a middle class a “historic aberration”? There was a middle class in the time of the Mayans, the Aztecs. Mainly artisans and scribes, merchants and physicians of the day, but they were middle class. Persia had a similar middle class. Egypt, Rome. Included higher ranking members of the military.
Moorish Andalucia had a merchant and academic (scribe) middle class. The Netherlands of the 1600s had a solid merchant middle class.
I’ve read this before about a middle class being a historic aberration, where does it come from, Krugman?
To be sure, there wasn’t much of a middle class in Europe between the fall of Rome and the more prosperous (whoops, there’s that middle class) part of the middle ages. The Dark Ages were a brutal interregnum. A middle class has always been a hallmark of a successful civilization, no matter what opinions we may hold about some of those civilizations. Of one thing you may be sure, though. As the middle class goes, so goes that civilization.
Preach it, Palmy!!
The Netherlands of the 1600s had a solid merchant middle class.
I’ve read this before about a middle class being a historic aberration, where does it come from, Krugman?
There was probably a middle class all over Europe starting in the middle ages. In those days the two main classes were the aristocracy and the peasantry. The small numbers of craftspeople and traders and so forth were in the middle.
There’s still a middle class in America. It’s just been shrinking for decades.
Also, your reference to Krugman reminds me of that guy who calls himself Junior Bastiat or whatever. There’s must be a large number of people on the internet who make negative statement about Paul Krugman without bothering to read what he writes.
“There’s must be a large number of people on the internet who make negative statement about Paul Krugman without bothering to read what he writes.”
We read enough to know we don’t want to read anymore. It just makes you crazy. Lemme know when he calls for the abolition of the FED. Wouldn’t want to miss that.
There is always a middle class. How many people are in it varies wildly.
“There is always a middle class. How many people are in it varies wildly.”
ED ZACHARY! Or varies widely, depending what is going on in a society or civilization at the time. Expands, contracts, sometimes down to nothing, as in the USSR. But one could argue there was still sort of a class system there, for all its attempts to eradicate it.
When I wuz a pup, the janitor at our parish school was a member of the middle class. Maybe lower middle class. Immigrant from Italy. Made enough to support a wife and three kids and live in a very modest, but somewhat pleasant neighborhood. To be sure, he did take on some handyman work, but he kept the lights on, the pipes flowing and floors clean at our school and everyone respected him and was even a little afraid of him. He was friendly, but distant and didn’t like to be bothered when he was in the middle of a task.
“A middle class has always been a hallmark of a successful civilization, no matter what opinions we may hold about some of those civilizations.”
Spot on! And the Age of Enlightenment plus the Renaissance and the rise of the bourgeoisie represented a centuries-long awakening of a middle class that grew into the foundation of modern Western Civilization. Maintaining a strong middle class should be a top priority of the oligarchs who are overseeing its demise. When plankton dies, whales are soon to follow.
“Lemme know when he calls for the abolition of the FED.”
He’s probably schmoozing them for a future position on the Federal Reserve Board.
Demand for physical precious metals is exploding as Yellen and her printing press hurtle us down the road to Weimar 2.0.
http://www.businessinsider.com/demand-for-physical-gold-is-exploding-2016-5
All of that conjured-from-thin-air money is still looking for places to go…
All the money exiting the Wall Street-Federal Reserve pump & dump is headed for higher ground to ride out the next financial crisis.
http://www.zerohedge.com/news/2016-05-07/gold-flight-safety-surges-amid-biggest-junk-bond-outflows-history
Something tells me this isn’t going to end well.
http://www.businessinsider.com/the-south-china-sea-debacle-is-getting-more-heated-2016-5
http://www.dallasnews.com/business/columnists/steve-brown/20160506-steve-brown-why-finding-housing-in-booming-d-fw-market-is-so-difficult.ece
Why finding housing in booming D-FW market is so difficult.
About 80,000 people moved to North Texas last year, or more than 200 newcomers a day.
The inventory of homes listed for sale with real estate agents in North Texas is stuck near a two-month supply. That’s about a third of what’s considered a normal market.
Most of the houses built in Dallas-Fort Worth are expensive properties aimed at move-up and affluent buyers.
“Back in 2006, over 60 percent of the new home starts were priced under $200,000,” Brown said. “Today less than 20 percent of the starts are at these most affordable prices.”
‘Back in 2006, over 60 percent of the new home starts were priced under $200,000,’ Brown said. ‘Today less than 20 percent of the starts are at these most affordable prices’
Some say land prices don’t affect house prices. What was the cost of lots in 2006?
When I was up north of Dallas in 2014, the billboards said “zero-down”, “starting in the 700’s” and the like.
Yep, a lot of what is getting built in town is the zero lot, 3 story row homes…starting in the $400’s! The single lot tear downs are happening all over now when a couple years ago it was only certain areas.
zero lot, 3 story row homes
Someone must think that Texas is a tiny little state with little undeveloped land to build on.
Irrelevant.
And yet there are many houses for sale within a five-minute walk of me (Frisco, TX) and the signs have been sitting there for months.
Dallas: Cold — Buyer’s Market http://www.zillow.com/dallas-tx/home-values/
Frisco, Tx: Cool — Buyer’s Market
http://www.zillow.com/frisco-tx/home-values/
There is no shortage of housing in DFW, either for rent or for sale
Dallas, TX Real Estate and Homes for Sale
4,835 Homes
http://www.realtor.com/realestateandhomes-search/Dallas_TX
Dallas, TX Price Reduced Homes for Sale
1,318 Homes
http://www.realtor.com/realestateandhomes-search/Dallas_TX/show-price-reduced
Dallas was hot as a firecracker not that long ago.
Are you sure?
Colleyville, TX (DFW) Housing Affordability Surges As Prices Plummet 21% YoY
http://www.zillow.com/colleyville-tx/home-values/
B…b…but gun control stops gun violence! The MSM says so!
http://www.chicagotribune.com/news/local/breaking/ct-chicago-shootings-violence-20160506-story.html
Gun control = using both hands….just ask granny!
GREAT-GRANDMA, 80, GUNS DOWN INTRUDER AFTER CROWBAR BEATING.
http://abc7chicago.com/news/great-grandma-guns-down-intruder-after-crowbar-beating/1326680/
She nailed that sucker three times…pretty good gun control by any measure.
The left gets upset if u use more than 3 bullets
Falsifying data like BLS unemployment statistics used to be a crime.
http://market-ticker.org/akcs-www?post=231366
Speaking of feeling like deja voux, it seems like the 2008 financial crisis that never went away but was only papered over with trillions of printing-press QE is starting to rear its ugly head again.
http://www.theguardian.com/world/2016/may/06/imf-threatens-greece-eurozone-christine-lagarde
‘Back when the 2005-07 housing bubble was brewing, photos of impossibly small houses selling for insanely high prices famously made the rounds’
‘Echo Park Home In Need Of Renovations Lists For $770K’
‘Southern California housing prices are once again starting to soar even among fixer-uppers. In fact, one in Echo Park is currently listed for $770,000. Posted pictures show the multiple occupancy four-bed, two-bath property is in need of some serious renovations or perhaps a tear-down on the 6,700-square-foot lot.’
‘Some statistics show the prices in this community have gone up 38 percent. But many of the people that live on the street say they weren’t happy to see this property listed at $770,000. They’re afraid it could force lower-income renters out of the area.’
‘Though there is rent control in the area, Faktorovich says he is confident the property will sell for the asking price.’
The truth is that prices are starting to level off in LA. High end (>$5 million) are sitting vacant waiting for buyers and more middle-segment homes are coming on the market (as people begin sensing the beginning of the end). Did the realtor pay for this puff piece? Local news is so oblivious…
‘The luxury Los Angeles Westside is an altogether different story. Here, for example the average sales price of a home last year was $9.4 Million for Malibu Beach, $7.9 Million for Holmby Hills, $7.5 Million for the Sunset Strip area of the Hollywood Hills and $7.1 Million for Beverly Hills.’
‘At the higher luxury end of the market, particularly in those pockets where speculators are developing multiple high end projects, price reductions are more common and inventory is not moving as quickly. With more inventory available at the high end, buyers have become more discerning.’
‘There are current reports of a significant slowdown in the Miami real estate market with the most expensive neighborhoods being the hardest hit. Inventory there climbed in the first quarter of this year by about one-third over the same quarter a year ago.’
‘Miami Beach saw the average sale price down 7.5 percent year over year to $905,252 according to the Douglas Elliman and Miller Samuel Real Estate appraisers & Consultants report released a couple of weeks ago. The total number of sales fell during the first quarter by about 21 percent.’
‘Local agents report that the problem there is the increased inventory of luxury condominiums currently under construction as well as weak demand from foreign buyers especially at the top end of the luxury market.’
‘At the top 10 percent of the Miami market, prices dropped by almost 15 percent to an average sales price of about $3 Million. Due to the large volume of inventory, there is approximately a three-year supply available.’
‘The President of Miller Samuel reports that “The high end is softer than the broader market right now.” He went on to explain that “We are coming off this unusually strong period for the high end between 2011 and 2014 and now we’re seeing normalization of that segment.”
‘Reports by financial experts on the condition of the New York real estate market are also reporting that activity in the ultra high end range has dropped off and that asking prices for Manhattan residences are seeing dramatic reductions.’
‘According to the National Assn of Realtors there was a drop off in the number of vacation homes sold in 2015 by 18.5 percent compared to the number of sales in 2014. This drop off in discretionary purchases appears to reflect the high level of uncertainty prospective buyers are feeling about the economy.’
‘Real estate agents in California, New York and Florida are reporting that foreign buyers are not rushing into these markets like they did a couple of years ago when they were buying everything in sight.’
It’s leveling off for sure.
LA was crazy a couple of months ago - practically every open house had multiple offers on the first day. All thanks to one-click mortgages and 2-day pre-approvals. Surprise, surprise, the majority of those places are back on the market and sitting with price reductions because even with today’s incredibly loose lending standards, the “buyers” couldn’t perform.
Just this week I’ve noticed another rash of “sale pendings,” which I’m guessing is a new cohort of suckers lured in to fuel the fire by the P2P lender billboards on Sunset. Kind of like paying fake buyers to wait in line for new developments, except it’s pointless because in the end the stock of actual buyers with real money is almost as limited as the terrible, terrible inventory on offer.
That’s about typical for CA. CA is ground zero for housing fraud.
I’ve heard a number of “buyers couldn’t come through” stories too—and seen some places that came back on the market.
‘It is interesting that the debt-to-income ratio is above 100 percent for virtually every city,’ said David Leidel, a former banker who is now a financial management counselor in Sebring. ‘I believe the rule of thumb is to be below 38 percent. Cities like Sebring and Avon Park, which have 597 and 466 percent respectfully, illustrate the continuation of the financial crisis.’
