Investors Need To Batten Down The Hatches
It’s Friday desk clearing time for this blogger. “If you’ve been shopping for a home in Boston or its suburbs in the past few years, you probably know how this story ends: cars lining the block and a hundred people at the open house. A dozen offers rushed to the listing agent, many of them above asking price or in cash. And an emotionally taxing, white-knuckle bidding war. When your reasonable offer is rejected, it’s enough to make you cry. ‘It’s really almost a national phenomenon,’ Lawrence Yun, chief economist at the National Association of Realtors, said of the Boston-area market.”
“Could the second attempt be the charm for a million-dollar-plus home sale in Sylvan Park? A $1.28 million listing of a 3,477-square-foot, single-family home at 109 42nd Ave. N. provides the latest test for that neighborhood southwest of downtown Nashville. Barring a major negative global event, Christie Wilson, president of The Wilson Group Real Estate Services doesn’t believe there’s going to be a popping bubble. ‘There are definitely micro markets in Nashville that are experiencing a bubble, and if demand subsides, we will see a typical deflate, but not a pop,’ she said. ‘That is the nature of real estate. It goes up, and it goes down … and still it remains the best investment a person can make.’”
“Reality TV show host and entrepreneur Marcus Lemonis on Monday sold his five-bedroom, 8,225-square-foot mansion in Lake Forest for $2.7 million. Lemonis paid $4.936 million for the mansion in 2005. He first listed it briefly in 2008 for $6.7 million and later relisted it in 2011 for $4.995 million before several price cuts. He then relisted it in 2014 for $4.1 million before taking it off the market. He put it back on the market on May 23 for just below $3 million.”
“Armstrong Realty Management CEO Benjamin Ringel, who’s facing foreclosure on his Southampton mansion, now has another legal woe. Ladder Capital is suing the Midtown-based landlord, claiming he defaulted on a $5.9 million mezzanine loan secured against an Upper West Side retail condo.”
“Detached housing sales have plunged 84 per cent on Vancouver’s West Side and are down 88 per cent in Richmond during the first two weeks of August compared to the same period in 2015. Total detached house sales through the Real Estate Board of Greater Vancouver plunged 71 per cent in the same period. Zolo Realty BC Inc., a real estate firm that tracks average, rather than benchmark, prices in Vancouver’s housing market, reports that as of Aug. 22, the average home price in the city dropped 17.1 per cent from July 25, to $1.1 million.”
“Noted real estate investment analyst Ozzie Jurock said it is likely that there will be a sharp increase in listing inventory in the weeks ahead. ‘As investors, we need to batten down the hatches,’ Jurock told his readers this week.”
“The ‘turmoil’ of the Brexit vote has seen Cambridge house prices fall for the first time in years, prompting fears the city’s housing bubble may be about to burst. Figures released today show the city’s average house price fell from May to June. One city estate agent, who asked not to be named, warned the local market could ’spiral out of control’ if things don’t soon stabilise. He said: ‘Sellers don’t want to accept prices could be coming down, and buyers have been conditioned into thinking Brexit would lead to prices coming down. The effect is, nothing much is really selling.’”
“Rents dropped by an average of KD 60 compared to two months ago in Salmiya, according to a report. Al-Rai’s report quotes Qais Al-Ghanem, Secretary of the Real Estate Association, who previously predicted a drop in rents due to a 30 percent decrease in investment lands’ prices in many areas, in addition to the fact that supply now far exceeds demand. ‘The real estate market has been saturated following the boom in construction investment buildings, and rents will eventually go down following years of rent bubbles,’ he indicated.”
“Rents have dropped considerably in high-end apartments. For instance, in Egmore, where there has a been a huge supply of luxury apartments, rentals over the last one year have dropped from about ₹85,000 to ₹65,000 an apartment. Abdur Ravoof, a property consultant, says the situation is particularly tough in high-end apartments – houses that fetch rent of over a ₹1 lakh a month. As companies and employees cut costs and expenses, rentals are taking a beating. Also, with the continuous increase in supply of apartments, the tenants have a wider choice.”
“‘I am paying a hefty maintenance on the vacant apartment on OMR. I need a tenant now,’ says a desperate apartment owner. His tenant has recently moved out of the two-bedroom unit to a larger apartment for a nominal increase in rent within the same township project. ‘True, this is the story of Chennai’s residential rental market,’ acknowledges Jayant Hemdev, Partner, Hemdev Real Estate, a leading player in the sector.”
“In Abuja, findings show remarkable drop in rents and house prices. At the Federal Housing Estate in Lugbe, where a three-bedroom flat was going for between N700,000 and N900,000 per annum. A tenant, who introduced himself as Luke, said his annual rent was N700,000 but his landlady had asked him to start paying N450,000 in the next rent cycle. According to Lordye Agema-Hur, CEO of Sir Hur Nigeria Limited, a three-bedroom flat sold for N20 million at the Federal Housing Estate in Lugbe, but can now be bought at N17 million.”
“Unfortunately, despite this drop in prices, there is low activity in the market owing to the fact that buyers are not coming up due to lack of cash. ‘It is not a seller’s market any longer,’ Terungwa Sabe, an Abuja-based estate surveyor and valuer, said in a telephone interview.”
A reader emailed this to me. DR Horton cutting prices in southern California:
https://drive.google.com/file/d/0B0N6Num8O29ZcjI5UDRtM1k2OEU/view
‘There are definitely micro markets in Nashville that are experiencing a bubble, and if demand subsides, we will see a typical deflate, but not a pop,’ she said. ‘That is the nature of real estate. It goes up, and it goes down … and still it remains the best investment a person can make.’
