To Test Reality We Must See It On The Tight-Rope
A weekend topic on what could be done about the housing bubble, starting with the Business News Network. “Canada’s federal government is prepared to take further action against skyrocketing Vancouver and Toronto home prices, but Bay Street is split on whether Ottawa should. More than three dozen of the country’s most well-known money managers were surveyed by BNN about whether further intervention is needed to cool Canada’s two hottest housing markets. Only about half – 19 out of 39 regular guests on Market Call and Market Call Tonight – said yes, with 16 saying no, and four warning the government would need to tread carefully.”
“Ottawa has already increased the minimum down payment required for homes costing more than $500,000; although the changes appear to have made little difference with prices in both the Vancouver and Toronto markets continuing to reach record highs. Actions taken thus far, according to BMO chief economist Doug Porter, have largely ignored the most important factor driving Vancouver and Toronto home prices higher: foreign buyers. According to the BNN survey, much of Bay Street agrees.”
“John Kim, portfolio manager at Aston Hill Financial, said there could be ‘unintended consequences’ of intervention into two local markets from a federal level; while Paul Tepsich, managing partner at High Rock Capital, said the risk is even greater. ‘If [Ottawa intervenes in the Vancouver and Toronto housing markets], they will collapse the entire economy as the consumer is way too levered even with house prices climbing,’ Tepsich said.”
The Daily Express in the UK. “Property experts have warned that today’s sky-high prices are only affordable with interest rates at near-zero and that a crash is inevitable, the moment rates start rising. Even normally bullish estate agents are expressing concerns about the sustainability of today’s crazy prices. The market is particularly vulnerable now as new figures show buy-to-let investors are abandoning the market in the wake of Chancellor George Osborne’s aggressive tax crackdown.”
“There are also signs of a slow down in the once overheated prime central London market where prices rose just 0.1 per cent in the year to May, the lowest growth figure since October 2009, according to figures from Knight Frank. The number of active buyers to available properties has halved, it said. Now a new report by economic forecaster Fathom Consulting has warned house prices could plummet by almost half.”
“Prices have surged to average 6.1 times earnings, a ‘whisker’ away from the market’s peak valuation of 6.4 times earnings which it hit just before the financial crisis. By holding base rates at 0.5 per cent since March 2009 the Bank Of England has slashed mortgage repayments and stoked housing demand, according to Fathom. It warned that house prices will need to plummet by up to 40 per cent to come into line with the pre-2000 average of 3.5 times earnings.”‘
“Alternatively, household incomes would have to grow at 10 times their current pace for the next five years. ‘Real mortgage rates will not remain as low as they are today. And when they do rise the fragile arithmetic supporting the elevated house price-to-income ratio will unravel,’ a Fathom spokesman said. ‘All the while ‘lower for longer’ rates of interest are inflating the housing bubble and worsening the inevitable correction.’”
“Haart chief executive Paul Smith warned that trouble is brewing as buyers are abandoning the market due to high prices. ‘There is trouble in paradise as we start to see a big slump in buyer demand.’ Smith, whose company operates estate agencies haart, Felicity J Lord and Spicer McColl, said the nation was ‘near the limit in terms of price rises’ and growth and transactions look set to fall.”
An editorial by Sol Palha. “If you had told individuals before 2009 that we would be living in a negative-rate environment in the near future, most would have treated you like a lunatic. Fast forward a few years and voila, bankers all over the world are embracing negative rates. China devalued the yuan once again, adding further fuel to the already blazing fire. The Fed will have no option but to lower rates and then Jump onto the negative-rate bandwagon.”
“We can already see the ‘all-is-good’ slogan breaking down to ‘it’s-not-as-good-as-we-thought’. And that will eventually change to the slogan: ‘it’s ugly out there’ and we need to lower rates to prevent a catastrophe. The same strategy has been used again and again; it works marvellously so why stop now. The masses have been well trained so there is absolutely no need to change the game plan. Keep the lie simple, repeat it over and over and folks will believe it. Crowd psychology clearly illustrates that the mass mindset is self-destructive.”
“The first experiment was to maintain a low-rate environment; the second was to flood the system with money, which was achieved via QE. The third phase was to get the corporate world in on the act of flooding the markets with money. This was achieved through massive share buyback programs. The next stage is to introduce negative rates to the world to fuel the mother of all bubbles, which is currently underway.”
“Negative rates will lower the cost of mortgages as, in many cases, holders receive a check from their bank for interest payments. Negative rates are already fueling a property bubble in Sweden and real estate prices have surged significantly in the U.K. It’s only a matter of time before the same phenomenon occurs in the U.S. where banks will almost certainly lower lending standards. Barclays, for example, recently announced 0%-down mortgages.”
“Nations will continue to devalue their currencies in a bid to stay competitive. The global economy is weak and only hot money is creating the illusion that all is well. Mass psychology indicates that the masses prefer a sweet lie as opposed to the blunt truth. In that sense, they will get what they desire — a market that looks magnificent from the outside but is rotten to the core.”
“‘The way of paradoxes is the way of truth. To test Reality we must see it on the tight-rope. When the Verities become acrobats we can judge them.’ - Oscar Wilde.”
From the last piece:
‘We expect property prices to continue trending up.’
And doesn’t everyone? How many articles start off with something like this: “In what is now like a broken record, house prices rose by….”
How many consecutive quarters have house prices risen in Florida? Usually by double digits. And California. We expect. That’s a powerful thing.
Just yesterday, with stocks near an all time high, we get a bad jobs report. “No rate hike!” announces the press. The patient is always strong, yet too weak to get out of bed.
‘There is trouble in paradise as we start to see a big slump in buyer demand’
Paradise. The money flows. We all wait at Applebees, so what’s the worry?
This whole post (36 replies as of now) is one of the most depressing things I have read in recent memory.
A friend who lives in my building is moving back to South Carolina, because she is starting to realize that she will never be able to have a decent standard of living in Denver.
Denver has lost its soul (if it ever had one). It’s all a bunch of f*ing clones, 100K income millennial douchebag brogrammers who drink $7 beers and play in some stupid kickball league, they’re all white, they all look the same, sound the same, and I can’t remember the last time I met one under the age of 35 who ever mentioned reading a book.
F* this place, I’ll be out of here in less than a decade.
Just got off the phone with my sister, who is your Denver neighbor. She didn’t have much time to talk, as she was getting ready to work the first of two twelve hour days this weekend, but I am sure the value of her condo in the Governor’s Mansion district is rapidly levitating.
Another thing about Denver, all the rich white people here have a COEXIST sticker on their Subaru but they’d never send their kids to school together with kids whose parents speak Spanish at home.
I went on a Tinder date with a girl of South Asian background who just moved here and had previously lived in Toronto and Vancouver and she told me she couldn’t believe how white this city is, LOLZ.
Every city turned into an impoverished ghetto.
Rectangular states are for whites people. Linear ambiguity disturbs us.
Median household income here is less than $60,000.
http://www.denverpost.com/2016/06/03/denver-median-home-sold-price-nears-400000/
My sister makes more than that and is largely debt free (if she has a mortgage, it’s way above water) with no dependents. I just worry about her work hours in this Democratic dystopia where Middle-class workers have to all work the equivalent of 1 1/2 full-time jobs — one for themselves plus an extra 1/2 job to provide for the 100 million or so working age adults who don’t work.
If those non workers get jobs, they just push the providers into being providees.
Record 94,708,000 Americans Not in Labor Force; Participation Rate Drops in May
By Susan Jones | June 3, 2016 | 8:49 AM EDT
…
“It’s all a bunch of f*ing clones, 100K income millennial douchebag brogrammers who drink $7 beers and play in some stupid kickball league, they’re all white, they all look the same, sound the same, and I can’t remember the last time I met one under the age of 35 who ever mentioned reading a book.”
Are you sure you don’t live in Portland? In addition to that we also have tatted and pierced whities from the heartland who apparently didn’t want to be as unique and “weird” as they thought, as they come here to be around other “weird” folk instead of staying and living unique among the bubbas back home. That’s the irony. Don’t be fooled. Most of the people FROM Portland aren’t “weird.”
‘This whole post (36 replies as of now) is one of the most depressing things I have read’
‘Their Richmond Hill bungalow was listed for $899,000. There were nine bidders and the property sold for $1.43 million. He compares the sale to “winning the lottery” for his clients. “It was underpriced a little bit to set up the bidding war, but still, it set records all over the place,” Jones said.’
“We had three bidders that were just beating the living daylights out of each other. We didn’t know where they were going to stop. It’s a nice home, but it’s a 65-year-old, 900-square-foot bungalow on a 50-foot lot. They (sellers) are so happy. I can’t even begin to tell you. They’re retiring and going to buy a piece of property up north and build a house. They got way more money in their pocket than they expected. They’re absolutely thrilled. Every deal I’ve done in the past two years has been multiple offers.”
Economics isn’t depressing or exciting. These lottery winners are happy though. Should selling an ordinary house result in winning the lottery? Is such a situation of any concern?
The topic is what should be done. To do something requires acknowledging there is a problem. New Zealand’s central bank/government sees a problem, as does Singapore, Taiwan, Hong Kong and to a lesser extent Canada, Dubai, the UK and Australia.
What should be done? From the Friday post:
“Home prices went up in March. All indications are that April was an up month too. Bit by bit, prices are regaining the ground lost during the long collapse from 2006 through early 2012. If there’s one thing we should have learned from the housing bust, it’s that rising home prices aren’t an unalloyed good. Rapid price increases in the early 2000s directly led to the subsequent crash. Sale prices lost all connection with both rents and incomes; after a certain point they were going up mainly just because they were going up, and buyers feared missing out. That couldn’t go on forever.”
