Not Every Landlord Can Afford To Take The Hit
It’s Friday desk clearing time for this blogger. “Two large development projects in Palm Springs have hit the pause button, alarming residents who fear a work stoppage for months or even years to come. Construction equipment seems to have all but disappeared where Rael Development is constructing a 150-room luxury hotel. Residents are wondering why the project is being delayed. ‘Seems like there hasn’t been any activity for a while now,’ wrote David Robertson in an email in early October. ‘Are we getting burned with another development going belly up before it has even been completed?’”
“About a mile away is another construction fence, this one encircling an 11.6-acre tract of blank desert, which is set to become The Cameron, a collection of 80 two-story town-homes, 22 live-work units and 15,000 square feet of retail. Work there has all but stopped, due to a change in the builder. ‘The previous builder was a partner with a company called Rialto Capital, and they’re the major financial partner. That’s what they do with different builders,’ said Todd Cunningham, a partner in Woodbridge Pacific, based in Mission Vejo. ‘And they just had some issues and they decided to separate from the previous builder.’”
“No two words sound more onerous to wealthy home sellers than ‘price reduction.’ But with Miami more than a year deep into a housing market slowdown that’s seen sales tumble and listings linger, EWM International Realty CEO Ron Shuffield is urging luxury homeowners to face reality. Many homeowners in Miami are already taking the hint. By the beginning of July, 37 percent of the city’s luxury listings had seen their asking prices cut by an average of 14 percent, according to EWM’s data.”
“Miami is now grappling with nearly three years worth of inventory. That means buyers are more inclined to sit on the sidelines and shop around for deals. ‘When you have inventory growing to that level and sales falling off, the major motivator to buyers is going to be an adjustment in price,’ he said.”
“The Park Avenue townhouse housing the nonprofit Queen Sofía Spanish Institute sold for $25 million at the end of last month, according to public records, falling $23 million short of its original listing price of $48 million in October 2014. Meanwhile, a nearby townhouse at 68th Street sold last week for $20.4 million, down $17.6 million from the $38 million asked in March 2015. The deep discount of the recent townhouse sales might also fall into a so-called ‘aspirational pricing’ phenomenon, experts say.”
“Townhouse properties are generally skewed to the high end of the market where conditions are weakest and many listings are ‘aspirationally’ overpriced, said Jonathan Miller, president and CEO of real estate appraisal and consultancy firm Miller Samuel. ‘Now that these conditions have been in place for more than a year, sellers are capitulating to the actual market conditions and reducing their prices to actually sell,’ he added.”
“The Attom Data Solution report for Chicago foreclosure activity shows a huge spike that occurred last month, entirely attributable to a 127% spike in auctions from September. At the national level all 3 components of foreclosure activity were up around 25 - 30% each. Daren Blomquist, senior vice president at ATTOM Data Solutions, commented that a lot of this increase may be coming from newer mortgages Daren went on to point out how a lot of these foreclosures are coming from government programs.’”
“‘The loans used in this housing recovery that appear to be most susceptible to foreclosure are those such as FHA and VA with low down payments. Our data shows FHA and VA loans combined represent 49 percent of all active foreclosure inventory for loans originated in the seven years ending in 2015. By comparison, FHA and VA loans only represent 12 percent of all active foreclosure inventory among loans originated in the previous seven-year period, from 2002 to 2008,’ he said.”
“Hmmmm. Government programs with problems. Low down payment mortgages that default. Who would have thought?”
“No matter where you live in the Las Vegas valley, no neighborhood is immune to squatters. Banks may be partly to blame for our squatter problem because of something called ’shadow inventory’ — homes that are bank controlled but maybe were left in a long-gone owner’s name or simply languishing in limbo because the bank has failed to foreclose, making the homes easy prey for squatters. The home in Darcy Spears’ neighborhood went into default in 2005, but GMAC didn’t take action to foreclose until this September — after Contact 13 got involved.”
“Phnom Penh investors and property owners are getting creative in the wake of subdued demand and oversupply in the residential market, with some deciding to renovate existing apartments and remodel them into hotels. Din Somethearith, president of the Cambodian Hotel Association, told Post Property there is a fair number of apartments located in the Tonle Bassac and Boeung Keng Kang areas that are being renovated into hotels due to the current apartment oversupply and downcast demand.”
“Somethearith added, ‘My friend has rented a villa to open up his own boutique hotel, and as a result, he is currently waiting for the boutique hotel to close down, because he hadn’t asked for my advice before continuing with his business endeavour. He tried to follow others’ example, while not taking into account that many small hotels in Phnom Penh and Siem Reap are closing down one by one.’”
“If you’re renting in Brisbane, chances are you’ve had a good year. Perhaps you’ve applied for a property, negotiated a hefty discount on the rent … and still been approved. The problem is that not every landlord can afford to take the hit. As rents continue to plunge, it’s likely to have an effect on apartment sales, said Angus Commins, principal at Space Property South Brisbane.”
“‘In fact, it’s already affecting sales. Investors are nowhere to be seen right now, what with yields going down and vacancy rates going up. Add in the lack of capital gains and the scare-mongering about negative gearing and of course no one is going to be buying,’ he said. Mr Commins said that as the issue unfurls into next year, it will likely mean a serious correction to Brisbane’s apartment market – sales and rentals.”
“‘It’s a train wreck and anyone who tells you otherwise has a vested interest,’ he said. ‘We get calls to our office every day from lawyers representing investors who are trying to offload apartments they can’t afford anymore. That’s going to start flowing through to some distressed sales. Any other agent around here will tell you the same. Looking into next year, we’re going to see a lot of people walking away from their deposits.’”
“Remember the infamous Fannie Mae and Freddie Mac that kick-started the last financial crisis? Last month hedge fund Bayview Financial bundled their junk securities into $118 million new bonds. Fitch Rating immediately stamped it with A- for investment grade. Didn’t they do the same for subprime mortgage bonds that were once top-rated AAA debts before the US housing bubble burst?”
“This is just the start. There is a total of $6 trillion US government-backed mortgage bonds waiting to be offloaded to the investors. Whether this is rock solid or a time bomb, only time will tell. We tend to have selective amnesia for painful lessons from bad investment. When the market crashes, everyone feels the pain. We mourn and shed tears. But when everything’s over, it is soon forgotten.”
“What is the worst thing that can happen to the property market? Cooling measures? Market oversupply? Price corrections? The biggest nightmare in any property market is the burst of the housing bubble. Because once that happens, even when government lifts all cooling measure; developers clear units at rock bottom prices; and prices drop to a ridiculous level, there will be no taker.”
“Because bad debts are everywhere. Fire sales are everywhere. Negative equities are everywhere. The banks are forced to absorb the bad debts. Even printing of more money cannot save the market. You can’t end such a big problem with no pain.”