‘Poorer areas will take longer to recover,’ Leidel said. ‘And I would think that real estate values would follow the recovery path. I am not sure how long one can survive financially where their debt payments exceed their income, but that could be a reflection of people who are awaiting foreclosure…’
Remember the Massachusetts landlords recently who stopped making payments on their rentals? It was a “business decision”.
“the Massachusetts landlords recently who stopped making payments on their rentals?”
Did they stop collecting rent too?
Oh hell no. Didn’t give up their city counsel seats either.
Policymakers have no endgame; markets do.
http://www.zerohedge.com/news/2016-05-07/stan-druckenmiller-endgame-his-full-apocalyptic-presentation
The end game for policymakers is to leave office and hand their successors a market on the brink of collapse.
Woman says squatter has taken over her home …
https://www.yahoo.com/news/woman-says-squatter-taken-over-200020624.html
IMO The comments to this story are well worth a read; contains some good anecdotes.
If the mortgage debtor owns the home, why is a squatter living in it? The story is completely bizarre!
JingleMail, do you have any problems with squatter taking possession of your properties? (Come to think of it, Lil’ Sis had a renter who turned into a squatter for half a year of missed rental payments…)
We rented in 2006, after coming to understand this market…thank you HBB. Our LL stopped paying the mortgage (on $720,000 loan….$2,000/Mon rent) so we stopped paying rent until we used up our security deposit and prepaid rent. Then we agreed to pay rent in ARREARS. We would not pay in advance, since we did not know if wouldown the home tomorrow. It all worked out well, except for the disruption of moving, but that is always a risk when renting.
He lost the home to foreclosure about 4 months later. It sold for $345,000 a year later, foreclosed again and sold for $272,000 in 2010. It’s now valued at $410,000, still way below the original price!
Economic Hackers.
That’s all the economic policy makers are. They don’t reliably know the outcomes of their policies. They try different things and see what happens. Hacking.
I posted an article yesterday where policy makers in Sweden they don’t move to quell their housing bubble because ‘no one wants to break the spell’. Like they don’t know how this thing is going to turn out. Maybe the unicorn-esque soft landing (at least for the connected elites) will occur.
Perhaps I hit it - that’s their goal. That’s what was engineered here.
I’m surprised the media don’t connect some dots about how various governments/central banks have reacted. Singapore is the best example. They decided in 2009 they had a bubble on their hands and have stuck to their guns, despite howling from developers and UHS. They even bump up land releases from time to time to drive prices down further. Even Australia, which has a lot to lose, started closing the door to foreign buyers in the last year and enforced laws that saw Chinese buyers forced to sell what they had bought!
One big problem is interest rates. New Zealand, Australia and Sweden keep rates lower (or negative) to boost the economy which feeds the housing manias. Why not simply have a separate interest rate for house loans as opposed to business/consumer loans?
From the MarketWatch piece:
“The pressure will be even greater if the Federal Reserve ever gets around to seriously raising rates. An increase in the 30-year mortgage rate to 6% from 4% reduces buying power by the same amount as a 19% jump in home prices, all else being equal, according to Oliner.”
And that right there is why you can bet we will enter the next recession with the Fed facing no alternative to ZIRP and/or QE4. They are not going to risk currently raising rates and deflating home prices.
“The townhouse is actually Robert’s second property out there. Last year, he bought a two-bedroom for about $750,000. In April, he sold it for 14 percent more. ‘I didn’t think it would be this quick. But the time is right,’ Knigge said. “
Flipping new construction in 1yr for a 14% gain… Who was it who said they weren’t seeing speculation in today’s market a few days ago??
There have been crimes committed throughout this saga since 2000. Now the crime is more egregious.
Most likely not his primary residence, otherwise he would wait for the 2 year capital gains deal. Yeah it’s speculation alright.
Rancho Bernardo, CA Housing Affordability Improves As Housing Prices Crater 10% YoY
http://www.zillow.com/rancho-bernardo-san-diego-ca/home-values/
“Rancho Bernardo Market Overview
Data through Mar 31, 2016
$566,900 ZHVI
1.6% 1-yr forecast (Mar 31, 2017)”
It seems returns on investment here are shriveling. It is also too bad that owners face the ticking financial time bond of having to repay Poway Unified School District’s capital improvement bonds.
Should have said “Capital Appreciation Bonds” ( article soon to post).
If anyone reading here can envision a future state of the world where that deal looks like a prudent move in hindsight, please elaborate.
“1.6% 1-yr forecast (Mar 31, 2017)”
One has to wonder whether such a low predicted appreciation rate after years of much higher appreciation properly reflects the drop off in investor demand and increase in investor supply that is likely to result as a bubbly rate of price gains peters out. Why would investors park new money in a high risk investment that offers such a low rate of expected return? And investors cashing out of housing to pursue better prospective gains in other asset classes add to supply.
It seems like there is some chance that shifting investor priorities could drive near term price declines.
To Bail Out Its Bond Nightmare, Poway Looks to New Debt and Higher Taxes
The poster child for irresponsible school bond borrowing says it can cut down on its billion in debt, but the deal raises a lot of questions.
By Will Carless | August 27, 2014
The Poway Unified School District has become the poster child for an era of reckless and risky school bond borrowing that will ultimately cost California taxpayers tens of billions of dollars.
A year ago, Poway’s debt seemed inescapable. But now, with the help of San Francisco financial adviser Dale Scott, Poway Unified wants to chart a path out of its mammoth debt problem. The catch? Poway will have to jack up property taxes on some residents – an option it rejected back in 2011.
The deal currently before the board is complicated, but we’re going to take a crack at explaining it. We’ll take a look at the legal red flags and some other curiosities about Poway’s new deal in a separate post.
First, a quick recap: Poway shot to fame in 2012 with its 2011 sale of about $126 million in bonds. Because of the wacky way Poway put together its deal, using something called Capital Appreciation Bonds, the district stuck taxpayers with repayments over 40 years totaling almost $1 billion.
…
To investigate the veracity of Housing Analyst’s daily posts on price declines, I drilled down into the Zillow web site to download sales price statistics for Rancho Bernardo. It took quite some time to figure out how to do this, but here are the numbers I finally dug out:
Median sale price ($)
Current $442,100
Month Over Month -1.1%
Quarter Over Quarter -21.9%
Year Over Year -10.3%
It looks like HA is simply making the effort to dig out the actual sales price numbers from Zillow, and his detractors are too lazy to bother checking him.
The Month Over Month and Quarter Over Quarter median price change figures should be annualized for a proper comparison. Here are the annualized calculations:
Month Over Month (annualized)
((1-0.011)^12-1)*100% = -12.4%
Quarter Over Quarter (annualized)
((1-0.219)^4-1)*100% = -62.8%
How sad to see our landlords’ investment gains going up in smoke!
I also find it quite curious how the Zestimates keep going up against a backdrop of price declines, and also how easily accessible those Zestimates are compared to the actual sales price statistics. Go figure!
To investigate the veracity of Housing Analyst’s daily posts on price declines, I drilled down into the Zillow web site to download sales price statistics for Rancho Bernardo. It took quite some time to figure out how to do this, but here are the numbers I finally dug out
You are too funny. You’re on this blog every minute of every day, but only today were you able to see how to see this data. Like it hasn’t been posted a hundred times.
But ahhh, your investigative skills were able to lead you to it, after “quite some time”.
Yes, it takes quite some time to scroll halfway down the page, select Median Sales Price from the drop-down box, and then Show Data Table.
Such work you do to enlighten us.
https://snag.gy/m5EzRB.jpg
“The townhouse is actually Robert’s second property out there. Last year, he bought a two-bedroom for about $750,000. In April, he sold it for 14 percent more. ‘I didn’t think it would be this quick. But the time is right,’ Knigge said. “
The idiot. The 14% is $105,000. Had he waited another year (and if it was his primary residence), he would have $105,000 tax free.
The 2 year tax free deal is a flipper’s dream and I think is part of the speculation craze. While I am against all taxation, I consider that tax shelter a social engineering deal that favors the bubble.
I prefer the long term 15% capital gains tax (85% of the realized gain is what I like to think about as a tax break - much more than left over from my 28% bracket).
But I have enough conservative investments in treasuries and bonds ready to pounce on low priced RE when the bubble pops. I’m looking for a 50% price drop. And chances are good that the capital gains tax break is going to be dropped, maybe also the MID, within the next ten years as the boomers kick the bucket.
Idiot?? You sure about that? Time will tell, if Bubble 2.0 popped before he hit the two year mark on that place (which seems highly likely) he could easily have been upside down. I have no use for flippers but I think getting out now with a small profit was smart. Also his net profit was probably far less than $100K after deducting 6% commission and another % or two for fees, inspections, etc.
The 2 year tax free deal is a flipper’s dream ??
Nothing could be farther from the truth…It must be your primary residence for at least 2 out of the last 5 years….Hardly a “Flip”…
“at least 2 out of the last 5 years”
oh. I thought it was just 2 consecutive years. So I was wrong all that time. This means someone would have to rent out the house at best three out of those five years. So live in it the first two years and rent it out the next 3 years.
It’s much less of a good deal. A lot can happen in 5 years.
Yep, stocks with their long term capital gains of 15% - are a better deal.
Here in California I would be paying the federal 15% plus the California 10% on realized gains. That is below my 28% bracket at the federal level alone. I’m paying about 38% of my income in taxes at the state and federal level right now. 25% is too high as it is, but it’s better than 38%. I like the weather and year round recreational opportunities of my area too much to consider going elsewhere. If I do go back to Phoenix, I would have to live in two places: Phoenix in the winter and spring, Flagstaff in the Summer and Fall. It would be as pricey as living in one place in California, IMO.
oh. I thought it was just 2 consecutive years. So I was wrong all that time. This means someone would have to rent out the house at best three out of those five years. So live in it the first two years and rent it out the next 3 years.
No, that’s incorrect. You can live in it for two years immediately after purchase, and at that pointt you qualify for the “two of the last five” standard regardless of whether you have even owned it for five years.
It’s less restrictive than you were thinking, SH—the two years do NOT need to be consecutive, just total time of two years spread any time over the last five years. Could be all in six-month intervals and you would still qualify.
But I’m still confused. Do you have to own the house for five consecutive years to get the full capital gain tax break or not?
No…a minimum of two years of ownership would suffice if you lived in it the entire time from purchase to sale.
Thank you. I was right the first time.
So if I get lucky and buy at the next collapse (my criteria is when a house is 1/6 of my net worth and in a safe nabe where there is fresh air and lots of high tech industry) - I can live in it for 24 months and if its market value is reasonably higher I can sell it for the tax free gain.
I can live in it for 24 months and if its market value is reasonably higher I can sell it for the tax free gain.
Except now you’re thinking about the purchase like a speculator would…
I have a serious question: Why is Senior Housing Analyst allowed to post blatantly wrong headlines that are negated by the data he points to? One might think this post is harmless sarcasm, but I think it detracts from the serious purpose of this blog. When a new or returning reader clicks on a few of those SHA links, they start thinking WTF!? I know I did.
