This page has been archived and commenting is disabled.

"Boomerang Foreclosures" Are Back As Bernanke's Second Housing Bubble Begins To Pop

Tyler Durden's picture




 

Something curious happened in California in January: the foreclosure process virtually ground to a halt. Specifically, as RealtyTrac describes it, "the downward foreclosure trend in California accelerated into hyper speed in January, decisively shifting the balance of power when it comes to the nation’s foreclosure activity", shifting it in favor of homeowners and effectively preventing banks from sending out Notices of Default (NOD) repossessing homes whose owners no longer pay their mortgages. This was the result of the Homeowners Bill of Rights, or legislation which "extends many of the principles in the national mortgage settlement — including a prohibition on so-called dual tracking and requiring a single point of contact for borrowers facing foreclosure — to all mortgage servicers operating in California. In addition the new law imposes fines of up to $7,500 per loan for filing of multiple unverified foreclosure documents." The outcome of this law as it propagates through the market can be seen in the chart below: in January 2013, California foreclosure starts are now down to levels not seen since 2005!

And for the first time since 2006, Florida properties with foreclosure filings surpassed those in California.

As a result of this latest artificial intervention (the first one of course being the Robosigning fiasco which hit in November 2010 and which resulted in the wristslap mortgage settlement whose sole purpose was, again, to give a legitimate reason to boost shadow inventory) preventing underwater properties in the state with the most impaired mortgages and the most "underwater" housing, from hitting the market, the outcome is simple: a direct, explicit subsidy by US banks to prop up the housing market.

As we explained before when we clarified the concept of "foreclosure stuffing", as a result of clogging up the foreclosure pipeline, where millions in homes will not clear the market for years, as even less inventory will enter and exit the foreclosure process, the inventory of available homes declines even more, pushing prices even higher, but not due to a rise in demand, but simply due to a subsidized contraction in supply.

What else happened in January as a result of this latest intervention in the California housing market:

  • U.S. foreclosure starts were down 11 percent from the previous month and down 28 percent from a year ago to the lowest level since June 2006 — a 79-month low.
  • U.S. bank repossessions (REO) decreased 5 percent from the previous month and were down 24 percent from January 2012 to the lowest level since February 2008.

This is all shown dramatically in the next chart, which demonstrates that as a result of the latest crunch in California foreclosure activity, foreclosures at the national level, both starts and completions, in January plunged some 30% below year ago levels.

Note in the chart above the dramatic contraction in all foreclosure activity starting in November 2010 - the month when the "Linda Green" robosigning scandal so conveniently broke out. Because while the punishment to the banks as a result of the "mortgage (robo)settlement" was laughable, what it did do was provide a perfectly legal cover to reset the foreclosure activity to a new baseline: from 330K per month on average to just 210K currently, and in the process keep some 3.2 million additional properties (using a simple back of the envelope analysis) in the shadow backlog, and thus out of the market supply, resulting in what some still erroneously dub a "housing recovery."

Two other charts that show how exogenous intervention reduces the supply of housing availability for sale, are the charts of foreclosure starts, and completions, both of which have plunged to multi-year lows.

Yet while informative, none of the above, which frequent readers are well aware of, is the focus of this story.

What is, is that as always happens when central planning is involved, when one tries to stop a leak here, two new leaks appear elsewhere. Because while the Homeowners Bill of Rights managed to grind foreclosure activity to a halt in California, what is happening elsewhere is the dreaded Boomerang Foreclosure phenomenon, or, said simply, redefaults.

In other words, those homeowners who tried to take advantage of the most recent housing bubble mania created over the past year by the unholy trinity of the Fed (open-ended liquidity, REO-to-Rent programs, and $40 billion in monthly purchases of MBS), foreign buyers (who launder illicit money courtesy of the NAR's anti-money laundering exemption and park it in ultra luxury US real estate, usually sight-unseen) and of course, the banks, who with the aid of the robosigning fiasco and the Homeowner Bill of Rights, have over the past year subsidized the housing market by keeping non-cash flow generating mortgages on their books in exchange for a wholesale subsidizied rise in housing prices, ran out of cash before they could flip the "hot potato" that is the house they just bought, to a greater fool, and since they had no actual cash to pay the mortgage with, and with no fear of retribution, handed it right back to the bank.

As the chart below shows, while California foreclosure activity is collapsing, things in other places are starting to indicate that the second housing bubble blown by Bernanke in 5 years, is finally starting to crack:

RealtyTrac has more:

  • Scheduled foreclosure auctions increased  from the previous month in 26 states and the District of Columbia, hitting 12-month or more highs in several key judicial foreclosure states, including Florida, Illinois, Pennsylvania, and New Jersey,

In other words, ignore the sad and very much artificial reality of California where the real estate market is no longer indicative of what happens in a free market, and instead keep a close eye on those states where all artificial attempts to crush foreclosure starts and completions have been used up, and where reality is about to come back with a bang.

Because for all the propaganda, and all the artificial attempts to juice the market, the sad reality is that the US consumer has less and less disposable cash flow, and when one adds such $1 trillion + debt items as student debt (now greater than all credit card debt combined), has a soaring debt load to add.

The only question is how long until the funding to prop up this latest artificial housing market subsidy runs out, and banks realize that the time to dump all those millions of underwater homes on their books into the market is now.

Because, like with everything else, those who sell first, sell best.

Source: RealtyTrac

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 02/14/2013 - 13:33 | 3243513 Banksters
Banksters's picture

Dear leader said in the SOTU speech that home prices were rising.   Therefore, the economy is now on double plus good standing. 

 

Europe’s brittle economies shrank at their fastest rate since the collapse of Lehman Brothers four years ago, official data for the fourth quarter of 2012 showed on Thursday, with both strong and weak countries falling short of expectations.

 

Dear leader said DECOUPLING BITCHEZ!

Thu, 02/14/2013 - 13:36 | 3243533 El Hosel
El Hosel's picture

What about all those foreclosures sitting on the side lines..... waiting to break even.

Thu, 02/14/2013 - 13:41 | 3243554 Banksters
Banksters's picture

Put yourself in a holy position before readingt the dear leaders words.

 

From the SOTU.  Ready?

 

Part of our rebuilding effort must also involve our housing sector. Today, our housing market is finally healing from the collapse of 2007. Home prices are rising at the fastest pace in six years, home purchases are up nearly 50 percent, and construction is expanding again.

But even with mortgage rates near a 50-year low, too many families with solid credit who want to buy a home are being rejected. Too many families who have never missed a payment and want to refinance are being told no. That’s holding our entire economy back, and we need to fix it. Right now, there’s a bill in this Congress that would give every responsible homeowner in America the chance to save $3,000 a year by refinancing at today’s rates.

 

May your farts aerosolize in your blood stream for questioning  dear leader. 

Thu, 02/14/2013 - 14:07 | 3243629 Zymurguy
Zymurguy's picture

yeah, he's been smoking too much Choomer with that guy from NAR.

Thu, 02/14/2013 - 15:13 | 3243832 Freddie
Freddie's picture

I talked to an old guy who is semi-retired with a RE and mtg license about 10 months ago.  He said the only people getting turned down were very light skinned people especially at BAC.  He said even if they had 80 to 90% down and good credit.   Others like O could sign and drive.

Thu, 02/14/2013 - 18:14 | 3244530 DosZap
DosZap's picture

Right now, there’s a bill in this Congress that would give every responsible homeowner in America the chance to save $3,000 a year by refinancing at today’s rates.