Experts forecast the state of Miami’s real estate market in 2017: panels
Alicia Cervera Lamadrid: “We will have a solid, steady season. It just won’t be a runaway season”
November 17, 2016 02:15PM
By Francisco Alvarado
http://therealdeal.com/miami/2016/11/17/experts-forecast-the-state-of-miamis-real-estate-market-in-2017-panels/
Timber.
Was it up over 6% last for 2016?
That is $30k a yr on a $500k house, free living!
It Gets Ugly in Houston
by Wolf Richter • November 18, 2016
http://wolfstreet.com/2016/11/18/vehicle-sales-construction-sector-get-crushed-in-houston/
Texas is truck country. About three-quarters of all passenger vehicles sold are trucks or SUVs.
I wonder how all those pricey vehicles were financed. A HELOC, perhaps?
Which means that soon it will be time to head south and pick up a F350 King Ranch 4×4 diesel crew cab for a fraction of its MSRP.
The MSRP for top of the line, loaded trucks is insane - as high as $80k now.
This is the priciest pick up at the local Chevy dealer:
http://www.kinggm.com/VehicleDetails/new-2017-Chevrolet-Silverado_1500-Crew_Cab_Short_Box_4_Wheel_Drive_High_Country-Loveland-CO/2851789873
A mere $60,000!
The Ford dealer has this beauty, for $71,000
http://www.loveford.com/new-Loveland-2017-Ford-Super+Duty+F+350+SRW-King+Ranch-1FT8W3BT0HEB58363
Who buys these things?
Some pudgy pale beta at my former government contractor gig drove a King Ranch F-350. And it never had a speck of dirt on it.
What’ll Happen to Housing Bubble 2 as Mortgage Rates Jump?
by Wolf Richter • November 16, 2016 • 58 Comments
http://wolfstreet.com/2016/11/16/whatll-happen-to-home-price-bubble-2-when-mortgage-rates-jump/
http://www.bloomberg.com/news/articles/2016-11-18/trump-is-making-bond-markets-nervous
Investors see a burst of growth, bigger deficits, and more inflation ??
How Uniquely republican.
What more amazing is that Trump doesn’t take office until Jan, 2017.
Blaming your failed economic plans on someone else - how uniquely democrat.
I guess you never studied economics, as you obviously don’t understand rational expectations.
All I know is that Trump was not even nominated, let alone won, a Nobel Peace Prize.
How is he supposed to bring peace to the Middle East?
How is he supposed to bring peace to the Middle East ??
Well, we do know how he deals with pressure and resistance don’t we…
That must drive that Rick Santelli guy crazy. He’s surrounded by Democrats all day.
Trump was not a dyed in the wool Republican. Both the establishment parties lost this round.
“Both the establishment parties lost”
Trump’s cabinet picks says otherwise.
Sessions isn’t establishment.
I think people have different definitions of establishment. I get Ben’s point of view, but it’s hard to see Sessions as an “anti-establishment” figure. It’ll be interesting to see if he enforces federal drug laws on the West Coast. Given his recent statements, it seems likely: “We need grown-ups in charge in Washington to say marijuana is not the kind of thing that ought to be legalized.” Democrat or Republican, Washington always knows best.
Hi, PB.
How now? Where are you hanging out these daze?
The Financial Times
Markets
Wall Street eases as dollar hits 13-year highs
Treasury yields rise as ‘Trumpflation trade’ trundles on
Global Market Overview
36 minutes ago
by: Jamie Chisholm, Global Markets Commentator
Trump trade back on
Friday 22:15 GMT. Wall Street slipped but stayed near record territory as the dollar climbed to a new 13-year high and US government bond yields hit multi-month peaks on Friday, on expectations that President-elect Donald Trump’s policies will boost the economy and deliver tighter monetary policy.
After a mixed Asia-Pacific session, which included Japanese equities entering a bull market, the pan-European Stoxx 600 slid 0.4 per cent.
Investors have been eyeing the benchmark Wall Street gauges as the S&P 500 tests — but has so far failed to cross — a record set earlier this summer. The index slipped 0.2 per cent to 2,182, leaving the equity benchmark less than 1 per cent below its August record. The Nasdaq Composite touched a new high before falling back.
Dollar strength has “started to become a bit more of a concern today”, said JJ Kinahan, chief market strategist at TD Ameritrade. “With the Fed rate hike imminent at this point, what pressure does the [stronger dollar] continue to put on these multinationals and what does that mean for the next two quarters of earnings.”
…
“Because bad debts are everywhere. Fire sales are everywhere. Negative equities are everywhere. The banks are forced to absorb the bad debts. Even printing of more money cannot save the market. You can’t end such a big problem with no pain.”
That didn’t stop the PTB from trying!
Maybe the “PTB” will stop trying now that we have a new administration. The old policies have been an abysmal failure for “Main St.,” which is why Trump was elected. Lots of Obama voters cast their ballots for Trump.
The Peeps That Be have changed! I knew this would eventually happen.
6 trillion in mbs ?
A- rated ?
Wtf?
I was confused by that also. $6 TRILLION? And where are they waiting? Is this a typo or am I missing something?
I would like to see a small sale sample from the
feds mbs plutonium core
A-
?
“$6 TRILLION? And where are they waiting? Is this a typo or am I missing something?”
I’ll take “parked on the Fed’s balance sheet” for $1,000, Alex.
Is there any real limit on the degree to which the Fed can convert its balance sheet into a permanent storage asset toxic waste dump?
If so, what defines the limit?
“toxic asset”
(Caffeine dose is just kicking in…)
If so, what defines the limit?
The ignorance and tolerance of the people; the only limit is political.
I’ll take “parked on the Fed’s balance sheet” for $1,000, Alex.
According to the Fed’s balance sheet, they only hold $1.7T of MBS. So that only accounts for ~30% of the $6T.
Put otherwise, the Fed took a 30% share of MBS off the market as part of its interest rate suppression / real estate price support program.
And the MBS purchases were a one-way operation, as unwinding them would crash the market.
And it was all legal, because the economy was in a crisis when this policy was rolled out
This will put a big dent into San Diego real estate investment demand:
http://www.sandiegouniontribune.com/business/growth-development/sd-fi-rentalban-20161026-story.html
It would have, had the city council voted for it. But, it didn’t pass. They’re going to review it again in four months:
http://www.10news.com/news/san-diego-city-council-considers-banning-short-term-rentals
Yellen the Felon: I won’t quit.
http://www.telegraph.co.uk/business/2016/11/17/janet-yellen-i-wont-quit/
Nov 18 2016 at 6:01 PM
Updated Nov 18 2016 at 6:10 PM
Fed chair Janet Yellen pierces Donald Trump’s fiscal euphoria
by Vesna Poljak and John Kehoe
“There is not a lot of fiscal space should a shock to the economy occur,” Dr Yellen said.
