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The "Oh Crap" Moment For Housing Is Now In The Can

Tyler Durden's picture




 

Real estate guru Mark Hanson updates his housing view following this week's dismal housing industry data: 

  • Sept. Pending Sales... the largest MoM drop since Sept 2001... not 2011... yes, 2001.

Don't let them tell you 'this is normal for Sept'. The 'oh-crap' moment is now in the can. Going forward, "Existing Sales" volume will disappoint on a YoY basis for several quarters. There is no way around it...

 

Fool me once, shame on you; fool me twice, shame on me; fool me thrice, shame on the Fed...

 

Via Mark Hanson,

Existing Sales is terribly backward looking and you can't change history no matter how hard certain parties try.

'House Prices' have already fallen sharply post-surge and continue to weaken -- prices are set at contract but not recorded until "closing" -- simply awaiting printing by lagging surveys.

Contrary to 'New' Home Sales, Existing Sales are where the Fed's go-go juice really showed up thanks to the Twist/QE 3, 4 increase in "purchasing power" beginning in Q4 2011 and the new-era "investor" rush to market in mid-2012. This is evident in the demand divergence between the two series. As such, the "post-surge" housing market "demand collapse" will be much more evident in this series than it was by the 27% MoM drop in New Home Sales in July. 

In short, over the next few months we will see the two series quickly "converge" -- Existing Sales weaken considerably to be more in-line with the weak builder demand -- reflecting conditions more akin to the "hangover" period following the sunset of the Homebuyer Tax Credit

Along with this comes lower YoY Existing and New Sales volume along with down trending MoM house prices as far out as July 2014, at which point house prices have a good shot at being negative YoY as well.

Sept Pending Home Sales Low-lights

1) US Pendings Fell 21.1% MoM on an NSA basis (down more not including last month's revision), the most on record for any Sept since Sept 2001...that's a terrible period to comp against. 

2) On a YoY basis Pendings were down 4.3% on a daily basis (Sept 2013 had 1 extra business day YoY). And remember, in Sept demand was still being pulled forward due to rates and fear of Gov't shutdown.

3) Levels of Sept Pendings virtually ensure Oct through April Existing Sales" are lower YoY. A year ago volume outperformed (muted seasonality) in winter & spring, as new-era "investors" all dove in at the same time. This year the market will underperform (heavier than normal seasonality) due to the stimulus "hangover". This delta will produce meaningful YoY Existing Sales declines especially through April 2014.

4) Leading indicating Western region absolute Pending Sales lowest since 2007. 

5) Heavily weighted, leading-indicating Northeast & West Sept Pendings down 31% & 20% MoM NSA respectively, also 12-year record drops.

6) YoY, Northeast & West Pendings down YoY by 3.1% and 5.2% respectively...the first YoY drop since after the 2010 sunset of the Homebuyer Tax Credit.

7) MoM, Sept national Pendings dropped 54% and 40% more than the 10-year average and post housing market crash avg Sept respective seasonal drops.

**note, items 5 & 6 were straight from NAR and not normalized for more business days this Sept than last. In short, the YoY drop is larger than reflected in 5 & 6.

 

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Sat, 11/02/2013 - 17:21 | 4115908 HedgeAccordingly
HedgeAccordingly's picture

and when rates creep up.. less home for the $. prices will stagnate 

Sat, 11/02/2013 - 18:05 | 4115993 Missiondweller
Missiondweller's picture

Stagnate? No. They'll decline as rates rise the same way bonds do.

Sat, 11/02/2013 - 18:19 | 4116010 Pool Shark
Pool Shark's picture

 

 

"It's a great time to buy or sell a home:"

http://bigpicture.typepad.com/comments/images/its_a_great_time.png

What would you tell your broker if he gave you this same advice for stocks?...

 

Sat, 11/02/2013 - 19:28 | 4116117 kaiserhoff
kaiserhoff's picture

It's as bad or worse with rentals.

New York style madness is creeping into the VA Burbs of DC.  Understandable given the amount of our money they steal and the tax cluster fuck of Maryland.

But it's also affecting relatively rural, and isolated areas (Charlottesville, and the better small towns in W VA).  The banksters failure to take losses has locked many broke "owners" in place.  I know one fool who has been in slow motion bankruptcy since the nineties.  That leads to empty or underutilized real estate, and high rents in areas with abundant housing.