“For homeowners, housing isn’t just something one consumes; it’s an investment. And when your investment rises in price, that’s a good thing. This simple truth explains a lot about public policy surrounding housing in the U.S. The home mortgage interest deduction is a subsidy for the affluent that serves no discernible economic purpose, but is almost impossible to get rid of because removing it would (1) raise taxes for those with mortgages and (2) depress home prices across the board. Zoning and other land-use regulations have been accused (and to some extent convicted) of segregating Americans by income and slowing U.S. economic growth, but it’s almost impossible to get rid of them because they raise the price of existing homes.”
“So no, I don’t see my nation suddenly embracing the idea that rising home prices are a terrible thing. But it seems like it’s worth the effort to try and at least sow a little doubt.”
‘Luxury Urban Housing, Built on a Myth, Is About to Take a Big Hit’
‘For years, we’ve heard about the “return to the city.” It was never as true as the hype, but now it’s about to collapse entirely.’
‘So who’s buying them? It’s wealthy foreign nationals, largely as investments. In many cases these units are not really residences but pieds-a-terres for the world’s wealthy; in some markets, as many as 60 percent of units are not primary residences. But such sales are susceptible to changes in foreign economies. And today, many of these buyers must contend with slowing economies at home.’
‘Realtors in Southern California, long a favored destination for Asian investors, report a significant slowdown in investment , particularly along the coast. In some developments, roughly half the Chinese buyers paid cash, often well over $1 million per unit. This in markets where barely 10 to 20 percent of the houses are affordable to the median income family.’
‘Perhaps nowhere in urban America better epitomizes the relationship between foreign capital and high-end real estate than Miami. From 2004 to 2008, Miami enjoyed a massive luxury housing boom, with over 20,000 new units constructed—only to see many go them vacant for years.’
‘South Florida may be the ultimate mecca for luxury developers, but it’s hardly alone in facing a high-end property crash. Over the past decade, New York has been inundated with ultra-expensive high-rise real estate. The new towers have affirmed the city’s fundamental attraction to the ultra rich. In Lower Manhattan, 31 towers with over 5,000 apartments are sprouting up, with a median price for condos of $2.43 million, a 70 per cent increase since 2013. The overall Manhattan condo market has shot up “only” 54% to $1.84 million.’
‘But over the past few years, no luxury market has been more over-heated than San Francisco. As occurred in the 1990s, the city’s luxury market has ridden the current tech bubble to unprecedented heights—in the process creating what may be one of the most severe real estate bubbles in the country. In the city proper, the median value of homes has skyrocketed, from $670,000 at the beginning of 2012 to $1.12 million today, a gain of more than 67 percent, according to Zillow.com.’
‘Now there are signs that this boom is about to slow.’
‘Right now the decline in the luxury market has not yet turned into a full-on crash in multi-family housing. But there are some worrisome warning signs, such as rising apartment vacancy rates. Already some markets, such as Houston, seem to be overbuilt, particulary given weakness in the area’s critical energy sector. Other urban cores threatened by overbuilding include such disparate cities as Indianapolis, Raleigh-Durham, Denver and Atlanta. According to the consultancy firm Costar, vacancies in downtown areas are reaching double digits in such attractive markets as Boston, Charlotte and Philadelphia.’
‘Other trends suggest that this decline may be more painful than many suspect. We may be entering a phase where we have reached “peak urban millennials” as they head into their 30s, get married and move to the suburbs. The idea that investing in the urban core, and in luxurious density, guarantees a happy result has now lapsed into mythology. It needs to be replaced with something that more accurately effects not what developers hope (or planners decree) but what people need, and can afford.’
What happens when hundreds of thousands, maybe millions of rich people find out their safe deposit boxes aren’t safe? I find that question kinda interesting.
‘Saudi Arabia’s Public Investment Fund is plunging $3.5 billion into Uber, cementing a value for the ride-sharing company of $62.5 billion. But Uber isn’t the first American-owned private company to look East for investors to validate an astronomical valuation. And it’s not the first time investments from sovereign wealth funds signaled the top.’
‘During the economic boom a decade ago when private equity firms were enjoying sky high valuations, they also took money from sovereign wealth funds in Abu Dhabi, Kuwait, Singapore, and China.’
‘Back in September 2007, for instance, Blackstone took a $3 billion investment from the China Investment Corp. in exchange for a 10% stake, valuing the company at $30 billion shortly before Blackstone listed shares on the public market. Others soon followed. Abu Dhabi’s Mubadala Development Co. invested $1.35 billion in Carlyle for a 7.5% stake in September 2007, giving it a valuation of roughly $18 billion. Abu Dhabi Investment Authority bought 9% of Apollo a couple of months later.’
‘Shortly after these investments, shares of private equity companies plummeted. Blackstone’s stock fell more than 85% in total between late-2007 and early-2009. The current share price is still below Blackstone’s stock price its first day of trading, and it has only touched above that price briefly over the past nine years. Carlyle listed shares in May 2012 in an IPO that valued the company at $6.7 billion, valuing the company’s shares at less than half Abu Dhabi’s investment fund paid for it.’
‘Towards the end of the mid-2000s buyout binge, Blackstone and others were making some bad deals that the sovereign wealth funds didn’t know about, or ignored.’
‘According to the New York Times, about 80% of the people who use Uber in Saudi Arabia are women. Nevertheless, the population of Saudi Arabia is roughly 29 million, only slightly larger than the state of Texas. While the country offers some new possibilities, the overall new addressable market is relatively small.’
‘Still CIC might serve as a reminder that when sovereign wealth funds buy in, they do it at the worst time. In 2014, the fund’s manager was accused by China’s top auditor of mismanagement and poor due diligence in part because of the fund’s failed investments overseas. Despite that, Blackstone is humming along, not that CIC’s investment ever recovered.’
‘That might serve as a warning to anyone buying into a tech unicorn right now, or when they finally go public. These days, the people paying up for unicorn rides have not proved all that smart in the past.’
Toronto home prices soar as fears of ‘the B-word’ mount in Vancouver
The Globe and Mail (subscription)-Jun 3, 2016
The first key word represents “bubble,” with BMO Nesbitt Burns questioning if … in the world, followed by Sweden, Colombia, Ireland, Britain, Australia, Mexico, …
Saudi Arabia’s Public Investment Fund is plunging $3.5 billion into Uber, cementing a value for the ride-sharing company of $62.5 billion.
I seriously do not understand what kind of defensive “moat” this company has to justify such a valuation; yes, they have critical mass and brand awareness—but considering how little infrastructure is required to start up something similar, they do not seem to me to have a defensible perimeter. Heck, Yellow Cab had both critical mass and brand awareness as well…
Am I missing something?
“…but considering how little infrastructure is required to start up something similar…
Am I missing something?”
https://www.lyft.com/
Yes, I know–but potentially also ‘n’ more similar start-ups, if those two don’t compete aggressively. Shouldn’t that drive margins down eventually?
‘The Bank of Canada is concerned that the acceleration in housing prices in Toronto and Vancouver may be partly due to purchases based solely on the expectation that prices will keep going up, Deputy Governor Lawrence Schembri said on Thursday.’
‘Schembri said that Canadians moving away from resource-producing regions to the major cities of Toronto and Vancouver in order to find jobs has created a huge demand for housing in those cities, driving prices up as supply remains relatively limited. But he expressed concern that such fundamentals are not the only reason for rising prices.’
“The concern that we have at the Bank of Canada is these price increases may reflect in part the fact that certain people (are) buying housing on (speculation), expecting this price increase to continue,” said Schembri. “People should not be buying housing based on the expectation these prices are going to continue” as the demand from the influx of workers into those regions will not continue at the same rate, Schembri said.’
‘The Bank of Canada is concerned that the acceleration in housing prices in Toronto and Vancouver may be partly due to purchases based solely on the expectation that prices will keep going up, Deputy Governor Lawrence Schembri said on Thursday.’
That’s just crazy talk. How do bankers come up with such whacky ideas?
As they entertained possible explanations for accelerating home prices, did the bankers consider the roles of historically unprecedented low interest rates, government guaranteed lending, relaxation of lending standards to the point where anyone who can breathe qualifies, or the flood of hot, dumb, borrowed money from overseas looking for a speculative investment in something that is likely to rapidly appreciate?
‘If [Ottawa intervenes in the Vancouver and Toronto housing markets], they will collapse the entire economy as the consumer is way too levered even with house prices climbing’
Isn’t this how it inevitably ends? We’ve improved so much, we can’t stop it or it will collapse?
‘If you’re planning to buy a house in the Greater Toronto Area, be prepared to go to war. As demand in the local housing market increases substantially on an almost monthly basis, so, too, does the number of bidding wars. Graham Jones, a Re/Max Hallmark agent who has worked in the industry for 25 years, just sold a house in a bidding war that netted his clients a substantial profit.’
‘Their Richmond Hill bungalow was listed for $899,000. There were nine bidders and the property sold for $1.43 million. He compares the sale to “winning the lottery” for his clients. “It was underpriced a little bit to set up the bidding war, but still, it set records all over the place,” Jones said.’
“We had three bidders that were just beating the living daylights out of each other. We didn’t know where they were going to stop. It’s a nice home, but it’s a 65-year-old, 900-square-foot bungalow on a 50-foot lot. They (sellers) are so happy. I can’t even begin to tell you. They’re retiring and going to buy a piece of property up north and build a house. They got way more money in their pocket than they expected. They’re absolutely thrilled. Every deal I’ve done in the past two years has been multiple offers.”
‘It seems this story is becoming commonplace.’
‘The increase is blamed on several factors. Interests rates are at or near record lows, the Canadian dollar lags behind other world currencies and, historically, GTA real estate is a relatively safe investment gamble.’
‘In northern York Region and some areas of southern Simcoe County, for example, Chinese buyers are bidding amounts substantially above asking price. Wasim Jarrah estimates Chinese bidders account for 60 per cent of people placing bids in multiple-offer situations in the area.’
