Leverage Doesn’t Help Affordability
A report from National Mortgage Professional. “As if high default costs haven’t been challenging enough for mortgage servicers, a growing number of seriously delinquent loans are Federal Housing Administration products, which require significant upfront investment to resolve. An estimated 25% of all outstanding mortgages that were seriously delinquent at the end of the first quarter of this year were insured by the FHA, up from less than 20% in the first quarter of 2012, according to the Mortgage Bankers Association.”
“FHA loans typically tend to default more than government-sponsored enterprise loans because they are designed to be more affordable to borrowers by offering lower down payment and credit score requirements. But market conditions that changed during the most recent housing boom-and-bust cycle have made the trend more pronounced.”
“At one point during this cycle, FHA’s share of defaults dropped below an estimated 10%. So the increase in FHA default share to nearly a quarter of the market has been a shock to the servicing industry, particularly those servicers that entered the market when FHA defaults were low. ‘They don’t know how to service FHA loans, and it’s hitting them in masses,’” said Matt Martin, CEO of Chronos Solutions, a mortgage industry vendor that offers FHA foreclosure property services.”
“Also worth noting that while the share of FHA defaults is high compared to recent history, it’s still below what it was before the anomalous housing boom in 2005. But during the Great Recession and its aftermath, many loss mitigation options and regulations that didn’t previously exist came into being and have challenged the market’s historical assumptions. ‘With the rapid increase in FHA lending that began in ‘08, really ramped up in 2009 and then remained elevated in 2010, 2011; many of those loans are five-, six-years-old and, if they’re still outstanding, they are hitting usually their peak levels of risk for foreclosure,’ said Frank Nothaft chief economist at CoreLogic.”
From Banking Exchange. “Is mortgage credit headed for a quality dropoff? Or is it already here? Edward Pinto and Stephen Oliner of the American Enterprise Institute’s International Center on Housing Risk recently reported their analysis of nearly 21 million agency loans and noted several trends toward risk. Among their findings: The National Mortgage Risk Index (NMRI) for the FHA and the Rural Housing Service continues to rise and peaked in June.”
“‘Unless household income accelerates, then we will have to have an increase in [government] leverage from what’s already a high level,’ Pinto said.”
“The pair’s research covered 9.5 million purchase loans and almost 12 million refinance loans made from November 2012 until June 2016. Another concern is the number of risky loans compared to the level conducive to long-run market stability. Low-risk loans accounted for just 37% of June’s volume. For first-time buyers, the low-risk share was only 23%. Part of that is due to the continuation of credit easing. The largest share of loans—more than 40%—are classified as high risk, which is ‘not an indication for a stable market in the long run,’ Pinto said.”
“Oliner said the key risk factors for loan default are: Credit scores below 660. High debt-to-income ratios. Down payments of 5% or less. Oliner said all three factors have been on the rise since 2013. ‘An increasing share of loans have all these characteristics and are on 30-year terms,’ Oliner said. ‘So with a low down payment and a 30-year loan, a buyer has very little equity going in and none for a long time afterward.’”
“Additionally, the growing number of non-bank loan originators has contributed to the rise in overall risk, according the AEI experts. ‘There wasn’t a lot of difference in 2012, but by time of the latest data, that gap [between banks and non-banks] had widened dramatically,’ Oliner said. ‘Banks have been reducing risks, mainly by shifting away from subprime borrowers and lower down payments, while nonbanks have been lowering standards for every one of the risk factors.’”
“Not only are they offering riskier loans; they are offering more of them, with nonbanks having gone from a 28% market share of purchase loans to a 58% share.”
“Citing the decades of research his colleague Ed Pinto has done in housing and loan risks, Oliner concluded the report by pointing out that those who forget history are doomed to repeat it. ‘This is a usual historical cycle,’ he said. ‘We’re heading in a direction that is not going to end well unless we can cap leverage. It doesn’t help affordability.’”
The Holland Sentinel in Michigan. “Low inventory and high demand among homebuyers are pushing the housing market in Holland and Zeeland to an unusual place for the area, according to local agents and brokers. ‘If you’re a seller, take advantage of that,’ said Doug Klaasen, Realtor at Keller Williams in Holland and president of the West Michigan Lakeshore Association of Realtors. ‘But if you’re a buyer, make sure you’re 100 percent ready to go and be able to make a decision.’”