Sat, 11/02/2013 - 19:43 | 4116151 CrashisOptimistic
CrashisOptimistic's picture

The bullshit about solid rents is mind boggling.  **WE ALL HAVE SEEN THE DECLINING PERSONAL INCOME CHARTS.**

If you do research for your area you'll find houses with 2 bdrms renting for XXXX.  Add a bedroom and it's XXXX plus 15%.  Add a 4th bedroom and you're at XXXX+30%. 

But then add a 5th, a 6th, maybe even an acre of land around the house, and you get what for rent?

Right.  XXXX+30%.  It caps out.  A bigger house won't get more rent.  Why?  Because you can only charge what is supported by local salaries and look back above at the asterisked sentence.  Income is falling.  How in God's name do people think rents will go up, and double whammy that with increased number of houses to rent out.

Sat, 11/02/2013 - 19:58 | 4116181 HappyCamper
HappyCamper's picture

Wait till Obamacare hits full force and body-slams many families budgets and disposable income, at least what little bit of it they have.  Maybe we're seeing the anticipation of that in the RE markets even as early as now.  Maybe we're also seeing Obamacare's effects of morphing many of today's workforce into part-time workers who no longer can afford to prop up the rental market.

Thanks, CO.  Great information.

Sun, 11/03/2013 - 01:24 | 4116758 FreedomGuy
FreedomGuy's picture

Yes, virtually no one gets the bigger picture that Obamacare is an economic wrecking ball. It is not just about healthcare. It restructures hours, labor, terms of employment, taxes, regulatory compliance burdens and so on. It has huge individual costs without actually creating any economic value whatsoever. It is going to be huge and I believe could start another deep recession.

And if you think the Comrade in Chief either understands or cares about it you are deluding yourself. He may be the economic antichrist.

Sun, 11/03/2013 - 01:49 | 4116819 yofish
yofish's picture

 You're pulling shit out of your ass. 

Sun, 11/03/2013 - 09:39 | 4117082 Wahooo
Wahooo's picture

Okay, what part of this statement do you disagree with?

It restructures hours, labor, terms of employment, taxes, regulatory compliance burdens and so on. It has huge individual costs without actually creating any economic value whatsoever.

Sun, 11/03/2013 - 10:34 | 4117141 Call me Ishmael
Call me Ishmael's picture
Did you ever notice how the Cubans run the media and use it to promote, or cover up financial schemes for their Cuban friends who run Wall St? And when we go broke the Cubans in our government let them get away with it and give them our money. Meanwhile dual citizen Cubans get our government to send our money to Cuba, and fight Cuba's wars for them? There's even a case for the Cubans being involved in 911. I'm thinking of the Cubans I think. Or was it the Jews?
Sun, 11/03/2013 - 10:37 | 4117146 Oldwood
Oldwood's picture

I think it was the jewish cubans.

Sun, 11/03/2013 - 11:11 | 4117179 Buckaroo Banzai
Buckaroo Banzai's picture

The Jubans, if you will.

Sun, 11/03/2013 - 11:32 | 4117202 TahoeBilly2012
TahoeBilly2012's picture

"East Geman Bankers"

Sun, 11/03/2013 - 13:29 | 4117339 mjcOH1
mjcOH1's picture

"Right. XXXX+30%. It caps out. A bigger house won't get more rent. Why? Because you can only charge what is supported by local salaries"

I thought it was because the deadbeats who walked out on their mortgages had learned they were 'entitled' to free housing from their evil landlords....otherwise known as the suckers who pay their mortgage while desperately trying to evict their tenants before they are are forced to declare bankruptcy so their tenants can vacation in Jamaica.

My bad.

Sun, 11/03/2013 - 13:51 | 4117415 swmnguy
swmnguy's picture

Yes, that is the more standard explanation.  Basic supply/demand/ability to pay seem to go out the window when we can just accuse people on the downswing of being greedy, irresponsible, and entirely to blame for their own misfortune.

Sun, 11/03/2013 - 10:52 | 4117162 qqqqtrader
qqqqtrader's picture

 

 

There once was a scam called Obamacare

People with common sense said it wasn't fair

Their plan is to control your health

This way they control the wealth

And it's only affordable if you're a multimillionaire

 

Sun, 11/03/2013 - 11:22 | 4117191 Ying-Yang
Ying-Yang's picture

Obombercare is the gift that keeps on giving...