Australian shares could be supported by a lower Australian dollar as US Federal Reserve chair Janet Yellen warned that Donald Trump’s planned budget stimulus could force US interest rates higher.
But, with a tight jobs market and already high national debt levels, an overheating economy adds to the risks investors face.
Dr Yellen has challenged Mr Trump’s plan to unleash massive fiscal stimulus. The Fed chair all but promised that the central bank will raise interest rates next month before the president elect is in office and asserted the independence of the Fed, which faces greater interference by a Republican leadership. Dr Yellen, who made it clear she would not stand down, told a Congressional committee that unlike in 2008-09, the economy today was “operating relatively close to full employment” and there was less excess capacity.
…
This is hilarious, like playing reverse psychology with a three year old. Pension funds, banks, insurance companies, savers, all BEGGING Dr. Yellen to raise rates and she says no. Trump threatens fiscal stimulus, just like all the central bankers and their sycophants have been calling for for years, and suddenly, she’s going to raise rates to stop it.
Oh no Janet, not higher rates! Please, no! Anything but that!
‘just like all the central bankers and their sycophants have been calling for for years’
That’s the way I remember it.
I thought Trump had been saying this whole time that the extended low rates are a bad thing. I’m pretty sure he’s planning on paying for the US government with taxes on US wages, which will be going up in short order. And if they don’t go up, then he’ll pay for everything using the tariff money he’ll collect.
“I’m pretty sure he’s planning on paying for the US government with taxes on US wages,…”
I’m guessing he’s planning on paying for the US government with supply-side policies: Lower taxes + more spending = larger deficits
To stop what?
(Proposed answer: Inflation, before we return to the Jimmy Carter years)
China “worried” about capital outflows (but not so worried they’ll mount a serious crackdown).
http://www.businessinsider.com/r-exclusive-china-ready-to-slow-yuan-descent-worried-about-capital-outflows-sources-2016-11
Fauxahontus Warren, who masquerades as a champion of the middle class but then rushes to block the Fed (the mortal enemy of the middle and working classes) from any real audit, and throws in with Crooked Hillary, creature of the .1%), is bloviating again.
http://www.breitbart.com/video/2016/11/17/sen-warren-to-president-elect-trump-im-ready-to-fight/
Fake, just like crooked Hillary, and Bernie, and Obama. I overheard some fossilized hippies at the farmers market yesterday lamenting about the Trump win, but focused mostly on how bad $hillary was and how Bernie was better (would have won - yeah right) but too old. Kind of like themselves, lol!
The progressives bench is empty too, Kamala Harris is a puppet with no brain (which is I guess what the ((tribe)) wants) and Tulsi is another power hungry pol who’s sociopathy makes politics a natural fit. Oh, and she’s a cult member funded by drug smuggling - look it up if you doubt me.
I just discovered this millenial commentator, non partisan and pretty interesting views, calling it like it is
https://www.youtube.com/watch?v=JthIxb1jHR0
Finally, an AG who might actually apply the law to the .1% (and won’t be having any “snakes on a plane” sub rosa meetings with Bill Clinton to work out quid pro quo).
http://www.zerohedge.com/news/2016-11-18/trump-said-pick-jeff-sessions-attorney-general
Another neocon failed-state fiasco. Heckova job, Hillary.
http://www.aljazeera.com/news/2016/11/libya-winners-today-161117091112596.html
And Hillary laughs about it….
—
Oct 20, 2011 - Secretary of State Hillary Clinton shared a laugh … “We came, we saw, he died,” she joked when told of news .
https://youtu.be/Fgcd1ghag5Y
Greetings from Brisbane. I was in an elevator at a new apartment complex near downtown a few days ago. On the elevator wall was a sign that said: “Dear tenants: if you refer a new tenant to us, we will give you $200 once they sign a lease.” Yep, it’s just starting to get desperate here. I imagine by this time next year, the sign will read: “Dear tenants: Will the last person to permanently leave this building please turn out the lights???”
“Dear tenants: if you refer a new tenant to us, we will give you $200 once they sign a lease.”
Does DIRECTV own that building?
How the DIRECTV Referral Offer works
When a friend who’s already a DIRECTV customer refers you to DIRECTV, you can get a $10 bill credit every month for 10 months. Plus, for every referral they make, your friend also gets $100 in bill credits, so everyone wins.
http://www.directv.com/DTVAPP/referral/referralProgram.jsp
Luigi must have had vacancies.
Italy: Luigi Fogli tries to protect his hotel confiscated to host asylum seekers [ENGSUB]
https://www.youtube.com/watch?v=BzZ6–p01KM
Federal Reserve Chair Throws Cold Water On Trump’s Economic Plan
November 17, 2016·5:25 PM ET
President-elect Donald Trump has pledged a $1 trillion infrastructure spending program to help jump-start an economy that he said during the campaign was in terrible shape.
Speaking on Capitol Hill Thursday, Federal Reserve Board Chair Janet Yellen warned lawmakers that as they consider such spending, they should keep an eye on the national debt. Yellen also said that while the economy needed a big boost with fiscal stimulus after the financial crisis, that’s not the case now.
“The economy is operating relatively close to full employment at this point,” she said, “so in contrast to where the economy was after the financial crisis when a large demand boost was needed to lower unemployment, we’re no longer in that state.”
Yellen cautioned lawmakers that if they spend a lot on infrastructure and run up the debt, and then down the road the economy gets into trouble, “there is not a lot of fiscal space should a shock to the economy occur, an adverse shock, that should require fiscal stimulus.”
http://www.npr.org/sections/thetwo-way/2016/11/17/502480053/federal-reserve-chair-throws-cold-water-on-trump-economic-plan?utm_source=twitter.com&utm_campaign=npr&utm_medium=social&utm_term=nprnews
Funny how Yellen never talked about this with the obama deficits.
obama was the first to break the $1 Trillion deficit/year benchmark.
obama has added more to the debt than ALL OTHER administrations COMBINED and accounting for inflation.
Sounds like the banking clan doesn’t like Trump.
Although having Trump poke a finger into their eye may seem like a badge of honor to his Republican rivals, I am guessing central bankers don’t find it quite so agreeable.
“there is not a lot of fiscal space”
$20 trillion man: National debt nearly doubles during Obama presidency
By Dave Boyer - The Washington Times - Sunday, November 1, 2015
When President Obama signs into law the new two-year budget deal Monday, his action will bring into sharper focus a part of his legacy that he doesn’t like to talk about: He is the $20 trillion man.