PS: I left off the part about taking away your Motgage deductions, and City/County/School Tax deductions also.

That $3k, will go a L_O_N_G way.

Thu, 02/14/2013 - 18:39 | 3244655 neidermeyer
neidermeyer's picture

With the FHFA owning 90%+ of the mortgages , 100% of which are uncollectible , they just want to give the sheeple a reason to slit their own throats by signing new papers rather than go on a payment strike and file a QT suit.

Thu, 02/14/2013 - 13:35 | 3243518 rogeliokh
rogeliokh's picture

We must be all idiots.. World-wide money printing going on at unprecedented levels. Never in History counterfeiting operation was so large and so widely spread out. And yet GOLD going down. A cannot believe this Bullshit, They telling US go buy Netflix with 50000000000 P/E, Gold is no good for you. 6-month downtrend already and only manage to knock $150-$160/oz.. Previous correction took 4 month. Sick and tired watching this manipulation day after day. They'll try to knock 1625 today or tomorrow for sure. Yeah, I get it already, Gold is going down, cause we got robust economic recovery, right. Recovery around Wall Street, CNBC studio and Washington DC only.

Thu, 02/14/2013 - 23:52 | 3245410 BeerBrewer09
BeerBrewer09's picture

the day will come. it may be ugly, but it will come.

Thu, 02/14/2013 - 13:34 | 3243520 disabledvet
disabledvet's picture

The media isn't going the financial now ups abroad because my guess is they don't want people to think "all that foreign money has dried up." sorry but income producing assets are King in this world...and the totality of real estate is in fact the exact opposite of that. Since no one will touch Treasuries ("no income") the only answer is still equities. But I think "shakedowns of Apple" are your tell that cash flow is drying up faster than sweat in the Sahara.

Thu, 02/14/2013 - 13:36 | 3243534 Pareto
Pareto's picture

Excellent article.  Helps one understand contradictions and what D. Stockman has been saying all along.

Thu, 02/14/2013 - 13:36 | 3243537 Lord Of Finance
Lord Of Finance's picture

The only thing that will burst this humongous hemmrhoid will be a rise interest rates. Nothing else can shatter the illusion of this manipulated market. Bond market cracks seem to appear more frequently lately, but NOTHING  will change until it shows signs of blood. 

Thu, 02/14/2013 - 13:46 | 3243567 El Hosel
El Hosel's picture

Its getting dicey now... "The Market" has not made a new high today, very  suspicious.

Thu, 02/14/2013 - 13:37 | 3243538 Payne
Payne's picture

Banks dump the loan as soon as they can get an approved loan mod.  They are selling off portfolios to whatever sucker will buy.  

Fri, 02/15/2013 - 01:27 | 3243626 Lord Of Finance
Lord Of Finance's picture

. . . and maybe its those sucka's who are the ones sellin their silver after they realized they be a sucka.

Thu, 02/14/2013 - 13:42 | 3243556 chunga
chunga's picture

Over on the right coast Attorney Glenn Russell is kicking ass and taking names.

Last month in the MA SJC...

Huge Win for MA! HSBC vs Jodi Matt Jan. 14 2013 Update

Then this past Tuesday in the First Circuit Court...(this is a precedent as far as I know)

MA First Circuit Court of Appeals Remands Foreclosure 2/12/2013

This dude's got it going on. Fuck the black hat bankers and their foreclosure mill lawyers.

Fuck 'em good.

Thu, 02/14/2013 - 13:46 | 3243568 Seasmoke
Seasmoke's picture

i am fighting BOA on my own, for switching my original account number and having no record of it today

Thu, 02/14/2013 - 13:56 | 3243596 chunga
chunga's picture

Rock and roll...just have to read, read, study.

Their lawyers are mostly lazy, dishonest, sloppy, hacks.

I've got a ton of shit on scribd. (all free)

I try my best to upload when I can.

Thu, 02/14/2013 - 16:13 | 3244007 centerline
centerline's picture

I hope to never need it, but I have been collecting such information for quite some time.

If you get it organized, maybe see if TD or a moderator here would post up the list.  I, for one, would download/print it all.

Never hurts to be prepared.

Thu, 02/14/2013 - 16:30 | 3244066 chunga
chunga's picture

Here's one of my personal favorites.

Bank of America Responds to Moynihan Lawsuit - Cites Criminal Act Committed By Rogue Foreclosure Mill Harmon Law

The problem with working as a Financial Predator for other Financial Predators is sometimes they eat YOU.

"Let me be clear, I am going to file an action for Mr. Brady in the Federal District Court for the District of Rhode Island and I am going to name you a Defendant. Let me stress that I do not operate from a position of fear, nor do I stand in awe of you or your company. The time has come for you to be called to task for your role in the destruction of my America."

cc: chunga (sent to fat-ass Moynihan and AG)

LOL!

Thu, 02/14/2013 - 13:45 | 3243563 bonzo112358
bonzo112358's picture

Check out what 700k+ gets you in some parts of socal.  http://www.doctorhousingbubble.com/culver-city-flippers-paradise-culver-city-inventory-incomes-and-real-estate-prices/  More shocking are some of the commenters.  The hubris of some of the people that believe housing is priced correctly because homes are selling is just asinine.  Reminds me very much of AAPL shareholders back in September of last year when AAPL was going to $1,000. 

Thu, 02/14/2013 - 13:51 | 3243582 El Hosel
El Hosel's picture

$769 a sq ft  and all the apple pie you can eat.

Thu, 02/14/2013 - 13:47 | 3243570 yogibear
yogibear's picture

Bubble Bernanke and the Fed buy all the houses as well. Make the US a North Korea. A central planned and state owned economy. 

Bernanke and the Fed's plan is to install a banking tyrant.

Thu, 02/14/2013 - 13:47 | 3243571 jim249
jim249's picture

Bullish. Time for markets to rally!

Thu, 02/14/2013 - 13:50 | 3243579 GraveyardSpiral
GraveyardSpiral's picture

So even with all of the talk about INFLATION, this single event (increasing foreclosure starts) could be the intial DEFLATIONARY downdraft that pulls all other prices down (including spending) and will provide the neccessary "catalyst" to allow the Bernank to launch his squadrons of helicopters, no?

Dr. Engali & Redpill & Hedgless Horseman: I'm interested in your comments

Thu, 02/14/2013 - 14:34 | 3243683 Dr. Engali
Dr. Engali's picture

I agree with your statement/ question, but I don't believe that it will happen. There is no way that the fed is going to let banks make a massive dump of houses in the market after all they have done to prop up the market.It's hard enough to get comps for apprasails now, can you imagine what it would be like with a massive housing dump? The whole country would be Detroit. In my opinion fed will continue to buy up  mortgages and free up the banks books to keep the process as slow as possible. They may accelerate in some markets and slow it down in other markets..depending on inventory and how quickly houses are moving. The deflationary event that gets the fed printing is going to come from some place where we aren't looking.

 

Edit...farm property is going to be interesting to watch. Everybody is piling into it and land prices have been soaring lately.

Thu, 02/14/2013 - 15:40 | 3243910 MachoMan
MachoMan's picture

The farm land bubble will break mercilessly...  I like it better than RRE and CRE in general, but it's still bublicious as hell.  It hasn't been too many decades ago that sections upon sections were bought at tax sale around here... 

The big issue with the farm land bubble is quality of farm...  particularly water.  Historical bases of 50 years don't mean shit if you don't get any rain for the next decade.  Oops.  (among other issues).