“They can move their family here while still finding affordable housing,” Royal LePage sales representative Wasim Jarrah, who works out of an office in Aurora, said. “Chinese buyers are savvy. They like to negotiate and feel like they’ve got a good deal. It’s the same thing that happened to Markham, and for the Italians in Vaughan. It’s a very healthy real estate market. Even when people are purchasing in multiple offers, they’ll realize a profit if they stay in their properties for up to three years. The (current) sellers are making a sizable profit as well.”
“If you look at the number of housing starts compared to population growth, we’re just not building homes fast enough,” Joe Asensio, of the Brampton-based JN Asensio Realty, said.’
“You see homes going up everywhere, but they’re all sold before they even build them. I’m on the tail end of the Baby Boomers; this will sound terrible, but we’re just not dying fast enough. People need somewhere to live; there just isn’t enough affordable housing available. This trend will continue for a long while. The real estate market is going to stay nuts for a long time yet. I don’t know whether there’s a need to slow it down.”
‘Asensio is involved in multiple-offer scenarios daily. He watched 51 offers roll in for a property in Brampton recently and admits the number of bids on homes in the area will often enter double digits. Jones agrees with these assessments that Asian buyers, low interest rates and short supply have driven the housing market. However, some sectors are in higher demand than others. For example, townhouses and condominiums are not generally seeing the same percentage increases in value as freehold homes.’
“People don’t have a lot of options,” Jones said. “It’s impossible to tell whether it’s foreign or domestic money, but there’s certainly a lot of Asian buyers who are desperately trying to get freehold properties in the GTA.”
‘Between Aurora in York Region and Innisfil in Simcoe County, there appears to be an influx of Chinese buyers. “No one really knows what that offer price is or what the conditions are. I don’t know what the offer is, but if I want that house, I’m going to put in a lot more money and take out conditions for inspection and financing and everything else. Given there’s a shortage of housing on the market, people want to get into the market and they have to compete.”
“Are we overpriced?” Asensio said “Realistically… not really. We’re still one of the most affordable areas in the country. I don’t believe we’re in a bubble and I don’t foresee that prices are going to drop anytime soon.”
Thanks for the update, Mr. Magoo.
Chinese buyers are savvy? No, Chinese buyers are the dumb money. And it’s dumb money of criminal origin, which makes this all the more disgusting.
These realtors are sure living large, selling their own country out from under themselves.
‘An over-heated property market in some cities is making it hard to reduce the number of unsold homes, thus, different regulations should be applied to different cities on local levels, said industry experts. According to statistics by China Index Academy, the average price of housing price in 100 Chinese cities grew 10.34 percent year-on-year, 1.7 percent growth from that of last month, the 10th consecutive month for the double hikes, reported Shanghai Securities News.’
‘The top ten cities with the highest price increase in May are all second-tier cities. The average increase was close to three percent, which cities, such as Xiamen and Hefei witnessed a hike close to six percent. Riding the trend, the property price of second-tier cities this year is expected to reach 30 to 40 percent.’
‘Chen Sheng, head of China Real Estate Data Academy, said that the fast increase of housing and land prices in some second-tier cities are more or less influenced by the housing price of first-tier cities like Beijing, Shanghai and Shenzhen.’
“It is unsettling that the housing and land prices hiked so much in three months when it’s supposed to reach those levels in three years,” Chen said. “The loosened monetary policy makes it easy for developers and property buyers to take loans which supported the market’s turnaround.”
‘Quotable Value says home values in Auckland have begun accelerating again and new measures aimed at curbing investor activity in the market have not put much of a dent in demand from investors. QV figures today show prices in Auckland rose 3.3 per cent in the last three months and 15.4 per cent in the year to May. The average value in the Auckland region is now just over $955,000.’
‘Last year the Reserve Bank introduced new rules in Auckland that required property investors to have a minimum 30 per cent deposit. But QV says it appears to be investor demand that’s driving the rapid value growth in Auckland and other parts of the country. QV home value registered valuer James Wilson says throughout May they have seen a continuation of the buoyant market conditions experienced during April and values are rising rapidly across the city again.’
‘He says they are also seeing numerous examples of properties selling within short time-frames by property speculators. He also says vacant sections within new developments are extremely popular, with on-selling of vacant sites which have been purchased off plans providing strong capital gains.’
‘Labour says with the average Auckland house price approaching $1 million it’s clear the Government has given up on fixing the housing crisis.’
“The Government has run up the white flag. It has admitted defeat. None of its housing policies have had any lasting impact and the latest QV numbers show the market is running hot again,” said Phil Twyford, Labour’s housing spokesperson. “First home buyers are shut out, speculators are running riot, mortgage slaves are handing all their hard-earned to the Aussie banks and we’ve got families living in cars and campgrounds,” Mr Twyford said.’
‘More than 1,300 new city centre apartments have been given the green light - despite fury that not one of them will be affordable housing. Circle Square, on Oxford Road’s former BBC site, will include a 36-storey skyscraper, park, offices, a multi-storey car park and 677 apartments for rent. The First Street South development near the Mancunian Way comprises 624 new flats.’
‘Neither contains any ‘affordable’ housing, despite the council’s planning policy stating it should make up at least a fifth of any development containing 15 or more units. Planning officers said their decision to recommend approval was in line with the policy, however, because the council can waive the rule if it would make a project financially ‘unviable’.
‘But all three city centre councillors raised objections over the move, while committee member Basil Curley said he was ‘really disappointed’, not for the first time, that none of Circle Square will be cheaper when people are struggling and many are sleeping rough.’
“It’s quite shameful really that cheek-by-jowl with that we have these fantastic, prestigious developments that we’re all very proud of,” he said. “We would like to see some consideration given to those living in our city who are less fortunate than the rest of us.”
‘City centre councillor Kevin Peel said the area should be treated in the same way as any other part of Manchester, adding: “We should not be creating a ghetto only accessible to the wealthy.”
‘the council can waive the rule if it would make a project financially ‘unviable’
What would make it so? Ah, the land cost too much to build affordable housing. So just how many examples of lots of luxury building but nothing affordable do I have to present? We have a 30 or 40 year boom in apartment building and not one county in the US has affordable housing for low income people?
What’s driving that boom? Artificially low interest rates and government backed financing. Gee, wasn’t that the case in the late 1990’s and early 2000’s?
Gee, wasn’t that the case in the late 1990’s and early 2000’s?
Yes but Jamie and Lloyd are now billionaires (and the top fraction of 1 percent, the non-salaryman wealthy are doing spectacularly well). And the politician incumbency rate has not dipped.
Until one of those things changes, I don’t see much impetus for change.
The for,er El Toro base is called Great Park and was slated to become a real park, but now is being developed for houses and condos and apartments. Construction is very visible just down from the metro link train station in Irvine. By the Spectrum, another apartment high rise is going up. A low rise about two or three floors is going in right next to the start of the San Diego Creek bike path. Centrepoint apartments looks all complete closer to my office.
UCI, lots of high tech jobs, nearby Spectrum, and Irvine is just a hub of business.
‘Hong Kong Home Prices Have Much Further to Fall Before Controls Are Eased’
‘Memo to Hong Kong developers calling for the government to ease property curbs amid a slump in home prices: Don’t hold your breath.’
‘Declines in the residential property market have to get a lot worse before Hong Kong’s lawmakers would consider rolling back measures they introduced more than five years ago to rein in prices, according to eight analysts and economists polled by Bloomberg News. On average, they estimate that home prices, which have fallen 13 percent from a September peak, will have to plunge another 19 percent before the government intervenes.’
‘A correction of that magnitude would be Hong Kong’s biggest since a six-year downturn that lasted until 2003 and would exceed declines during the 2008 global financial crisis. Still, officials may be willing to stomach such a historic slump because they’re more concerned with the widening wealth inequality that’s helped drive Chief Executive Leung Chun-ying’s popularity to a record low. Hong Kong ranks as the world’s least affordable housing market and Leung reiterated in May that prices remain too high.’
“Any policy change has a policy risk,” said Eva Lee, a UBS Group AG property analyst in Hong Kong. “If we are still in a low-interest rate environment, if they encourage investment demand, the market will get crazy.”
Isn’t it interesting that other countries openly debate and have policy on housing bubbles, while in the US and others it’s treated like a glorious windfall?
Hell, in the US a housing bubble is treated as a birthright, and if you are not a loan owner you are pitiful.
Bailouts are also a birthright to f-d buyers.
‘Skyrocketing Seattle housing prices cut both ways, helping owners and challenging buyers. But is an Old Testament-style reckoning on the way?’
‘My colleague Mike Rosenberg reported this week that single-family house values in Seattle shot up 10.8 percent year-over-year in March, the second highest in the nation after Portland, according to the latest S&P/Case-Shiller index.’
‘It’s a new record, surpassing the previous peak in the summer of 2007 — and we saw how that turned out. Nationally, the increase was 5.2 percent. Here, it’s especially good news for homeowners and bad for buyers.’
‘So is Seattle in a bubble? And will those discontent with the local boom get to enjoy some rough justice when it all caves in?’
‘Perhaps, but probably not. The old bubble was a nationwide phenomenon, stoked by subprime mortgages, Wall Street hustles, high leverage, and compromised regulators. While the latter two always bear watching, the same dangerous confluence of factors from 2007 don’t apply to today. The Case-Shiller 20-city index remains below its 2007 levels.’
‘Instead, the biggest price increases are tied to low supply, high demand and strong economies in certain very desirable cities, such as Seattle, Portland and Denver. Elsewhere, it is a natural consequence of the recovery.’
‘The more likely outcome is a slow moderation caused by higher interest rates, deflation of a tech bubble, slowed jobs growth or, in some places, new inventory of housing coming online. Even then, if San Francisco is an example, prices will soon begin marching up again.’
‘House prices have been disconnected from median incomes since the early 2000s. So the issue is not merely housing affordability but stagnant or falling incomes. And bubble pops only make this worse.’