Check out the photo of this over a million house. You probably drive by hundreds just like it every day that didn’t cost a fourth of that. When the money is gushing about like it is in Nashville, UHS get elevated to positions like telling us what bubbles are going to do. When people are losing everything and pouring cement down the toilets, they’ll become REO brokers.
I’m sorry i didn’t see this sooner, Ben.
Check out the Zillow listing:
July 2015: SOLD $746K
February 2016: Listed $1.275M
The google satellite map shows that the pool was under construction as of Feb 2016. Total rebuild-flip.
And the styling is all wrong. The airplane roofline suggests that this should have been a modern house, not insultingly fake Craftsman with HGTV-style exotic wood, which is totally out of place for Craftsman. I bet the neighbors appreciate the 10-speaker outdoor sound system in the back yard.
‘A tenant, who introduced himself as Luke, said his annual rent was N700,000 but his landlady had asked him to start paying N450,000 in the next rent cycle.’
How ya like them apples oxide?
Yeah great. I’ll tell my old DC-area landlord that rent is dropping in Nigeria, therefore they better drop their own rent or… well, face the wrath of HBB?
The wrath of mean ol’ Mister Supply and Demand. I’ve already linked to rent reductions in the DC area. If rents can fall in Manhattan and San Francisco, and there are thousands of units on the way, your ex-landlord will be helping his tenants move before you know it.
Hitler coming,going to hire hillOXa brgaids
Rents going up
Very well. I’ll tell my old DC landlord that rents are dropping in Nigeria, so when all his tenants chase cheaper rent to Nigeria, he will suffer the wrath of Mister Less Demand for his DC apartments.
I’m sure all those Fed workers and contractors will love telecommuting from Nigeria. (but how would they report for drug testing?)
‘The world’s biggest pension fund posted a $52 billion loss last quarter as stocks tumbled and the yen surged, wiping out all investment gains since it overhauled its strategy by boosting shares and cutting bonds.’
‘Japan’s Government Pension Investment Fund lost 3.9 percent, or 5.2 trillion yen ($52 billion), in the three months ended June 30, reducing assets to 129.7 trillion yen, it said in Tokyo on Friday. That erases a 4.1 trillion yen investing return for the previous six quarters starting October 2014, the month it decided to put half its assets into equities.’
Heck of a job Janet, central bankers. Lots of people aren’t going to be retiring.
They should have bought MOAR STAWKS.
more rubbish from jackson hole today?
They always have a few members of the FOMC saying they want to raise rates.
19 Trillion in debt has their hands tied.
Wouldn’t it make more sense to whittle the $19 t down to size through higher-than-expected inflation?
yep thats the only way it has a hope of being paid.
Traders are wising up to the Fed’s empty rate hike threats.
MarketWatch
Dollar retreats as Yellen fails to reassure traders looking for a rate hike
By Joseph Adinolfi and Hiroyuki Kachi
Published: Aug 26, 2016 11:07 a.m. ET
Investors now looking ahead to next Friday’s jobs report
…
‘As Federal Reserve officials enjoy a few days in scenic Jackson Hole, Wyoming, for their annual international banking conference, they may be wise to keep any outdoor adventure photos off the Fed’s new Facebook page. Otherwise, they risk feeding an impassioned group of trolls that have more or less claimed the verified, week-old page as their own.’
“Can you guys please help me get some of that QE? I’m trying to buy 16 cars, 4 houses, 2 jets and a yacht,” reads one comment that had garnered more than 440 likes as of Thursday afternoon, referencing the controversial quantitative easing policy the Fed launched in the aftermath of the Great Recession.’
“Quick question! I’m a noob at this, but I’m trying to take over a country through monetary enslavement and currency destruction… Any pointers?” reads another, which had attracted more than 2,500 likes by Thursday.’
‘More ardent opponents seized on the opportunity to attack those in charge at the central bank. Former Rep. Ron Paul, R-Texas, for example, dedicated nearly half an hour of an internet broadcast last week to discuss “what you won’t find on the Fed’s Facebook page.” Among the bullet points discussed was “that the Fed actually rewards failure” and “that they are the cause of the economic booms and busts.”
“We still believe strongly that we should end the Fed,” Paul said. “We shouldn’t even have the Fed. But if we have it, we should know what they’re doing.”
‘The Fed’s recent Facebook posts suggest the central bank is paying attention to its critics. One post acknowledges that bank officials “are often asked, ‘Who owns the Federal Reserve?’” Another states that “a common misconception about the Federal Reserve System is that we are not subject to audit,” as it delves into the government bodies to which the Fed is accountable.’
‘But even these explainers have been subject to internet sarcasm and scrutiny. “Thank you for this incredible insight to what you are subject to but have not done. Incredible work over there at the Fed,” reads one comment.’
I’m looking at that Facebook page right now. I think there are at least 100 negative comments for every positive or neutral one.
It reminds me of a couple of years ago, when JP Morgan Chase set up a Twitter question-and-answer session, only to cancel it within a matter of hours. Among the questions: “I have mortgage fraud, market manipulation, credit card abuse, LIBOR rigging, and predatory lending. Am I diversified?” and “At what number of billions of dollars in fines will it no longer be profitable to run your criminal enterprise?” Actor Stacy Keach did a dramatic reading of some of the best.
https://www.youtube.com/watch?v=i5lMJkw8Bv8
THE WALL STREET JOURNAL
Years of Fed Missteps Fueled Disillusion With the Economy and Washington
Once-revered central bank failed to foresee the crisis and has struggled in its aftermath
By Jon Hilsenrath
Aug. 25, 2016 11:10 a.m. ET
In the 1990s, a period known in economics as the “Great Moderation,” it seemed the Fed could do no wrong. Policy makers and voters saw it as a machine, with buttons officials could push to heat or cool the economy as needed.