“The Holland housing market is always relatively strong, Klaasen said. But multiple offers on homes — and homes going for over list price — is a new dynamic to the local market. ‘We’re seeing the most amount of movement in the $100,000 to $200,000 range,’ said Sarah Lilly, associate broker with Five Star Real Estate Lakeshore. ‘Homes are moving very quickly and sometimes with multiple offers, and sometimes go for over list price.’”
“Housing prices have rebounded well from the Recession, Klaasen said, explaining in some places sale prices are now higher than they were pre-2008. The average home sale price in the Holland area is about $220,000, an increase of eight percent from last year, Klaasen said. Average sale prices also rose seven percent from 2014 to 2015. ‘That kind of increase isn’t sustainable long-term,’ Klaasen said, urging caution.”
The Columbian in Washington. “Real estate agent Tracie DeMars pulled her car up to a small, one-level house set back from the street in the Fruit Valley neighborhood. When it was built in 1942, the two-bedroom, one-bath house with 828 square feet was an average-size new home. ‘This is what many buyers want: a nuclear ranch with a little bit of yard,’ said DeMars with Re/Max Equity Group. ‘If a house is decent and in good shape, it’s going to move fast.’”
“Lightning speed is more accurate. Clark County’s real estate market for smaller homes is sizzling. Small pre-owned homes are receiving multiple offers and most often for more than the asking price. Those multiple offers are made within days of the house being listed, and sometimes within hours. This feeding frenzy happens not only in the gentrifying downtown neighborhoods, but also in some of Vancouver’s poorest neighborhoods: Fruit Valley, Rose Village and Harney.”
“The little 1942 house on Unander Avenue in Fruit Valley was listed for $195,000. In two days, there were six offers. The winning offer of $210,000 was $15,000 more than the listing price. That’s $253 per square foot. A few blocks away, DeMars pointed out a three-bedroom, one-bath 910-square-foot ranch that sold for $103,000 in 2010, at the depth of the recession, $160,000 a year ago and $195,000 this spring. ‘The price increases this year are unsustainable,’ DeMars said. ‘We’re quickly getting to the point where first-time buyers can’t afford a home.’”
“Sometimes, first-time buyers can’t afford a single-family home and have to settle for an attached, two-story townhouse. DeMars stopped the car again and pointed to a newer, three-bedroom, two-and-a-half bath townhouse near Burton Road. It had shared walls and a tiny yard. Even the townhouse market is hot, DeMars said. Many buyers who can’t afford a single-family home are having to settle for a townhouse. ‘It’s hard all the way around,’ said DeMars.”
“For a first-time buyer who signs on the dotted line and agrees to pay $200,000 plus decades of interest, it could be home.”
‘The federal government’s effort last year to get more millennials and first-time buyers to purchase a home doesn’t seem to have worked. In fact, according to some industry watchers, it might have made it even tougher for them to buy a house.’
‘Last year, as part of an Obama administration-wide effort to boost Homeownership, which is close to the lowest rate on record, the Federal Housing Administration lowered mortgage insurance premiums (MIP) on its loans in most cases by $800 to $900 a year (and in higher-priced areas of the country even more), in an effort to entice first-time borrowers to become homeowners.’
‘The move was also noteworthy because FHA loans have mortgage insurance premiums that are paid through the entire life of the loan, unlike other loan programs where private mortgage insurance (PMI) rolls off once the borrower has gained 20% equity of the home.’
‘The advantage of FHA loans is that borrowers with FICO credit scores sometimes as low as 580 can typically qualify for a home loan, where loans purchased by Fannie Mae and Freddie Mac, the biggest backers of home lending, will usually only buy loans with FICO credit scores no lower than 620.’
‘Indeed, the volume of FHA loans jumped substantially after the mortgage insurance premiums were reduced, according to data from RealtyTrac. But some industry insiders say that while the volume of FHA loans increased, first-time buyers, especially millennials, weren’t convinced to jump in to the housing market.’
”We’re still not seeing those first-time home buyers going to FHA,” said Bryan Sullivan, the chief financial officer of Foothill Ranch, Calif. -based loanDepot, the second-largest online lender in the U.S. “It’s still a relatively older borrower” for FHA loans, he said. Sullivan said that the drop in FHA loan premiums simply meant that other borrowers looking for a home loan opted for the FHA product, rather than bringing additional new buyers into the market. “It’s substantially just a reshuffling of the deck,” he said.’