‘How high is too high? When it comes to home prices the wounds left from the Great Recession make this question an important one. Amidst that event, home prices plummeted and didn’t begin to recover until 2011. Recent price growth has been particularly strong and for a while that was welcome news. More recently though, a rapid escalation has led some to worry about the potential for another house price bubble.’
‘Freddie Mac’s current Insights report, published by its Economic & Housing Research Group headed by Chief Economist Sean Becketti, asks how one can tell it is time to worry. While there is no foolproof technique they explain a two-stage method for identifying unsustainably-high house prices.’
‘Sometimes, the report says, it is easy to see where home prices are escalating too quickly. It happened recently with the oil price boom that generated big home price gains in some oil patch areas. The recent collapse in energy prices suggests those increases are likely to be reversed and some signs of distress are already surfacing. “For cases like these - that is, situations with geographically-specific economic shocks-no model is needed to identify heightened house price risk.” But what Freddie Mac’s economists are looking for is a way to spot situations where prices appear to be feeding on themselves without apparent economic reasons. This constitutes the beginning of a bubble.’
‘Stage-one thinned the herd to 10 metros with unusually high PTI ratios at the end of 2015; Raleigh and Charlotte, North Carolina; Jacksonville, Orlando, and Miami, Florida; Dallas, Austin, and San Antonio, Texas; and Portland and San Jose on the West Coast. Not only are these metros in clusters, but in each the ratios are high relative to the historical experience of each. For instance, the current PTI ratio in San Jose is 9.6. But that PTI ratio is only modestly higher than San Jose’s outlier threshold of 9.4. The San Jose metro includes much of Silicon Valley, and the relatively-high volatility of house prices in San Jose reflects the relatively-high historical volatility of the tech sector. In contrast, the current PTI ratio in the Dallas metro is 3.4, lower than the national median value of 3.5. However, PTI ratios in Dallas historically have been both low and relatively stable. The outlier threshold for Dallas is only 3.2.’
‘In addition to a high PTI, the answers to three other questions are needed to identify potential price bubbles.’
‘Are there nonfinancial reasons for those ratios? Is the growth, for example, one explained by a geographically-specific industry? If yes, then high prices may be sustainable; if not they may represent a financial bubble.’
‘Are credit conditions deteriorating? If delinquencies, defaults and/or unemployment are increasing then house prices may come under pressure.’
‘Is leverage increasing? If owners are using their home equity to finance high levels of consumption they may not have enough financial cushion to weather future slowdowns in the economy.’
‘The loan-level ratio has increased noticeably in recent years, and the trend presents an intriguing pattern. Prior to 2001, the national loan-level ratio was relatively flat and averaged about 2.6. From 2001 to 2008, the ratio increased steadily to roughly 3.8. Since then, the ratio has oscillated around this higher level. This pattern suggests that, post-crisis, borrowers are devoting a higher-share of income to housing, on average, than they did historically.’
A comment:
‘Larry Gray - Senior Mortgage Banker, Mason-McDuffie Mortgage Corporation’
‘There are always bubbles but predicting them is no easy feat. San Francisco was a good example to use of how much higher people are willing to go in their income to housing expense ratio. Obviously, being one of the most densely populated cities, there will be limited room to increase housing. The city has been creative in allowing for increased housing if falling far short of demand. The huge increases in both rents and home purchase prices in San Francisco has caused more pressure on Oakland and other East Bay city prices. However, we in the business, notice decreasing competition for housing in some parts of the extended S F Bay area. Back when the real estate market began to slow down substantially by 2007, San Francisco was the last to slow down quite a bit. I have heard of parents in Marin County which gets spillover of San Francisco home searchers, say to parents who gave up looking to buy in their beloved community,that they miss being able to do some of the things, like traveling, they used to as a family. The high monthly housing expense they took on from a home purchase in the past few years, is a burden but I think it will pay off in the long run.’
‘There are always bubbles but predicting them is no easy feat.’
There is always BS when used home sales people start talking.
Anyone who has had a look at the home price index graph back to 1890 in Robert Shiller’s book, “Irrational Exuberance,” realizes that real estate cycles before 1997 were not bubbles, and pre-1997 home price inflation was negligible.
The Housing Bubble did not get rolling until after 1997, and is yet to end.
Top News
Thu Jun 2, 2016 | 11:17 AM EDT
U.S. house price rises to continue outstripping inflation, wages: Reuters poll
Scaffolding is seen at the construction site of a new home in Carlsbad, California September 22, 2014. REUTERS/Mike Blake
By Sweta Singh and Rahul Karunakar
(Reuters) - U.S. house prices are forecast to rise at more than double the current rate of underlying consumer prices and wages over the next few years, underpinned by steady and solid turnover in the housing market, a Reuters poll showed.
While housing affordability is getting worse for first-time buyers, most analysts and economists polled by Reuters say that rents are even more prohibitive, which should prompt more young people who can manage to do so to buy their first homes.
So while few expect a major boost to economic growth from the housing market, it is currently on a strong enough footing to withstand the Federal Reserve’s plans to gradually raise interest rates, which will also increase mortgage costs.
…
‘US hiring grinds to a near-halt; many stop looking for work’
‘U.S. hiring slowed to a near-standstill in May, sowing doubts about the economy’s health and complicating the Federal Reserve’s efforts to raise interest rates. While unemployment slid from 5 percent to 4.7 percent, the lowest since November 2007, the rate fell for a troubling reason: Nearly a half-million jobless Americans stopped looking for work and so were no longer counted as unemployed.’
‘Employers probably cut back on hiring after the economy grew at just a 0.8 percent annual rate in the January-March quarter.’
‘Yet Friday’s dismal jobs report was a surprise in part because most recent economic reports have been encouraging: Consumer spending surged in April. Home sales and construction have also increased. Sales of new homes reached an eight-year high in April.’
Timing of rate hike ‘not really that critical’: Fed’s Evans
Reporting by Geoff Cutmore, writing by Anmar Frangoul
Fri, 3 Jun ‘16 | 4:35 AM ET
CNBC.com
Fed’s Evans says rate hike timing ‘not really that critical’
There could be two rate hikes in 2016 if data continue to be favorable but the timing of both won’t prove to be crucial, Charles Evans, the Chicago Federal Reserve president, told CNBC.
…
Weak US jobs report spoils Fed rate hike plan
Ron Insana
23 Hours Ago
CNBC.com
By all means, raise interest rate in June. With only 38,000 jobs created in May, and downward revisions in two prior months, this is such an opportune moment for the Federal Reserve to move forward with a rate hike in a week, or so. NOT!
Yields on the 10-year Treasury have slipped below 1.75 percent this morning, hardly a sign of an accelerating economy laden with inflationary pressures.
…
“Employers probably cut back on hiring after the economy grew at just a 0.8 percent annual rate in the January-March quarter.”
Americans need more credit so they can buy stuff and go on vacation. Exceptional.
The few Americans who are determined to stay debt free, save for their own retirement, and cut their own taxes are struggling. At least that is my experience. But the year is almost half over and I can see an easier April 15 2017 ahead. It’s a battle of waiting out the bubble. I can wait and still add to my retirement savings.
It’s a struggle to save money and stay out of debt when the Fed is waging a War on Savers. But it is also heartening to watch your net worth steadily rise while your free-spending neighbors continually dig themselves into a hole.
These days the stock market has been about steady for the last 18 months. So it’s barely noticeable. I figure my net worth is about the same now as 18 months ago. However, I spent a lot up to last September. This is a war on savers for sure, and I am digging in. My rent is 12% of my wages and compensation, but was about 25% up to September. The Fed can take a long walk on a short dock.
It’s Saturday morning and Ben Jones is on fire.
That’s right. massive.global.housing.bubble.
The poor donks. The poor poor donks.
Since moving to California a couple of decades ago, I have met individuals from all walks of life who claimed that the path to wealth was to buy California real estate and then just wait. This has included retirees, students, car loan officers with real estate investments on the side, economists with small rental investment empires on the side, home builders, hair dressers who divide their time between cutting people’s hair and making out-of-state residential real estate investments, long-term renters who finally threw in the towel and bought a very expensive home as an “investment” to protect against ever-skyrocketing rents, etc, etc, etc.
It is finally time for me to admit that this mutually-agreed herd of self-styled financial savants was right where I was wrong: California real estate truly does always go up, and anyone who doesn’t buy at least one house out here is a financial fool who is destined to stay priced out and pay ever-increasing rents forever.
‘During the boom years, the moving trucks brought over the Altamont Pass families that were priced out of increasingly expensive communities around the Bay. Hardly anyone moved in the other direction.’
‘Those households helped bring the housing fever with them: a $400,000 enthusiasm for $200,000 homes, a faith that $400,000 homes should become $500,000 jackpots. At the time, the rapidly rising home values seemed to say something about Stockton itself — that this was a place that was coming up, that was finally poised to share in the Bay Area’s prosperity.’
“We really did think, ‘Oh great, we’re doing better, things are looking up,’” says Jan Truscott, a real estate agent in town and the former dean of business at San Joaquin Delta College. Stockton was even on one of those lists at the time of “All-American Cities.”
‘Martin Saltzman, 64, bought his modest one-bedroom home in 2006, near the worst possible moment, with no money down. Then, shortly after he moved here from the Seattle area to be near family, the economy collapsed, and he couldn’t find work in the hospitality industry. He took up substitute teaching, and when he was home he watched one cable news show after another in his living room.’
“I was watching them continuously to figure out why I was in the situation that I was,” he says, “to try to get some sense it wasn’t necessarily my fault — I just made a good decision at a bad time, or a good decision at a good time that turned bad.”
‘His home now is worth about half the $126,000 he paid for it. Visionary Home Builders, Ornelas’s organization, helped him refinance the property last year for a lower mortgage payment, which helped. But Saltzman wants to get out of homeowning entirely as soon as he can.’