Thu, 02/14/2013 - 18:41 | 3244666 GraveyardSpiral
GraveyardSpiral's picture

Thanks for the feedback doc. It sounds like you, too, expect a deflation event first as an excuse to trigger the nexr Ctrl-P command.  

Thu, 02/14/2013 - 23:47 | 3245387 jim249
jim249's picture

You are oh so right. A part of HAMP allows banks to get subsidzed by us taxpayers in short sales. There is no rush by the banks to dump properties onto the market. Here is a link to a Chase document for short sales.

https://www.chase.com/ccpmweb/chf/document/chase_hafa_eligibility_matrix...

 

"Home Affordable Foreclosure Alternative (HAFA): A part of the Making Home Affordable (MHA) Program that provides financial incentives to borrowers and Chase for utilizing a short sale or Deed-in-Lieu to avoid a foreclosure on an eligible loan"

Thu, 02/14/2013 - 13:52 | 3243585 boeing747
boeing747's picture

FYI, most of 'non-performing' home owners don't go thru 'foreclosed' but rather 'short sale' in Bay Area. So data will show 'foreclosed' dropping, understand?

Thu, 02/14/2013 - 13:58 | 3243602 Sigep0612
Sigep0612's picture

Every politican claims things are getting better in the Real Estate world.   I think things are getting better but not as rosy as the media or gov reports.   1) Zillow reports that over 30% of home sales are in cash.  Who has that kind of cash?  Investors and Foreigners.   What does that mean?  Rents are going up.  2) For individuals, Underwriting guidelines to obtain a mortgage are tight.  There is no question that Fannnie and Freddie have tightened the reins and if you have good credit and want a new mortgage or refinance you're goning to jump through hoops.  3) Fed is buying $85B in mortgage back securities every month.   The Fed is the only buyer of mortgages in the secondary market.  Scary.  Rates need to increase before investors come in to replace the Fed.   

The reality is that if Banks dumped more foreclosures on the market it would depress prices and frankly, I don't know that there would be buyers.  The entire country could turn into Detroit.   

Conclusion:  Not as bad as it was from 2007-2010 but its going to take a long time before there is a bona fide housing recovery.     

Thu, 02/14/2013 - 14:10 | 3243636 ParkAveFlasher
ParkAveFlasher's picture

Not with you on point #1:

1) Cash buying has no significance to rent rates.  That statement has no logic to it.  Cash buying happens for people who want to park their cash for quite a few years in a (thanks to short sales, foreclosures, and baby boomers retiring and downsizing and calling it a life) reasonably priced piece of house.  Once they drop the cash, they have equity, in fact they can afford to lower rents better than those owners who must pay a mortgage.  Thus, 100% equity buys gives you leverage in pricing your unit rentals competitively.  Rent rates conform to area economies and demographics. Rich owners may correlate to rich renters but there is no causal relationship.

2) I agree.  But, let's watch this government fuck that up.

3) This will improve as long as point 2 improves.  If point 2 doesn't sustain, this backslides.

Thu, 02/14/2013 - 18:20 | 3244565 Blankenstein
Blankenstein's picture

This sounds like a page out of the NAR playbook.  That 30% of cash buyers no doubt includes the Hedge Funds buying in bulk.  Who are these specuvestors going to flip this junk too?  There are more foreclosures in the pipeline and still a large amount of shawdow inventory, definitely not a tight supply.  

And tougher lending standards?  Probably, considering they used to loan out money to anyone who could fog a mirror.  So we should go back to the time of no docs, subprimes and Option ARMs?  

Houses are still overpriced in many areas and have yet to reflect market fundamentals.  People paid such high prices for these crap shacks that they don't have a lot of money to spend on other things after feeding the monthly mortgage and property taxes.  This lack of extra spending money affects the retail and restaurant business in the area.  Prices that don't reflect incomes are not sustainable and are a drain on the economy.    

Thu, 02/14/2013 - 14:05 | 3243623 Sweet Pea
Sweet Pea's picture

OK how does one "launder" money simply by spending it on stuff?  Doesn't it have to be disguised as legit revenue?

 

Thu, 02/14/2013 - 14:21 | 3243668 Village Smithy
Village Smithy's picture

You have "dirty money", for example proceeds from drug trafficking, illegal weapon sales, prostitution, human trafficking etc. You come to America and buy an expensive house. No one involved with the transaction is required by law to ascertain where the money came from, so they don't. Now you are rid of your "dirty money" and have replaced it with a nice clean title on some real estate. You can rent it out for a nice "clean" income stream or sell it and in effect replace your dirty for clean.

Thu, 02/14/2013 - 19:16 | 3244789 Sweet Pea
Sweet Pea's picture

I thought the lender or title co had to report any large amt of cash tendered, which would trigger some scrutiny.

Thu, 02/14/2013 - 20:04 | 3244908 Son of Loki
Son of Loki's picture

I read the Aliens wire it in so the title company/realtor don't report it...it's one of those NAR lobbying successes ... another loophole that screws Americans and favors The Aliens. I learned that from one of those semi-nars.

Thu, 02/14/2013 - 15:45 | 3243931 Catullus
Catullus's picture

Yeah. You buy the house and sell it and then the revenue is from the sale of a home.

Thu, 02/14/2013 - 18:50 | 3244707 neidermeyer
neidermeyer's picture

I sold my house to the Russian mob in 1997 , they rolled into town , called a few real estate managament companies and bought about 70 houses that week for cash, probably about $5-6M total outlay. Governments don't track rental income too closely , if you're a foreigner and just forget to file who's to know? .. sell to finish the cycle.

Thu, 02/14/2013 - 14:07 | 3243631 847328_3527
847328_3527's picture

Many people are so brainwarshed by MSM it's almost silly.

Thu, 02/14/2013 - 14:10 | 3243632 thismarketisrigged
thismarketisrigged's picture

can someone please fucking explain to me why this fucking market is flat today with all the news about europe, including germany, the 1 country that was thought to be doing ok compared to the rest, are all fucking contracting and furthering themselves into deep recessions, and yet this mother fucking market is not fucking down triple digits, but fucking flat?

 

i know my user name says it all, but geez, i didnt think it can be this blatantly obvious

Thu, 02/14/2013 - 15:44 | 3243926 jim249
jim249's picture

The markets are not down because they are not allowed to drop. You see the rapid drops on opening and then a snap back to trade trendless for the rest of the day. This has been going on for years. The markets are now centrally planned just like the rest of the economy.

Thu, 02/14/2013 - 21:57 | 3245145 Jacque Itch
Jacque Itch's picture

It's that simple

Thu, 02/14/2013 - 14:24 | 3243657 jtz5
jtz5's picture

 

Any real estate attorneys out there that can help me determine if there is potential litigation against either the original appraiser or my bank that still owns the original loan?

 

We bought a house in 2005 from a For Sale By Owner.  He had the house listed at $519k with a sq footage of 2065.  My bank ordered an appraisal and the appraiser matched the preliminary price agreement we had with the seller at $455k, but the appraiser listed the house at 2326 sq ft.

 

Fast forward to end of 2012 and we are in the process of trying to re-fi the mortgage from the same bank.  The bank ordered an appraisal and it came back at $255k with a sq footage of 1825.  The appraiser did not use any comps in our neighborhood that are more relevant than others since our neighborhood tends to command premium pricing because of lot size and historical value.