Now, after more than a decade of economic disappointment, the central bank confronts hardened public skepticism and growing self-doubt about its own understanding of how the U.S. economy works, a development that helps explain one of the most unpredictable and populist political seasons in modern history.
…
Dumb question of the day: What’s the difference between ZIRP with zero percent return on savings and a Fed-engineered 2% inflation rate versus a 2% tax on savings?
No one has to vote on the savings tax.
Being able to tax and redistribute at will without that pesky representative democratic input is much more convenient.
Warren Buffet net worth chart (I don’t know the source, or if it’s even true but I suspect the reality is not too far removed): https://i.imgur.com/Njq5wJth.jpg
And if they don’t, they should at least enrich their cronies.
If only Bagdad Bob had had a twitter account…
wiping out all investment gains
Who made the gain? Transferring wealth to rich folks is the desired outcome of cheap money.
With newly created money the people who create it get to spend it first, before it is diluted, are the winners.
Now we all have to get loans to buy cars and homes cause the prices are so high.
We also get to pay high interest rates to banks on money that was borrowed into existence for free.
why are credit card companies gouging people for 20% interest?
why are credit card companies gouging people for 20% interest?
Because they can?
If folks are willing to borrow at 20% in order to get their chit before they can afford it, and credit card companies are happy to lend at that rate, who loses if they consummate the financial agreement?
Stay out of dealerships and avoid credit cards. Pay with cash. Problem solved.
Or just enjoy the best of both worlds: use your plastic when convenient to do so, but pay off the balance religiously. It turns out that Megabank, Inc is not the only borrower who qualifies for zero rate borrowing; you can, too!
Only gov workers can retire
Age 55 in va
I just wanted to apologize to Ben for my fit of pique over immigration yesterday. Ben was absolutely right in his response. If there’s a slim chance we could stop the killing and the wars and the bloodshed, rather than getting my nose out of joint because Pedro gets to stay, I am morally obligated to take that chance.
Paul Craig Roberts has said almost the exact same thing:
http://www.zerohedge.com/news/2016-08-25/paul-craig-roberts-trump-vs-hillary-summarized
I think the choice is between wars and killing driven by ambition and cronyism, or ambition and killin as an unintended result of egomania and ignorance.
The wars and killing aren’t going to stop.
‘The wars and killing aren’t going to stop’
That’s your opinion.
I think Paul Craig Roberts’ piece crystallizes and supports your analysis.
I was very childish yesterday, like a little brat stamping their feet over not getting a Tonka truck.
When you’re dying of thirst in the desert, you don’t knock away a dipper of water because it isn’t a bottle of Evian.
If there’s a chance, however slim, you have to take it.
When, in human history, have the wars and killing stopped?
Read moar Pinker.
Pax Romana.
200 years of no wars.
After all of them. Wars can’t continue indefinitely. They are too expensive; eventually they bankrupt the aggressors and you run out of people to kill. What’s really going on here? These globalists are running “conflicts” that never end. One year Al-Qaeda is our worst enemy, a few years later we’re arming them to fight the new Hitler. I’ve provided tons of evidence ISIS was anticipated and embraced by US intelligence, even as Turkey and the gulf kingdoms bankrolled them. Israel openly treats their wounded and sends them back to fight.
Remember the US generals saying “we’re never leaving Iraq…we’re never leaving Afghanistan.” Not that long ago one said it would take generations to defeat ISIS. Jumpin’ Jehoshaphat, we beat the Nazis, Italians and Japan in 5 years!
Their goal is something other than winning a war. Besides being the empire supporting globalism, where we promise to protect our rich trading partners and borrowing to do it, where does all this money go? Death merchants. Consulting firms. Mercenary corporations. We used to have a healthy skepticism of death merchants and the like. As long as they can create a never ending stream of boogie men and regime change, and as long as “deficits don’t matter”, it’s the mother of all cash streams. And it flows and flows to those who keep the whole thing going. It’ll end. Can we pull the plug on it? I don’t know, but if we put these neocons away from power for a few years, it might make the picture a bit clearer.
“”Wars can’t continue indefinitely.”
That is true, but they are going to escalate the next four years. The interest rates have to go way up first. I don’t think they will raise the rates high enough to crowd out defense spending.
Which candidate is the antiwar candidate? Please link articles to document their platform.
I read the other day that, after more than 50 years, the FARC in Colombia has agreed to enter into a peace agreement.
While that’s good news, real peace would force a realignment of priorities. One of my favorite novels about Colombia has a character venting “if the war ends, there would be no reason for half the population to eat their own s__t. There would be no guerrilla, so they would have to invent one.”
+1 PB. (Of course please link articles from independent sources to document their platform)
yes, snake, this was significant. Nothing wrong with a realignment of priorities, as long as they are of benefit to the citizens overall. Better education, better quality of life, these are good things.
I assume FARC was not supported by Soros or other NGOs. Had it been, there would probably have been no peace agreement.
There are always third parties involved in these conflicts. Always. Once both sides recognize who is promoting the conflict, the conflict usually ceases.
PB and SH, let me be clear that my post was to apologize to Ben for being a dick yesterday and to acknowledge that he gave me a good, well-reasoned piece of his mind that I took very much to heart. That was between him and me.
The requests for “please post links” are unnecessary. Both of you have been on this blog a LONG time, as I have, and if you haven’t seen Ben’s anti-war posts from time to time over the years, why should he jump when you say frog? He’s got other things to do.
Now, having said that, go to Anti-War.com and read Raimondo for a bit. You may or may not find it most enlightening. I trust that both of you are able to type that into a search engine.
Only the links to corps media will work.
I’ve already posted plenty of links and quotes. This election has become explicitly about globalism and the war machine it rests on.