Is that a trash can, a shredder, or both?
Hehe… it’s definitely not a cross-cut shredder.
the serious purpose of this blog
You could listen, or you could could overpay 50% for a used house.
P.S. houses depreciate, they are not investments…
P.S. houses depreciate, they are not investments…
You’ve gotta admit, though, you’d have banked of you’d bought in Denver when you first moved there.
Are you sure?
South Park/Denver, CO Housing Prices Plummet 10% YoY
http://www.zillow.com/south-park-hill-denver-co/home-values/
Denver as a whole is up almost 70% since 2012, according to your data source.
When did you move there, goon?
Down 10% and falling. Massively inflated prices always results in economy crushing collapsing demand.
US Housing Demand Plummets To 20 Year Low
http://2.bp.blogspot.com/-yX5B5Hn95bQ/VYC3Wr6ihBI/AAAAAAAAj7I/alOslZa-cK8/s1600/MBAJune172015.PNG
Goon was in Denver as it went from a tier three city to a near tier one, but he missed the boat. Now he’s priced. out. forever.
Unless those inheritances keep rolling in!
http://www.zillow.com/denver-co/home-values/
fixt 4u.
Unless those
inheritances keep rolling in!prices keep falling.You could listen, or you could could overpay 50% for a used house.
P.S. houses depreciate, they are not investments…
Huh? I know that! There is hardly anyone more anti-bubble than I. What is going on here, why is my statement being misunderstood? I’m flabbergastered.
There is nothing flabbergasting about widespread mortgage fraud, collapsing demand and grossly inflated housing prices falling to dramatically lower and more affordable levels. Nothing.
Arcadia, CA Housing Prices Plunge 10% YoY
http://www.zillow.com/arcadia-ca/home-values/
they start thinking WTF!?
What’s even funnier is that the two biggest towel-snapping bullies on the blog, housing analcyst and phony, get special protection from zingers and insults directed against them.
Because we can’t hurt their widdle feewings.
The bullies are a specially-protected class! Just like the minorities on campus they rage about.
Could it get more ironic?
‘The bullies are a specially-protected class’
I delete comments directed toward you as much or more than anybody.
I could well imagine. I’m the type of voice the bullies and trolls want to shout down, so they can towel-snap everybody else into line.
I’ll make you a deal , though. I’ll accept whatever they throw at me, if my own stuff (which is never obscene or threatening, as you know) can get through to them.
Isn’t it time the bullies got a little taste of what they dish out? Because they sure seem to have a lot more leeway to dish it out than I do.
‘I’ll accept whatever they throw at me’
I knew you were going to say that. I don’t protect anybody. I get sick of the rancor. If I delete a comment that others are attached to, those go away too. I don’t have any control over that. Usually if you have a comment deleted, there is someone else getting the same. If it gets too time consuming, I just ban people. If you don’t like it, there is a complaint box somewhere around here.
Ponte Vedra Beach, FL Housing Prices Plummet 8% YoY
http://www.zillow.com/ponte-vedra-beach-fl/home-values/
I don’t protect anybody.
Really? Seems like they zing me at will, while I have to tread carefully around them. As they complain about special protections for this or that group.
Not a complaint, just an observation.
http://imgur.com/gallery/nqlNfOz
“Isn’t it time the bullies got a little taste of what they dish out? Because they sure seem to have a lot more leeway to dish it out than I do.”
Comment by Oddfellow
2016-05-07 14:29:25
Goon was in Denver as it went from a tier three city to a near tier one, but he missed the boat. Now he’s priced. out. forever.
Unless those inheritances keep rolling in!
Comment by Oddfellow
2016-05-07 12:58:57
“What’s even funnier is that the two biggest towel-snapping bullies on the blog, housing analcyst and phony, get special protection from zingers and insults directed against them.”
Comment by Ben Jones
2016-05-07 13:09:48
“I delete comments directed toward you as much or more than anybody.”
Comment by Oddfellow
2016-05-07 13:18:21
“I’ll make you a deal , though. I’ll accept whatever they throw at me, if my own stuff (which is never obscene or threatening, as you know) can get through to them.”
Oddie
How would you know anyone got “protection from zingers and insults” unless you were the one having your “zingers and insults” deleted?
You are talking out of both sides of your mouth.
FWIW, I don’t think you get much in the way of coddling, fat boy.
Thanks Russ
Your keyboard warrior insults always give me a good laugh.
For centuries, my people have trained as keyboard ninjas, first with cuneiform tablets, through the ages of moveable type, to the mechanical typewriter, and now, I, the pinnacle of thousands of years of evolution and discipline, wield this sublime bluetooth instrument to strike in the name of justice!
I agree completely, and have posted 2 times to him with no reply. Each time I’ve follow his link alleging a “cratering” of house prices, I’ve found the opposite.
I also agree prices are to high, and hope they in fact do decline, but he posts multiple instances daily and all links seems to falsify his claim of falling prices. How about some integrity?
Are you sure?
Reston, VA Housing Prices Crater 6% YoY
http://www.zillow.com/reston-va/home-values/
“Each time I’ve follow his link alleging a “cratering” of house prices, I’ve found the opposite.”
You have to scroll down the page and change the drop down to SALES
price. Then move the ball on the graph to the same month of the previous
year. You will see the percentage drops of SALES (not Zillow value or list price) shows exactly what he says it shows percentage wise.
Just ignore the “cratering” posts. That particular author has zero credibility after repeatedly posting false information. I would’ve banned him years ago for detracting rather than contributing to the HBB.
for detracting rather than contributing to the HBB ??
+1 RKH….
Refute it and then you’ll establish some credibility my friends.
Raise Wages, Kill Jobs? Seven Decades of Historical Data Find No Correlation Between Minimum Wage Increases and Employment Levels
Summary
Since the passage of the Fair Labor Standards Act in 1938, business interests and conservative politicians have warned that raising the minimum wage would be ruinous. Even modest increases, they’ve asserted, will cause the U.S. economy to hemorrhage jobs, shutter businesses, reduce labor hours, and disproportionately cast young people, so-called low-skilled workers, and workers of color to the bread lines. As recently as this year, the same claims have been repeated, nearly verbatim.
Raise wages, lose jobs, the refrain seems to go.
If the claims of minimum-wage opponents are akin to saying “the sky is falling,” this report is an effort to check whether the sky did indeed fall. In this report, we examine the historical data relating to the 22 increases in the federal minimum wage between 1938 and 2009 to determine whether or not these claims—that if you raise wages, you will lose jobs—can be substantiated. We examine employment trends before and after minimum-wage increases, looking both at the overall labor market and at key indicator sectors that are most affected by minimum-wage increases. Rather than an academic study that seeks to measure causal effects using techniques such as regression analysis, this report assesses opponents’ claims about raising the minimum wage on their own terms by examining simple indicators and job trends.
The results were clear: these basic economic indicators show no correlation between federal minimum-wage increases and lower employment levels, even in the industries that are most impacted by higher minimum wages. To the contrary, in the substantial majority of instances (68 percent) overall employment increased after a federal minimum-wage increase. In the most substantially affected industries, the rates were even higher: in the leisure and hospitality sector employment rose 82 percent of the time following a federal wage increase, and in the retail sector it was 73 percent of the time. Moreover, the small minority of instances in which employment—either overall or in the indicator sectors—declined following a federal minimum-wage increase all occurred during periods of recession or near recession. That pattern strongly suggests that the few instances of such declines in employment are better explained by the overall national business cycle than by the minimum wage.
http://www.nelp.org/publication/raise-wages-kill-jobs-no-correlation-minimum-wage-increases-employment-levels/?utm_campaign=website&utm_source=twitter&utm_medium=site
“Seven Decades of Historical Data Find No Correlation Between Minimum Wage Increases and Employment Levels”
I guess they haven’t raised the minimum wage high enough for the correlation to show up. Undergraduate microeconomics theory says that a high enough minimum will result in a reduction in jobs at the margin.
Undergraduate microeconomics theory
But what would undergrad macroeconomics say? Apparently that jobs increase.
“But what would undergrad macroeconomics say?”
Irrelevant.
I guess they haven’t raised the minimum wage high enough for the correlation to show up. Undergraduate microeconomics theory says that a high enough minimum will result in a reduction in jobs at the margin.
So what you’re saying is that that theory has never been tested. In other words, it looks good on paper, but you have no idea whether it’s valid.
No. I’m saying that people who don’t understand basic microeconomics tend to favor increasing the minimum wage as a solution to the problem of wage stagnation, not realizing that they may end up eliminating opportunity for low-wage workers by depriving them of employment opportunity they would have willingly accepted at a wage that would have been preferable to unemployment.
The basic point is still that that’s a theory that’s never been tested.
It’s too bad that politicians don’t set up changes in the law to test their effects. For instance, one might consider eliminating the minimum wage in one part of San Diego, raising it to $15 in another part of town, to $20 in another, $25 in yet another, and so on. The predicted result is that employers whose operations require employees with the lowest skill levels would locate where the minimum didn’t apply, and workers who decided that working for low wages was better than no wages would work there.
If you just raise the minimum everywhere at once, you won’t observe the willingness of low-wage workers to freely choose to work at jobs paying less than the minimum, because they won’t exist. The exception might be to monitor wages and employment for illegal workers under the table; theory predicts this will increase when California’s minimum wage law goes into effect, while legal employment opportunity at wages below the new minimum will decrease.
California’s Dream World
By William Shughart • Wednesday May 4, 2016 1:43 PM
California Gov. Jerry Brown caved in recently to intense lobbying from labor-union leaders and signed a bill to raise the state’s minimum wage from $10 to $15 per hour by 2022.
“California is proving once again that it can get things done and help people get ahead,” Brown said.
Dream on, Gov. Brown – the only people who will get ahead are the members of the Service Employees International Union (SEIU), public-sector employees generally, and progressive activists.
Many other Californians will be hurt, especially young, less-skilled and less-well-educated blacks and Latinos, some of whom either will lose the jobs they have at $10 per hour or be unable to find work at all.
The economic science of minimum-wage laws is settled. While the magnitude of the effect may be disputed, virtually all credible studies of labor markets show that increases in the minimum wage reduce the amount of work private employers are willing to offer, the total compensation workers receive, or both.
The impact of a minimum-wage hike may not show up in total employment, but it can materialize in many subtle forms. Employees’ hours can be cut or jobs reclassified from full time to part time. “Fringe benefits,” such as scheduled work breaks, paid vacation time, on-the-job training, and help paying for uniforms worn at work can be reduced or eliminated to shift compensation from nonwage benefits (often untaxable to the employee) to taxable cash wages.
The cost to the employee of losing nonwage compensation is highest in the case of retirement and health care benefits, since employers can insure their workforces at a lower cost per employee than individuals can buy such coverage on their own.