 

Now that our house is 501 sq ft less than what we thought in 2005, can we pursue legal action against the 2005 appraiser or bank?  It seems we paid $98k too much based on the incorrect sq footage appraisal ($195/sq ft x 501).

 

I know appraisals are meant more for informational purposes, but our sq footage estimate was off by 29%.  It seems like that is negligence to me?

 

Thanks for any responses.

 

Thu, 02/14/2013 - 14:34 | 3243704 IridiumRebel
IridiumRebel's picture

I am no lawyer, but it is a bank you are taking on so you are fucked as all cards are stacked in their favor. I hope it works out...

Thu, 02/14/2013 - 14:36 | 3243707 jim249
jim249's picture

A listing always says " buyer to verify all information". You did not do your homework.

Thu, 02/14/2013 - 14:48 | 3243742 dick cheneys ghost
dick cheneys ghost's picture

What is the sq footage of the home? Check with the city/county assessor, or measure it yourself..........

 

If the seller misrepresented the sq footage, I would sue him.

 

In hindsight, this should have been checked before closing..........

Thu, 02/14/2013 - 16:17 | 3244013 jtz5
jtz5's picture

Well, the city has sq footage of 1805 listed on their books, but when we first started talking to the previous owner, he said they would have a lesser amount that what he claimed of 2075 since he had done some rennovations that added sq footage and didn't pull a permit and the city hadn't recently assessed the improvements.

Once the bank ordered the appraisal, our thought was that the appraiser would verify or deny the sq footage...why would we think we needed ANOTHER appraiser to confirm sq footage when that is what we wanted the first appraiser to do.  I can understand if the appraiser was off +/- 10% on sq footage, but not close to 30%.

Thu, 02/14/2013 - 17:37 | 3244416 dick cheneys ghost
dick cheneys ghost's picture

Can of worms...........The question is, is the addition LEGAL?...............the second appraiser, who appraised it as a 1800 sq ft home is going by the book........The addition was not permitted and may not be legal.........the addition should have been mentioned in the appraisal report, but it does not necessarily warrant any value.........

 

The first appraiser/appraisal was wrong and was just trying to get the deal done.......good luck going after him/her. Check with state licenseing guidelines........I think an appraiser has to hold his paperwork for 5yrs, but dont quote me on that.

 

If I were you, I would talk to a lawyer and see if it is worth going after the seller. He built an addition with no permits and then misrepresented the size of the house when selling it.

 

Best of Luck..........

 

 

Thu, 02/14/2013 - 20:50 | 3245003 BurningFuld
BurningFuld's picture

If I were you I would buy a tape measure and measure it myself.

Fri, 02/15/2013 - 05:40 | 3245695 RafterManFMJ
RafterManFMJ's picture

I graphed your trend line; be careful because if you measure your house just 3 more times it will cease to exist.

Thu, 02/14/2013 - 14:59 | 3243775 Notarocketscientist
Notarocketscientist's picture

1.  Tear all copper wiring out of the walls, and remove all fittings, toilets, and anything else of value in the house and sell all.

2.  Buy a case of Black Label and invite your mates over for a bender.  Do some lines of coke to loosen up the bowels then ask them to piss and shit everywhere.  Fling the shit at the walls. 

3. When the crew is good and wrecked break out the sledge hammers and bash the fuck out of the walls.

4.  Drive a car onto the lawn and tear the fuck out of it.

5.  Throw the keys in the ditch and drive away.

6.  Send a letter to your bank and appraiser telling them to get fucked and eat shit

Thu, 02/14/2013 - 15:10 | 3243820 darteaus
darteaus's picture

Good advice for kids moving out of their parent's house to go to college.

Fri, 02/15/2013 - 04:35 | 3245658 The Navigator
The Navigator's picture

Good advice for anyone sending their keys to Ben FU Bernanke.

Thu, 02/14/2013 - 23:37 | 3245375 helping_friendl...
helping_friendly_book's picture

Caveat Emptor bitch!

Appraisers  serve the loan originators and lenders. Thery get the deal done giving you max pain.

They ask what the sale price is and then bring their appraisal in so you will have to pay PMI.

Always tell your lender you want to borrow twice as you actually do.

I told my lender I wanted to borrow 200k when in fact I only wanted to borrow 100k.

When the dick ass appraiser came back with his contrived number the lender said I would have to pay $200/month PMI. Then I broke it to him I only wanted to borrow 100k and I had plenty of equity so as to not require PMI it broke his heart. All that money they wouldn't be able to steal from me.

Appraisers are tools.

The best way is to MISINFORM them so they base their appraisal on pumped numbers. I loved sticking it to the bank by working over the dipshit crooked appraiser. I saved my self $200 a month with that trick, which I use to pay down the principle.

Thu, 02/14/2013 - 14:19 | 3243658 847328_3527
847328_3527's picture

Here's from Kaiser Health Plan:

 

$2 Billion Medicaid Program Helps Mostly Illegal Immigrants

 

 

"During the debate over the 2010 federal health care overhaul, Democrats promised that illegal immigrants wouldn't be among the 27 million people who'd gain coverage. President Barack Obama repeated that pledge last month when he outlined his immigration plan."

 

http://www.kaiserhealthnews.org/Stories/2013/February/13/Medicaid-illega...

 

How does Cali keep it's lights on? And check out the number of "free lunches" handed out in Cali schools....astronomical ! I don't want the little tykes to starve but I wonder  how Cali pays for all these "free lunches" ?

Thu, 02/14/2013 - 14:32 | 3243699 IridiumRebel
IridiumRebel's picture

negotiating sale of house as we speak.....PLEASE GOD GET US OUT NOW.....

Thu, 02/14/2013 - 17:09 | 3244286 jim249
jim249's picture

Is this a sign of a bottom in the housing market? A bit of panic here?

Thu, 02/14/2013 - 18:40 | 3244659 IridiumRebel
IridiumRebel's picture

It's a plateau before the next leg down.....kinda tough for folks to buy houses when their wages are getting less and less.

Thu, 02/14/2013 - 14:32 | 3243700 Hongcha
Hongcha's picture

"

“Awful lot of rich people in China ... buying west coast RE".

Oh my, how many times have I heard that in the past two years.

There are a lot and they are buying RE; my humble shack in Concord CA saw a 20% appraisal increase on the third and final time I refinanced (to 3.50, 30-yr fixed).

That is feverish, unwholesome, not sustainable.  Like a sprinter on meth.

Be warned; the yellow wave has crested ... those are party members seeking to get their $ out while they can.  There is nothing coming after that.  And Americans are not going to follow in their wake.  They can’t do the 20% and there are no jobs.

There are no jobs. 

Exceptions, of course – west coast (serving China), a few others.  For now.

The velocity at which money seeks return, is astounding.  This latest little window of opportunity is already filled and closed, imvho.  The race is run.

I have our cash in a 1% CD in my name.  My wife wants to grab a condo on the East Bay shore.  She will have to climb over my smoking carcass to get at it.

It's topped, gentlemen.  It's already played.

San Francisco Examiner yesterday - 462 building permits backlogged in the Planning Office at City Hall.

Cranes up and down SOMA building condos.

A glut is about to hit.  I give it a year.  Hang on to your cash.

All imvho.

 

Fri, 02/15/2013 - 04:55 | 3245672 The Navigator
The Navigator's picture

You are right HC.

In SoCal (Riv, SD) commercial leases for office space have flat-lined - no one is leasing anything short or mid term, small or large... long term contracts are dead.

"The Greater Fool" rule applies in SoCal real estate, both residential and small commercial - may the Gods help us all.