The recent trips I took were a revelation because it exposed me to TV and radio. I came away convinced the MSM is doing a full court press to demoralize Trump supporters. I decided I should be less wishy washy and not be intimidated or demoralized by this onslaught. It’s enough to know who the opposition is: neocons, machines Bush and Clinton. Who can deny that these groups are in fierce opposition to Trump?
The requests for “please post links” are unnecessary. Both of you have been on this blog a LONG time, as I have, and if you haven’t seen Ben’s anti-war posts from time to time over the years, why should he jump when you say frog? He’s got other things to do.
Sometimes I thing that Ben should just remove the comments section and just post his blog entries.
Paul Craig Roberts had this to say:
“All that is required is for enough Americans to awake from their insouciance to recognize that it is the enemies of their own lives, their own living standards, and their own liberty who are violently opposed to Trump.
If Americans cannot reach this realization, they have no future, and neither does the planet Earth.
The ruling oligarchy hates Trump because he disavows war with Russia, questions the purpose of NATO, opposes the offshoring of Americans’ jobs, and opposes the uncontrolled immigration that is transforming the United States into a multi-cultural entity devoid of unity. The oligarchs are replacing the United States with a Tower of Babel. Oligarchic power grows exponentially among the disunity of diversity.”
‘The wars and killing aren’t going to stop’
Article published less than an hour ago:
“Former Bush administration official Paul Wolfowitz said he is considering voting for Hillary Clinton in an interview in which he lambasted Donald Trump as dangerous.
Wolfowitz, who was the deputy secretary of defense for President George W. Bush in the lead-up to and start of the Iraq War, said in an interview published Friday that while he isn’t enthused about it, he may be forced to vote for Clinton.
“I wish there were somebody I could be comfortable voting for,” Wolfowitz told the German publication Der Spiegel. “I might have to vote for Hillary Clinton, even though I have big reservations about her.”
http://www.cnn.com/2016/08/26/politics/paul-wolfowitz-voting-hillary-clinton-donald-trump/
Donald Trump is no non-interventionist
http://reason.com/blog/2016/03/31/donald-trump-is-no-non-interventionist
‘But despite his position being characterized by some as being in favor of “abolishing” NATO, Trump has repeateldy stated he would like to see the alliance continue.
“I don’t mind NATO per se,” Trump told Fox & Friends last week, for example. “It has to be reconstituted, it has to be modernized,” he said. “We need to either transition into terror or we need something else, because we have to get countries together.”
He repeated the same critique at this week’s town hall, calling for NATO to refocus on terrorism and for other member countries to pay more into the alliance, following a broad Trump theme that the U.S. pays too much and other countries pay too little for America’s military presence and actions abroad.’
Trump wants 30,000 troops. Would that defeat ISIS?
http://www.cnn.com/2016/03/11/politics/donald-trump-30000-troops-isis/
No, the wars and killings won’t stop whether there is a president Trump, a president Hillar, a president Stein, nor a president Gary Johnson.
To,think otherwise is naive.
I prefer to think of it as optimistic.
With Johnson and Stein there will be no wars.
Trump is a wild card, could go either way.
Hillarious is CERTAIN wars.
I am no fan of Johnson. I don’t want Yellowstone sold to the Chinese.
I don’t want Yellowstone sold to the Chinese.
Yellowstone is more logical choice than inviting them to bid up your neighborhood displacing friends/families.
Obviously you have never been to Yellowstone.
Been there done that.
Even if the Chinese own it, I am sure you can still visit with a small fee.
“I don’t want Yellowstone sold to the Chinese.”
I remember when the Japanese businessmen were buy-up prime California real estate such as Pebble Beach Golf Club. That lasted about ten years I think; probably fun while it lasted.
“…because Pedro gets to stay…”
Our agriculture and beef industries wouldn’t survive without them.
Regardless of your opinion on immigration, this is true. I remember back in the 1970s where the slaughterhouse in the nearby town was primarily staffed with undocumented immigrants from down south. The feds would raid the place every few years, but even back then, there was always a continuous stream of new workers (wanting to get away from the migratory farm work so their kids could go to school in the same place) refilling the spots.
If you’ve ever been to one of those places - well, let’s just say that I would rather be the septic pumping guy than work at a slaughterhouse.
Yes, I’ve been to a slaughterhouse, I don’t even know how people do it. I spent one day there and couldn’t imagine any more than that. Two of the people on our crew (we were shooting video) got sick and had to go home.
I’ve also been in a freezer warehouse. Not quite as bad as a slaughterhouse, but pretty grim. And there are people who go to work in these places every. single. day.
My first job at 9 was in a slaughter house. I tolerated most of it ok but the big saw that turns a cow into 2 sides of beef haunts my dreams to this day.
Was a good experience though… If one is going to eat meat, one should understand the process.
Labor aside, the Gulf of Mexico and its vast buried pipeline infrastructure are the second largest oil supply to the U.S., so don’t let “The Donald” fool ‘ya.
Used to be, “When there’s smoke, there’s fire.”
Now, “There’s a lot of smoke, but no fire.”
Except there’s a ton of fire, all over the Middle East and other places as well. Literally. And much of it because of this woman and her spouse.
Ben has made some jokes in the past about arguments on the internet, the one about “Wow, I really learned a lot from that internet argument” said no one, ever”.
I have to laugh because actually, I did learn something. Ben’s well thought out post yesterday caused me to have a dark night of the soul last night, I didn’t get much sleep, considering the possibility that in fact my tiny little vote could actually provide some hope to others far away that they might avoid bombs and drones. This is a far more important issue than whether millions of people already here should stay or go.
The more important issue is whether millions of people around the world will live in peace or die horribly. When you look at it that way, what the heck. Let the mariachi band play on.
Does everyone have to learn about Hope and Change the hard way?