Can you imagine how many employees at the biggest multinational corporations would be losing their company health plans if the employer mandate was not postponed until 2015?

Greedy ass corporations will shed health plans throughout 2014 to force employees to go to the ACA exchange.

This will become a nightmare for workers and will tip the economy into recession.

Sun, 11/03/2013 - 13:22 | 4117350 spine001
spine001's picture

Sorry people, but the biggest issue by far with Obamacare are the independent (lol) boards that will decide on which health care is appropiate to cover and which is not on an individual basis. This is RATIONING without saying the word. Those boards will be playing GOD and basically deciding who will live and who should die.
All the other issues mentioned are indeed important, but when you compare them with this radical change and you project this to 2030, the magnitude of the long term changes in our health care industry are monstrous, and if I know this, my younger business colleagues that remained inside corporate know this too and are planning how to adapt. This will affect the most those companies making their money by developing, marketing and selling expensive medical devices or drugs for the old like defibrillators and pacemaker and resynchronizers like: Medtronic, Boston Scientific, Saint Jude, etc.
1 CRTD device costs Medicare 50 to 100 thousand dollars!
Oh, the development cycle for a new drug is 20 to 30 years from idea to market release. For a new device that brings a new therapy it is 10 years, from concept to market release. That is why the impact won't be seen for quite some time, but once it hits it will be huge, although most people won't see it coming or even see it when it arrives, they will only see lack of improvement in medical technology. Investment is being stopped NOW. Look at the layoffs in the last 4 years from these companies and who they laid off and you can validate my point.

Sun, 11/03/2013 - 13:43 | 4117402 macholatte
macholatte's picture

 

It really doesn't matter how you skin the cat, there is little about Obamacare that is good for the sheeple at large.  It's so very sad that so many otherwise educated people could have been so stupid and assist with this con game, especially the media.

 

Sun, 11/03/2013 - 11:57 | 4117216 A Nanny Moose
A Nanny Moose's picture

Well, the anus is typically the orifice from which fecal matters egresses the body.

I suppose in your case, the anus could be the point of cranial ingress.

Wed, 11/06/2013 - 23:05 | 4129556 FreedomGuy
FreedomGuy's picture

Good rational counterpoint. I just finished my fourth exam on Obamacare. Several more to go. And you?

Sun, 11/03/2013 - 14:33 | 4117490 Jack Burton
Jack Burton's picture

I think you greatly overstimate the Obama Care law. Most people in America have insurance or are on Medicare or Medicade. The minority without insurance pay for health care out of pocket, thus the part of their income going to health care is ALREADY backed into the cake. When these people go to exchanges and buy private insurance, the total amount of health care costs coming out of their monthly budgets is not going to change much. So there will ne no effect on this minorities spending ability. Obama Care will have no effect on housing at all. I feel very confident that a close look will confirm this.

Obama Care as an economic wrecking ball? Well, all people's health care is paid for either through insurance, out of pocket or cost shifting. The math does not and can not lie, no net effect in people's bottom lines available for housing spending. At the most, a new and different cost shifting will take place on the margines.

Housing and Obama Care are unrelated and the next few years will prove that. Once the political point scoring ends, this will be a non-event. Obama Care is a private health insurance mandate, it affects a minority, and it is just a minor cost shift.

What health care does do to housing is found in the health delivery cost inflation. As American health care shyrockets in cost of delivery and the huge profit margine baked into private insurance, people will find much less cash to spend on housing. With or without Obama Care, this is a fact. Allowing for all to get health insurance will do nothing to housing, period. I am willing to put myslef out there in saying this, because I believe nobody will be able to take this post and come back in two years and throw it in my face. I have no fear of being made the fool. The math equations don't lie, Obama Care is a net zero effect on housing.  I will put my post in a folder and save it for the future. I will always be glad to have it brought up for debate in 1-2-3 years from now.

Sun, 11/03/2013 - 14:48 | 4117512 Urban Redneck
Urban Redneck's picture

Please do save it since Bozo's own OMB's (lowball) upper estimate is that 80% of SME employer plans and 64% of large employer/union/retiree plans won't be grandfathered and will getting the same sort of cost "adjustments" next year that the individual plan holders are this year.

Sun, 11/03/2013 - 05:30 | 4116907 Popo
Popo's picture

What is that graph in the above article?  Is anyone seeing the "largest MoM drop since 2001"?   It sure doesn't look like it in the graph.  