Ordinary people can see some of these forces at work almost every day as profit-seeking private retailers try to control their labor costs (the single largest cost of doing business in many cases) by replacing human check-out clerks with self-service scanners that record purchases and then “ask” the customer to pay with cash, check, or credit/debit cards. The once-ubiquitous table server is being replaced by electronic kiosks in San Francisco restaurants. That trend is sure to continue and to accelerate over the coming years as California’s minimum wage rises to $10.50 per hour in 2017 and then by $1 every following year until it reaches $15.
Adam Smith wrote that he had never seen much good done by people claiming to promote the public good. California’s pending minimum-wage hike will be testimony to the bad consequences of good intentions. A stroke of Gov. Brown’s pen cannot magically cause workers employed at $10 per hour suddenly to become employable at $15 or even $10.50.
Economics 101 teaches that someone can find a job in the private sector only when that person adds more value to a business than it costs to employ her. Lobbying by the SEIU or any other special-interest group cannot override that principle.
A strategically timed study by UC Berkeley’s Labor Center claims that some 5.6 million Californians employed at wages now below $15 per hour will see their paychecks rise 24 percent ($3,400 per year) by 2022. But that study assumes, contrary to economic theory and evidence, that all 5.6 million people not only will keep their jobs at the higher minimum wage, but that the 80 percent of them employed full time will continue to be offered 40 hours of work per week. That conclusion is equivalent to saying that water runs uphill.
…
Irrelevant.
And remember….. Falling prices to dramatically lower and more affordable levels accelerates the economy, creates jobs and a massive boost to everyones wallet.
Great, then let’s increase the minimum wage to $100.00/hour! Then everyone will be rich!! Employment will skyrocket!!! (And house prices will keep on increasing, too!!!!)
P.S. And of course NELP is an unbiased source
We should just raise everyone’s wages to $100/hour and print the money to pay for it. Pretty soon all of us could be millionaires with no debt or unemployment!
Is that a credible source of information on this issue? So far as I can tell, attorneys most often are professional liars who tell lies in exchange for their paychecks. There are exceptions.
$15 Minimum Wage Follies in California and New York
Good intentions, but a near total failure as an anti-poverty policy
Ronald Bailey | April 8, 2016
$15MinimumWageUniversity of DallasBoth California and New York have just adopted measures to raise their minimum wages to $15 an hour over the next few years. Los Angeles Mayor Eric Garcetti hailed the increase, declaring, “Today California leads the nation once again, passing a historic minimum wage increase that will help lift millions of hardworking men and women out of poverty.” New York Gov. Andrew Cuomo was pleased too: Not long before signing the legislation, he had been saying, “If you work full time, you shouldn’t have to live in poverty—which is why it’s time for New York to lead the way and pass a $15 minimum wage.” Like many supporters of the increases, both politicians evidently believe that it is an effective anti-poverty policy.
On the face of it, it seems like a no-brainer: Boost a worker’s income enough, the thinking goes, and you’ll push him or her over the poverty line. Working full-time for the current federal minimum of $7.75 per hour, a single mother would earn only about $14,500 per year. That is well under the $19,000-a-year poverty line for a family with a single working adult and two children. Boost her pay to $15, and she’ll be well over it.
But does this really lift poor people out of poverty? The economic literature strongly suggests not.
…
“Working full-time for the current federal minimum of $7.75 per hour, a single mother would earn only about $14,500 per year.”
Sounds like a good reason to avoid becoming a single mom with low job skills.
“Sounds like a good reason to avoid becoming a single mom with low job skills.”
Regardless of marriage status having a baby is a woman’s god-given right, and for you, gabacho, compulsory to fund it.
It’s every single mom’s right to have other members of society pony up the money to pay for raising her kids.
Redmond, OR Housing Affordability Skyrockets As Prices Plummet 19% YoY
http://www.movoto.com/redmond-or/market-trends/
Northbrook, IL(Chicago) Affordability Leaps As Prices Nosedive 16% YoY
http://www.zillow.com/northbrook-il/home-values/
This is an example: The headline says prices dropped 16%, whereas the linked data says prices were exactly flat (0%). Most of the posts from SHA are like this.
Is the fact that the data does not match the headline supposed to be some sort of joke? I’m not complaining, I just don’t get it. All you guys who are long-time insiders perhaps can explain the humor to me.
perhaps can explain the humor to me.
Not sure about the humor, but are you familiar with the character “Wormtongue” from the Lord of the Rings?
This is a good blog. Take what it offers if it fits, ignore what doesn’t fit.
There are a lot of incompatibilities but, hey, so it is in the real world. I think you will discover that who is incompatible with you is probably incompatable with others. Such is life.
“Most of the posts from SHA are like this.”
So there you are, now you know. Ignore him from now on and you will be set.
Ignore him from now on and you will be set
Except he changes his name on a daily basis.
So? Ignore them too.
So ignore zillow’s claims about your house’s value.
Just roll with the price declines my friend. Just roll with it.
So? Ignore them too ??
Exactly !! If you see a new post name make sure you vet it first before you respond to it….HA’s post are redundant…You will be able to tell in short order that its him…
The data is what it is my friend.
Mount Vista, WA Housing Prices Plunge 18% YoY
http://www.zillow.com/mount-vista-wa/home-values/
Thanks, Combo. From my last several months of reading, you are one of the standouts as far as comments go.
Ona inside humor note: Perhaps eventually I will eventually figure out what Lola is. I figured Donk=Debt-Donkey, but not yet why and how certain posters get called Donk. One day I will become an insider, too. Donk!
Perhaps eventually I will eventually figure out what Lola is.
Lola is a projection of HA’s inner battles and frustration; he has a clear fixation with transgendered prostitutes.
Data my friend…. data.
Bend, OR Housing Prices Crater 13% YoY
http://www.zillow.com/bend-or-97701/home-values/
You really have to drill down into the Zillow web site to find it, but for the persistent, you learn that the Bend median sales price fell by 13.4% year-on-year.
Needless to mention, the Zestimates keep going up!
It takes an amazing amount of backbreaking work to find this data, but by golly, it can be done!
https://snag.gy/m5EzRB.jpg
“When you go to Zillow, you have to filter out all the lies.”
Karen rocks!
P.S. They say the market is “Cool” in our area (Rancho Bernardo 92127 zip code), which must mean it is frozen solid, given Zillow’s pro-bubble bias.
Bend, OR Housing Prices Crater 13% YoY
Data, my friend… data.
If you look at the entire Bend area, rather than cherry-picking one small zip-code (which you do to increase the noise and decrease the signal), you instead get this headline:
Bend, OR Housing Prices Soar, up 7% YoY and MoM
http://www.zillow.com/bend-or/home-values/
And you’re free to post it my friend.
Excellent.
Bend, OR house prices SOAR 53%!!!!!!!
http://www.zillow.com/bend-or-97210/home-values/
Are you sure?
Bend, OR Housing Prices Crater 13% YoY
http://www.zillow.com/bend-or-97701/home-values/
Seems to matter ALOT (sic) which zip-code you pick, huh?
Bend, OR Housing Prices Shoot Up 18%
http://www.zillow.com/bend-or-97003/home-values/
You guys are unbelievable. You’ve been shown again and again how to get the data on Zillow.
I’ve been learning to make infographics for a training program, so I created a nice and simple one for the folks here.
Even the slow learners should be able to get it.
Enjoy!
https://snag.gy/m5EzRB.jpg
‘Even the slow learners should be able to get it’
Thanks for this. “Who is the liar?”
I smell some crow on the grill!
No problem. This blog saved my sanity over a decade ago when it seemed to me everyone around me had lost their minds.
And that’s a permalink. It will always be there to use against trolls.
Nice infographic, Karen!
I will say, though, that the table is only pulling out three tiny little data-points from that graph. The entire graph is more interesting, IMO, as you can see clear seasonal fluctuations (not always precisely aligned at the same month, producing noise in both MoM and YoY comparisons), a more complete picture of the market: Northbrook has been essentially flat, modulo seasonal fluctuations, for almost 7yrs now; there was one huge dump in 2009, another huge dump in 2012 with a subsequent recovery from that, and then a lot of little squiggles going sideways, essentially meaning nothing. If you ran a linear regression on the data after the first big dump in 2009, it would be nearly flat.
The sales data is what it is. And everyone calls HA a liar and says the data don’t support his headlines, when in fact he takes the data directly from Zillow.
Karen, you are missing a key point: HA picks tiny zip-codes that are nothing but noise. I could just as easily pick out tiny zip-codes that show 20%+ gains; would that really be good “data” that actually tells us something meaningful about the direction of the broader market?
When the data is represented honestly, I have no issue with it; when tiny zip-codes are cherry-picked to tell a lie, I do have a problem with it.
I can’t wait for the bust to really get under way. But HA has been saying that it is already started for the past two or three years, posting these links that lie with statistics.
Data my good friend.
Ventura, CA Housing Prices Crater 16% On Ballooning Housing Inventory
http://www.movoto.com/ventura-ca/market-trends/
Data, my friend:
Ventura, CA housing price SKYROCKET, up 53%!!!
http://www.zillow.com/ventura-ca-90066/home-values/
(Yes, I know, this is BS noise, caused by choosing a tiny zip-code with insufficient sample size to produce useful stats with a meaningful confidence interval. But bogus data is what HA loves, so I do it for him nonetheless…)
Doubtful my friend. Especially considering housing demand is at 20 year lows with millions of excess empty houses out there.
Thank you for the infographic, Karen!!!! Very, very helpful!
My good friend from Seattle developed a handy add-on called the JT extension that filters posts on this blog. I encourage you to use it.
https://chrome.google.com/webstore/detail/joshuatree/bpijogddiefkbkfjnlejhkeemoeapiim?hl=en-US
Winter Garden, FL Housing Affordability Improves As Prices Fall 5% YoY
http://www.zillow.com/winter-garden-fl/home-values/
Donk?
Data my friend.
Vienna, VA Housing Prices Crater 10% YoY On Ballooning Mortgage Defaults
http://www.movoto.com/vienna-va/market-trends/
“You gotta roll with it” — Caitlin Vestal
Oasis — Roll With It (live at Glastonbury 1995):
https://www.youtube.com/watch?v=3mwgB910ofw
Fake Beatles for a fake housing “recovery”
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
“Wall Street Is Falling Off A Cliff (And The Bottom Is A Long Way Down)”
http://www.zerohedge.com/news/2016-05-07/wall-street-falling-cliff-and-bottom-long-way-down
“Said another way, when financial assets are being artificially inflated by excessive liquidity, it’s easy to make money by shuffling this ever-appreciating inventory back and forth, and to look very smart while doing so.”
Just like the black suited guys shuffling back and forth between shops in the diamond district trading the same worthless gems back and forth. Just on a larger scale.