We already learned. Hope and Change was the mantra of another candidate.
The one we’re discussing has the slogan “What Do You Have to Lose?” It’s supposed to be aimed at minorities, but I can tell you it works for me. LOL, in fact it just might be the most brilliant political slogan ever.
It’s easy to be nation-centric, as I have been. But when you read the comments on some political forums and you see numerous posts by people from all over the world who are anguished and urging Americans to do the right thing and prevent Hillary from taking the White House, it’s a bit of a show stopper. It’s often said that people from other countries know more about the US than its own citizens.
Of course they do. They are on the receiving end of the shiddy results of shiddy and murderous foreign policies.
I would be interested in seeing those posts … All I’ve Evers seen foreigners react to trump with is horror and ridicule. Where have you been reading them?
… not by way of questioning you, just genuinely interested.
Isn’t the north side the “safe” side.
Lord help you if you own a house or a business in a long term democrat controlled city with insane public unions and a huge FSA - like Chicago.
——
Thieves Targeting Wheels; Is Your Car A Target?
August 25, 2016
By Dana Kozlov
(CBS) – People on the North Side say car owners should tread carefully.
In a matter of minutes, their wheels could be gone. They know, because it keeps happening.
Munaf Chand says he went to sleep recently and all rims on his car were intact.
He got a text in the morning from his father, who told him his car was up on bricks, the wheels missings.
“I told you you’ve got to watch out,” his father said.
The sight of tire-less cars and SUVs perched precariously on bricks or blocks has become common on the North Side. Tow truck drivers are left to literally pick up what’s left.
North Center resident Chris Finley is another tire theft victim. His were swiped last fall, right in front of his house.
“My car was literally parked 100 feet from where I sleep,” he tells CBS 2’s Dana Kozlov.
Auto body shop owner Pete Rizzo isn’t surprised. He says thieves stack the props under the car and deflate the tires so that they can be removed by power tools.
This is what bothers me about the location location crowd.
The whole world is crumbling around you. There are “barbarians” at the gates a couple miles down the road, but somehow “my location is safe” is still heard ad nauseam.
The liberal gated enclaves in far left cities will be the first to go…
For some reason the criminals have more respect for the bitter clingers with thier Bibles and guns.
That’s probably true.
Jesus 2.0 sez: shoot those poors that want the wheels off your SUV!
Or the “conservative country clubs”. This sucker will go down.
Well of course they do; they don’t want to get shot at!
Steeling rims is a growth industry, so why stop at hitting single cars?
‘Heritage Buick GMC in Rockwall was burglarized overnight Saturday, but it wasn’t cars that were stolen — just parts of them.
Robert Bobo, the owner of the dealership, said the Rockwall Police Department called him Sunday morning and told him that 35 of his vehicles, Yukons and pickups, were up on blocks and stripped of their 20-inch tires and wheels. The theft is estimated at $150,000.’
http://www.nbcdfw.com/news/local/Thieves-Steal-140-Wheels-Off-35-Cars-126085683.html
Apparently, this is now a thing, dealerships all over get hit like this.
I keep a sign “FULL TANK” on my GM car
no takers
Who buys all these 50-60K SUVs? The last time I was in a GMC dealership they had a decked out full size SUV in the showroom floor, and the price made my head spin. The sales droid told me that most were sold in “cash” transactions. The first word to pop into my head was “HELOC”
Back in 2004, that was one of the first signs, to me, that something was seriously out of whack. This is a low-wage town, and the number of Cadillac Escalades on the road didn’t make sense. At the time I didn’t know what a HELOC was. I thought “where is all this money coming from?”
Sometimes I still think that. There are other times when I wonder what percentage of high-end vehicles are leased.
80% of the people who tell me they got a new car have done so through a lease. Or “fleece” depending on your point of view.
It’s really the only way to go from MT pockets in 2008-09 to throwing “mortgaged” cash around like a big shot.
Not you specifically, but you can try living without a car. I have been car-free for two months now. It is not entirely “easy” — so many of our towns are not really livable unless you do have a car. But if you want to live without one, you can make it work if you relocate yourself to a place where you can walk for basic essentials like groceries, and a place with a good bus system for other trips.
One good thing about not having a car — you buy what you can carry. So when you’re in the shopping aisle, you don’t buy nearly as much “crap” as before.
And no insurance to pay, no gasoline to pay, no risk of getting your car’s wheels stolen.
There’s some tradeoffs with it, but so far it’s working for me.
Being carless has enabled me to live well in places that would destroy me if I had to drive. Coincidentally, those places are where the most money is to be made. Go figure.
“‘It’s really almost a national phenomenon,’ Lawrence Yun, chief economist at the National Association of Realtors, said of the Boston-area market.”
Just say ‘no’ to bidding wars. Hold on to your cash and buy for half the price after the next crash. Or better yet, rent forever for half the cost.
who is gonna take the losses on all the bonds trading way above PAR?
I asked this question a couple of days ago - this can’t be true, can it?
Comment by azdude
2016-08-24 12:11:15
“In short, the global bond market has become a giant volcano of uncollectible capital gains. For example, long-term German bunds issued four years ago are now trading at 200% of par.
Yet even if the financial system of the world somehow survives the current mayhem, the German government will never pay back more than 100 cents on the dollar.
What that means is there will eventually be a multi-trillion dollar bond implosion as speculators and bond fund managers alike scramble to cash-in their capital gains at the first sign that the global bond markets are breaking and heading back to par or below. And it is not just the “winners” who will be stampeding for the exists.”
http://davidstockmanscontracorner.com/bubbles-in-bond-land-a-central-bank-made-mania-part-3/
This is another reason they cant raise rates. It would unwind this bond ponzi scheme.