‘Sullivan’s conclusion was backed up by a recent analysis by the American Enterprise Institute, a conservative-leaning think tank in Washington, D.C., which said that far from the premium reduction encouraging first-time buyers, those buyers were already in the market, and simply opted for FHA loans over other products, such as loans backed by Fannie Mae, Freddie Mac and the Department of Veterans Affairs.’
‘Of the 180,000 additional loans the FHA made to new home buyers in the past two years, AEI said, about 85,000 came from other agencies. Just 35,000 loans could be attributed to the MIP reduction, AEI calculated. “Almost all the pickup of the FHA’s share was at the expense of its competitors,” said Edward Pinto, co-director of the International Center on Housing Risk at the American Enterprise Institute.’
‘The timing of the insurance premium cut may not have helped, both loanDepot’s Sullivan and AEI’s Pinto said, as entry level home buyers have been hurt by stagnating inventory, and the MIP cut only encouraged more buyers into a market with limited supply. “Lowering the premium didn’t do anything to create more housing supply, but just created more demand in what’s already a seller’s market,” said AEI’s Pinto.’
‘Indeed, the cut in the mortgage insurance premium may have just allowed borrowers to purchase bigger or better homes in more desirable neighborhoods, but the reduction in insurance premiums was negated by increased sales prices as borrowers fought over lower inventory.’
‘Pinto said that the mortgage premium reduction accounted for a theoretical 0.5% decrease in monthly payments, but it was overwhelmed by a net 1% markup by sellers in the purchase price. The AEI also noted that after the FHA premium cut, the ratio of the value of first-time home purchases to move-up or second-home purchases rose from 71% of the move-up buyer price, to nearly 75% of the move-up buyer price, the AEI noted.’
“Recipients just used the added buying power to purchase more expensive homes,” said Pinto.’
‘Lowering the premium didn’t do anything to create more housing supply, but just created more demand in what’s already a seller’s market’
From the post:
‘Part of that is due to the continuation of credit easing. The largest share of loans—more than 40%—are classified as high risk’
‘Oliner said the key risk factors for loan default are: Credit scores below 660. High debt-to-income ratios. Down payments of 5% or less. Oliner said all three factors have been on the rise since 2013. ‘An increasing share of loans have all these characteristics and are on 30-year terms,’ Oliner said. ‘So with a low down payment and a 30-year loan, a buyer has very little equity going in and none for a long time afterward.’
‘created more demand in what’s already a seller’s market’
To me with this and the apartments, the question is why? Little towns you never heard of are “on fire!” like they discovered gold.
‘all three factors have been on the rise since 2013′
They already told us the why; wealth effect. Foam the runway for the banks. Getting reelected and keeping the Fed around.
‘A bridge that relies on wealth effect, you better hope that you got enough growth to justify the asset price increase which created the wealth effect in the first place.” - Raghuram Rajan
They are doing this because they don’t have the growth to justify the asset price increases.
‘Lowering the premium didn’t do anything to create more housing supply, but just created more demand in what’s already a seller’s market’
Makes perfect sense if your goal is to enrich those who already own homes, who coincidentally are wealthy constituents who vote at disproportionately higher rates than poor renters vote.
A very simple question:
Where is all the money coming from to make these loans?
It seems like we have endless credit. When the credit cycle goes to sh@t they talk about all the losses.
Were there really any losses if the credit was created out of thin air?
“if your goal is to enrich those who already own homes…”
Unlikely. Consider that the goal may be to maximize the amount of debt being serviced, to maximize the skim for the lenders.
“The Chinese internet space is littered with the corpses of failed US internet firms,” one industry source told me this morning, as reports of the Didi-Uber deal emerged. “Everybody’s just tired of the bloodletting. Uber’s investors probably just wanted out.”
No surprise there. Losing a billion dollars a year - as Uber was doing in China - is nothing to sneeze at.
So if you can’t beat them, join them - that may be what Uber’s ultra ambitious chief executive Travis Kalanick was thinking. This deal may be Uber’s best available option on the table.
As part of the deal, Uber’s China business will retain its separate branding and US-based Uber Technologies will hold a stake of about 17.5% in the combined company.
The irony is hard to miss. The Chinese ride-hailing giant has spent the better part of the last few years in what many called an all out attack on Uber in its other markets.