Mr. Obama’s spending agreement with Congress will suspend the nation’s debt limit and allow the Treasury to borrow another $1.5 trillion or so by the end of his presidency in 2017. Added to the current total national debt of more than $18.15 trillion, the red ink will likely be crowding the $20 trillion mark right around the time Mr. Obama leaves the White House.
When Mr. Obama took over in January 2009, the total national debt stood at $10.6 trillion. That means the debt will have very nearly doubled during his eight years in office, and there is much more debt ahead with the abandonment of “sequestration” spending caps enacted in 2011.
http://www.washingtontimes.com/news/2015/nov/1/obama-presidency-to-end-with-20-trillion-national-/
‘Yellen cautioned lawmakers that if they spend a lot on infrastructure and run up the debt, and then down the road the economy gets into trouble, “there is not a lot of fiscal space should a shock to the economy occur, an adverse shock, that should require fiscal stimulus.”
I remember Bernanke complaining that the government wasn’t doing enough and he had to push house prices higher. Guess what? This election people said the “wealth effect” suxs. With all this spending, why is there any infrastructure that needs fixing? And isn’t infrastructure what Democrats have been pounding the table about for many years?
It boils down to one thing really. How many states did Yellen win? How many counties? The central bank was explicitly repudiated for it’s failure by the people. If Yellen doesn’t like it she can go live in Butthurtistan.
What language is spoken in Butthurtistan?
Fartsi.
‘This election people said the “wealth effect” suxs.’
That’s a great point. To some extent, this is the first election the Fed ever lost.
Thank goodness the Republicans won a majority in the House last week!
Technically, they *kept* their majority in the House. If the Trump wants to spend on infrastructure, Yellen can’t stop him.
I’m hoping that this infrastructure spending produces actual STUFF. Not “tax breaks” and jobs “saved” and other hokum that only happens on paper.
Yes, we need better roads, bridges, ports, etc. to get all that stuff made in China to more stores more quicker. Also to get Americans to more Applebees more quicker to make their butts more bigger more quicker.
“If the Trump wants to spend on infrastructure, Yellen can’t stop him.”
It depends on your definition of ’stop’. The Fed is certainly in a position where they can crash the economy in a manner where the political blame lands on the president.
yep, i hate to agree, but this right out FDR’s playbook for the likes of the WPA or the CCC.
infrastructure needs to be repaired, but ‘make work’ should never be a tool.
Yellen is a Keynesian. You know, the Krugman like dig a ditch and fill it in. How are the roads where you live? Here in Arizona they stink. We’ve got thousands of illegals pouring over the border. There is plenty of stuff to work on here if you don’t have anything needs doin’.
i’m not against repairs being done. i’m against finding lame excuses to tax and spend people’s dollars away. i’m against ’spending’ being a goal. most of the money government takes in could be better spent by the people it’s being taken from.
incidentally, i despise keynesianism. i belive yellen is a disaster as was the bernank and the later part of greenspin.
There’s a new interstate highway being built between Phoenix and Las Vegas. At the rate they are going it will take 20 years. 85% of the land in Arizona is controlled by some form of government. Much of the west is similar. Feds won’t allow much resource extraction. We’ve got coal towns shut down while China burns all they want. I don’t know how this will play out but there’s plenty we can to do for ourselves if they look around. Did you hear they identified a trillion dollars worth of oil in west Texas this week? And a bunch of natural gas. That’s going to need some infrastructure to get at and distribute.
re texas shale: yep, i saw that. it’s great. build the infrastructure to handle it. that’s true progress.
“At the rate they are going it will take 20 years.”
agreed, the state workers work very slow. so do private companies that get paid cost+ government money. as a matter of fact, they might even be worse.
“We’ve got coal towns shut down while China burns all they want.”
obama: “your electricity rates will necessarily skyrocket.”
“I don’t know how this will play out but there’s plenty we can to do for ourselves if they look around.”
yes, but i’d rather have things done in an ‘as needed’ basis. time value of money and all..
government tries to spend all it takes in and then some, to make excuses to get/tax more.
When Meg Whitman was running for CA’s governor, one of her ideas was to have someone run the math on which projects had the largest return on cost, and allocate capital efficiently to the best projects first.
Nah, too logical. Let’s vote in someone else who will pander to the proper special interests, and allocate capital to projects based on who has the best lobbyists.
Filling in potholes isn’t sexy, but when you think about the reduced wear and tear on cars, there is a lot of expense that can be wrung out of individuals pockets.
I’m 100% in favor of capital investments that are needed (on an “as needed” basis, as you suggest).
However, I am also in favor of projects that have a real, demonstrable, defensible, and significant return on investment (well in excess of the cost of borrowing).
The problem is that I don’t trust our politicians to choose the right investments for the second category.
Like it or not, infrastructure is largely a government thing. Take this interstate: the traffic is already there, reduced to two lanes for many miles, can’t pass the semis, slowing everyone down and dangerous. They are building it in small sections. Just knock the thing out already, we’ll be more productive. The Texas oil: imagine how many high paying jobs will be created. Stop fighting the frackers: no one even lives out where they found this oil. Let the coal miners make a living. If China can burn it, why can’t we? It basically comes down to looking out for ourselves for a change. Look at the markets: bonds down stocks up. That’s how things used to work before QE etc.
It used to take us 3 or 4 years to build an entire freeway here in LA back in the 50s and 60s.
Now we have improved equipment, techniques and materials and highway construction takes 20 years for a simple 4 lane road in empty land to be built.
Totally. Government’s. Fault.
Totally. Government’s. Fault.
And they wanted to do big infrastructure projects? LOL
I hate Michael Savage but liberalism is mental disorder.
“most of the money government takes in could be better spent by the people it’s being taken from.”
Who needs roads when you have gambling, hookers and booze?
“Who needs roads when you have gambling, hookers and booze?”
and who needs better food, nicer shoes and suits, and an all around better standard of living either?
“there is not a lot of fiscal space should a shock to the economy occur, an adverse shock, that should require fiscal stimulus.”
Shouldn’t they be thanking him for _creating_ more “fiscal space”—e.g. room for them to act if needed? By driving up inflation expectations, they will have room to raise rates, giving them for “fiscal space” in the future should it be needed.
It sounds like he’s offering them what they’ve been saying they wanted for close to a decade now—and they’re inclined to say “no thanks”.
WTF?
What the Fed does is called monetary policy. Government budget deficits are fiscal policy.
I understand all of that, Mike. Apparently you didn’t understand my post.
By talking about taking significant FISCAL actions, he is giving them room, room created FISCALLY (e.g. “fiscal space”), room in the future that they might use for additional MONETARY actions.
But saying there is no “fiscal space”—what does that even mean? If he were to heat things up too much with stimulative spending and infrastructure investment, they would merely have to raise rates to maintain balance. And the normalization of rates is something that everyone should be relieved about, especially the Fed.