These folks have been buying bonds for the capital appreciation, not really the yield. They have pushed up the values way further than the par value the issuing entity will pay back when the bond matures. It seems like a matter of time before sh@t hits the fan.
I read that this bubble we are in today is more of a bond bubble than anything else. Housing and stocks a long for the ride.
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Comment by Panda Triste
2016-08-24 15:48:39
This can’t be true, can it?
Maybe I don’t understand the terms.
Let’s say today I want to purchase a U.S. Treasury Note. It’s going to mature on August 24, 2026, and I will receive $10,000 on that date.
Say I am willing to pay $9,000 today to receive $10,000 in ten years. The “par” value is $10k, right?
Are you telling me these Germans are paying 20,000 EU today to receive 10,000 EU in 10 years?
Say I am willing to pay $9,000 today to receive $10,000 in ten years. The “par” value is $10k, right?
The par value is what you paid for the bond when you purchased it from the original issuer ($1000 is a typical par value). When the bond matures you get the $1000 back. Interest could be paid over the life of the bond (often known as “coupon” bonds) or it could be paid in a lump sum when the bond matures.
Bonds can go up or down in resale value based on interest rates. Say you bought a $1000 bond that pays 10% interest per year. Then suppose that the next day S&P changed the bond rating of the issuer to something much, much better and now they start selling bonds that pay only 4% interest.
That 10% bond you have is much more desirable than the 4% bond because it will pay $100 per year vs $40 per year. Say it was a 10 year year bond. It would pay about $600 more in total interest than the newer bond, hence the older bond would be worth about $600 more than it’s par value on the resale market. As it approaches maturity the extra value diminishes.
Many bond can be recalled, which means that the bondholder could force you to sell the bond back to the issuer, so that they don’t have to pay more interest than necessary.
There is also the reverse case, when interest rates rise. In that case your older bond loses resale value, and you would probably have to resell it for less than par value.
These resale values also vary on when interest is paid. Any decent finance textbook should have a chapter covering this.
One new wrinkle are negative interest rates, which would mean that the issuer would repay less than par value when maturity is reached.
I dunno, might not be that simple, at least in coastal Calif.. In early 2007 I sold my place for nearly triple what I paid it after owning it for 10 years. Put the money in the bank and did not try to buy again until 2011 and it was virtually impossible to compete with the flippers and speculators paying 100% cash…my offers (at full price or slightly more, had cash for a big down payment and a preapproved mortgage) were simply ignored several times. I would not get sucked into a bidding war anyway but did not even have that dubious opportunity in 2011/2012.
May try buying again after Bubble 2.0 pops but wonder if the situation will be the same, do NOT want to waste my time playing that game again…but am happily renting in the meantime.
‘That is the nature of real estate. It goes up, and it goes down … and still it remains the best investment a person can make.’
Does it seem odd that one asset class is better than the rest under any and all circumstances? It’s almost as if the used home sellers have repealed the laws of finance.
I can show you whole cites…
Detroit, Cleveland, Newark, Camden, Buffalo, St Louis, etc.
Where, since the 1960s, real estate was probably the worst investment you could have made.
Literally, Beanie Babies would have been a better choice.
Helped my parents sell the family homestead a couple of years ago. Anywhere near the Ferguson antifada was not a good location to sell real estate at the time. The price was over fifty percent below the 2007 bubble top.
Investors in U.S. west coast cities have nothing to worry about. It’s different in Vancouver, where the government is willing to tax foreign residential real estate investors in order to help its citizens find affordable places to live.
“Detached housing sales have plunged 84 per cent on Vancouver’s West Side and are down 88 per cent in Richmond during the first two weeks of August compared to the same period in 2015. Total detached house sales through the Real Estate Board of Greater Vancouver plunged 71 per cent in the same period. Zolo Realty BC Inc., a real estate firm that tracks average, rather than benchmark, prices in Vancouver’s housing market, reports that as of Aug. 22, the average home price in the city dropped 17.1 per cent from July 25, to $1.1 million.”
Can… Can it really all be happening again? Is this it?
It’s Groundhog Day!
And it’s happening with near 0% interest rates…
That’s the beauty of the situation at hand as we transition into the next phase of bubble collapse. The Fed will have a much harder time propping up home prices by suppressing interest rates, given they are already permanently suppressed. Eventually market forces trump government intervention.
Yes, as Yellen said yesterday, The Fed has reached the bottom of the empty toolbox. Maybe they can put the toolbox on Ebay . . . but that only works once.
Acts of love.
Peddling fiction.
Smidgens of corruptions…
A vast, ALT-right conspiracy!
Alex Jones has a black heart!
They’re posting pictures of racist frogs!
Lol, you can’t make this stuff up. Alex Jones couldn’t have purchased the promotion that Jimmy Kimmel just gave him.
I didn’t see this from yesterday:
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Comment by Professor Bear
2016-08-25 08:21:57
Do federally-guaranteed subprime mortgages* concentrated in high-crime, low-commerce areas without good schools possibly have a role?
* By subprime, I mean low-down payment, low-FICO score loans that a private lender would not touch without the federal guarantee, not Oxide’s personal definition of subprime.
—————
I do not have a personal definition of “subprime.” I do not use the word “subprime” at all, except to point out confusion in the different usages. In fact, FICO is such a poor predictor of ability to repay that whole concept ought to be banished from underwriting altogether.
Fannie Mae does not guarantee “subprime” mortgages characterized by low-down low-FICO score. Fannie Mae guarantees mortgages based generally on the ratio of monthly payment to income, regardless of FICO or down payment. As long as the buyer keeps his job, and as long as the payment stays the same,* the buyer should be able to repay the loan.
And none of this is new. I have been saying this for years.