Monroe, CT Housing Affordability Improves As Prices Sink 4% YoY
http://www.movoto.com/monroe-ct/market-trends/
Leased a 2016.5 Mazda cx5 today. $1229 down ($750 loyalty rebate) $229 mo, 12k miles a year. Take the rest of the money from the insurance (car totaled) and invest in 10% div stock. $65 mo. Write off lease, save 30% or more. Cost to drive about $120 mo plus 30mpg so save $50 over old car getting 20 mpg. Free firmware updates and $600 sensors all under warranty. If it sits outside, who cares. Oh, and $1000 wear and tear allowance.
“Leased a 2016.5 Mazda cx5 today.”
My wife wants a cross-over SUV, but she doesn’t want to pay for it.
Spend some time reading about car repairs on the 08’s, they take your money either way.
Wow! China’s coming debt bust; What a startling prediction (not) …
http://www.economist.com/news/leaders/21698240-it-question-when-not-if-real-trouble-will-hit-china-coming-debt-bust
“CHINA was right to turn on the credit taps to prop up growth after the global financial crisis. It was wrong not to turn them off again. The country’s debt has increased just as quickly over the past two years as in the two years after the 2008 crunch. Its debt-to-GDP ratio has soared from 150% to nearly 260% over a decade, the kind of surge that is usually followed by a financial bust or an abrupt slowdown.”
“its debt-to-GDP ratio”
If China is anything like the U.S. then the GDP part that goes into making up this ratio is actually a measure of price increases as much (or more) than anything else, price increases that raise the prices of rents - both actual rents and imputed rents. And these price increases are powered by … they are powered by debt.
So if just may be worse than it looks: As the GDP grows this growth will act to hold down the debt-to-GDP ratio. But if the growth of GDP is a result of price increases that is powered by debt then this GDP is not really all that solid, it’s more like it is … imputed.
But as for the debt? It’s definitely solid.
So if this is correct then what we have in China (at root) is a lot of solid debt that powers a lot of imputed GDP. Something similar to what we have here in the U.S.A.
FWIW: Here’s a Debt to GDP ratio chart …
http://www.macrotrends.net/1381/debt-to-gdp-ratio-historical-chart
Have you ever spent time with someone who says they’re $100k in debt just on credit cards and make the observation that they have nothing to show for it? Not a single thing?
‘Dropbox cut a bunch of perks and told employees to save more as Silicon Valley startups brace for the cold’
‘In a company-wide email in March, Dropbox said it was cancelling its free shuttle in San Francisco and its gym washing service, while pushing back dinner time by an hour to 7 p.m. and limiting the number of guests to five a month. (Previously it was unlimited, a big perk given its open bar on Fridays.)’
http://finance.yahoo.com/news/dropbox-cut-bunch-perks-told-183310180.html
Some comments:
‘I have worked in a silicon valley start up environement for about 10 years now. The muppie (1/2 millennial, 1/2 yuppy) mentality is amazing. I’m surprised they can figure out how to pay their rent or dress themselves in the morning as they make 6 figure salaries, can’t figure out how to put a dish in the sink and play ping pong 1/2 the day. The other 1/2 the day they are eating free food and drinking free alcohol on the companies dime. When they are done with that they complain and go work at facebook or google in their skinny jeans.’
‘It’s about time this latest bubble of Silicon Valley hubris started imploding. Wait until BayvArea landlords discover that it’s difficult to collect $3,000/month rents for studios when the scrum-masters and social engagement shamans are out of work.’
‘So, did they get rid of the idiot that okayed that 100k Panda that they didn’t thing was a good use of funds?’
‘Who’s ever heard of most of these company’s?’
‘What the heck is a “Dropbox” anyway?’
Dropbox is a cloud storage company. I have an IT consulting company and I get paid a lot recommending useless tools like dropbox to mega corps in financial sectors.
‘Dropbox is a cloud storage company’
And a bar, apparently. Free bar.
‘I get paid a lot recommending useless tools like dropbox to mega corps’
I worked for a dotcom and we had a vanity office in SF. Just so we could put it on our website. The three employees there made more than the 8 in our Austin office. If I called at 10AM, they would be asleep and hung-over. This is all fun til the money runs out. Then it was lay-offs and bankruptcy. I was gone by then but could see it coming.
Oh it’s coming. The tears this time will drown the bay area.
This is no little thing. I used to be a public accountant. Over time I realized how many of these companies I did work for were losing money. Borrowing from family, running up credit cards, not paying bills (then those people have problems), working long hours for nothing. We hear that a high percentage of businesses fail. I can tell you it’s a brutal truth. But where would we be if people didn’t try?
This is why I cringe when I read about $100,000 pandas the management instantly regrets. If these guys go under, that’s $100,000 a vendor won’t get. They are blowing over 20k/employee/year on booze and stuff. It has a ripple effect. This “we’ll worry about making money later” crap is dangerous and reckless.
IMO, cloud computing is headed for a world of hurt. Way too much capacity and what’s used is too many photos of wee-wees and cats. Pointless twitter conversations nobody remembers.
IMO, cloud computing is headed for a world of hurt.
The “consumer cloud” companies like drop box most definitely are heading for pain. They’re hoping that just the way people are paying $60-80 for a cell phone plan that they too will be willing to take on another monthly nut to have cloud storage, instead of storing their photos and mpegs on their own hard drive. It ain’t gonna happen.
What will be interesting to watch will be the corporate cloud, where companies rent servers on the cloud (say from Amazon, Microsoft or Oracle) instead of having their own servers and IT staff. While everyone chatters about this being “imminent” it sure seems to be taking its sweet time.
(say from Amazon, Microsoft or Oracle
My current client (a giant giant mega corp) is doing exactly the same. They are laying off IT admins left and right and pushing new projects to cloud.
“where companies rent servers on the cloud (say from Amazon, Microsoft or Oracle)”
One online company that deals with antiques and collectibles rented from Amazon, had some problems and went elsewhere for their service. Not sure where, though, they never said.
I worked a floor above those guys… It was a running gag that none of them could operate the elevators. They were always getting in a downward bound one when they wanted to go up, and vice versa. Seemed like there was a preponderance of short people there too.
“Seemed like there was a preponderance of short people there too.”
LOL.
A lot of the guys I worked with were asian. I loomed over them, while they loomed over the dropboxers. There was a lot of suppressed mirth on those elevator rides.
preponderance of short people
Nobody recognized it at the time as indicator of great significance.
Not relevant.
You sound short.
‘I have worked in a silicon valley start up environement for about 10 years now. The muppie (1/2 millennial, 1/2 yuppy) mentality is amazing. I’m surprised they can figure out how to pay their rent or dress themselves in the morning as they make 6 figure salaries, can’t figure out how to put a dish in the sink and play ping pong 1/2 the day. The other 1/2 the day they are eating free food and drinking free alcohol on the companies dime. When they are done with that they complain and go work at facebook or google in their skinny jeans.’
Even as 30-something (early 30s) boomers, my girlfriend lost her defense industry job in the early 90s and moved to Silicon Valley. Got a job at Silicon Graphics, which was top dog over Sun Microsystems. I visited her once. She took me to her company in Mountain View in the evening. Half the parking lot was full - people working late was impressive to me because where I was coming from people left usually by 5pm. We went inside. I would see all sorts of cubicles all decorated up. One had an intricate Macrame roof. They used to have Friday beer busts. At noon on Fridays they would stop work and have pizza and beer. Once they had bussed everyone to San Francisco to a Pointer Sisters show. My girlfriend eventually got fired. Why? Because she did not realize she had to work long hours for all those perks. I think she was actually working 35 hour weeks. That taught her a big lesson. She has been steadily working at another company in the area for twenty years now.
I keep thinking of that now that I’m in commercial. I do a lot of research. I spend a lot of time at it. And sometimes I get some embedded work in crypto, such as the implementation of the Elliptic Curve Menezez-Qu-Vanstone algorithm to produce a shared secret https://en.wikipedia.org/wiki/MQV
I’m always worried for my job. My boss is my friend. He’s way high level in the company. And his next in line has assigned me to come up to speed with node js, so I have done it and added jquery and combined it with my pet project on trusted computing. I’m in a rush to learn as much as I can lest I get fired over some exuse. The second-in-line told me he has some work and will tell me about it but he forgets. You know, IDK. A former employee got the same treatment and left because he could not stand it. My answer is to work with it. Take the opportunity to learn new stuff and come out with better products for your next career.
Got gold?
http://www.zerohedge.com/news/2016-05-07/gold-doing-what-it-does-best
Gold: Five year price chart …
http://finviz.com/futures_charts.ashx?t=GC&p=w1
B…b…but I thought the Eurozone crisis was fixed after Draghi’s “whatever it takes” and untold trillions in “stimulus” for his bankster pals. Meanwhile, the Brexit date slouches closer, when UK subjects might finally get a change to reject their EU overlords.
http://www.telegraph.co.uk/business/2016/05/07/greek-debt-crisis-threatens-to-flare-up-ahead-of-brexit-vote/
This is the end, beautiful friend
This is the end, my only friend
The end of our elaborate plans
The end of ev’rything that stands
The end
http://www.zerohedge.com/news/2016-05-07/stan-druckenmiller-endgame-his-full-apocalyptic-presentation
For decades the stock market has climbed walls of worry and thrived.
August 31, 1976 four months shy of 40 years ago, the Vanguard 500 index fund inception date, that fund earned an average annual gain of 10.81%
1970s Oil crisis
1979 Hostage Crisis
1982 Latin America Sovereign Debt Crisis
1982 Lebanon Marine Barracks Bombing
1980s Savings and Loan Crisis
1980s Iran Contra Scandal
1987 Stock Market Crash
1989 Junk Bond Crash
1989 Housing Bubble Crash
1991 Gulf War 1
1994 Teguila Crisis (sudden devaluation of the Mexican Peso)
1997 Asian Contagion crisis
1990s Kosovo meddling
1999 Dotcom bubble
2000 Y2K
2001 9/11
2007-2008 Global Financial Crisis
I’m keeping the cap on my physical precious metals at 10% and still mostly in stock mutual funds. Drukenmiller is another “end of the world prophet” out of tens of thousands of others.
People like him help keep stock values from getting too bubbly.
Conveniently forgotten extraordinary measures taken to lift the equity prices after each collapse.
In turn, you conveniently forgot that the standard of living has grown tremendously since 1976.
Cars in 1976 lasted only 3 years and you had to buy a new one after that.
Cable TV was just getting started but you had to choose only ABC, NBC, CBS and independents - so the new source was essentially one new source. There was no alternative media since there was no http://WWW.
Information today is virtually free compared to 1976.
Medicine has gotten better. Personally I have a heart defect that until 1996 it was unknown there are genes to cause it. Knowledge has grown. My own thyroid issue is controllable through medicine and with both heart and thyroid issues I live a normal life - in fact my heart is stronger compared to three months ago.
Solar electric power costs have come down remarkably since 1976.
Commercial aircraft has become far more energy efficient with better designs.