Take that cash in a 1% CD and get it ready for purchasing gold/silver - it's coming brother, coming quickly - and forget about a East Bay shore condo.

 

Thu, 02/14/2013 - 14:46 | 3243735 ItsDanger
ItsDanger's picture

Time for some Tom Vu inspiration.

http://www.youtube.com/watch?v=K853GykeGH0

 

Thu, 02/14/2013 - 14:51 | 3243753 Notarocketscientist
Notarocketscientist's picture

THE FORECLOSURES ARE COMING!  THE FORECLOSURES ARE COMING!  SELL SELL SELL - BEFORE IT IS TOO LATE!

Thu, 02/14/2013 - 16:18 | 3244017 centerline
centerline's picture

Pushing for refis is what they want.  Clean up for the secondary market no one talks about - plus the paper trail and chance to add recourse and/or other clauses to new docs.  What's already in the foreclosure hopper is another story... different tactic there.  Overall goal is destruction of private property rights though.

Thu, 02/14/2013 - 15:32 | 3243884 haskelslocal
haskelslocal's picture

Tough to IGNORE 10% of the US RE economy.

Especially if you LIVE in California.

So what does someone in California do? Just read this and ignore their own situation?

Thu, 02/14/2013 - 16:25 | 3244048 Hongcha
Hongcha's picture

Haskellocal; there are at least two Californias inland and coastal.  The latter is doing fairly fuckiing well at the moment, 90% due to the Chinese money.  A little due to the pick-up in software tech starts. 

Inland is fucked, looking more like Tijuana, Mexico by the day.  I mean all inland, up and down.

I already have one foot nailed here.  I suggest you stay away if you are shopping for RE.

Thu, 02/14/2013 - 20:07 | 3244918 Son of Loki
Son of Loki's picture

Hongcha, I agree. INland sucks.

Thu, 02/14/2013 - 15:35 | 3243893 earnulf
earnulf's picture

Locally, a home that was bought in repo for 25K in 2010 was remortgaged through Deutsche Bank for 79K in 2011 and needless to say, is back in foreclosure again.    While some remodeling was done, the garage is still open to the elements and the house is not secure.    Any remodeling done on the home is probably trashed and the listed real estate property owners are out of a town some 80 miles from the house.    Zillow thinks it will foreclose around 61K, IMO it's a 32K property and potentially less if the copper thieves have gotten to it

Thu, 02/14/2013 - 15:44 | 3243917 Son of Loki
Son of Loki's picture

Lots of shoddy construction these past few years...not to mention all the titles defects. I notices owners are now suing subsequent 'buyers' saying the auction folks had no right to sell their property.

 

If you are planning on buying, bring lots of extra $$$ and a good lawyer. A good structural engineer would be nice.

Thu, 02/14/2013 - 15:43 | 3243922 catacl1sm
catacl1sm's picture

Holy Shit. Dick "Buy Bank Stocks!" Bove is warning about the loss US reserve currency status, on CNBC no less. WTF?

http://www.cnbc.com/id/100461159

Thu, 02/14/2013 - 16:44 | 3244153 DiveGerl
DiveGerl's picture

If the american people understood the enormity of how they were being fleeced, they would be building scaffolding in the streets to hang bankers!

http://thefraudjournal.blogspot.com/2013/02/occ-complicity-or-flat-out-s...

Thu, 02/14/2013 - 17:05 | 3244265 eddymunster
eddymunster's picture

The dept. of education has already thought of that.

 

Fuck Heinz ketchup and their catsup!

Thu, 02/14/2013 - 17:16 | 3244312 Brixton Guns
Brixton Guns's picture

Silent Weapons For Quiet Wars

Technical Manual
May 1979 #74-1120
United States Air Force

http://anticorruptionsociety.com/2013/02/14/silent-weapons-for-quiet-wars/

Thu, 02/14/2013 - 18:08 | 3244514 sessinpo
sessinpo's picture

Fantastic article and thread.

 

Threads like these are gold on ZH.

Thu, 02/14/2013 - 18:49 | 3244703 robertocarlos
robertocarlos's picture

Connecticut? What the hell is it connected to?

Thu, 02/14/2013 - 19:13 | 3244780 Dealyer Turdin
Dealyer Turdin's picture

A crimp on connecter keeps it squarely attached between Taxachussets and the largely underwater state of New Cork.  It has been hard to hear the screams over the wash of the Bernank's hellacopetter, however.

Thu, 02/14/2013 - 19:17 | 3244798 IridiumRebel
IridiumRebel's picture

Rhode Island, New York and Massachusetts

Thu, 02/14/2013 - 19:04 | 3244754 havin' thangs
havin' thangs's picture

If I am a first time PM buyer, what is my best avenue?

Who is the most reputable online dealer? 

Are there any alternatives to pawnshops if I want to buy PMs in person?

How should I store them  cost effectively?   *Other than at the bottom of a large body of water.*

Thu, 02/14/2013 - 19:16 | 3244794 IridiumRebel
IridiumRebel's picture

Fire proof safe at home with a Winchester Shotgun.

Gainesville Coins is good.....

Thu, 02/14/2013 - 19:21 | 3244803 Sweet Pea
Sweet Pea's picture

Coin shops.  They should have mint Eagles and Maple Leaves, Krugs..check spot before you shop. they will charge a premium.

Thu, 02/14/2013 - 19:39 | 3244835 havin' thangs
havin' thangs's picture

What is the acceptable % premium above spot that I should be willing to pay?

Thu, 02/14/2013 - 21:03 | 3245022 Dealyer Turdin
Dealyer Turdin's picture

Silver Doctors run a good site for shoppin' and learning.

Thu, 02/14/2013 - 23:03 | 3245285 IridiumRebel
IridiumRebel's picture

Ok bro.....PM 101.

Buy a safe. There are many good ones. I reccomend one that can fit a gun and is fire proof. Sites that are good are APMEX, Gainesville and Scottsdale silver. Buy silver too. I am a 50/50 guy. You want a 3-6% premium. Silver at 32 spot, pay 34. I have gold from 1 gram to 2.5, 5 and then the oz. Silver should be in ounces but bought in bulk. I also check eBay as sometimes you get some desperate Füx but the comp is fierce and bidding wars ensue. I lay low on some sought pieces and at 15 seconds left to bid I drop the hammer. Also, check craigslist for estate sales as every so often there will be some kids selling granddads barbarous relic. After you accumulate enough, take a boat to your nearest pond and then have an accident where all of your guns, gold and silver are lost in an unfortunate capsizing.

Thu, 02/14/2013 - 23:51 | 3245409 IridiumRebel
IridiumRebel's picture

instead of being some anonymous pussy and downvoting me, refute me Mr. Red Arrow. You got a fuckin problem with the free flow of info?

Fri, 02/15/2013 - 01:59 | 3245575 Joseph Jones
Joseph Jones's picture

Thanks, mr. rebel.

Sorry I have no idea the reason for the (apparently) faux boat accident and resulting loss of weapons and PM.  Please explain....

 

Fri, 02/15/2013 - 02:27 | 3245600 IridiumRebel
IridiumRebel's picture

It's a running joke that when the confiscation comes you claim boating accident to block reprisals.

Fri, 02/15/2013 - 02:36 | 3245604 Freddie
Freddie's picture

Any safe you buy - make sure they cannot carry it out.  On a hand truck, dolly whatever.  They will bring a sledgehammer to smash out a door jamb too.  You almost have to put the safe in a safe room that cannot have the walls knocked out.  Bolting it to the floor may not eb enough.