Jack McCabe: it’s already begun….
https://www.youtube.com/watch?v=bZpyfzhNkkg
**** This is probably well worth your time. McCabe is very well known and a consultant to many large investors.
Can you double-check that link? Looks like an interview with some other guy (Fabian Calvo?), not Jack McCabe…
“Can you double-check that link?”
Try this one:
https://www.youtube.com/watch?v=2VBHzG0dW2Q
It does seem like we have seen this movie before…
Massive inventory
Not giving it away
Sales slow
For sale listing keep growing
Not giving it away
Interest rates go up
Projects stop mid way - never to be restarted
Deposits disappear
Not giving it away
Defaults
Squatters
The cry for bailouts
Paper it over with trillions of printed monies
etc.
No one knows the future but it looks like if the Fed wants to raise rates it will happen in the “Lame Duck” session.
Hopefully Trump will be different.
Affordable housing happens when government doesn’t help to make things “fair” and buy votes.
Funny, how bad movies often get a sequel.
Did you forget something: NOT GIVING IT AWAY, DAMNIT!!
And Janet is hitting the Crater Accelerator with both feet.
Go Dingbat go!
‘due to a change in the builder. ‘The previous builder was a partner with a company called Rialto Capital, and they’re the major financial partner. That’s what they do with different builders,’ said Todd Cunningham, a partner in Woodbridge Pacific, based in Mission Vejo. ‘And they just had some issues and they decided to separate from the previous builder.’
That’s not a change in the builder. That’s your financing going away.
‘The home in Darcy Spears’ neighborhood went into default in 2005, but GMAC didn’t take action to foreclose until this September — after Contact 13 got involved’
Read the article to see what GMAC put these people through. Eleven years, but shadow inventory is a conspiracy theory. And there’s thousands in Las Vegas alone.
But it is a victimless crime. The democrats told me so.
Drug House
Chop Shop
Brothel
Porn production
Etc.
Who cares about neighborhoods. Or the families there. Or the children there.
Obama BAILED OUT GMAC. The 1% got theirs.
All about the money.
When I see the first banker in a perp walk - Trump will have done more to clean this mess up than obama ever did.
Is 11 years a typical time span for shadow inventory to remain in the shadows?
“Is 11 years a typical time span for shadow inventory to remain in the shadows?”
In the neighborhoods I watched houses where the “owners” were evicted and the houses sat empty for a few years, I would call the bank listed on the foreclosure notice on the door they would tell me they couldn’t talk to me because the “owner” was still the “owner”.
Those same neighborhoods had other foreclosures where the “owners” were allowed to stay through those years and were only evicted and put up for sale after the vacant foreclosed houses had been sold.
The hood I live in that took from about 2008 through 2013 or 14
I wonder how many were allowed to run out the clock.
Foreclosure to Home Free, as 5-Year Clock Expires
By MICHAEL CORKERYMARCH 29, 2015
http://www.nytimes.com/2015/03/30/business/foreclosure-to-home-free-as-5-year-clock-expires.html
“I wonder how many were allowed to run out the clock.”
Regardless of how many were allowed to run out the clock, this should give you an idea of how they felt as it ran out.
https://www.youtube.com/watch?v=qYscemhnf88
“Lost another one to Ditech.”
Brilliant read…
—
Dear Democrats: Just Keep It Up and See What Happens
American Spectator | 11/18/16 | Friedman
The Democratic Party is broken, beaten down, shell-shocked, and scratching its heads wondering what went wrong.
President Obama should keep going around the world making incendiary comments about President (elect) Trump. There is nothing Americans like more than hearing negative comments about the person for whom they voted, and themselves, even more so when those comments are made abroad. Mr. Obama’s presidency started out with an apology tour, and to quote Yogi Berra “it’s like déjà vu all over again.”
Next on the agenda is making sure protesters remain on the street, blocking highways and businesses. There is no better message to those out of work than people who don’t want to work. College, elementary, and high school kids should continue to stage walkouts. Who doesn’t enjoy watching their tax dollars at work?
Getting more celebrity endorsements is also a key factor for the next presidential election. Whoever is the next Democrat nominee must ensure that he or she or they acquire endorsements, not just from every entertainer in America, but every entertainer in the world.
Have them create YouTube videos, constantly tweet, Facebook, threaten not only to leave the country but to burn themselves at the stake, maybe quit the profession altogether, because we know they will follow through. But of paramount importance is to call anyone that disagrees with you a racist, sexist, transphobic, homophobic, white nationalist. I know that might sway the middle-of-the-road voter, like it just did.
Get the fringe voters. Keep kneeling during the national anthem. Continue to call out our police departments for being racist. Reinforce what must be the biggest issue that people fear as they go to bed at night, climate change. I’m not really sure you guys have spoken about this issue enough. Go to Ohio, Michigan, and Pennsylvania, and drive there in your hybrids. Talk to the Americans with no work, and tell them it’s not that they don’t have a job that is the problem; explain to them how they are replaceable but the earth is not.
Never ever call it radical Islam. In fact, every time there is an attack abroad, and God forbid domestically, keep insisting Islam is a religion of peace, while knocking intolerant Christians. Instead of destroying ISIS, insist that they need therapy; maybe even offer them your service animals. We know that, while ISIS hates all humans, they do love children and pets. Next, absolutely have Keith Ellison as the next head of the DNC. I’m sure many Americans would be okay with his ties to Louis Farrakhan and organizations like CAIR. What Republican or mainstream American voter didn’t like hearing him compare George W. Bush to Hitler? In fact, maybe make Bernie and Ellison co-chairs, a socialist self-loathing Jew and a Muslim tied to extremism. I can hear you winning in four years with this selection.
Making negative comments about Dear Leader will soon be illegal.
Looks like Kayne West has kissed the hand.
Yeah - they might be a called racists or anti woman or be charged with hate speech…no wait
They might have violent demonstrations and block roads…no wait
They might call for revolutions and violence towards their political opponents…no wait
Yeah. I just don’t see it.
The Debt King will try.
In fact, maybe make Bernie and Ellison co-chairs, a socialist self-loathing Jew and a Muslim tied to extremism.
Just another typical angry right wing screed with nonexistent straw men. You’d think that these people would be in a good mood,. They just won an election. They’re still full of anger.
Also, there’s no evidence that Bernie Sanders loathes himself. He had a great year this year.
‘Losing an election is bad enough, but losing an election and not learning the right lessons from the loss is potentially devastating. And right now, the Democratic Party is at a fork in the political road, faced with two very distinct choices about where it goes from here. The good news is enough of the post-election data is in for the Democrats to learn the right lessons and take the right road going forward.’