Last year Didi invested $100m (£75m) in Lyft - Uber’s main competition in the US. It also tied up with Ola in India and Grab in South East Asia in an effort to provide customers with a pan-Asian experience - but also conceivably to put the pressure on Uber which was trying to make inroads into China.
The deal is a huge loss of face for chief executive Travis Kalanick, who once famously said success in China meant being number one there.
http://www.bbc.co.uk/news/business-36938813
Denver, CO Real Estate and Homes for Sale, 10,012 Homes
http://www.realtor.com/realestateandhomes-search/Denver_CO/radius-10
Denver, CO Real Estate and Homes for Sale, Price Reduced, 3,114 Homes
http://www.realtor.com/realestateandhomes-search/Denver_CO/shw-pr/radius-10
31% of all Denver sellers reduced their price at least once.
About time. I live in Denver and can tell you there is no way these prices are sustainable. I’m speaking from someone who lived in Phoenix during the last bubble. I work with people here in Denver who make good salaries who couldn’t afford their homes if they had to buy them now. It was the same scenario when I lived in Phoenix. Yes, they overbuilt in Phoenix, but the locals here are being priced out, a lot of people can’t afford to move up, and anecdotally, I’ve run into quite a few people leaving jobs here for other states that are more affordable. When people are waiving appraisals and bidding up houses with terrible foundation problems (which most of the west side has), then you know there is a problem.
“When people are waiving appraisals and bidding up houses with terrible foundation problems”
That right there is insanity as your moniker indicates. Only people with MT pockets or rocks in their head or both would do such thing. Nots.
Irish banks moved to calm stock market nerves Monday morning after European stress tests published on Friday rated them among the worst financial institutions .
The stress tests by the European Banking Authority (EBA) posed a question mark over both AIB’s and Bank of Ireland’s ability to absorb losses in the event of a prolonged economic downturn.
The EBA found that in an “adverse scenario” AIB’s capital ratio, which measures a bank’s equity against possible risks, such as borrowers failing to repay loans, fell below the level generally required by regulators and markets. The authority found AIB would have a Common Equity Tier 1 (CET1) ratio of 4.3 per cent at the end of 2018, below the 5.5 per cent typically required. This put the bank among the worst performers of 51 European banks.
In a statement Monday morning, the bank said that the EBA results “are point in time projections based on prescribed stress assumptions and should not be treated as indicative of the future financial performance of AIB”.
The bank stressed that the EBA figures are based on a “ 2015 static balance sheet and does not reflect current or future improved financial performance”.
The bank also noted that the overall EBA stress test result of 7.4 per cent is 0.5 per cent higher than the 2014 result, and that AIB is “well-capitalised and capital accretive”, noting that the bank’s reported capital position as at June 30th 2016 is a transitional CET1 ratio of 16.5 per cent and fully loaded CET1 ratio of 13.3 per cent.
http://www.irishtimes.com/business/financial-services/banks-move-to-calm-markets-after-european-stress-tests-1.2741495
Nothing to see here move on.
Italy’s UniCredit shares SUSPENDED as banking crisis grows
SHARES in Italian lender UniCredit were suspended this morning amid rising fears the country’s banking crisis could tip Europe over the edge.
Investors rushed to dump UniCredit stock after stress tests issued Friday prompted worries over the firm’s stability in a downturn.
The selling frenzy triggered a temporary trading freeze before leaving the firm’s share price nursing losses of five per cent.
Italy’s oldest bank Monte dei Paschi di Siena (MPS) came out as the weakest firm in the European stress tests, which are designed to show how banks would weather a severe economic crash.
Saddled with billions of pounds worth of bad loans, the lender is now relying on a €5billion bailout to save it and stop a crisis that threatens to blow up Europe’s financial system.
The eurozone is already reeling from a weaker economic outlook after Britain’s decision to leave the European Union (EU).
Now experts are downgrading Italy’s long term outlook and say there is a growing risk the country’s anti-establishment Five Star party could become a reality.
It comes ahead of a referendum in October or November that may end up with Prime Minister Matteo Renzi’s resignation - plunging the country into chaos amid a change in government.
The Five Star party is calling for a referendum over the euro among over measures.
Mujtaba Rahman, practice head of Europe at Eurasia group, said: “Regardless of the referendum outcome and whether early elections are held, Italy’s medium-term political outlook is seriously deteriorating as the likelihood of a Five Star win in the next election is now significant.