Fri, 02/15/2013 - 05:18 | 3245686 The Navigator
The Navigator's picture

bolt it to the foundation, fill it with another 300-600lbs of silver/ammo/firearms, it ain't going anywhere. Buy a big fucking (24 rifle) safe.

Just keep a couple outside to grab, to protect aginst home invasion or a last minute run.

Semper Paratus - always prepared.

Thu, 02/14/2013 - 19:08 | 3244766 Lumberjack
Lumberjack's picture

Boston news outlets reported this morning that the RE market is re-bounding...

Thu, 02/14/2013 - 19:40 | 3244843 devo
devo's picture

I wish I weren't too lazy to read this. Cliff's notes anyone?

 

Thu, 02/14/2013 - 19:46 | 3244865 ebworthen
ebworthen's picture

"Recovery" in housing due to low inventory caused by forestalled foreclosures and refi's, which, when they come to the market, will crash prices and MBS's all over again (especially since employment and wages are still in the shitter).

Thu, 02/14/2013 - 19:54 | 3244880 devo
devo's picture

Thanks. 

Banks can keep inventory low, though. And they are renting places out for income. Not sure how wages or employment matter when the buyers are institutions and/or investors and the properties are slowly leaked onto the market. A crash in price assumes banks will list all properties at once and there are real workers out there buying and thus wages matter. I think this is a land grab where banks and investors will be landlords. The "punishment" for subprime loans is tax payer subsidized property with a yield/rent. Good gig if you can get it.

Thu, 02/14/2013 - 20:41 | 3244991 Son of Loki
Son of Loki's picture

devo, my neighbor works for a bank division that helps manage these properties and she said the bansk lose money on these b/c management fees, maintenance, insurance, taxes, etc. I suspect they are threading water as long as the free taxpayer money subsidizes them.

Thu, 02/14/2013 - 20:23 | 3244924 socalbeach
socalbeach's picture

Answer to the question posed in the article,

"The only question is how long until the funding to prop up this latest artificial housing market subsidy runs out ..."

When Ben Bernanke runs out of bits.  63 bits for a signed integer gives a maximum of about 9*1018 pennies.  The most you need now to store credit numbers is about 100 trillion dollars, or 1016 pennies.  So the Fed could increase the current monetary base by a factor of about 900 before they'd start running into problems.

Thu, 02/14/2013 - 20:24 | 3244952 Woodrox
Woodrox's picture

Hank Bazooka Paulsen

Thu, 02/14/2013 - 20:26 | 3244957 boooyaaaah
boooyaaaah's picture

Did you is issuking currencyver hear of Horace Greely Schatt
The financier that ended the German run away inflation in less than 6 mos
He introduced a parallel currency the rentamark
Parallel to the currency issued by the Riech bank Germany's Central bank

Now we have the first parallel currency in the USA

I KID YOU NOT

Amazon is issuing currency

Thu, 02/14/2013 - 22:08 | 3245164 WmMcK
WmMcK's picture

Brother, can you spare a One coin?

Thu, 02/14/2013 - 21:20 | 3245057 Call me Ishmael
Call me Ishmael's picture

Zero Hedge won't be able to warn me when the REAL correction of this bloated economy is happening because they say the sky is falling everyday. How about a color code system.

That being said, I'd be lost without you ZH.

Thu, 02/14/2013 - 21:35 | 3245094 IridiumRebel
IridiumRebel's picture

In a post the other day they had an article that stated that the collapse would be a slope and not a cliff essentially. This is why they are doing all of these gimmicks. The solutions are fairly simple, the tough part is not getting suckered in by wondering, "Maybe all of that chart porn is just for show. I should buy a house cuz everyhting is muddling along. Maybe it will just keep muddling along. Maybe I am missing out." BOOM.....it hits. We are following Rome. We are Rome. Devaluing currency and opening the borders as we whore anything and everything out. The answer after we hit the inevitable will be war, just like WWII. It will get us out of the rut, but it will cost millions of lives and globally realign everything. Stay. Read. Prepare.

Thu, 02/14/2013 - 22:55 | 3245297 Stuffs And Stuff
Stuffs And Stuff's picture

Yes, history will repeat once again; it isn't just repeating now though, it will again in the future too. The machine is supposed to serve humanity, but the script always eventually flips and humans become servants to the machine. This is basically the message of fight club on a much larger scale. 

I think Bill Maher summed it up best when he said (and I'm paraphrasing): "I don't think human life is valuable, I think we should promote death - Whatever keeps the freeway moving."

This quote perfectly sums up the mindset of the so-called elite. At this point, the machine is basically fuelled by human suffering. They don't care about that, they just want it to keep on going. The status quo is what is important to them, not well-being or actual human progress; in fact, these two things impede their interests.

What's the point of having a system if it's this fucked up?

We can demolish it. There's a good chance we'll lose our lives doing it. Our children, then, will have to fight the same battle. History repeats over and over. 

Thu, 02/14/2013 - 23:48 | 3245400 IridiumRebel
IridiumRebel's picture

Basically they just blow bubbles and then burst the fucker with foreknowledge by getting out early. I read that Soros is making a killing on currency wars. currency wars will soon become real wars and then the real killing will occur. I know this bubble will burst in the not so distant future. They are getting more greedy too. So these boom/busts will get more frequent and violent. It is all manipulated. More are awakening. 

Fri, 02/15/2013 - 04:33 | 3245656 Stuffs And Stuff
Stuffs And Stuff's picture

I agree.

Ofcourse they will get more greedy, this is the nature of greed - It feeds. It feeds incessantly.

The name and time of the tyrannical regimes may change, the name and time of the wars may change, but what is constant here is human suffering.

The only question I have at this point is, which is more disgusting: the tyrant or the willfully ignorant? The bully or the bitch?

Fri, 02/15/2013 - 01:50 | 3245562 Joseph Jones
Joseph Jones's picture

Will Amerikans submit to a war draft without burning down the cities?  A draft would appear absolutely necessary to fight a mass war. 

What percentage of FFs in big cities will opt out by claiming work related injury rather than risk death by shooting when responding to put out fires?  They really don't put out fires anymore.  Far highest percentage or incident type is medical, fires are almost extinct except for those started by PD out for blood/revenge such as in LA recently.   

Fri, 02/15/2013 - 02:24 | 3245598 IridiumRebel
IridiumRebel's picture

These snot nose kids will play "shoot the moving Volvo" all day long from some base with a drone.....they'll volunteer. They're desensitized so a double tap to kill a EMT makes no difference.

Thu, 02/14/2013 - 21:21 | 3245062 Shizzmoney
Shizzmoney's picture

I love how the chart goes down at the moment a "Bill of Rights" passes.  It's like whenever a legislation is passed or a decree is made about something the majority of people want, or feel must happen to make the situation better, the market tanks.

Wall St has all of us by the fuckin' balls.  And we won't even acknowledge it; hell, some of us ask for a little jiggle!

What a great "free market" we have here in Amercia. 

Thu, 02/14/2013 - 22:08 | 3245167 Stuffs And Stuff
Stuffs And Stuff's picture

Atleast he's consistent, I guess?

Thu, 02/14/2013 - 22:13 | 3245176 G-R-U-N-T
G-R-U-N-T's picture

Excellent post ZH!