*Which is why I constantly post “fully amortized PITI from Day 1.” During the bubble, loans were approved based on income vs a teaser monthly payment. Of course, when the payment doubled after three years, the buyer was still going to default even if they kept their jobs, spouses, and health. But, if the monthly payment is fully PITI from the beginning, then the underwriting is based on the full monthly payment, not a teaser. There are far fewer defaults simply because the bad loans would be denied in the first place.
Nearly every loan was a liar loan.
You just made up a job and income.
No one checked. No one cared.
They were all going to get rich on appreciation and the bank sold the loan to the taxpayers.
“was”
“made”
“checked”
“cared”
“were”
“sold”
Past tense, all of it. Thank you for playing.
“As long as the buyer keeps his job, and as long as the payment stays the same,* the buyer should be able to repay the loan.”
What if there’s another recession some day, unemployment in these low-income areas skyrockets, and home prices collapse by 50%? Do you expect subprime borrowers with no skin in the game to keep making payments on underwater property, even if they are lucky enough to keep their job?
People just don’t give enough credence to risk when they assume debt.
“People just don’t give enough credence to risk when they assume debt.”
They don’t have to because the professional fees mean that the debt fits their budget and family needs.
Any idea what would happen to the auto industry if balloon payment loans were outlawed? Poof. The entire financial sector would go-away were it not for government support. Last months retail numbers tell it like it really is… the consumer is tapped-out. No fiction.
Just saw an BMW television ad (volume off) while waiting on a coffee: zero down, first payment due in 90-days and zero percent interest for 5-years! Yeah… hope the historians get this right.
the 84 month loan was too rasis
wayfair has 0 down furniture
house-car-furniture
trifecta
Such auto loans will not be banned, but in about 6 weeks (October 1), they will be subject to Dodd-Frank rules. If a bank wants to extend a balloon loan, they will have to keep 5% of it during securitization. Is that enough to poof the auto industry?
Securitizers have been whining about this rule ever since it was proposed. Some are complaining that they are so accustomed to shoveling off 100% of their loans that their company doesn’t even have the people/software set up to retain 5%. Others are not-so-subtly playing the race card, that if they have to adhere to requirements, they won’t be able to make as many loans to the poors. Most are just complaining that crushing government regulation is cutting off their taxpayer-backed gravy train. Here’s a fun metaphor:
————————-
The Rule’s risk retention requirements are an oddity in American law…. Would it be a good idea to require auto manufacturer management and employees to drive their own cars, and chefs to eat some of their own food (five percent of it perhaps)? That way those who build our cars and cook our souffles would have “skin in the game.” Get busy, Congress! http://www.culhanemeadows.com/skin-game-securitization-credit-risk-retention-rules-take-effect-late-year/
————————-
Yes well, if that restaurant had a record of poisoning people, making the chef eat 5% would be a great idea. And the cars have a record of crashing, making 5% of the employees drive cars also sounds like a good idea.
Car dealers don’t have recourse infrastructure ,so the 5% May be a hassle
Well that’s the point.
Even if it’s very easy to set up software to retain 5%, auto financers probably don’t want to eat part of a risky loan, even 5%.
So auto finacers will simply stop offering risky loans, and offer only loans that meet the guidelines for strictness so that they don’t have to retain the 5%.
So if you’re looking for a car after October 1, don’t be surprised if the dealership asks for 2 years of credit history and 10% of the total cost (including taxes/fees). Good luck selling those $50K SUVs!
Just 3% as down payment and massive government intervention to qualify for a house your salary can’t support is SUBPRIME.
Not by the definition of the bank. According the banks and the old Fannie Mae, “subprime” is defined by FICO score alone, not by income or down payment. You know who bought houses with 3% down and a house their salary can’t support? PRIMES. And they did most of the defaulting.
But, if the monthly payment is fully PITI from the beginning, then the underwriting is based on the full monthly payment, not a teaser.
Oxy: yes, you’ve been saying this for years, but you are STILL (after all these years) ignoring the fact that the largest chunk of mortgages to go bad were PRIME mortgages, not mortgages with teaser rates.
In other words, PRIME buyers do make the rational decision to walk away when RE takes a massive dump and they have no skin in the game.
When things finally start heading down fer-realz this time around, it will be the same, even though the lending landscape is not identical; the people are the same, and if anything, they have been taught that there are no consequences to walking away.
‘I am paying a hefty maintenance on the vacant apartment on OMR. I need a tenant now,’ says a desperate apartment owner. His tenant has recently moved out of the two-bedroom unit to a larger apartment for a nominal increase in rent within the same township project. ‘True, this is the story of Chennai’s residential rental market’
India is a strange story. There’s a lot of corruption and what they call “black money”. These developers are sitting on tens of thousands (or more) of shell apartments, just not quite finished so they can say they are under construction and can’t be delivered. Most of it is too expensive for end users. What they need is liquidation.
Us is no different.
“‘I am paying a hefty maintenance on the vacant apartment on OMR. I need a tenant now,’ says a desperate apartment owner.
Sounds like you are involved in a dutch auction, and you just don’t know it yet; the simple way out is to lower your asking rent until you land a tenant. Note that others with empty apartments will also be bidding against you for tenants in this dutch auction.
http://www.bloomberg.com/politics/graphics/2016-dnc-contributions/
This seems totally ethical and not at all skirting the intent of campaign finance laws.
hawkish yellen is out talking about another rate hike to keep the dollar from going into freefall.
Jim Rogers says the world will buy dollars as a safety play. No where else to go.
The fed is trapped. Hoisted in its own petard.
looks like yellen followed the script pretty well today.
Reading from a tele? Obama has taught her well.
exactly
does anyone think they would raise rates before the election?
If so I have some ocean front property in az for u.