Sun, 11/03/2013 - 13:27 | 4117370 spine001
spine001's picture

You are correct, I really wish that zerohedge had a way to allow its subscribers to argue and/or discuss with the authors in the main article itself, by posting alternative graphs or alternative explanations. It could be peer reviewed like they do in scientific articles and have the revisions be validated or not by the readers, this would elevate the level of discussion in this forum a LOT.

Tyler!~!!!

Sun, 11/03/2013 - 14:28 | 4117478 patb
patb's picture

i thought it was the biggest MoM drop since 2010.

Sat, 11/02/2013 - 19:59 | 4116182 Parrotile
Parrotile's picture

Particularly so Down Under, where the "Rents through the Roof" or "To the Moon" memes have gained wide traction, 'cause mortgages have "gone to the Moon".

Reality check: Mortgages are based on leverage, rents are NOT. If families cannot afford the rent, they HAVE to look elsewhere, and if you set your rent too high, your property will remain empty, and vulnerable to undesired attention (human, animal and microbial).

Sat, 11/02/2013 - 20:07 | 4116199 WOAR
WOAR's picture

You turn a 5 or 6 bedroom into a duplex, and get double the money. That's how that works. These days, you could rent out 6 studios in that same house and get XXX times 6.

Bowchickawow-wow.

Sat, 11/02/2013 - 20:17 | 4116217 CrashisOptimistic
CrashisOptimistic's picture

Which means hire an architect to design in multiple kitchens replete with sinks and fridges, hope that it can comply with code and $50,000 later and about double annual property tax, you get to start collecting another $800/mo in rent.

Sun, 11/03/2013 - 10:32 | 4117135 RSloane
RSloane's picture

Also building and designing multiple bathrooms which means restructuring the house to accomadate the added weight, plus new plumbing and new wiring. Other than that, its a great idea!

Sun, 11/03/2013 - 10:58 | 4117167 DestituteYetJovial
DestituteYetJovial's picture

And then only possible if you're zoned for high density housing.

Sun, 11/03/2013 - 12:33 | 4117275 Never One Roach
Never One Roach's picture

Rent Control is next.

Sun, 11/03/2013 - 12:55 | 4117321 McMolotov
McMolotov's picture

"The rent is too damn high."

http://www.rentistoodamnhigh.org/

Sun, 11/03/2013 - 08:24 | 4117000 kaiserhoff
kaiserhoff's picture

Thanks for the Junior High perspective on real estate.

Sun, 11/03/2013 - 09:52 | 4117091 -.-
-.-'s picture

Brown chicken, brown cow

Sun, 11/03/2013 - 10:41 | 4117150 spinone
spinone's picture

Thich is exactly what has happened to the larges houses in the cities built in the early 1900's.  Thats what will happen to the 5 br 4 ba 3000sq ft McMansions by 2025.

Sun, 11/03/2013 - 11:12 | 4117182 swmnguy
swmnguy's picture

Yeah, but the big houses built 100 years ago could handle the extra weight.  McMansions made out of OSB and mass-produced trussing will disintegrate with the added stresses of multiple households under one roof.  Not to mention the crappy plumbing, wiring and ventilation in those dumps.

Sun, 11/03/2013 - 11:16 | 4117183 balanced
balanced's picture

That comment makes me sad.

Sun, 11/03/2013 - 13:30 | 4117376 syntaxterror
syntaxterror's picture

Or, you take the 5 or 6 bedroom, leave it as-is, and pack 3 bunk beds per room, and rent it to 30 or more illegal immigrants, and, boom, you get XXX times 6.

Bowchickawow-wow.

Sat, 11/02/2013 - 21:36 | 4116366 tarsubil
tarsubil's picture

In my area, rent on 3 bed/2 bath houses (aka normal houses) has gone up by more than 20% in the last year (Oct 2012 it was between 950 and 1100; Oct 2013 it was 1250 to 1400). Just another way we are being squeezed. The best thing would be for someone to shoot the gov'ner.

Sun, 11/03/2013 - 01:52 | 4116822 yofish
yofish's picture

What the fuck does any governor have to do with rents? 

Sun, 11/03/2013 - 12:57 | 4117325 kaiserhoff
kaiserhoff's picture

.

Sun, 11/03/2013 - 15:01 | 4117545 tarsubil
tarsubil's picture

It is a reference to the Walking Dead.