“All the issues that have plagued Renzi’s government thus far – a stagnant economy, corruption scandals, banks – are likely to continue to do so.
“Stalling reforms would also expose Renzi to accusations of inaction; while progress on remaining items would alienate critical constituencies.”
http://www.express.co.uk/finance/city/695282/Italy-Unicredit-shares-SUSPENDED-as-bank-crisis-grows
“We’re quickly getting to the point where first-time buyers can’t afford a home.’”
More sanctimonious boo hooing for a target group. Second, third and fourth time knotheads can’t afford it either….. not without committing financial suicide.
Private sector pension scheme deficits have surged more than 50 per cent to record levels of £390 billion in the past 12 months amid increasingly challenging conditions, new data out today shows.
The total UK private sector defined benefit pension scheme deficit as at end-July, 2016 has shot up by £135bn compared with a deficit of £255bn in July 2015, according to the latest monthly update from JLT Employee Benefits (JLT), the worldwide employee benefits-related advice group.
Britain’s blue-chip FTSE 100 companies saw their combined defined benefit (final salary) pension deficit jump to £136bn as of yesterday compared with £81bn a year ago.
Charles Cowling, Director, JLT Employee Benefits, commented: “Pension scheme deficits have once again soared to record levels.
“Markets may have recovered, following their initial dive, in the aftermath of the Brexit vote but conditions remain challenging for pension schemes.
“With hints of a rate cut on 4 August, at the next Bank of England’s meeting, it looks increasingly likely that record low rates are here to stay.”
Final salary scheme deficits at FTSE 350 companies, which widens the net to include big as well as the biggest publicly quoted British businesses, leapt to £156bn in July 2016 from £92bn a year ago.
Cowling said companies with actuarial valuations this year faced most pressure as pension trustees will press them to use “all the levers available to them to reduce pension shortfalls”.
http://www.scotsman.com/business/markets-economy/private-sector-pension-scheme-deficits-skyrocket-by-50-1-4190772
Bugger there goes the pension.
.
Newtown, CT Affordability Improves As Housing Prices Dive 6% YoY
http://www.zillow.com/town-of-newtown-ct/home-values/
Are foreign buyers of US debt belatedly wising up to the fact that Yellen is going to print all those debts away?
http://www.bloomberg.com/news/articles/2016-08-01/foreign-appetite-for-u-s-securities-has-taken-a-drubbing
it seems like folks were buying these bonds for the appreciation. I guess yields are so low now that the value of the bonds cant go much higher?
What if yields went negative on the 10 year? What would a home loan rate be then?
DEFAULT OF PRINT!!!!!!!!!!!!!!!!!
Things that make no sense to me: 95% of the ‘Murican electorate bend over on demand for the Oligopoly by voting for its annointed Republicrat water carriers election after election, yet ‘Muricans in record numbers are defying Oligopoly’s attempts to disarm the population to clear the way for the DNC’s Comrades of Proven Worth to take their collectivist kleptocracy to the next level. Seems inconsistent to me.
https://www.theguardian.com/us-news/2016/aug/01/gun-stocks-surge-background-checks-smith-wesson
The New York Fed warns of rising levels of student debt, while utterly ignoring the role of the Fed in making college increasingly unaffordable for the middle class or ensuring that college graduates saddled with dangerously high levels of debt can look forword to jobs as baristas or bartenders in our Obama-Fed-Goldman Sachs “recovery.”
http://www.marketwatch.com/story/new-york-fed-warns-of-troubling-consequence-of-rising-student-loan-debt-2016-08-01
No mention of STEM degrees v “The Arts.” I’ve seen people from non-professional families get sucked into dubious college programs thinking that a pot of gold awaits them.
UGH the college debt “crisis”. Such an annoying fabrication that feasted on morons. I cant count the people I know with polysci, psych, or social degrees who are working dept stores or other menial jobs. They complain that a $50-60k yr job wasn’t waiting for them post grad. Yet none of my STEM friends are -un or underemployed, ZERO. “I wanted to study my passion”, well now you are broke or living $600 paycheck to $600 paycheck.