They must think people are total fools.
why do people get so butt-hurt on speeches given from teleprompters? Would it make you feel better if they looked down at a piece of paper or do you want to force them to memorize 19 pages? Great use of their time! Have you ever given a presentation?
Yes I have given presentations. Notes in index card are ok, even power points are ok, but reading verbatim from a tele is the most unnatural way of communication.
I think if you had to give 10 a day, reading off the tele would be preferred by both the audience and speaker.
Rodgers is probably right, it seems to be what happens every time.
Though, if everyone has to sell their US Treasuries to get foreign reserves to pay the bills, who will buy those bonds, other than the Fed Res?
I am sure other central banks will find a way to get in the scheme.
This won’t end well…
——
Canada to allow banks to use deposits to cover the banks debts
Government of Canada - 2016 Budget | 26 August 2016 | Government of Canada
To protect Canadian taxpayers in the unlikely event of a large bank failure, the Government is proposing to implement a bail-in regime that would reinforce that bank shareholders and creditors are responsible for the bank’s risks—not taxpayers. This would allow authorities to convert eligible long-term debt of a failing systemically important bank into common shares to recapitalize the bank and allow it to remain open and operating. Such a measure is in line with international efforts to address the potential risks to the financial system and broader economy of institutions perceived as “too-big-to-fail”.
The war on savers gets ramped up.
Won’t this be an incentive to move your money to a healthier bank?
They elected that commie idiot and now they will suffer
Blame Canada
I’m sure the opposition is biding its time. This time the Canadian crash is going to be colossal and Trudeau will just make it worse. No get out of jail free card for them this time.
Can we load up few C-5 with Yellonbucks and drop them in Canada like we did with iraqi/irani/afghani?
“Canada to allow banks to use deposits to cover the banks debts”
Yellen would (and could) do this here too. Cat-food granny would simply be chalked-up as collateral damage; save the banks.
Now what, with Trump’s apparent reversal on immigration? That round up would have created a lot of gov jobs.
Still no where equal to the new democrat voters Hillary is counting on…
Not sure how that answered my question.
Don’t Yellen and friends just seem to be buying time?
How many years have we heard this talk about a rate hike cycle?
Like Lucy and Charlie Brown with the football.
And if they do, it’ll be probably be a paltry 0.25%. No one will be retiring.
Oh, your parents died in their job? How uniquely American, isn’t it?
stawks didnt like the speech today. Do u think someone will panic buy in the last hour again?
july 18, 2016
With mortgage rates near historic lows, and volumes still strong in the early days of the third quarter, banks predict the trend will continue, providing a bright spot in a low-rate environment hammering their wider results.
JPMorgan has added more than 1,000 employees this year to handle the swell in mortgage business, said Mike Weinbach, its chief executive of mortgage banking. He believes U.S. lenders will make about $1.8 trillion of mortgage loans this year, 40 percent more than he had expected at the start of the year.
you have to buy stawks to ever retire!
Imagine if we all bought Google the first year! We all knew it was great and used it daily. What is it up 1600%?
Every time I read something like this I head out back and work on my time machine for an hour.
There is always another one (out there right now) that in 5-8 yrs we can say the same thing.
FOMO MAKES PEOPLE DO STUPID SH@T
One winner thousand losers
Always happens.
Just dont gamble with money you cant afford to loose.
My best investment ever was Apple. I bought LEAPs post-iPod, pre-iPhone, and made about 20x.
My worst investment ever was Apple. Had I borrowed what would have amounted to a huge amount of money for myself then, and exercised the options and kept all the stock, I could have paid back that debt with 6 months worth of dividends and would be sitting on about a 100x on the exercise price of the options.
My time machine is almost built Ben…I’ve been working on it for a bit over a decade.
Picked up some chicken for .69 cents a lb. Put it all in the smoker this morning. No complaints. Just add rice and beans and you can live all mo for less than $50.
I am going to fire up the bbq soon. Got a twelve pack of a lagunitus beer called the 12th of never. solid beer.
I hate cooking in the oven during the brutal summer heat. Heats up the whole house. I can cook all summer on 5 gallons of propane.
Was anything solved in jackson hole today?
god tried to hit them with lightning, few fires in Tetons.
“Was anything solved in jackson hole today?”
Maybe they stomped on Joe the Plumber (in effigy) a la Alice Cooper stomping baby chicks?
Bahrain segment of iRevolution (Banned from CNN after first broadcast):
https://www.youtube.com/watch?v=-j4Sti7-tYw
any of u have any experience with goldmoney.com?
83% GJ
jill 74%
hillary 52%
take the test, see who you side with http://www.isidewith.com/
it must be fake, or all my anti-neocon stances
I’m suspicious. EVERYBODY trumples at least a little bit. I would expect at least 0.5% Trump even if Al Gore himself took the test..
Bijan property on Rodeo Drive sells for $19,000 a square foot!
From one of the overall news reports from today’s Fed meeting, just the yahoo article:
https://www.yahoo.com/news/feds-yellen-says-case-interest-rate-hike-strengthened-140306802–business.html
“In her speech, Yellen noted that Fed officials have a wide range of views on where rates will likely be in the coming years. She said current forecasts imply a 70 percent probability they will be between 0 percent and 3.75 percent at the end of 2017.”
…
I found this statement curious. I am no expert, and not the best math person in the world either.
The end of 2017 isn’t that far away. Doesn’t a forecast of between 0 and 3.75 seem like a really wide range for a fairly short time period? And why just a 70% probability estimate? Maybe she was trying to say that there is a 30% probability that by the end of 2017, rates would not be between 0-3.75%, but either negative or above 3.75%. My money would be on 30% chance of being negative by the end of 2017. I am skeptical it would get into the 2-3% range in such a short time. It seems like that would cause a lot of problems. Or maybe they were just throwing their hands up in the air, “Who knows”.