Thu, 02/14/2013 - 22:31 | 3245226 IridiumRebel
IridiumRebel's picture

I just sold my house. Fuck yes you fucking fucker. Fuck you Bercocksuckinanke and all you snake oil selling fuckers. Rot in Hell! I'm out! Ok! You may collapse this bitch at any point. Shit down your fucking throat you fucking turd chucking bankstah Füx! I'd like to thank LongSoupLine for the fuck you fucking fuck donkey dick inspiration. VAGINA.

Thu, 02/14/2013 - 23:44 | 3245386 Yes_Questions
Yes_Questions's picture

 

 

Titty Farts!

and/or: http://www.youtube.com/watch?v=_RyImt-lREs

 

Fri, 02/15/2013 - 04:45 | 3245665 ebworthen
ebworthen's picture

Congratulations, sold my suburban boat anchor in December, fuck you GMAC and Bernanke!

I was so sick of the taxes going up, the utilities going up, the cost of appliances and maintenance going up, the fees, the rules (if you don't shovel the sidewalk we will fine you) blah, blah, blah.

I realized I was renting the house from the city and the bank, especially after KELO vs. City of New London, and then of course, the crash engineered by the FED and the Banks, then LIBOR, then the FED buying $40+ Billion a month to buy Mortgage Backed Securities to benefit the banks that GAMBLED with people's payments - just added insult to injury.

Thu, 02/14/2013 - 22:32 | 3245227 Whiner
Whiner's picture

Blow me a bigger one. 2008 never climaxed.

Thu, 02/14/2013 - 22:36 | 3245242 Kingkongballs827
Kingkongballs827's picture

PVC Gun Burial Tube. Holds 3 long rifles Ak47, SKS, AR15 plus ammo and gold & silver. Check it out here.

http://www.ebay.com/itm/160970141105?ssPageName=STRK:MESELX:IT&_trksid=p3984.m1555.l2649

 

 

Thu, 02/14/2013 - 23:34 | 3245371 fuu
fuu's picture

Fuck off douche.

Fri, 02/15/2013 - 02:06 | 3245586 brak
brak's picture

Fuck off spammer - nobody is paying $275 for $20 of PVC and a schrader valve

Thu, 02/14/2013 - 23:46 | 3245397 Clowns on Acid
Clowns on Acid's picture

Even after the housing market began its collapse in 2006, Federal Reserve Chairman Ben Bernanke said in 2007, "The impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained."

Roll forward to 2010/11/12...."The impact on the broader economy and financial markets of the problems of excessive QE infinity, including bailing out the European banks, seems likely to be contained, because this time we are the market. Buy equities bitchez !"

Thu, 02/14/2013 - 23:51 | 3245403 dolph9
dolph9's picture

The story of modern Amerika is a story of how sheeple take the bait and bankers make off with the loot.

In this case, the sheeple have an insatiable craving for home "ownership" (which really means mortgage), "space," "amenities," "good schools," "safety" "keeping up with the Joneses" etc.

The sheeple will also do anything, anything, to get away from people who are even remotely different than they are.  This means they are constantly moving about the country trying to find their homogenous utopia.  And they can never find it, and if they do find it, some other people who are a little bit different start to move in, then their paradise is lost and they have to move yet again.

The banks know this well.

It never occurs to the sheeple that their thoughts and actions contribute to the whole mess, and that they are putty in the banks' hands.

 

To be fair, housing is way overpriced in Amerika and everywhere on this planet particularly in the "first" world.  Why anybody should have to work like a slave their entire life just to have a roof over their head is simply beyond me.

Fri, 02/15/2013 - 00:06 | 3245431 BeerBrewer09
BeerBrewer09's picture

+1

best post of the thread award

most people are so emotionally affected they care not who they empower as long as they are externally "happy"

Fri, 02/15/2013 - 00:51 | 3245494 Teamtc321
Teamtc321's picture

Great post, thank you for sharing. I guess I'm either weird or one step ahead or behind. I carry the attitute, if people don't like they way I look, they can turn their fucking head. 

Drives some people crazy, good, I say.

Fri, 02/15/2013 - 05:31 | 3245693 AnAnonymous
AnAnonymous's picture

What gives that special name "sheeple" to 'americans'?

The depicted behaviour is typical 'american' behaviour since 1776, July, 4th.

Fri, 02/15/2013 - 00:01 | 3245425 the grateful un...
the grateful unemployed's picture

the housing market hasn't a chance, for one thing there is a lot of old inventory, (against a shrinking population and fewer qualified buyers) which in the car industry would respond well to a cash for clunkers program (some of these homes need to be knocked over) and secondly these homes, espeically the newer mcmansions are high maintentance, they require all sorts of service jobs, landscape, pool, cleaning, heating (against a shrinking population - remember Greenspan wanted to loosen immigration rules) very wisely most people have taken to renting, or to no maintenace condos, and now the inner cities are building high rises with micro apartments (how does that help suburban housing?) but you notice that the midwest is dying? every year a few more towns disappear. and the blight moves closer to the cities where people are stacked up like cord wood, mostly because there is no economic path out. and you can literally homestead these rural towns, if you don't care about a doctor, or a supermarket, (or cops or firemen).  ultimately people would move back out of the city if the Fed wasnt propping up the asset values of property everywhere. their policy will take us to the city in soylent green and it doesn't need to be that way if we had a free market

Fri, 02/15/2013 - 02:25 | 3245599 delacroix
delacroix's picture

springfield.craigslist.org/reo/3603980098.html

Fri, 02/15/2013 - 00:04 | 3245427 Leboob
Leboob's picture

I like the fact that when inflation hits in about 3 or 4 years, I can pay off all my debt in one fell swoop. Then I can get a job as a barista or maybe a golf course starter and live happily ever after.

Fri, 02/15/2013 - 01:45 | 3245470 steve from virginia
steve from virginia's picture

 

 

 

They call THIS analysis!

 

"In other words, those homeowners who tried to take advantage of the most recent housing bubble mania created over the past year by the unholy trinity of the Fed (open-ended liquidity, REO-to-Rent programs, and $40 billion in monthly purchases of MBS), foreign buyers (who launder illicit money courtesy of the NAR's anti-money laundering exemption and park it in ultra luxury US real estate, usually sight-unseen) and of course, the banks, who with the aid of the robosigning fiasco and the Homeowner Bill of Rights, have over the past year subsidized the housing market by keeping non-cash flow generating mortgages on their books in exchange for a wholesale subsidizied rise in housing prices, ran out of cash before they could flip the "hot potato" that is the house they just bought, to a greater fool, and since they had no actual cash to pay the mortgage with, and with no fear of retribution, handed it right back to the bank!"

 

159 words, 775 characters. ONE INCREDIBLE RUN-TOGETHER SENTENCE! What does it all MEAN?

 

In other words, those homeowners who tried to take advantage of the most recent housing bubble mania created over the past year (by the unholy trinity of the Fed (open-ended liquidity, REO-to-Rent programs, and $40 billion in monthly purchases of MBS), foreign buyers (who launder illicit money courtesy of the NAR's anti-money laundering exemption and park it in ultra luxury US real estate, usually sight-unseen) and of course, the banks, who with the aid of the robosigning fiasco and the Homeowner Bill of Rights, have over the past year subsidized the housing market by keeping non-cash flow generating mortgages on their books in exchange for a wholesale subsidizied rise in housing prices, ran out of cash before they could flip the "hot potato" that is the house they just bought, to a greater fool, and since they had no actual cash to pay the mortgage with, and with no fear of retribution,) handed 'it' (whatever IT is) right back to the bank.