I have 0 sympathy for my “millennial” brethren complaining about student loans, it just makes my blood boil. None of them considering community college first, a local university, or a useful or in demand degree. I understand there is a definite downturn in the economy and 95 million are unemployed, but having a psych degree does not help the case. My college cost me the price of a fully loaded Honda Accord, for a Mech Engineer degree, and a Job within 1 day of graduation. If I have to pay for some student loan bailout, I’m marching. /end rant
BREXIT being blamed for pre-existing conditions, i.e. the oligarch looting and asset-stripping of the productive economy, which is now succumbing to its parasites.
http://www.telegraph.co.uk/business/2016/08/01/pound-drops-as-manufacturing-activity-shrinks-at-fastest-pace-in/
BLM finally unveils its true agenda: gimme dat!
http://www.zerohedge.com/news/2016-08-01/end-war-black-people-blacklivesmatter-demands-reparations-investments-political-powe
1) What percent of U.S. citizens owned slaves in the antebellum era?
2) What percent of non-black U.S. citizens have ancestors who owned slaves? (Not my ancestors…they were still back in the old country until after the Civil War had ended.)
3) Would the reparations be limited to those whose ancestors owned slaves, and if so, how would the payment amounts be determined?
4) Would there be offsets for the value of food and shelter that slave owners afforded their slaves?
It would be honorable to send them a check.
Every month?
the only reason we had slavery was white people OUTBID the locals, then found out they vastly overpaid and how high the upkeep was, so they had to pass Jim crowe type laws to protect their investments…sound familiar?
My great grandparents came from Europe and worked in coal country in the north. 0 slaves, not much money when they came over here, and had to live in a poor ethnic part of town to survive within the community. BLM needs to get over themselves. I wish I had an advantage for college scholarships, grants, and jobs based on something other than my resume, skillset, and grasp of the English language.
Nothing for the Irish?
The Irish Slave Trade – The Forgotten “White” Slaves
The nightmare scenario for the NAR and coastal bubble markets: China finally succeeds in curbing capital outflows.
http://www.zerohedge.com/news/2016-08-01/chinese-success-curbing-capital-outflows-spells-disaster-high-end-new-york-san-fran-
Calculating the real loss of Americans’ purchasing power due to the Fed’s deranged money-printing to levitate Wall Street’s pump & dump.
http://www.peakprosperity.com/blog/99392/burrito-index-consumer-prices-soared-160-2001
Germans seeking to defend themselves against the blessings of multiculturalism and Soros-sponsored fundamental transformation must be xenophobes and insensitive bigots.
http://www.shtfplan.com/headline-news/with-terror-and-rape-spreading-self-defense-weapons-permits-hit-record-highs-in-germany_08012016
“Economist Ludwig von Mises was pessimistic on the denouement. “There is no means of avoiding the final collapse of a boom brought about by credit expansion,” he wrote. “The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
http://davidstockmanscontracorner.com/qe-forever-cycle-will-have-catastrophic-end/
Yup. Sooner or later it will happen. Stocks will be crushed. Real estate will be crushed. Gold, silver, platinum will soar!
Keller, TX Housing Prices Collapse 25% YoY; Inventory Skyrockets As Housing Demand Craters
http://www.movoto.com/keller-tx/market-trends/
Imagine what REAL stress tests would look like for the PIIGS insolvent banks.
http://www.marketwatch.com/story/bmps-rallies-after-rescue-deal-but-other-italian-banks-slump-after-stress-tests-2016-08-01
The Chinese neighbor wife is screaming at her husband loudly enough so that we can hear it loud and clear from our living room. I have to guess it relates to investment losses, based on the amount by which they overpaid for the home they bought.
What happened to the boxes in the window?
in 30 years. Photograph: Daniel Leal-Olivas/PA
Hilary Osborne
Tuesday 2 August 2016 00.01 BST
Last modified on Tuesday 2 August 2016 08.20 BST
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Home ownership in England has fallen to its lowest level in 30 years as the growing gap between earnings and property prices has created a housing crisis that extends beyond London to cities including Manchester.
The struggle to get on the housing ladder is not just a feature of the London property market, according to a new report by the Resolution Foundation thinktank, with Greater Manchester seeing as big a slump in ownership since its peak in the early 2000s as parts of the capital, and cities in Yorkshire and the West Midlands also seeing sharp drops.
Home ownership across England reached a peak in April 2003, when 71% of households owned their home, either outright or with a mortgage, but by February this year the figure had fallen to 64%, the Resolution Foundation said.
https://www.theguardian.com/society/2016/aug/02/home-ownership-in-england-at-lowest-level-in-30-years-as-housing-crisis-grows
A double EuroMillions winner from Bulgaria has been forced to demolish an illegal shed in his garden that he rented it out to Eastern European migrants.