‘And simply put, that road is the economy, stupid. The bad news is a significant number of the party faithful are doubling down on what we can call the loser’s road of identity politics, elitist/celebrity-driven condescension and racial fear-mongering hysteria.’
‘Let’s start with the right road that some Democrats are seeing very clearly. Senator Bernie Sanders said it best this week when he told CNN that he is “deeply humiliated” that Hillary Clinton and the Democrats as a whole lost the white working class vote.’
“Senator Bernie Sanders said it best this week when he told CNN that he is “deeply humiliated” that Hillary Clinton and the Democrats as a whole lost the white working class vote.’
http://www.nydailynews.com/news/politics/mayor-de-blasio-aide-ripped-racist-facebook-photo-article-1.2876568
working blue collar poor whites went with Trump, neo-cons and the 1% went with HRC. It flipped.
Why did the Democrat party turn its back on its white Middle Class base?
working blue collar poor whites went with Trump, neo-cons and the 1% went with HRC
It’s hard to find information about the 1%, but those with incomes above $250,000 (the top 6%) preferred Trump 48% to 46%.
You go ahead and believe that. I’m sure it makes you feel better.
If you have some evidence that Bernie loathes himself, please share it with the rest of us.
We know he’s deeply humiliated.
synonyms: embarrass, mortify, humble, shame, put to shame, disgrace, chagrin
Yes, there’s evidence for that. It would make sense that such a person should have a leadership role in a party that just lost an election. It would be better than a cheerful sort of person who think that everything’s fine.
But the writer who called him a “socialist self-loathing Jew” probably means that he’s loathed himself for long time, probably most of his life, not just recently as the result of an election.
‘Bannon represents, he not unreasonably believes, the fall of the establishment. The self-satisfied, in-bred and homogenous views of the establishment are both what he is against and what has provided the opening for the Trump revolution. “The media bubble is the ultimate symbol of what’s wrong with this country,” he continues. “It’s just a circle of people talking to themselves who have no f—ing idea what’s going on. If The New York Times didn’t exist, CNN and MSNBC would be a test pattern. The Huffington Post and everything else is predicated on The New York Times. It’s a closed circle of information from which Hillary Clinton got all her information — and her confidence. That was our opening.”
‘It is clear when we return to our conversation that it is not just the liberal establishment that Bannon feels he has triumphed over, but the conservative one too — not least of all Fox News and its owners, the Murdochs. “They got it more wrong than anybody,” he says. “Rupert is a globalist and never understood Trump. To him, Trump is a radical. Now they’ll go centrist and build the network around Megyn Kelly.”
‘It is less than obvious how Bannon, now the official strategic brains of the Trump operation, syncs with his boss, famously not too strategic. When Bannon took over the campaign from Paul Manafort, there were many in the Trump circle who had resigned themselves to the inevitability of the candidate listening to no one. But here too was a Bannon insight: When the campaign seemed most in free fall or disarray, it was perhaps most on target.’
“The media bubble is the ultimate symbol of what’s wrong with this country,” he continues. “It’s just a circle of people talking to themselves who have no f—ing idea what’s going on.
Sounds a whole lot like old school Soviet era Pravda.
I knew a Russian guy who came to the US in the 90’s. He told me that pretty much everyone knew the the Soviet media did little more than spout pure BS. Much like ours does today.
We know he’s deeply humiliated.
synonyms: embarrass, mortify, humble, shame, put to shame, disgrace, chagrin
Not only did Sanders have the nomination stolen from him because “it was her turn”, he then cucked himself by going out and shilling for the witch.
Poor Barney. Poor poor Barney.
Bannon is giving himself plenty of credit here that he doesn’t deserve. Yes, Trump fired up part of a new base. But looking at the numbers, Trump won in large part because Hillary herself inspired millions of voters to *stay home.*
interesting statistic:
100% of Stein voters vote for Hillary –> nailbiter election but Trump would still have won.
100% of Stein voters + 25% Johnson voters vote for Hillary –> Hillary would have won, barely.
100% of Stein voter + 27% Johnson voters vote for Hillary –> enough to flip Florida, and Hillary would have won comfortably.
This was a third 9 (and fourth) party election.
Poor poor
Not true. Bought a vacation home soon after the primary.
interesting statistic:
Nonsense statistics. If Trump had gotten 60% of Johnson votes, he would have had 700 electoral colleges.
” because Hillary”
The way I see it, the Bush endorsement of Hillary was a mask off moment. Hillary was the candidate of the combined Republican and Democrat Establishment. Yet combined they could not trounce the malcontents.
It is incredible that some are still arguing R vs D like that has anything to do with what has happened. It is a sea change.
‘At the national level all 3 components of foreclosure activity were up around 25 - 30% each. Daren Blomquist, senior vice president at ATTOM Data Solutions, commented that a lot of this increase may be coming from newer mortgages Daren went on to point out how a lot of these foreclosures are coming from government programs.’
‘The loans used in this housing recovery that appear to be most susceptible to foreclosure are those such as FHA and VA with low down payments. Our data shows FHA and VA loans combined represent 49 percent of all active foreclosure inventory for loans originated in the seven years ending in 2015.’
Heck of a job Mel.
It’s gotta crash, given the amount of government-sponsored rigging that has been padded into home prices since 20012.
Our data shows FHA and VA loans combined represent 49 percent of all active foreclosure inventory for loans originated in the seven years ending in 2015.’
It keeps the NAR awash in cash as they make all their money at the point of sale. And the NAR has an extremely robust lobbying program.
I had not heard of this either…
—-
The Trump Fed
NY Sun | 11-18-16 | Editorial
President Trump will have a choice opportunity that few if any presidents have had — the immediate chance to fill two openings on the board of governors of the Federal Reserve. Only five of the board’s seven seats are now filled, a fact that has received scant attention in the press. Yet finding the right nominees will be important in setting the stage for monetary reforms needed to end the age of fiat money and put paid to the “false economy” of which Mr. Trump warned.
We are only one stop on the organ known as the “Great Mentioner,” but we see a fabulous field. It includes economist Judy Shelton, one of America’s most articulate advocates of sound money and a tribune of Jeffersonian principles; Steve Forbes, the author of a particularly clear book on the gold standard and a sage with few peers in his grasp of monetary history; and David Malpass, an economist who has been a senior economic adviser to Candidate Trump and a critic of the Fed’s zero-interest-rate policy.
Are there any fiscally-sober goy left in DC?
Housing prices in the DC Metro area depend on there not being any left…
One goy.
Two goyim.
Rand Paul, not a neo-con.
“to end the age of fiat money”
An imaginative fantasy.
Concerns of imminent apartment over-supply
Australian Broadcasting Corporation
Broadcast: 17/11/2016
Reporter: Hayden Cooper
The residential construction boom on the east coast of Australia has been the story of the past five years, but there are now serious concerns of an imminent over-supply.