“I have no idea how long that would be,” he says. “Are we looking at another 10 years?”
“I was watching them continuously to figure out why I was in the situation that I was,” he says, “to try to get some sense it wasn’t necessarily my fault — I just made a good decision at a bad time, or a good decision at a good time that turned bad.”
I’ve noticed one undesirable consequence of bubbles is to lead even very rational people to make choices which seem foolish in retrospect. The more extreme the bubble, the more intense become the incentives to make regrettable decisions.
“I’ve noticed one undesirable consequence of bubbles is to lead even very rational people to make choices which seem foolish in retrospect. The more extreme the bubble, the more intense become the incentives to make regrettable decisions.”
“If” - R. Kipling
IF you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise:
If you can dream - and not make dreams your master;
If you can think - and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build ‘em up with worn-out tools:
If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: ‘Hold on!’
If you can talk with crowds and keep your virtue,
‘ Or walk with Kings - nor lose the common touch,
if neither foes nor loving friends can hurt you,
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it,
And - which is more - you’ll be a Man, my son!
Thanks for sharing the poem. It happens to be the same one I shared with my eighteen-year-old son when he left home to move across the country last fall.
But Hari Seldon can!
This guy watches cable news pundits to figure out his financial decisions? That’s probably his first mistake - oh wait, he doesn’t make mistakes - just ‘good decisions at bad times’.
“You don’t make mistakes - just good decisions at bad times.”
This is just SCREAMING to be on t-shirts and tote bags in the Housing Bubble Blog online store! Cafe Press, anyone?
“It is finally time for me to admit that this mutually-agreed herd of self-styled financial savants was right where I was wrong: California real estate truly does always go up, and anyone who doesn’t buy at least one house out here is a financial fool who is destined to stay priced out and pay ever-increasing rents forever.”
Mmm… swill that free-market kool-aid. Another?
Prof. Bear.
I feel the same way about FL RE.
I feel strongly that both CA and FL are setting up to crash again at some point in the next few years, and that Democrat politicians will once again propose to rescue housing market victims from their financial folly of buying at Bubble-era prices.
Whether the household-level bailout measures will prove sufficiently large to make greater fools look smart remains to be seen.
My curiosity over why our government is in the business of encouraging households to make poor decisions which equate to the financial equivalent of committing seppuku remains undiminished.
People just barely hanging on don’t rock the boat. It’s a way to enslave people in the land of the free.
“It’s a way to enslave people in the land of the free.”
And there it is. Slavery used to be a product of coercion, now it’s a product of persuasion.
And the best part is: Now days the slave and the slave owner ARE THE SAME PERSON!
Bahahahahahahaha … no more hassles with the care and feeding of our modern day’s slaves; this is something they willingly do on their own. Present to a willing slave-to-be schmuck a dotted line and I’ll be damned if they won’t sign it.
Bahahahahahahahahahaha … dumb ‘em down, and profit.
There is no U.S. law against slavery provided the slave voluntarily signs the dotted line on the contract.
The best part is, the slaves use peer pressure to recruit more slaves… It’s viral slavery!
viral slavery
Nice.
The thing is, how many ordinary people were rescued by any of the Obama Administration’s alphabet-soup programs in any material way? The intention was to save the banks. That’s all. The rest was just marketing and public relations.
Runway foaming + optics
This is not correct. Many many many ordinary people were saved. Current housing prices and all that come with them are the result. All those who held on and kept paying their mortgages even after seeing their house value crater were saved. And now they’ve got credit and a big asset again.
All the bitchin here by crypto leftists who support Hillary, whose housing policies will be a continuation and expansion of all this terrible stuff. I asked several days ago what people thought about the different candidates position on housing without a single reply.
Many many many ordinary people were saved—at the expense of many many many ordinary people who are being pushed in front of the approaching steamroller…
I asked several days ago what people thought about the different candidates position on housing without a single reply.
I must have missed that. Too bad, that would be an interesting topic. IMO, it’s a fairly short answer, though:
- Hillary: totally sold out to the biggest banks, so more of the same.
- Bernie: bust the trusts! The interesting choice.
- Trump: rabble-rousing against big banks for certain, but likely no significant change IMO.
“All the bitchin here by crypto leftists who support Hillary, whose housing policies will be a continuation and expansion of all this terrible stuff. I asked several days ago what people thought about the different candidates position on housing without a single reply.”
Since you tried your best to start an argument with the imaginary army of closeted Hillary supporters who read and post here, what would Trump, who made lotsa money selling real estate to greater fools, do differently?
Based on this real estate propaganda piece, perhaps Sanders or Trump would offer improvements on recent destructively excessive levels of government intervention in the housing market.
Trump or Sanders Would Be Terrible for Housing Market, Say Real-Estate Experts
By Benjamin Freed on May 25, 2016
Real-estate experts and economists who study the housing market may be quietly rooting for Hillary Clinton in this year’s presidential election, according to a survey conducted by the real-estate website Zillow. The site’s panel of 107 real-estate analysts, economists, and academics predict that home prices across the United States will grow between 3 and 4 percent over the next few years, but that those gains could be quickly upended if either Donald Trump or Bernie Sanders were to become president.
Zillow’s panel felt that Clinton, the likely Democratic nominee, is more likely to pursue polices that positively impact home prices and housing finance reform. Of the people surveyed, a 33 percent plurality said a Clinton administration would have a positive effect on home prices, while 31 percent said she would improve housing finance policies. Clinton’s campaign in February published a housing agenda that calls for a $25 billion “housing investment program” and grants of up to $10,000 for low-income families trying to make down payments.
…
“Zillow’s panel felt that Clinton, the likely Democratic nominee, is more likely to pursue polices that positively impact home prices and housing finance reform.”
WTF is housing finance reform?
“…that home prices across the United States will grow between 3 and 4 percent over the next few years, but that those gains could be quickly upended if either Donald Trump or Bernie Sanders were to become president.”
So if I understand correctly, a key distinguishing feature of Hillary Clinton’s housing agenda will be to continue driving up home prices faster than inflation.
This is a desirable policy outcome because…?!
“All the bitchin here by crypto leftists who support Hillary, whose housing policies will be a continuation and expansion of all this terrible stuff.”
Isn’t it amazing how not a single member of the supposed army of Hillary supporters who read and post here have a single thing to say in support of a housing policy predicated on ensuring indefinite real estate price inflation in excess of inflation? One almost gets the sense that nobody can actually provide a defensible explanation of why this is a desirable policy objective.
hasn’t the gov taken enough action?
we must have 12 agencies that artificially inflate home prices
chop heads !
The various federal agencies currently working 24/7 to increase housing prices are setting up America for the mother of all housing busts, soon to be followed by Hillary’s “Save Our Homes” mortgage debt jubilee.
And you are voting for her and a continuation of all of this. Plain and simple.
And all you folks up blog who toss out “whitey” comments, Hillary appreciates that support also.
‘who toss out “whitey” comments’
That’s always struck me as odd. Same with blanket Muslim statements. Most Muslims are Asians, not Arabs. Generalities are usually inaccurate.
What is an intelligent voter to do when politicians base policy on generalities, such as promoting housing policy to help “underrepresented” groups, or basing immigration policy on a category of religion that represents over a billion people?
You keep saying that I am going to vote for Hillary, and I keep saying I am voting for neither Trump nor Hillary. I wonder who is right?
“I wonder who is right?”
I was just at Safeway this morning, and there by the grace of God on the magazine rack at the register was a full cover shot of Ronald (mommy?!) Reagan under a tall white cowboy hat, immortalized. Hehe.
The San Diego Union Tribune is offering the brilliant advice to write in Ronald Reagan on the presidential ballot.
The only way that the Canadian market (mainly Toronto and Vancouver) will cool is by the federal government imposing an interest tax, ie, if rates are 2.5% then the govt charges an additional 2.5% tax annually on the selling price for each of the first five years.
This is a tax on rich immigrants (who often don’t even bother to occupy their new homes) preferring to establish a safe domicile they can come to quickly if things go bad at home.
And to get the much cheaper educations for their children. And to get our free medical.
Why are we letting a spoiled few make it so difficult for our children to buy ?
Wouldn’t it work to ban foreign investment?
Maybe if Trump gets elected, he can ban Chinese real estate investors from driving U.S. home prices out of reach of U.S. citizens.
He would certainly devalue his holdings to make America great again.
Mexico tried that = disaster
Prof Bear
No, it is only a tax on new sales, and only on foreign purchasers, and only on residential housing.
By selling them a house we are also giving them a boatload of freebies, paid for by existing taxpayers.
We have to do something. My daughter just sold her house for twice what she paid for it - two years ago ! Which sounds great until you think she might have to purchase another one. (not true, she already has another one).
Only higher interest rates, or taxes, will stop this bubble.
All bubbles pop:
‘Job losses from the oil downturn continue to wear on Calgary’s real-estate market, according to the Calgary Real Estate Board. That’s led to a rising number of homes for sale and fewer people buying them, data from the board suggest.’
“While recent oil price gains may have some feeling optimistic, weakness in the labour market continues to impact housing demand,” Anne-Marie Lurie, CREB’s chief economist, said in a statement. “We’re seeing housing supply levels rise in the rental, new home and resale markets.”
‘According to CREB, inventory grew in all market categories, with the largest growth in apartment and attached homes. “The resale apartment market has been the most difficult for sellers,” said CREB president Cliff Stevenson, noting that lower prices from other categories and more incentives from new home builders have made competition stiffer for homeowners.’
In 2007 I did an interview with a Calgary periodical. A lot of the questions were about the resource boom and how it might protect the region from a housing decline. I related it to the Texas bust and said the oil boom just made it worse. People forget how we got there; two oil embargoes. The Dallas/Ft Worth metro was the hottest real estate in the world market for 5 straight years in 1984. It all came down.