George Traykov, 48, bought a £300,000 three-bedroom semi to rent out but also built the ‘bed-in-shed’ outside, which he rented out to a couple for £600 a month.
Council officers swooped on the property in Feltham, west London, after neighbours complained about the illegal building outside, described as a studio in adverts for it.
Traykov, who won £1million in the Millionaire Raffle five years ago and another £160,000 two years ago, has now been forced to demolish the property after years of complaints.
The council first became aware of the illegal property in 2012 after neighbour complaints but a demolition order was not issued until 2015.
It is the second time Mr Traykov, a former member of the Bulgarian skydiving team, has been in trouble for illegal buildings after Harrow Council found one in the garden of another property.
Read more: http://www.dailymail.co.uk/news/article-3718073/Slum-shed-millionaire-Double-EuroMillions-winner-used-cash-build-illegal-bed-shed-garden-slum-migrants.html#ixzz4GA9Uj6d3
Follow us: @MailOnline on Twitter | DailyMail on Facebook
Sun Sentinel @SunSentinel 9h9 hours ago
What do you get in a million-dollar home? http://sunsent.nl/2apRny9
Talk about backing yourself into a corner. If they don’t keep the stimulus going (the money printing, the bond buying), with all of its accumulating side effect (of which they are unclear on), they are going to encounter some “disruptions.” I remember the talk of “bond vigilantes”, but the central bank was able to totally dominate the bond market. Eventually though… it may lose its power.
One of Keynes’ basic precepts, desperately wished for by partiers everywhere - “Tomorrow never gets here” - is almost certainly wrong:
Japan approves $130 billion fiscal steps as BOJ denies curbing stimulus
TOKYO | By Tetsushi Kajimoto
Reuters
August 2, 2016
Japanese Prime Minister Shinzo Abe’s cabinet approved 13.5 trillion yen ($132 billion) in fiscal measures on Tuesday even as the central bank fought market speculation that it is preparing to put the brakes on monetary stimulus for the world’s third-biggest economy.
“But even before the announcement, Japanese government bonds saw their worst sell-off in more than three years as investors feared the Bank of Japan may ratchet back the pace of its aggressive government bond buying.”
http://www.reuters.com/article/us-japan-economy-stimulus-idUSKCN10D05L?il=0
Every corrupt Democrat-run state, territory or municipality is the next Detroit. Forward!
http://www.businessinsider.com/a-word-of-warning-for-muni-bond-owners-dont-own-the-next-detroit-2016-8
D-day for Australia’s Real Estate Bubble—-Unknowable Degrees of Insanity
by Pater Tenebrarum • August 1, 2016
http://davidstockmanscontracorner.com/d-day-for-australias-real-estate-bubble-unknowable-degrees-of-insanity/
But…but…stress tests!
http://www.zerohedge.com/news/2016-08-02/european-bank-bloodbath-destroys-stress-test-credibility
Junk bond issuance collapsing in the US and Europe as more indications and warnings of a looming systemic global financial crisis appear.
http://wolfstreet.com/2016/08/01/junk-bond-high-yield-issuance-collapses-in-us-europe/
Meanwhile, DB slouches towards its Lehman Moment.
http://finance.yahoo.com/quote/DB?ltr=1
Decellerating construction in the UK? Can’t be air leaking out of the bubble; let’s blame BREXIT!
http://www.telegraph.co.uk/business/2016/08/02/ftse-100-to-open-down-greggs-on-a-roll-austrialia-cuts-rates-and/
Didnt brexit seem like it was rigged for people to make a quick buck?
There was all this doom and gloom talk on the media channels and then it all bounced back quite quickly.
Keynesian failure on display.
https://www.theguardian.com/business/2016/aug/02/japan-pm-shinzo-abe-launches-spending-programme-to-boost-economy
Here comes inflation - no surprise thanks to the Fed’s deranged money-printing.
http://www.marketwatch.com/story/mutual-fund-manager-with-no-1-ranking-is-ready-for-accelerating-inflation-2016-08-02
Precious metals are surging as the counterfeiters and racketeers at the Fed continue to debase the dollar into worthlessness.
http://www.kitco.com/market/