The electric car concept was a dream in 1976 but Tesla, and even Chevrolet (Volt) made it more efficient and realistic.
Financial planning information is extremely cheap thanks to the internet.
And now you can vacate the Federal Reserve banking system with crypto currency. It’s the alternative savings that you have a new choice to make.
“In turn, you conveniently forgot that the standard of living has grown tremendously since 1976.
Cars in 1976 lasted only 3 years and you had to buy a new one after that.”
But how long did they last before that? The 70’s were a highly inflationary period where wages were not keeping up so employee morale went down along with quality workmanship, that’s why autos were so unreliable starting around 1975 up until the late 80’s when living wages started to pickup again.
“Cable TV was just getting started but you had to choose only ABC, NBC, CBS and independents - so the new source was essentially one new source. There was no alternative media since there was no http://WWW.”
So what? I don’t watch TV at all today. If anything, TV is a reduction in the standard of living if you value your mind.
“Information today is virtually free compared to 1976.”
Yet people are no more the wiser.
“Medicine has gotten better.”
Nothing could be further from the truth. What is better is the efficiency in which hospitals take you to your grave while extracting every last penny from your pocket and the insurance’s pocket (read tax payers).
“Solar electric power costs have come down remarkably since 1976.”
Yet, electricity prices have gone up. So now you’ll have to go solar just to get back to square one.
“The electric car concept was a dream in 1976 but Tesla, and even Chevrolet (Volt) made it more efficient and realistic.”
And look at the total cost to own a typical electric car. So much for progress.
“Financial planning information is extremely cheap thanks to the internet.”
And where did that get the millions who lost their homes during the credit bubble?
“The 70’s were a highly inflationary period where wages were not keeping up”
Ehh…. You didn’t think before you wrote this.
Wages were spiraling. That *is* inflation.
…and that they kick low performing stocks out of the indices and replace them with high performing stocks.
yep. And the kicker is you get free management of your portfolio that way. Almost free. VFIAX was 0.05 per $100 last time I checked.
For Comrade Pelosi, pushing collectivist wealth redistribution and crony capitalism has been immensely lucrative.
https://ballotpedia.org/Nancy_Pelosi
What could possibly go wrong when TBTF banks give junior dervivatives traders a free hand to “maximize profits”?
http://www.businessinsider.com/how-jerome-kerviel-lost-72-billion-2016-5
Citizen bloggers are going to have a field day searching through the Panama Papers and uncovering the tax dodges of the super-rich and well-connected.
http://www.businessinsider.com/panama-papers-database-list-mossack-fonseca-companies-and-individuals-tax-details-live-2016-5
Built in 1906, only $278 a square foot, let the bidding war begin:
http://www.zillow.com/homedetails/143-W-Dartmouth-Ave-Englewood-CO-80110/13029327_zpid/
Because Dartmouth is the only east west street bisecting Santa Fe between Hampden and Evans (the RTD rail yards take up about a half a mile below Evans), this section of Dartmouth is backed up every weekday rush hour, good luck getting out of the driveway, and I hope you like the smell of car exhaust.
There are signs throughout the neighborhood saying “drive like your kids live here” which nobody driving on Dartmouth does.
At least it has a chicken coop.
Is the $776 in property taxes and the $13,453 2015 tax assessment on the chicken coop or the house?
For decades Greeks elected corrupt socialist and crony capitalists who promised benefits that someone else would have to pay for (sound familiar?). Now that these grifters have run out of Other People’s Money and the financial reckoning day has arrived, we are seeing a preview of coming attractions once the Collectivist Comrades of the DNC install their Permanent Democrat Supermajority and loot the productive until they cease to produce.
http://www.dw.com/en/greece-braces-for-new-austerity-induced-pension-cuts/a-19241953
China’s debt levels, like ours, have become dangerously unsustainable.
http://wolfstreet.com/2016/05/07/china-population-decline-dooms-transition-to-consumer-economy/
The establishment of a bullion bank in Shanghai could be a death knell to the paper gold manipulation and price suppression of the London and New York bullion banks and precious metals traders.
http://www.zerohedge.com/news/2016-05-08/death-gold-market-why-one-analyst-thinks-run-london-gold-vaults-imminent
Imagine what the Fall of the House of Saud would do to the petrodollar.
http://www.alternet.org/world/why-saudi-arabia-suddenly-serious-trouble
Imagine what it would do to the Bushes.
Whatever happens don’t tell Barbara.
She’s some piece of work, eh?
Saudi Arabia is having trouble paying for its grandiose infrastructure projects. Taxpayers in places like Spain may not be thrilled about having to involuntarily subsidize companies that contracted to build railways and other high-profile projects that are now running into technical and budget problems.
http://wolfstreet.com/2016/05/07/saudi-arabia-cash-flow-oil-bust-unpaid-bills-layoffs/
Sunday funnies from TBP. Enjoy!
http://www.theburningplatform.com/2016/05/08/sunday-funnies-111/
Great stuff. Some interesting rumblings going on with the “Friends of Hastert” thing. Stay tuned. If they can’t keep the lid on and this one blows up, it’ll be a doozie.
I’ve read/seen some stuff about that, too. Member of the club, mutually blackmailable. Google “Kay Griggs”.
Some of you haters of California gonna really hate this:
http://imgur.com/y64TBNo
and this:
http://imgur.com/nw8YbP9
Why I pay high taxes for my Roth accounts: So that I might retire in the area and thumb my nose at the Franchise Tax Board and bike just about every day to scenes such as this.
Even a former friend of mine from Iowa lived in Hermosa Beach for several years and bragged about living in Hermosa Beach - and he hates liberals.
I enjoyed my time in Venice, Santa Monica, Palm Springs, Joshua Tree National Park in February but I would not want to live there.
No kids or teenagers running around by the beach?
There were families with small kids around this weekend. I did not walk on the beach sand this weekend. I did last weekend.
CDM is great, just dont leave it and get on the fwy.
too many chinese in Irvine
Redondo Beach is like that, but the contrast is higher. It’s a thin strip (south RB) of white folks, and then to the east is mostly Japanese. They came over partly because of the 1980s Japanese RE moguls and partly because Toyota HQ was there in Torrance.
In Irvine I just don’t see as many asians as I did in Torrance. But I heard the percent is like very high. I don’t believe it. Not sure if they all are in some type of hive in one corner of Irvine or not.
Corona Del Mar … and just north (just across the channel) is …
(drum roll)
The Wedge!
https://www.youtube.com/watch?v=em9psPJuZkw
At 2:10, was that a human perl?
A friend of my sister’s is a co-owner of a fishing trawler in Dana Point. He and his business partner would sometimes take surfers out to the Wedge. We spent time on their boat, an hour cruise toward Catalina a few years ago, had a blast, checked out the iPad nav, and he gave us links to a video of them with champion surfers at the wedge. They once caught a thrasher shark, showed us pictures of their tow with the shark . They got that long tail and use it to shove food into their mouth https://upload.wikimedia.org/wikipedia/commons/8/8c/Threshershark.jpg
“…thrasher shark…”
You might be surprised to learn the spelling is ‘thresher’, even though the common pronunciation is ‘thrasher’!
Ah thanks! I see the spelling in fact in that url I posted.
If you expand the bottom imgur image you can see 5 huge freighters on the horizon.
Far from the city, far from recovery
Loudoun County’s distant suburbs were the D.C. area’s hottest market — until nightmare commutes and a revitalized District flipped a housing switch
“When the downturn came, the new homes were derided as McMansions — temples to American excess. Homeowners found that not only could they not pay the mortgage but they also couldn’t afford to heat or cool their manses.
“At the time, most people were buying everything they could buy,” said Gordon Wood, a real estate agent with McEnearney Associates. “Now people are more realistic. They don’t look at their house as how they’re going to make a ton of money. They are starting to think about, ‘What are my true needs?’ ”
Of all the positives home buyers cite for wanting to live in the suburbs — affordability, schools, newer homes, leafy neighborhoods where children can roam freely — one negative has gained more traction: traffic.
“What is the time value of the hour and a half you spend commuting each way?” Fleming said. “If you really calculated, would you have bought that home out there? That’s why all these exurban areas are struggling to recover. Because there is not the demand.”
https://www.washingtonpost.com/graphics/business/wonk/housing/washington-dc/
Keep telling yourself that it’s “worth it” to live like this:
“gymnastics coaches can’t live there. Or firefighters, teachers, nurses, cops, chefs, clerks or day-care workers. And because they can’t head west (thanks to the ocean) or north or south (where other coastal properties are pricey, too) everyone pushes inland. It’s not high-skilled tech workers moving over here; it’s the construction workers who build their offices, or the coaches who instruct their children …
45,000 workers in the county around Stockton head over the Altamont Pass every day to jobs in the Bay Area. Rush hour starts at 4 a.m. San Francisco radio stations report on traffic in the Altamont Pass …
she and her husband worry about what it means for a city to become a bedroom community to someplace else very far away, to have so many children whose parents return home late every night, so many community members whose lives are fundamentally oriented elsewhere.
https://www.washingtonpost.com/graphics/business/wonk/housing/stockton/
If it’s cheaper for them to live elsewhere without the commutes and they are complaining, why don’t they move?
You won’t believe how much stress relief I have from ditching my other rental (and travel expenses) in Arizona.
At this point I am better off in California. But I would take a pay cut to live in Arizona only if I could get software work in my commercial field in Phoenix and if the salary is within 20% of what I am earning now. The expenses are low there but the salary is too low and my standard of living won’t be any better in Phoenix than in Orange County.
If it’s cheaper for them to live elsewhere without the commutes and they are complaining, why don’t they move?
People have different reasons for not moving. The biggest one, I think, is simple inertia. Other reasons I can think of:
The unknown: you know how things work where you live.
Fear of being an outsider
Leaving friends and family behind
It can be a monumental chore to move a family household and it costs a tidy sum to have it done professionally.
Economic uncertainty (couple this with being an outsider). A lot of people have a steady, good paying job that weathers the economic storms and fear not being able to get one like that in the new place. If you are a state or muni employee moving away is simply out of the question.
Lower pay (as you mentioned)
Anxiety. Some people simply afraid of anything different.
I’m sure there’s more.
Weather: many Californians can’t deal with things like snow or living in a tornado zone.
Fear of being an outsider
That’s for the weak-minded. You can profit handsomely by being an outsider, a roving high tech type.
Leaving friends and family behind
Either do so or don’t complain about economic stagnation.
Anxiety. Some people simply afraid of anything different.
Someone else’s problem.
Weather: many Californians can’t deal with things like snow or living in a tornado zone.
Bottom line is these are all choices. Last time I checked the people involved are over the age of 18. There is a choice to whine and pi$$ your undies or have the American courage to explore your potential and seize the opportunities.
I was in line at Ralph’s this morning and heard the clerk telling someone that he’s been a cashier for 31 years. When I got waited on, I told him I have 31 years of my job in June. He said he intends to work 9 more years. I said 10. He says the house is nearly paid off.