In 2007, I didn’t know the Chinese were going to pour 100 years of concrete in 3. I did know all booms turn to busts. Here we are 8 years later and it has. Look at the various factors being blamed for busts today: commodities, currency, overbuilding, stock woes. The common ingredient is greed based speculation. This should never happen with houses. The central banks, regulators and governments are in most cases encouraging it. Some thing or some one will cause Vancouver to fall. Same with San Francisco. It will then be chalked up to yet another “cause” when the root of the problem was there to be seen all along.
However, it seems bubbles take much longer to pop in the presence of deliberate government economic intervention to sustain them.
30% down?
Smelly Mel says 3% and if you know folks (dept of ag)it’s 0
‘In northern York Region and some areas of southern Simcoe County, for example, Chinese buyers are bidding amounts substantially above asking price. Wasim Jarrah estimates Chinese bidders account for 60 per cent of people placing bids in multiple-offer situations’
‘Chinese police have detained several activists while others were placed under surveillance for the anniversary of the bloody 1989 crackdown in Tiananmen Square, which was heavily policed on Saturday. On June 4 1989 military tanks rolled into the square in the centre of Beijing to crush pro-democracy protests, killing hundreds of unarmed civilians — by some estimates thousands.’
‘Nearly three decades after the crackdown, the communist regime continues to forbid any debate on the subject, mention of which is banned from textbooks and the media, and censored on the Internet. Six human rights activists, including the poet Liang Taiping, have been held by Beijing police since Thursday after holding a private ceremony commemorating June 4, the Chinese NGO Weiquanwang said.’
‘The detained activists were suspected of “provoking quarrels and fomenting unrest”, the group said, adding another activist had “disappeared” in recent days in the capital.’
‘As in previous years, the “Tiananmen Mothers”, an association of parents who lost children during the violence, were placed under heavy surveillance in the lead up to the anniversary. Tiananmen square in the centre of Beijing was also under tight security on Saturday, with guards at the entry points into the iconic tourist spot checking the IDs and passports of visitors more closely than usual, an AFP photographer at the scene said.’
‘Around a dozen parents from the Tiananmen Mothers visited a Beijing cemetery on Saturday where many of those killed in the crackdown are buried. They said they were outnumbered by security forces as they paid their respects at the graves of their children. “We have been under surveillance since last week… 30 (plainclothes policemen) were at the cemetery,” said Zhang Xianling, whose 19-year-old son was killed in 1989.’
‘A resident of Sichuan was also arrested this week for selling alcohol with labels that read “89-4 June” and images of tanks, according to Hong Kong-based media. The Tiananmen Mothers penned an open letter slamming the “27 years of white terror and suffocation” they have been subjected to by the authorities.’
“We the victims’ families are eavesdropped upon and surveilled by the police; we are followed or even detained, and our computers searched and confiscated,” read the letter signed by the group’s members and released the NGO Human Rights in China.’
‘The letter also said they had been warned that all visits to the home of the group’s founder Ding Zilin, who is now 79-years-old and in poor health, would be restricted from April 22 to June 4. Ding was under increased surveillance at her home and the police had cut the household telephone line, Hong Kong-based media reported.’
‘Calls to Ding’s telephone number on Saturday were met with a recorded message: “The user you have contacted does not have the right to receive calls.”
‘Meanwhile, the state-run Global Times newspaper ran an editorial in its print edition describing June 4 as “a normal day”.
‘Martyn Brown: An essay on B.C.’s housing crisis and what to do about it’
‘the Vancouver Board of Trade released a major new report. It found that Vancouver “ranks 15th out of the 17 metro regions for which data were available on housing affordability and gets a ‘D’ grade—only Shanghai and Hong Kong are less affordable. The region’s expensive housing acts as a major barrier to retaining and attracting high-end talent and business investment.”
‘A new survey conducted for Vancity shows just how central that challenge and its related impacts on the cost of living and quality of life has now become for Metro’s millennials. The April 2016 benchmark price for detached properties in Greater Vancouver was $1,403,200—up 30.1 percent over last year and up 53 percent over three years ago.’
‘Another Vancity report from early 2015 put Vancouver’s affordability problem in perspective. It noted that the median gross monthly household income in Metro was $6,225. At that rate, even with a whopping 20 percent down payment of $92,875, a typical family could only afford to buy a home worth up to $464,375.’
‘That’s less than the current benchmark price of $475,000 for a typical condo and nowhere near the $608,600 benchmark price for an average townhouse.’
‘It’s nuts.’
‘And a major reason for that problem is the impact of foreign capital—mostly from China—as SFU assistant professor Josh Gordon has persuasively presented in his new paper. Like a virus, it is a killer concern that is spreading.’
‘Metro Vancouver’s affordability crisis is now Greater Victoria’s unfolding nightmare. Victoria is now the second least affordable housing market in Canada and the third-hottest luxury real estate market in the world, according to Christie’s International Real Estate.’
‘Kelowna is now also feeling the pinch, aggravated by runaway foreign investment that is either directly or indirectly pushing home prices through the roof and putting the dream of home ownership out of reach for too many B.C. families.’
‘Meanwhile, the Clark government sits on its hands in denial and tries to pretend that it is just a minor symptom of B.C.’s booming economy.’
‘Relax, the real estate and development industries assure us, the impact of absentee ownership and foreign investment is widely overblown and not supported by its figures.’
Clark thanks condo kings for their support - The Globe and Mail
http://www.theglobeandmail.com › News › British Columbia The Globe and Mail
May 16, 2013 - Ms. Clark, who confounded the expectations of many with a big win for her … thank two of her major supporters, who are leading figures in that world. … “I want to say a special thanks to Bob Rennie and Peter Wall,” Ms. Clark .’
Median income back to 1996 levels, yet home prices soaring. Yeah, that’s sustainable.
http://www.theburningplatform.com/2016/06/04/20-years-of-progress-real-median-household-income-back-to-1996-levels-home-prices-exploding/
Kotter, welcome back.
I said I’d still post occasionally. I’m not falling off the face of the earth or heading for the hills, to the dismay of the HBB’s resident Pineapples.
I’m expecting a summer of escalating shocks, followed by a 2008-style crash - only orders of magnitude worse - after the elections when Yellen can no longer defer the financial reckoning day and our financial house of cards implodes under the weight of its own mark-to-fantasy valuations and artifice.
http://www.telegraph.co.uk/business/2016/06/04/how-a-summer-of-shocks-threatens-to-bring-mayhem-to-the-markets/
Can you describe in more detail how you think you will benefit from such a scenario? I’m not trolling; genuinely curious because this is one of the reasons why I bought this year.
My belief is that the same process will repeat itself. Squid funds will wrap their tentacles around bulks sales with BIG FED right in the middle. My belief is individuals like us will not be able to purchase FBs homes.
Remember FL_Donk…. nothing is more beneficial, accelerates the economy and create jobs like falling prices to dramatically lower and more affordable levels. Nothing./i>
Can you describe in more detail how you think you will benefit from such a scenario?
When did I ever say I’d benefit from such a scenario?
What happened with the squid funds that were supposed to buoy the Chinese stock market after last summer’s bubble-and-burst? Last time I read about it, the Shanghai Index was still off from its peak by 45%.
And then there is the oil bubble. Last time I checked, oil was around $50/bbl, still off by 67% from its June 2008 high above $150/bbl despite our friend Albuquerque Dan’s repeated assurances that oil was going to already have returned to $80/bbl by December 2015.
Not to suggest anything like this could ever happen to U.S. housing!
Ok, so you’re housing situation is better now, right?
Our housing situation is likely going to change in a couple of years when the youngest kids are done with high school in our high-priced school district. Renters have the option to leave when circumstances change without the potential worry of trying to offload an underwater home.
“Yeah, that’s sustainable.”
Or at least prolongable.
Debt produces equity produces wealth.
And the eventual collapse produces still more wealth, in the form of too-big-to-fail bailouts of systemically risky financial institutions.
God loves His bankers and takes care of them in all economic circumstances.
Your thread back a few threads up was facetious, wasn’t it? California RE was prolly a good buy in 1996 or 1997 but I had to bail on California back then. Had I stayed in that small town, I would be retired now like my friends, but at not eve half the net worth I now have. And four years left on a mortgage on a stucco box which was just a starter home.
Mostly facetious, though at this point in the mania, denial is so strong that it is pointless to even openly discuss my views of the mania with true believers. Since I am not a home owner enjoying current bubble rates of home price appreciation above inflation, I am obviously a crank who doesn’t understand California real estate.
“California RE was prolly a good buy in 1996 or 1997 but I had to bail on California back then.”
P.S. We had the good fortune to land in CA in 1996. All our prospective neighbors warned us about the risk of buying, which I interpreted as a buy signal.
And yet you still didn’t buy?
In California, renting is cheaper than owning the closer you get to the ocean. I know people who would drive until they qualify, but then that meant the temps get into the high 90s or low 100s easily. Then they have to commute long distances and get fat in addition. They. Just. Don’t. Think.
“And yet you still didn’t buy?”
We won the California housing lottery by buying in the mid-1999s then selling shortly before the crash, around the time Ben started this blog. We didn’t have any idea that a bubble was going to triple value of our place over eight years when we bought. It was dumb luck, though likely related to the rational decision to buy at the last point in California real estate history when renting was more expensive than buying.
1990s
A nice thing about renting small is that it’s easier to clean and organize. I have kind of an urban feel next to a very busy street (20 hours a day of traffic) and it’s a nice thing to come home to this small place and have enough time to make an elegant, but healthy dinner and enjoy a stein full of amber ale while the motorists hurry to get to their loans.
“A nice thing about renting small is that it’s easier to clean and organize.”
I have a garage full of toys that our two children enjoyed, and I’d love to bequeath you, but my wife won’t let go despite their non-use these days.