Transcript
HAYDEN COOPER, REPORTER: Look around in Australia’s cities and you will see a skyline that’s changing fast.
Gone are the days of the quarter-acre dream. High density apartment living is the new reality.
TIM LAWLESS, CORELOGIC: For the past five years unit supply has started to ramp up substantially, particularly in markets like say Melbourne and Brisbane, where historically we haven’t seen such a densification trend.
KOSTA DRAKOPOULOS, PROPERTY DEVELOPER: The inner city is still pretty strong. Collingwood and Fitzroy are just off the charts.
HAYDEN COOPER: The numbers don’t lie. Apartment construction underway at the end of the June quarter this year reveals the Eastern States in overdrive.
Fifty-five thousand new units being built in New South Wales. Forty-six thousand in Victoria. Thirty-one thousand in Queensland.
Tens of thousands more have been approved.
TIM LAWLESS: That means the pipeline is now probably full. What we’re seeing now is all those approvals are moving through to the commencement and the construction phase, so the next two years we should start to see a lot of these off the plan unit sales coming into the settlement period.
And that will be the real test for the apartment market is how many of those units actually don’t proceed through to a settlement.
HAYDEN COOPER: The skyline full of cranes is a dead giveaway of how good things have become for Australian property developers.
Melbourne’s Kosta Drakopoulos started out with nothing ten years ago. Now he’s rocketed into the BRW young rich list with a fortune of at least $60 million. His specialty lately? Small buildings with fewer than 60 apartments.
KOSTA DRAKOPOULOS: It was a slug, you know. But slowly, slowly mate we picked up a job here and there and they went well financially and it sort of escalated into a multimillion-dollar sort of business both in the construction and development side.
So and it’s still going pretty strong today.
HAYDEN COOPER: Along with Brisbane, the talk of a bubble in the Melbourne market is constant.
Kosta Drakopoulos sees the effects on the ground.
KOSTA DRAKOPOULOS: You go to an auction and it gets flooded by little syndicates, you know, maybe three accountants or three solicitors. They pay 10 per cent more than the site is worth.
I mean, good luck to them. They might start, we’re in the industry of making money in property. That’s our bread and butter.
They can go back to their accounting jobs and get their salaries or however they’re set up but I have competed against a lot of that in the last three or four years which has made it hard to purchase but they’re still out there.
http://www.abc.net.au/7.30/content/2016/s4577092.htm
Good times!
The Nasdaq has hit a new intraday all-time high.
The stock index hit 5,345.40 at 9:33 a.m. ET, just after the open, breaking through the previous intraday record of 5,342.88 set earlier this year.
Yellen’s Ponzi markets, fueled by nine years of financial crack cocaine, are hitting terminal velocity.
You too can buy low, sell high. (ps- now is high)
crushing.housing.losses.
extraordinary.house. appreciation
Are u surrounded in natty lite cans again?
What about apartments? Will there be crushing apartment losses too?
I am contributing to the ” go shopping” , picking up a 60″ TV at Costco tomorrow. They are soooo cheap now. Now I need to update my 10 yr old receiver. Any audiophiles on here?
polk? Bose?
what kind of tv did u get? I have a couple vizios and have been happy.
Receiver - Denon AVR-S720W
Polk 75T - great reviews
rears are Athena
center - Energy
Went with the Samsung at Costco. UN60KU630DFXZA <$700
I got a Samsung smart HDTV last year, really nice picture but you probably want to refer to the link below. They call it the ‘Soap Opera Effect’ I just thought the movies looked like videos.
How to Turn Off the ‘Soap Opera Effect’ on Your New TV
David PogueYahoo Tech•July 23, 2015
On Samsung TVs, it’s Auto Motion Plus.
https://www.yahoo.com/tech/turn-off-the-soap-opera-effect-on-your-new-tv-124837660749.html
The link below tells you what it is, something to do with how many frames per second movies and video are shot at, I didn’t really care I just wanted my movies to look like movies so I turned off the Auto Motion Plus.
What Is the Soap Opera Effect (and How to Make It Go Away)
By: Adrienne Maxwell, January 12, 2015
http://hometheaterreview.com/what-is-soap-opera-effect-and-how-to-make-it-go-away/
“…picking up a 60″ TV at Costco tomorrow.”
Will there be anything on it?
Greenwood Village, CO Housing Prices Crater 12% YoY
http://www.zillow.com/greenwood-village-co/home-values/
[Steve Bannon] absolutely — mockingly — rejects the idea that this is a racial line. “I’m not a white nationalist, I’m a nationalist. I’m an economic nationalist,” he tells me. “The globalists gutted the American working class and created a middle class in Asia. The issue now is about Americans looking to not get f—ed over. If we deliver—” by “we” he means the Trump White House “—we’ll get 60 percent of the white vote, and 40 percent of the black and Hispanic vote and we’ll govern for 50 years. That’s what the Democrats missed, they were talking to these people with companies with a $9 billion market cap employing nine people. It’s not reality. They lost sight of what the world is about.”
http://www.zerohedge.com/news/2016-11-18/steve-bannon-interviewed-issue-now-about-americans-looking-not-get-f—ed-over
Exactly. Do you have any idea how many people have accused me of being “not a feminist”, just because I voted for Trump? I tell them “You’re right; I’m not a feminist. Im a Feminazi!”
It makes no sense to equate the Donald with social issues. He hasn’t focused on them at all. It’s been all about economics. I have no clue how this will play out for real estate, but increasing rates should surely help moderate out-of-whack prices.
Dang right, Auntie!
Trump may not have talked much about social issues, but the choice of running mate suggests it will be a huge focus in the next 4 years. Trump wouldn’t have won if anti-abortion, anti-gay marriage evangelicals hadn’t turned out in droves. We’d like to think the election was a major repudiation of globalism, but social issues are what motivate people to stand in line to vote. The open Supreme Court seat and a greedy, unlikable, dishonest Democratic candidate were IMO the decisive factors.
Money quote -
“That’s what the Democrats missed, they were talking to these people with companies with a $9 billion market cap employing nine people. It’s not reality. They lost sight of what the world is about.”
Interesting interview. Would rather them make infrastructure improvements by cutting government and foreign entanglements rather than borrow at low interest rates. Issue debt free money, end the charade of the federal reserve.
Just a few days ago Harry Reid criticized white nationalists and someone made a comment here thinking that that term referred to white Americans proud of their country. According to such logic, Bannon is asserting that he’s not white.
The HBB did not make the list of “fake news” sites generated by a Comrade of Proven Worth and indoctrinator of precious snowflakes, despite its high truthiness quotient. We need to step up our game.
http://www.zerohedge.com/news/2016-11-18/meet-leftist-professor-who-wrote-hit-list-fake-news-sites
A WHITE CHRISTMAS INDEED!
no complaints
Not yet. Trump doesn’t move to white house until mid-January.