I was laughing to myelf. That clerk is the quintessential Californian. Like I said before, home ownership in California is the religion and the way to beat the Franchise Tax Board in the end. Even the self-described progressives here are into the religion of home ownership and they like high income taxes because they assume such will not affect them - they got the capital gains tax break on selling their house in mind.
I knew of one in Torrance who was from Idaho and had the intention of moving there on retirement. Not sure if he did so.
These people tax defer into traditional 401ks and cut their own California income tax for years, then they take their 401ks to places such as Nevada, Wyoming, Texas, or Washington and don’t have to pay back California for those years of tax breaks. And on top of that, they cash out their expensive California houses and take a tax free capital gain and move to a cheaper area.
In my own case I paid full California income taxes for fourteen years out of 31 - not bad. Got tax credit for about 10 years for Arizona residence, paid full Arizona taxes for 19 years. Converted a big chunk of traditional IRA to Roths in 2010 - the first year got California tax credit for Arizona taxes on that conversion, the second year paid no Callifornia taxes on the conversion because I worked fully in Florida - I think that is how it went, I think the conversion was taxed at the state level. The 2016 year Arizona income tax rate is 3.4%. For California it’s 10%. New Mexico has a 2.2% income tax rate.
But being where 43% of my tax deferred plans are in Roth IRAs and Roth 401ks, and that I have 10 years to retirement, it does not seem like a bad idea to stay in California.
The bottom line is that the rules of California living favor those who figure out how to game the system.
Stockton has had a reputation as a high crime area the last 15 years. And during the 2003-2007 runup in prices, about ten years ago, much has been written about the long distance commuters. There is even a train from the Valley to San Jose I think.
The other choice is far lower pay in Stockton itself.
more permits and fees should keep homes affordable?
http://davidstockmanscontracorner.com/regulators-at-work-compliance-costs-on-new-homes-reach-85k-or-25-of-total/
I have been bitching about this for years but some posters continue to say its not a problem.
It is a very real problem and of course, it’s why there’s no low-end new home market. The whole point is to drive home “values” up by inserting various random expenses (like tree planting at $7000 per home, which the home owners can do themselves) into the input costs. Btw, in some of the poorest neighborhoods in So Cal you will find impact fees for parks as high as ~$7000 per home (or per unit for apt’s). That is just for Parks! For an apartment unit, that is literally ~8%-10% of the construction costs. Throw in the rest of the impact fees and you’ll be around 25%-35%. And that doesn’t include compliance with newer building standards, which you can expect to raise the cost by about 3%-8% annually.
There are no “impact” fees.
No “pent-up demand” for $500,000 starter homes happening here:
“More millennials can’t afford to move out of home than at any other time in the past decade.
A Zillow analysis published Thursday showed that the share of people ages 24 to 34 living with their parents had risen every year since 2005, from 13% then to 21.4% in 2014.”
http://www.businessinsider.com/millennials-living-with-mom-housing-costs-zillow-2016-5
Shelter borrowed from a landlord(or mom and dad) is fraction of the cost of sheltered borrowed a bank.
The younger crowd is onto something it seems.
Falls Church, VA Housing Affordability Surges As Prices Crater 6% YoY
http://www.zillow.com/falls-church-va/home-values/
Related article to the Neal Gabler Atlantic piece:
“At its core, this relentless drive to spend any money available comes not from a desire to consume more lattes and own nicer cars, but, largely, from the pressure people feel to provide their kids with access to the best schools they can afford (purchased, in most cases, not via tuition but via real estate in a specific public-school district). Breaking the bank for your kids’ education is, to an extent, perfectly reasonable: In a deeply unequal society, the gains to be made by being among the elite are enormous, and the consequences of not being among them are dire. When understood mainly as a consequence of this rush to provide for one’s children, the drive to maximize spending is not some bizarre mystery, nor a sign of massive irresponsibility, but a predictable consequence of severe inequality.”
http://www.theatlantic.com/business/archive/2016/05/american-financial-hell/481107/
The Party’s Over in Alaska:
“America’s Last Frontier is in trouble. The 40-year oil boom that turned Alaska from a frigid backwater into one of the nation’s richest states is over. Not only have petroleum prices crashed, but Alaska’s supply of crude is running out. Thirty years ago the state was pumping 2 million barrels a day, a quarter of all U.S. output. But over the past decade, the Prudhoe Bay oil field, once the largest in North America, has started to reach the end of its life. Alaska’s output has fallen to 500,000 barrels a day, enough to fill only one-quarter of the capacity of the state’s main economic artery, the 800-mile Trans-Alaska Pipeline System.
With 90 percent of the general fund revenue tied to oil, the collapse has been devastating. Alaska, facing a $4 billion budget deficit, is one of four energy states that have slid into recession over the past year because of cheap oil. The state’s rainy day fund is burning through $11 million a day. If that keeps up, it will be out of emergency funds within two years.”
http://www.bloomberg.com/news/articles/2016-05-06/the-party-s-over-in-alaska
I didn’t know this:
‘Alaska’s output has fallen to 500,000 barrels a day, enough to fill only one-quarter of the capacity of the state’s main economic artery, the 800-mile Trans-Alaska Pipeline System.’
Good thing the GSE loan caps up there are as high as anywhere:
‘Already, people are leaving. The state lost more residents than any other in 2015.’
Alaskan oil is also high in sulpher, so most of it has to be shipped to more modern refineries in Asia instead of being refined domestically.
They’ve overfished the salmon to the point the tourism is dropping off too. Getting really ugly up there…
Fresno tenants trapped in slum apartments as city fails to protect them:
“Luis Decubas keeps a tightly rolled pack of 17 mice in his freezer. It’s proof of the pests contaminating the three-bedroom apartment in southeast Fresno that he shares with his wife and four children.
When he opens a kitchen cabinet, dozens of cockroaches fly out. Sometimes when the family wakes up at night, they can feel cockroaches tickling the inside of their ears.
The $650-a-month apartment has other problems: exposed wires, holes in walls, faulty electric outlets, mold.
“We shouldn’t be living like this,” says Decubas, 47.
Their apartment is not an isolated case. Thousands of the city’s poorest and most vulnerable people live in unhealthy and unsafe apartments. They stay silent because they fear being evicted or deported, and they continue to live in misery.”
http://www.fresnobee.com/news/special-reports/housing-blight/article75831252.html
“When he opens a kitchen cabinet, dozens of cockroaches fly out. Sometimes when the family wakes up at night, they can feel cockroaches tickling the inside of their ears.”
But after paying only $650-a-month for rent he should have enough money left over to take his dog mountain climbing.
I’m sorry, I shouldn’t have said that.
If I lived in Fresno I’d be climbing in Yosemite every weekend.
I wouldn’t live in Fresno.
B…b…but the Fed’s intervention in the markets has restored trillions of dollars in valuations to commerical and residential housing. We should all be grateful rents are so high and housing costs are outstripping our ability to pay for them. It means the economy is booming. The MSM said so. Anyone who says otherwise is peddling fiction….
“When he opens a kitchen cabinet, dozens of cockroaches fly out. Sometimes when the family wakes up at night, they can feel cockroaches tickling the inside of their ears.”
Are the poor incapable of simple correlation, e.g., as their filth increases so does the number of cockroaches?
“Are the poor incapable of simple correlation, e.g., as their filth increases so does the number of cockroaches?”
No, it’s just that they’re frequently crushed down into an apathy where nothing matters, so why bother cleaning up? Especially if you are working poor.
OTOH, I’ve traveled in Jamaica and other parts of the Caribbean, where people keep their shacks clean and whitewashed, and their yards trimmed, no matter how little they have. But that is more in the mountains than in Mo’bay or Kingston.
If it’s so bad, they could go back home….
San Andreas fault ‘locked, loaded and ready to roll’ with big earthquake, expert says:
“The San Andreas fault is one of California’s most dangerous, and is the state’s longest fault. Yet for Southern California, the last big earthquake to strike the southern San Andreas was in 1857, when a magnitude 7.9 earthquake ruptured an astonishing 185 miles between Monterey County and the San Gabriel Mountains near Los Angeles.
It has been quiet since then — too quiet, said Thomas Jordan, director of the Southern California Earthquake Center.
A 2008 U.S. Geological Survey report warned that a magnitude 7.8 earthquake on the southern San Andreas fault would cause more than 1,800 deaths, 50,000 injuries, $200 billion in damage and severe, long-lasting disruptions. Among the predicted problems: The sewer system could be out of commission for six months.
Such an earthquake could cause shaking for nearly two minutes, with the strongest shaking in the Coachella Valley, Inland Empire and Antelope Valley, but it also could send pockets of strong shaking into areas where sediments trap shaking waves, such as the San Gabriel Valley and East Los Angeles.
Even though the San Andreas fault does not go directly into Los Angeles — it is 30 miles away from downtown — the city is expected to be heavily shaken by a large earthquake on that fault.”
http://www.latimes.com/local/lanow/la-me-ln-san-andreas-fault-earthquake-20160504-story.html#nt=oft09a-5gp1
I recently chatted with a retired USGS employee who said that they have gutted their ranks in both Pasadena and Menlo Park since the 2008 financial crisis.
Earthquake, scmirthquake, this is just liberal propaganda to gain control over our precious bodily fluids.
California’s drought: Get used to it, scientists say
“The Bay Area and the rest of the state may as well get comfortable with drought.
Stanford scientists, along with researchers from Northwestern University and Columbia University, say the atmospheric conditions that have paved the way for California’s record drought have occurred at increasing intervals in recent decades, signaling that the current conditions may be the new norm.”
http://www.sfgate.com/science/article/California-s-drought-Get-used-to-it-7223819.php
When CA dries up and falls off, the world won’t know the difference.
Pfffft…we got unicorns…will make it rain up in here.
I just glanced at some figures in the dead tree edition of the Wall Street Journal. Is my perception correct that stocks have recently started a slow meltdown while long term Treasury yields gradually slide towards the zero bound?
UPDATE: China stocks slide nearly 3% on worries about looming bond defaults
05/06/16 05:10 AM EDT
By Dominique Fong
Markets also dip in anticipation of U.S. jobs report
Shares in Asia mostly edged lower Friday amid caution before a key U.S. jobs report, but China stocks were down more sharply over rising defaults and regulatory concerns..
The Shanghai Composite Index ended down 2.8%, while the smaller Shenzhen Composite Index sank 3.65%.
…
I don’t pretend to know what these rigged, broken, manipulated “markets” are going to do.
We must embrace the Oligopoly’s vision for a borderless globalist world.
http://www.washingtonexaminer.com/kerry-slams-trumps-wall-tells-grads-to-prepare-for-borderless-world/article/2590596
Borderless world. As in vaporized? Because if Kerry doesn’t GTFO, that’s what it’ll be.