Thanks for the link. It supports my thesis that house prices should be back at 1997 levels.
‘Goldman Sachs said the PBOC’s signals for a weaker yuan could spur another damaging wave of fund outflows. “Higher fixings could easily reignite capital flight, as households and firms anticipate a faster pace of depreciation,” Goldman said. “Capital outflows are heavily expectation-based, such that weaker fixings inevitably fan anxiety that a bigger devaluation is in train.”
‘A rush of funds for the exit would likely in turn put further pressure on the currency, Goldman added.’
‘China suffered almost $700 billion worth of capital flight in 2015, according to the Institute of International Finance. Beijing logged $100 billion per month in average currency outflow during November, December and January but the pace of outflows had tapered off in more recent months, with net foreign exchange sales by commercial banks at $23.7 billion in April, from $36.4 billion in March, Reuters reported.’
‘Goldman also cited the possibility of a serious knock-on risk if persistent fund outflows and a weaker renminbi came to fruition: It could derail the Fed’s hiking cycle.’
“One regularity over the past year has been that the S&P 500 has fallen sharply within a week or two of dollar-yuan fixing meaningfully higher, as focus on capital outflows and renminbi depreciation has built,” it said. That could prevent the Fed from moving too quickly, the bank added.’
Looks like Goldman is setting up another bunch of muppets for the slaughter.
“Negative rates will lower the cost of mortgages as, in many cases, holders receive a check from their bank for interest payments.
Umm… Not that’s I’ve ever heard of.
Has a single loanowner anywhere ever received a negative-interest mortgage?
I thought the negative-interest was only being charged on _deposits_, rather than on _loans_.
Banks are trying hard to avoid making interest payments to homeowners in the event of negative rates. But if central bankers can drive returns on savings to negative levels, it only seems fair for creditors to pay borrowers for the risk of assuming the obligation of borrowing money and agreeing to repay it.
Markets
A Battle Brews Over Negative Rates on Mortgages
Consumer groups in Spain and Portugal say lenders should pay up when mortgage rates drop below zero. Lenders are fighting back, with billions of dollars at stake.
Home buyers lack clarity about whether adjustable-rate mortgages could go negative in Spain. A residential block in Zaragoza, Spain.
Photo: Angel Navarrete/Bloomberg
By Patricia Kowsmann in Lisbon and Jeannette Neumann in Madrid
Updated May 15, 2016 8:05 p.m. ET
As interest rates in Europe fall near or below zero, lawmakers and consumer advocates in Spain and Portugal are attacking an ancient tenet of finance by insisting that lenders can owe money to borrowers.
Banks in the two countries, struggling to recover from recessions that shook their financial systems, are fighting back, with billions of dollars in mortgage interest payments potentially at stake.
Portugal’s central-bank governor, in a reversal, has rushed to defend the banks against a proposed law that would require them to pay borrowers when interest rates turn negative. Banks in both countries are rewriting new mortgage contracts to warn homeowners that they could never profit from subzero rates.
In Spain and Portugal, banks typically tie interest rates on mortgages to the euro interbank offered rate, or Euribor, a fluctuating rate banks pay to borrow from each other. In addition, interest rates in both countries include a fixed percentage of the loan, called the spread. In much of Europe, by contrast, fixed mortgage rates are common.
Euribor began turning negative last year after the European Central Bank cut interest rates below zero—charging lenders to hold deposits—to stimulate the Continent’s economies. That has pulled mortgage rates into negative territory in a few isolated cases in Portugal.
…
“Portugal’s central-bank governor, in a reversal, has rushed to defend the banks against a proposed law that would require them to pay borrowers when interest rates turn negative. Banks in both countries are rewriting new mortgage contracts to warn homeowners that they could never profit from subzero rates.”
So the banksters are working behind the scenes to create different interest rates depending upon whether they are on the borrower or lender side of the transaction?
Sounds illegal, but perhaps if you have the legislative branch of government fully captured through bribery, it may be straightforward to have the law changed to legalize special interest rates which work in the banksters’ favor under all circumstances.
It’s good to always remember the Golden Rule:
Them that gots the gold makes the rules.
“Them that gots the gold makes the rules.”
Unless the one who got the gold is an anarchist.
The current Fed-blown financial bubble is 8 X bigger than the 2008 subprime crisis.
https://www.sovereignman.com/trends/this-financial-bubble-is-8-times-bigger-than-the-2008-subprime-crisis-19590/
So long as interest rates remain near zero or lower, why worry?
Woe Canada…
Peak House
The anatomy of a housing bubble
VICE: Surreal Estate Part 1
Been to Home Depot 2x today AND Michael’s AND Bed, Bath, and Beyond.
This week I put $6k down on a $12k impact window and door job. Other than buying the house, and maybe a roof, it’s the biggest job we’ll have. I’d like to get that out of the way. That will be a $600/yr. insurance credit.
Also having the house retrofitted with hurricane clips. Another $600/yr. credit.
Rush ordered a hyrdabarrier for my garage to prepare for Invest 93L.
Next fall, I plan on getting stucco.
“Been to Home Depot 2x today AND Michael’s AND Bed, Bath, and Beyond.”
+1 Renting is like using a condom… just not the same.
Renters have more time and money to enjoy partner-oriented indoor recreational activities, thanks to not having to spend time and money at Home Depot over the weekend.
Partner?
Holy moly, $6k for boring stuff when you could have put it in AUY this January and have $13k. I been there, done that. I spent weekends in hardware stores, then fixing things and building things, digging out weeds, when I could have gone biking. And I regretted all the fun I missed when I went from renter to loanowner. It took me 6 years but I got out and was so happy to be free again.
“Next fall, I plan on getting stucco.”
Are you buying a second house?
No, I am actually going to get stucco on the house.
Nothing like throwing good money after bad on a rapidly depreciating asset.
Trudat. Feels good.
Next fall, I plan on getting stucco.
Aren’t you already stucco, Muggy??
Grantham Sees Another U.S. Housing Bubble Forming - Avoid Equity Residential
Summary
The sequel is never as good as the original, but the fact that there is already a part two to the American housing bubble is hard to believe.
This time though the worst of the bubble appears to be found in multi-family properties.
http://seekingalpha.com/article/3979785-grantham-sees-another-u-s-housing-bubble-forming-avoid-equity-residential
Drive until you qualify!
We are repeating the same bubble because there were no consequences for the first one for most people.
It all seems fake.
Silver Spring, MD Affordability Surges As Housing Prices Crater 11% YoY
http://www.zillow.com/silver-spring-md-20910/home-values/
An anti-austerity radical-left party, Podemos, is moving up in the polls as Spanish voters increasingly reject the crony capitalist, corporate-statist status quo. Spain’s general election on June 27th is widely viewed as a referendum on the EU and establishment political parties. Of course like their “radical-left” counterparts in Greece, Podemos will fold like a lawn chair once they get into power and start negotiating with Spain’s true rulers, the Goldman Sachs adjuncts at the EU and ECB.
https://www.yahoo.com/news/spains-podemos-overtakes-socialists-ahead-election-polls-094826405.html?nhp=1
‘Low interest rates have created a housing bubble in the Canadian real estate market, pushing the country’s financial system to the breaking point. At least that’s according to the Organisation for Economic Co-operation and Development (OECD). In a report published Wednesday, the group joined the growing collection of experts warning about excesses in the Canadian real estate market.’
“Very low borrowing rates have encouraged household credit growth and underpinned rapidly rising housing prices, particularly in Vancouver and Toronto, which together are a third of the Canadian housing market,” the Paris-based group wrote in its 2016 economic outlook report. “In relation to household incomes, both house prices and household debt are high. Macro-prudential measures have been strengthened recently but should be tightened further and targeted regionally.” (Source: “Hose down Toronto and Vancouver housing markets, OECD urges,” The Globe and Mail, June 1, 2016.)’
‘The group highlighted excesses in the Vancouver and Toronto housing markets, where prices have soared 41% and 45%, respectively, over the past five years. The fallout from those bubbles popping, the OECD says, would be felt far beyond the housing market.’
“The main domestic downside risk is a disorderly housing market correction, particularly in the high-price Toronto and Vancouver markets,” reads an excerpt from the report. “This would damp residential investment and private consumption, and could threaten financial stability.”
‘Australia’s property boom won’t end smoothly and there is a “dramatic” crash on the horizon according to a leading economic group. The Organisation for Economic Cooperation and Development (OECD) warned the national property boom which has attracted investors from across the globe could be about to crash. The end of the boom will reportedly be caused by ”uncertainties on future economic policy ahead of the Federal election,” the report states.’
“Domestically, the unwinding of housing-market tensions to date may presage dramatic and destabilising developments, rather than herald a soft landing.”
‘The reports warns Australia’s dependence on commodity markets in China as another factor that could see the property market plummet. “(Chinese markets remain) an important source of uncertainty and risk,” the report said.’
‘With Sydney listed as one of the most expensive cities in the world, a dip in the buyer and investor property market could have serious effects on the county’s national economy.’
Are we possibly looking at a ’selective’ bubble. And one that doesn’t have as much of an effect on single family homes in Palm Beach County Florida and similar areas?
Zillow is showing a possible slowdown in this area or maybe a .5 price decrease on many homes for the next year. But, certainly not as much as are being shown in some of these reports. For instance:
http://www.sun-sentinel.com/business/realestate/fl-home-prices-20160407-story.html
It says: ’small chance of home prices falling in south Florida.”
And Jack McCabe, an analyst in Deerfield Beach, said that’s exactly what could happen. While a housing slowdown will continue through 2016, he expects prices of luxury homes and condominiums to be most affected. Strong demand and limited supply of homes in lower price ranges will continue to nudge values of those properties higher, he said.
“This is not going to be a total market crash like it was last decade,” McCabe said. So, why not lock in the 3% interest rate long term right now? That’s not what I am doing. I’m in cash. But, why not? McCabe seems to think that may be a reasonable idea.