LOL
“Trump doesn’t move to white house until mid-January.”
A cut in standard of living; he should telework.
Sign, sign, everywhere a sign
Blockin’ out the scenery, breakin’ my mind
Do this, don’t do that, can’t you read the sign?
http://www.nydailynews.com/news/politics/mayor-de-blasio-aide-ripped-racist-facebook-photo-article-1.2876568
The superheated London real estate bubble is outstripping what renters are prepared to pay.
http://wolfstreet.com/2016/11/18/house-price-bubble-high-rents-in-prime-london-bank-of-england/
It was a lot easier for globalists to run their rackets when 95% of the voters were stupid.
http://www.dailymail.co.uk/news/article-3948808/We-not-letting-EU-German-finance-minister-warns-Britain-paying-Brussels-coffers-2030.html
crushing.multifamily.housing.losses.
ECONOMICS
Even Trump Is a Keynesian
NOV 18, 2016 9:39 AM EST
By Noah Smith
What does the election of Donald Trump mean for macroeconomics? Above all else, it means that the half-century-long challenge to Keynesian ideas is over. The insurgents lost.
https://www.bloomberg.com/view/articles/2016-11-18/even-trump-is-a-keynesian
I object! Trump is Trumpian.
We are all Keynesians now (except for some of us HBB regulars!)…
Weston, CT Housing Prices Crater 11% YoY
http://www.zillow.com/weston-ct/home-values/
The Truth About Fake News
Paul Joseph Watson
https://www.youtube.com/watch?v=uyS3Ghevf2I
…and I thought everybody wants to live there….
San Fran Home Sales Crash To Lowest Level Since 2008 As Pricing Reset Gets Underway
Are you an uneducated American?
Zillow uhs shill site shows 7 yr b/e vs renting
Add tax increase and 25%but increase and
Kaboom
San Fran Home Sales Crash To Lowest Level Since 2008 As Pricing Reset Gets Underway
http://www.zerohedge.com/news/2016-11-18/san-fran-home-sales-crash-lowest-level-2008-distressed-property-sales-fall-36-yoy
How long will it take for the west coast price correction tsunami to inundate San Diego?
“The whole recovery is based on cheap money. Take that away and you will have an asset implosion.”
Do u like picking up pennies in front of a steam roller?
San Francisco home sales fall to lowest level since the 2008 crisis as fewer and fewer creditworthy FBs can be found to purchase insanely overpriced SF houses.
http://www.housingwire.com/articles/38557-san-francisco-home-sales-fall-to-lowest-level-since-crisis?utm_source=dlvr.it&utm_medium=twitter&utm_campaign=housingwire
“creditworthy FBs”
That’s oxymoronic.
Rising mortgage rates could put a damper on overheated housing markets.
http://www.businessinsider.com/mortgage-rates-rise-2016-11
will we have massive asset deflation under trump?
Don’t know. So far it seems like the stock market is heading up…
someone has got very good at creating a short covering rallies with some buying at the most precise times.
“Bond carnage” is hitting mortgage rates. When will Yellen the Felon be forced to hike interest rates as well?
http://wolfstreet.com/2016/11/19/bond-carnage-hits-mortgage-rates-but-this-time-its-real/
SHE IS BLUFFING QE4 COMING THEY HAVE TO KEEP RATES LOW
Meanwhile, the tech oligarchs are doing more stock buybacks with billions in free FedBux.
http://www.businessinsider.com/facebook-is-doing-a-6-billion-stock-buyback-2016-11
big @ss fad
Another tantrum today Poet?
Good news! I’ve located Sweet William.
https://www.theburningplatform.com/2016/11/19/the-wambulance/
RATES GO UP= PRICES DOWN
Not always…it depends. Some times rates go up BECAUSE prices are going up. Nobody wants to hold on to long-term debt when inflation is a raging.
Trump may pick a real warrior to lead the Pentagon instead of a perfumed prince who’s main priority is turning our Armed Forces into a feminized social eningeering labratory.
http://www.businessinsider.com/james-mattis-trump-defense-secretary-2016-11
But now the stock market seems to be saying something very different. The ultra-low interest rate policy of the Federal Reserve cannot alone support growth at the rate needed. Rather, investors apparently have concluded that the economy can grow faster if the deficit grows, even if it leads to higher inflation and interest rates, and even the likelihood of higher rates from the Fed. This is exactly the fiscal medicine many liberals had been advocating.
But let’s be clear. Trump is not a Keynesian. He is taking a page straight out of Reaganomics. When Reagan came to office, he embarked on a huge tax cut. At the same time, finance was given a free hand and business was deregulated aggressively. As Reagan’s advisers argued, lower tax rates and fewer regulations would create more incentives for business to invest and consumers to spend, and therefore the federal budget deficit will not rise significantly as incomes and tax receipts grow. But while GDP grew under Reagan, unions were undermined and the minimum wage, adjusted for inflation, was mostly allowed to sink. Above all, incomes became much more unequal, the beginning of an income gap, that has continued growing, with only a couple of interruptions until recently, and that has specifically hurt the white working class. The top 1 percent now earns 18 percent of all income—double what it did when Reagan entered office.
Like Reagan, Trump says he will undertake large tax cuts for businesses and individuals. According to the Tax Policy Center, these cuts could reduce tax revenues by $7 trillion over the next ten years. Yet he has offered few plans about how he might cut the budget to reduce the flow of red ink. To the contrary, he plans to raise military spending (like Reagan did), embark on a huge infrastructure program, and—encouragingly—promises not to cut Medicare or Social Security. Instead Trump—supported by one of his main economic advisers, Peter Navarro of the University of California at Irvine—is claiming, like Reagan before him, that the tax cuts will produce a huge pop in economic growth, and therefore that tax revenues will rise rapidly.
But Republicans rarely if ever acknowledge, or even understand, that Reaganomics didn’t work. Paradoxically, it was the long-term effects of Reagan’s programs that contributed greatly to the to stagnating wages for the working class that in turn contributed to Trump’s victory. In fact, Reagan was forced to raise taxes significantly a couple of years later, as the persistently high federal budget deficit alarmed business and investors, as it likely will under Trump, according to almost all economic projections.
http://www.nybooks.com/daily/2016/11/18/trump-deficit-what-market-is-really-saying/
I hope we aren’t in for a reprise of more Reagonomics. Deficit spending is a crime against future generations.
Whether or not you like it, this seems to be where we are heading, soon to be heralded by Trump’s announcement that the old plan is a new one.
One thing in common between DJT and HRC is their shared faith in massive centrally-planned government intervention in the economy.