 

If this is a game, I win! What is 'it'? Is it a house? If it is now owned by the bank then the ex- owner must be living in a car somewhere.

 

'Housing Bubble 2.0' never amounted to anything b/c the ingredients do not exist: no shadow banking, no Countrywide, no Bear-Stearns housing bubble hedge funds, no repo, no commercial paper, no borrow-short-lend-long, no Fannie or Freddie (only FHA/Ginnie), no Lehman Brothers, no rating agencies, no CDOs, no NINJAs, no hispanic dishwashers starting real estate empires in Los Angeles or Las Vegas ... it was always a fraud in 72 words and 385 characters.

 

Brevity is the soul of wit!

 

:)

Fri, 02/15/2013 - 00:54 | 3245498 Notarocketscientist
Notarocketscientist's picture

Who wants to bet that when the bubble starts to pop Bernanke will announce that he is adding even MORE printed money to the 40 billion per month he is already printing for the sole purpose of giving it to his buddies at ZIRP so long as they agree to buy foreclosed properties.

And who wants to bet that at some point, when Ben's buddies go bust buying these properties they'll get bailed out (of course they are only taking billion dollar punts on the property market because they know Ben will bail them out if it all goes sideways - either than r they understand the the economy is completely fucked one way or the other so the downside is the same whether they participate or not i.e. total collapse... so better to own hard assets unleveraged)

This economy truly is a joke

Fri, 02/15/2013 - 01:52 | 3245566 andrewp111
andrewp111's picture

If he has to, The Bernank can buy up all defaulted houses directly, and make the NY Fed the country's bigest landlord.

Fri, 02/15/2013 - 01:23 | 3245529 Bear
Bear's picture

Boy ...  this certainly adds fuel to the Deflation argument 

Fri, 02/15/2013 - 01:54 | 3245568 TPTB_r_TBTF
TPTB_r_TBTF's picture

In other words ...

 

Number of words :     165.00
Number of sentences :     1.00

Indication of the number of years of formal education that a person requires in order to easily understand the text on the first reading:

Gunning Fog index :     71.09

Flesch Reading Ease :  -91.90

Online Text Tester

 

Fri, 02/15/2013 - 07:18 | 3245704 cnmcdee
cnmcdee's picture

I think there are far more factors involved than the mortgage.

House ownership in general has become a parasitic trap for governments to continually tax to oblivion.

If you want to know the duration it will take for anything to double, divide the percentage rate into 70.  If governments are incrementally increasing their taxation at a rate of a MODEST 2% a year (many cities are to fund endless beuracratic costs) the taxation rates will double every 35 years!!!  If their raising taxes 5% a year it will double every 14!!!  The US national debt will have to double every 5 years at its current rate of increase!  In otherwords people in Texas shockingly are already paying rates of $300-$400/MONTH just in the TAXES!  By 2040 with only a 2% a year increase - it will be $800 / month which will by then have exceeded the mortgage payment.  How would I ask, the banks fair when they are in competition with town X/Y/Z for the last vestiges of your money?!  It could easily go far higher.  Wages will not match (they have not for several decades) - increasing the disparity.

In this parametric growth model as the population increases (if the US population is growing at a rate of 2% in 35 years there will be 700 million 'living' ) taxes will be doubled on a average home, but the realized income will have dropped by then to third world levels, and infrastructure costs combined with the taxes will far exceed the mortgage.

In otherwords housing will become more and more of a luxury, or the method by which homes are occupied is going to change.  Basically the model of the one family home will not exist except for the top 10% of the country.  Everybody else will have to have developed a 'immigrant model' of having two or more families squished into a home, or boarders, or grandparents living there.  The mathematical incline will induce it. 

The real estate market and banks will do everything in their power to support the pricing as high as possible, and they will keep it this way by their own financing methods.  They will perpetrate it as long as the market will give them a return (as they have total control) - with the politicians getting onto their knees at a finger crack to suck the bankers jewels..  Why?  The houses mean NOTHING to the banks, it is only an instrument to them to contract you the slave debtor to gaurantee them a monthly payment, and a return on their 'investment.'  They know because you will develop a standard of living around that instrument (the house) you will do pretty much anything to keep it (including working third world standard jobs to crushing levels.) Thus the higher housing pricing can go, the great percentage of your monthly income they can extract (while the local town and municipality is thinking the exact same thing albeit only through a different mechinism - using the yearly pothole, or gun crime crises in order to justify the yearly 5% taxation 'wage raise').

However I choose a different path and opted to purchase a very nice  used fifth wheel for about $10,000, which is hard to tax because I'll simply haul it away. I picked up a great diesel truck to pull it for $5000. The two things I LOVE THE MOST about it are its mortgage payment, and its taxes - both $0.  Why? Because I know for a FACT that governments are going to push people in this direction in the end *anyways* by their own incessant self-justification of growth. Go ahead double the beuracracy, I'm not paying for any of it, and WHY SHOULD I? As Mark Faber pointedly informed an research economist, if deficits do not matter why tax at all?  Just fund the government through the devaluation of currency, like Zaire we can just pay everyone not to work, or produce wealth, and we can have a nation with a artificial GDP funded by social welfare consumption.  I'd suggest we are there already.

The other option is a 'hidden house' that will in time due to fiscal constraints of the populance become far more popular with people retrofitting their garages to live in the lofts.  I've even seen cases of people building whole houses over top their livestock barns.  The other option is of course a very small modest home in a quiet community that has no growth.  Too lazy to change their own bylaws, people can get away with dramatically reduced taxes... as long as their a small hidden minority and the towns majoritive funding is still coming from the cattle public, it will work.

Eventually this system WILL FAIL, and if you are off it you will be far less affected.  Those who are on it will simply see their standard of living drop more and more. Less and less food or free money will be available, as it is eaten up by the increase in the taxes, utility bills, or a minute change in interest rates. Shocks will  also come, as they always do in time, say the day the US stock market crashes (which it will within a few years) and the Federal Reserve attempts to gain capital inflows by raising interest rates to 2% to match Japans.  I've already seen people that live like this.  They may own beautiful new homes yet they have no furniture, and their fridge's are near empty.  Is that really living?  When their phone breaks they had to go on a payment contract with the telephone company because they can't scrap up $500 to buy a new one.

When people learn what real freedom is, they would  run from their mortgages, living small simple un-taxable lives.  The governments would be forced to acquiesce, and the banks should be banned from this predatory beggar the people lending.

If I was running the country I would pass a law that NO ONE can borrow a combined amount of double their yearly salary TOTAL.  If you make $30,000 the bank can only lend $60,000 (including credit card debts).  It would break their power over the people and force everything to go back to cash values.  Homes would drop precipitously in values (actually making them more affordable).  People's taxes would have to drop in relation to the lowered assessed values.  The banks would stop being the controllers, and would be relegated to a minor factor in society, and the power would go back to the people.  I would also pass extremely lack bankruptcy laws so pretty much anyone could simply walk away from their debts with a one time asset foreclosure, and that would go for ALL debts (student etc).

Finally additionally if you simply take the growth rate of the debt in terms of percentages http://en.wikipedia.org/wiki/File:USDebt.png you can see it is growing astronomically. It can (and will) sustain itself for a while because the people will have demand it, however the results will be Greece (or Japan with her 20 year recession).

When this end game of the collapse will come is going to occur IMHO with a Black Swan event.  And the United States will firmly become a third world nation at that time.

 

Do NOT follow this link or you will be banned from the site!