‘It says: ’small chance of home prices falling in south Florida.”
And of course if Mr Zestimate is wrong they will buy the house from you.
From time to time I’ll see some Zillow numbers on the properties I manage. It’s always high on rents or value.
‘So, why not lock in the 3% interest rate long term right now?’
You may not know this blog is about the housing bubble, it’s not a rent or buy calculator.
What happens when the Zika virus starts spreading across Florida?
I dunno, but maybe New Jersey should be concerned, because it has the dubious honor of being the first state to have a woman give birth to a zika baby. USA! USA! USA!
http://www.people.com/article/new-jersey-zika-woman
There’s a case of immigration fraud if I ever saw one. If it were up to me, she’d be on the first plane back to Honduras with her child and also the members of her family who were already here, for being accessories to her fraud.
So why don’t you?
Frog in your throat?
“This is not going to be a total market crash like it was last decade,”
Time will tell. But I believe the influx of foreign investors, which was already historically unprecedented in the pre-2008 episode, is far more extreme this round. And then there is the ZIRP/NIRP phenomenon, which was not a factor in the pre-2008 period, and is also without precedent.
We won’t know how total the crash is this go-round until interest rates have normalized and foreign investment levels revert to historic norms. We are in uncharted territory, and I don’t believe Jack McCabe, Ben Bernanke, Janet Yellen, or any number of other highly regarded experts actually has a clue about how things will play out as interest rates normalize.
However, Alan Greenspan’s prophetic warning keeps coming to mind:
“History has not dealt kindly with the aftermath of protracted periods of low risk premiums.”
“History has not dealt kindly with the aftermath of protracted periods of low risk premiums.”
Perhaps the one time that “The Maestro” deserved the title.
http://www.dailymail.co.uk/news/article-3580215/Nationwide-raises-limit-home-loans-fight-accusations-discrimination.html
“Britain’s biggest building society is increasing the age limit on home loans from 75 to 85 as lenders move to fight accusations of age discrimination.”
Bahahahahahaha … marketed as doing these old folks a favor no less.
“The Nationwide’s limit is the oldest someone can be when their mortgage matures – so customers of 80 will be able to have a home loan with a maximum term of five years.”
Bahahahahahahahahahaha … 85 years old and these pukes will at last be making the last payment on a mortgage?
Bahahahaha … there it is folks: dumb ‘em down, and profit.
Fools.
Are they running out of buyers or what?
Are they running out of buyers or what?
Of course. This is the standard model of debt-based booms, either for a business or an economy:
1) Rapid initial growth.
2) Stagnation as qualified debtors run out.
3) Reduce lending standards in a race to the bottom.
4) Implosion of business.
5) Taxpayers get stuck with the tab, sold as being distasteful but necessary for the welfare of Main Street.
Rinse and repeat. It’s the enshrinement of the ‘privatize the profits, socialize the losses’ business model, again sold as being necessary to the welfare of society at large.
It’s the institutionalization of the too-big-to-fail bailout model of financial management, coupled with widespread denial that the next bailout-worthy financial crisis is only a matter of time.
It’s bad when you have a generation of fools who can’t distinguish between a “house” and a “home.” The former only turns into the latter with time.
Read the copy and see whether real estate writers and players make that distinction.
This type of shit bothers me. Maybe it’s an age thing.
A house is always clean, organized and simple. A home creaks, has mold in places perhaps, has termites, and has lots of obstacles here and there to maneuver around.
Gimme shelter….
http://www.businessinsider.com/ivy-zelman-on-the-housing-market-in-barrons-2016-6
From the Barron’s article:
“There are still issues with recruiting construction head count. Impact fees are another hurdle: In the Inland Empire [inland Southern California, away from the beach], you pay $50,000 to local municipalities, no matter what size the house is [to offset the added long-term school and infrastructure costs attributable to development], so builders can’t make any money. Houston has $2,000 of impact fees. There is a very clear correlation between housing starts where growth has been the strongest and where impact fees are the lowest. We did a big report on this.”
It sounds good but that doesn’t account for the record high vacancy rates record low demand and record-high supply.
Now that a nonstop onslaught of personal attacks have earned him the Republican party Presidential nomination, leading Republicans are expressing discomfort over Trump’s ongoing personal attacks on anybody who refuses to kowtow to him.
Live by the sword, die by the sword.
Election 2016
Party Elders Knock Trump Over Criticism of Judge
Comments from McConnell, Gingrich add to other Republican pushback
By Thomas M. Burton
June 5, 2016 6:02 p.m. ET
Two Republican Party elders on Sunday denounced Donald Trump’s attacks on a Hispanic federal judge, adding to a wave of criticism from party figures of their presumptive presidential nominee.
…
‘One cannot help but wonder if Hillary Rodham Clinton is smart enough to be President. She evidently learned nothing from her attempt a few weeks ago to play the “woman card” against Donald Trump. He responded by slamming her for enabling her rapist husband’s multiple predations while savaging his accusers.’
‘You would think she would have remembered the old adage: “People who live in glass houses should not throw stones.”
‘But as if to demonstrate the truth of another proverb characterizing fools, “once burned, twice shy,” there she was in San Diego throwing rocks with reckless abandon in the glass house of America’s foreign policy. Donald Trump, she claimed, is dangerous. He is a threat to our national security. He doesn’t love NATO enough. Or Muslims’
‘Her tirade is an engraved invitation for Trump to shine a bright, unflattering light on Hillary’s foreign policy views and record as U.S. Secretary of State—one of the most checkered and blood-soaked in U.S. history.’
Hillary’s overthrow of Libya’s Muammar Gaddafi (conspicuously absent from her San Diego speech) has turned that country into an ISIS stronghold. Her cackle over his murder, echoing, tellingly, Julius Caesar—“we came, we saw, he died”—speaks volumes about her weird vainglory and bloody-mindedness.’
‘Hillary pushed for a Security Council resolution to allow U.N. forces to relieve the beleaguered city of Benghazi during Gaddafi’s last days—then promptly sandbagged the other members of the Security Council by superseding the resolution’s mandate, using it as carte blanche to hunt down Gaddafi and bring about regime change. Russia and China, which could have vetoed the resolution, but did not believing (naively) in Washington’s good will, felt deeply betrayed. Indeed, her perfidy and aggression may well have convinced Vladimir Putin that he needed to replace then-president Dmitri Medvedev—with himself.’
‘As for Benghazi, the original casus belli, it is well-known how little Hillary cared about the security of the U.S. diplomatic mission there, let alone the city as a whole. A Fox News report released May 12th sheds light on Hillary’s negligence and incompetence: a member of the U.S. Air Force squadron at Aviano airbase in Italy said he and his fellow airmen were waiting for the order to conduct a rescue effort, but it never came. The report also quotes a certain “Mike,” a member of an anti-terror quick reaction force: “We had hours and hours and hours to do something . . . and we did nothing.”
‘Questions put to Hillary by Senator Rand Paul (R-KY) at a hearing of the Senate Foreign Relations Committee suggest Hillary’s main concern—and the reason the late U.S. ambassador had travelled from Tripoli to Benghazi in the first place—was to arrange for the transfer of weapons from Gaddafi’s arsenal to Turkey and then to jihadist groups in Syria. Thus, the Benghazi calamity had its roots in our, ill-conceived “Assad-must-go” policy, which has plunged Syria into a horrendous cycle of violence and destruction, and continues to be U.S. policy today and Hillary’s preferred outcome.’
‘Once again—as in Iraq and Libya (and with Hillary’s full-throated support)—we are seeking to overthrow a secular government that has a long history of tolerating local Christian churches (the fate of Christianity being, of course, of zero interest to Hillary). Thanks in large part to her—we are now backing jihadist groups in Syria that are closely aligned ideologically with the people who knocked down the World Trade Center on September 11, 2001.’
https://www.chroniclesmagazine.org/blogs/anthony-t-salvia/trump-should-make-an-issue-of-hillarys-warmongering/
I foresee no good outcome to the November 2016 presidential election.
That is all.
https://www.reddit.com/r/lostgeneration/comments/4mpt6z/luxury_urban_housing_built_on_a_myth_is_about_to/
I was catching up on podcasts yesterday, and was listening to EconTalk…the guest was speaking about what he considered the main problem with government policies generally; he said that government policies mainly serve to do two things:
1. Restrict Supply
2. Stimulate Demand
The examples he gave were education and real estate, but he noted that those were just two examples (he also noted healthcare IIRC).
Education:
1. He noted the high barriers to create new colleges;
2. Subsidized student loans
Real Estate:
1. Zoning, increasing complicated building codes, etc., etc., etc.
2. Subsidized mortgages
Result? Exactly what you would expect with suppressed supply and juiced demand…higher prices.
With record low demand, record high inventory and rising vacancy rates, the only conclusion is rigged markets and fixed prices.
Home Economy & Politics Capitol Report
Why there’s a new kind of housing crisis
By Andrea Riquier
Published: June 16, 2016 2:31 p.m. ET
Nearly one-third of survey respondents said they’d had to scramble to cover a mortgage or rent payment in the past few years
America has a housing crisis, and most Americans want policy action to address it.
That’s the conclusion of an annual survey released Thursday by the MacArthur Foundation.
The “crisis” is no longer defined by the layers of distress left behind after the subprime bubble burst, but about access to stable, affordable housing.
A vast majority of respondents – 81% - said housing affordability is a problem, and one-third said they or someone they know has been evicted, foreclosed on, or lost their housing in the past five years.
Over half the respondents, 53%, said they’d had to make sacrifices over the past three years to be able to pay their mortgage or rent.
Yet most respondents believe the housing problem is solvable, and want policymakers to address it. Nearly two-thirds of survey respondents from both parties say housing hasn’t received enough attention in the 2016 campaign.
…