A Davos/Aspen production.
Mark Zuckerberg is really keen on this too. Facebook algorithms bury any link posted that questions the globalist narrative.
Also note the daily postings here of the Southern Poverty Law Center trolls.
The future demands it.
“The future demands from us something more than a nostalgia for some rose-tinted version of the past that did not really exist in any case,” Kerry said. “You’re about to graduate into a complex and borderless world.”
“New World Order”
George Bush Sr. was the first to speak that phrase publicly.
BTW was looking at some old pics with mom today, taken in South Florida. Now that her wing of the family have all moved to St. Pete and after Uncle 401 died in February, I no longer have any direct family ties to South Florida. Which is kinda sad.
You still have at least one friend in South Florida and that doesn’t even count that chick you met when you were down here.
Lakeland, FL Housing Affordability Surges As Prices Plummet 6% YoY
http://www.movoto.com/lakeland-fl/market-trends/
http://www.flickr.com/photos/clintjcl/69383431 -
Yeah I think the owner put the demo hammer to the BlogBitchBox.
All of these hundreds of people claiming to be Prince’s long-lost siblings really irk me, his long-lost son. And don’t try to debunk my claim pointing out that I look at least 98% white…if Fauxahontus Warren is Indian and Racheal Dozedall or whatever is black, my claim must be accepted at face value, as I’d never lie about something so lucrative, er, personal.
http://www.dailymail.co.uk/news/article-3577864/The-gold-rush-begins-700-people-claim-Prince-s-siblings-judge-rules-DNA-samples-taken-music-legend-s-blood-verify-claims.html
When lies tell you more than the truth, it’s time to be stacking gold.
http://deviantinvestor.com
Heck, they’ve been lying for decades. I’ve been earnestly stacking gold since 2004. And I did buy one 1-ounce American Eagle gold coin in 2001 for 4% above the $270 spot price.
Vacate the Fed. The Fed is the mother’s milk of endless wars. End the Fed and you end the wars.
If we don’t have a real war soon, we’re going to have serious population issues.
If we don’t have a real war soon, we’re going to have serious population issues.
Very funny CS.
http://www.globalresearch.ca/us-has-killed-more-than-20-million-people-in-37-victim-nations-since-world-war-ii/5492051
“If we don’t have a real war soon, we’re going to have serious population issues.”
I’ve mentioned this before. War and famine CAUSE population problems in terms of over-population. I know it is counter-intuitive, but any organism, when threatened with extinction, will reproduce madly in order to overcome the threat. It’s a wired, survival mechanism.
Want a stinking, overcrowded planet? Make war plentiful, make food scarce. See what happens. It’s the same principle as the baby boom post WW2. Or look at Africa, if you want a massive, real-time petri-dish experiment.
Now, the population will decrease or go extinct if the threat becomes real, widespread and devastatingly thorough to the point that life can no longer be supported by the environment.
Human beings reproduce less when they are economically secure and have enough to eat. Or think they are economically secure.
Noam Chomsky once pointed out that poverty today involved obesity. Same thing. Eat, for tomorrow we may die.
Nice to be able to agree with you for the first time in awhile Palmy.
Valid point. Also the more money you have, the more you have that can be conned out of you from those closest to you.
A woman told me years ago when she found I was moving out of a small town in California (at age 37) “you won’t find a wife by moving. You meet them in college.” I don’t know what caused her to say it. I hardly knew her. But that town was Ridgecrest and it historically has a high ratio of men to women.
But in a sense she is right. It’s far easier to marry a girl your age when you are traditional college aged. It’s harder the older you get. I worked hard at it and almost married two years after I moved from Ridgecrest (partly to try to prove that woman wrong). But then I lost the incentive.
Once my wealth started piling up I met women who extorted money from me.
That did it.
Confirmed bachelor.
The game has changed We’ve got the weapons to beat the reproductive rate now. We can vaporize 10 million in the blink if an eye.
“you won’t find a wife by moving. You meet them in college.”
The college ladies (aka poly dollies) had it easy back in the day… just look for the guys with a slide rule in their back pocket.
With millions of Britons priced out forever from home ownership, local governments are considering bans on second homes that are used as holiday cottages.
http://www.dailymail.co.uk/news/article-3578516/Britain-braced-ban-second-homes-Councils-UK-set-outlaw-sale-holiday-cottages-elsewhere.html
Greek “radical leftists” who rode to power on a wave of popular furry over EU-demanded “austerity” (impoverishing the population so the banksters collected on their bad loans) have naturally folded like cheap suits once they had actual responsibility for governance. Hope ‘n change, Greeks, hope ‘n change.
http://www.zerohedge.com/news/2016-05-08/greece-again-shut-down-protests-and-strikes-over-pensions
Another condo bubble bites the dust.
http://wolfstreet.com/2016/05/08/manhattan-luxury-condo-bubble-bites-dust-sales-and-prices-fall/
The future demands it.
Chinese exports “unexpectantly” fall - unexpected to who? Not the HBB bunch….
http://www.marketwatch.com/story/chinas-exports-unexpectedly-fall-on-weak-demand-2016-05-08?link=MW_latest_news
Weak demand is right. Not to mention the products suck. I bought a power supply for my digital camera. What a POS. After using it for a month or so, it doesn’t make a good connection, so I constantly have to hold the input secure. I could get another one, but what’s the point? It’s a crap shoot, another one may or may not function the same way, so I just make it work.
Screws that strip, parts that fail, lousy knick-knacks and knock-offs. Fake jewelry stamped 14k, 925 silver. Toxic products. What a stinkin’ cocked up BS source of supply. And when you look at their old artwork, ceramics, bronzes and jades and such, it’s enough to make you weep for what they were once capable of, and Mao made clowns of them.
CHY-nah! Fukkem.
Socialism is the death of everything good and honest.
Brace yourselves. 33% cash (preferably bitcoin), 10% gold, 57% stocks.
55% stocks 30% bonds 15% cash
Down from 60% , 30% , 10% This Bull market looks old and tried.
Wellesley, MA Housing Affordability Surges As Prices Plunge 8% YoY
http://www.movoto.com/wellesley-ma/market-trends/
“Back when the 2005-07 housing bubble was brewing, photos of impossibly small houses selling for insanely high prices famously made the rounds. It was one of those signals that you look back on and say, ‘Hmmm … that was a clear indictor of trouble ahead.’ So in what feels like déjà vu, it’s worrying now to see a glorified ‘tool shed’ on the market in New York for a cool $500,000. In Brooklyn, no less. Not even in Manhattan.”
Yup, this weekend felt JUST LIKE 2006. Went camping and the traffic was awful (campared to 2009) Almost impossible to find a campsite. Would not have if we didn’t have reservations. Lines through tourist towns are long and restaraunt wait times are WAAAAAy up. Housing news in our area has contractors booked 3 months out. Nobody calls you back. This is bubble 2.0. NO. DOUBT. ABOUT. IT!!
crushing.housing.losses.
News Flash: When the housing prices crator we see articles such as this 2010 article (I think we saw it posted on HBB back then) http://www.nytimes.com/2010/01/07/garden/07men.html?_r=0
And when the prices are at insane levels we are told that renting is for idiots.
Or this one.
Tim Geithner Can’t Sell His House, Either
By SCOTT MAYEROWITZ
ABC NEWS BUSINESS UNIT
July 27, 2009
The country is finally starting to see some positive signs in the housing market. But don’t tell that to Treasury Secretary Tim Geithner or the countless other Americans who still can’t sell their homes.
After leaving the tony New York City suburb of Mamaroneck to take his new post in Washington, D.C., Geithner put his five-bedroom Tudor home on the market for $1.635 million.
That was in February. By May, he cut the price $60,000 but still got no takers. A few weeks later, May 21, the home in New York’s Westchester County was reportedly rented for $7,500 a month.
“Mr. Geithner’s house is a textbook example of what is happening in the market here,” said Leah Caro, president of Bronxville-Ley Real Estate and president of the Westchester Board of Realtors. “Many sellers are bringing their houses on [the market], finding that they don’t have a buyer for it, making price adjustments in hope of luring a buyer into the marketplace. In the case of Mr. Geithner, he had to move. And renting was his best option.”
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High probability that Nathan Quevedo’s pony isn’t being ridden either.
China stocks drop on growth worries
Published: May 9, 2016 12:17 a.m. ET
Communist newspaper warns of ‘L-shaped recovery’
China Daily via Reuters
China’s walking an economic tightrope as growth is slowing.
By Chao Deng
Stock markets in China were broadly lower Monday, after the Communist Party’s mouthpiece reported that the nation’s economy is headed for an “L-shaped” recovery, stoking worries among investors that growth in the world’s second-largest economy will moderate further.
The Shanghai Composite Index (SHCOMP, -2.23%) fell as much as 2.2% to 2848.16, lagging behind most other markets in the region, and was still rather choppy midday. It was last trading near the lows of the day. The Shenzhen Composite Index (399106, -2.94%) was off 2.9% at 1816.68.
Traders were taking stock of a report Monday in the People’s Daily, which cited an “authoritative” person as saying that China’s economic growth trend would be “L-shaped” rather than “U-shaped” or “V-shaped.” Such citations in the People’s Daily have frequently been associated with views by top officials and therefore carry extra weight among market participants.
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Is the supply picture shifting in the world oil market?
FINANCIAL TIMES
3:42am MARKETS
Oil prices climb as Canada wildfires rage
Markets also digesting change at the top in Saudi oil ministry
Canada’s wildfires could blaze for months
Oil discoveries slump to 60-year low
Wildfires consume Canada oil sands centre
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Once the folly is perceived, any success to divest from fossil fuels will lead to a rush back into them. Other forms of energy are too costly!
ft.com > Companies > Energy >
Oil & Gas
May 8, 2016 3:59 pm
Vanguard chief criticises fossil fuel divestment campaigns
Stephen Foley in Malvern, Pennsylvania
The head of one of the world’s largest asset managers has criticised the fossil fuel divestment movement, saying its proponents are throwing away their chance to influence oil companies.
Bill McNabb, chief executive of Vanguard, says that even if divestment campaigners succeed in driving down oil company share prices, the only outcome would be to create a new generation of private oil barons.
“I get the theory relating to cost of capital, I’ve just never seen it work,” Mr McNabb told the Financial Times. “Companies would get taken private, and then the private equity guys and the management teams get rich beyond belief.
“You would take something that was public and transparent and make it private and opaque, and a wealth creation vehicle for a small group of individuals.”
Mr McNabb’s comments come at a time of increasing pressure on investors such as university endowments and public pension plans to stop supporting fossil fuel companies.
Student movements have persuaded universities including Yale in the US and the UK’s London School of Economics to divest at least the heaviest carbon-producing companies from their investment portfolios. Earlier this year, the Rockefeller Brothers Fund, which manages the fortune of some descendants of the oil baron John D Rockefeller, said it would also divest from fossil fuels.
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