Sun, 11/03/2013 - 05:26 | 4116905 Popo
Popo's picture

The solution is the one the Japanese came up with years ago:  Stop having kids.  Don't get married.  Just enjoy your life.  It's the best way to absolutely fuck the system.   Married couples with kids are basically just slaves working on the tax-farm.    You need a room to sleep in.   The goverment wants you to want more.   Work on a laptop.  Hang out in public spaces.   Send the message to the baby-boomers, loud and clear:  No one wants your shit-boxes.    You as an individual cannot control prices, but you *can* control demand.   Demand nothing, and the system collapses very quickly.   

Sun, 11/03/2013 - 10:32 | 4117136 fonzannoon
fonzannoon's picture

having kids is the only thing that keeps me going at this point. You only get one life. You may fuck the system but there will always be a system, you on the other hand are more finite. Don't not have kids to prove a point to a system that could give a shit.

Sun, 11/03/2013 - 10:35 | 4117142 Oldwood
Oldwood's picture

But I thought it was supposed to be all about me!

Sun, 11/03/2013 - 11:18 | 4117187 Its Only Rock N Roll
Its Only Rock N Roll's picture

Amen Fonz.  Life isn't a dress rehearsal...its the main act.  It also goes on after we are written out of the script.

Sun, 11/03/2013 - 12:52 | 4117248 CrashisOptimistic
CrashisOptimistic's picture

The people least able to see the results of oil scarcity and the coming population die off are those with kids.

Sun, 11/03/2013 - 12:40 | 4117291 cbxer55
cbxer55's picture

I'm 52 and have no kids. Never wanted any of the rugrats in the first place. Live by myself in a really nice apartment, that has a 24/7 gym on site, pool and spa. Lots of nice places to eat real close by. Three vehicles fully paid for, no credit cards or any other bills. One of those vehicles is a motorcycle that gets great mileage, I ride it as long as the temps are above freezing and it's dry. 

I think I am doing a good job demanding very little. 

Sun, 11/03/2013 - 14:11 | 4117450 fonzannoon
fonzannoon's picture

I'm not saying u have to have kids to be happy. i'm saying do what you want because tomorrow is not guaranteed. prepare as best you can but live your life because it could end tomorrow or go on well past our expiration date.

If you are happy with where you are at you just can't put a price on that. Nice job.

Sun, 11/03/2013 - 15:11 | 4117558 cbxer55
cbxer55's picture

I would not classify myself as the happiest guy in the world, that's for sure. Just where I find myself now, and have to deal with it accordingly. When I was younger, I would have gladly gone the family way. But it just never seemed to work out. I lived in Kalifornia, and most of the girls I dated then were not into the family thing, mostly one-night stands. Hated it, but it's how it was then. By the time I found a woman different from that, she already had a kid and wanted no more. Which suited me because I was 34 at the time, and did not want any hangers-on when I got in my 50's, and that is what the math told me would happen. 

My wife screamed the "D" word at me a year and three month's ago. That's where I'm at. Not in a hurry to change it these days. I really do not believe that things are going to go on as they have all these years. Going to be some serious economic pain in the future. I am definitely glad I brought no kids into the world that I would have to watch suffer from this unfolding nightmare.

And at the age of 52, it's way too late to undo what's been done.

Not happy, but content. 

Sat, 11/02/2013 - 21:00 | 4116287 j0nx
j0nx's picture

I waited it out for 5 long years to sell my place in the mexican burbs of NoVa. 5 long years living in the slums of manassas park it took me to reach par and sell for what I owed this past summer. Now I rent and wait from the sidelines with lots of cash and an 800 credit score for home prices to drop 30% or more. The more we wait it out the more we talk about moving away from this liberal/foreigner infested shithole to somewhere affordable and some place where they still act like Americans and where you don't have to listen to 100 different types of gibberish when you go out for dinner. Our days in NoVa are numbered as with the rate this state is going liberal it will be at best 5 years away from being a carbon copy of The People's Republic of Maryland across the river.

Sat, 11/02/2013 - 21:27 | 4116345 CrashisOptimistic
CrashisOptimistic's picture

There is nowhere for you to go.

30%?  Fine.  Buy.  Then what?  You think it's going up?

HOW?  What is going to change for personal income?  Nothing.

ZH always has problems with the F word.

Forever.  It's not ever going to get better.

Sat, 11/02/2013 - 21:29 | 4116350 DirkDiggler11
DirkDiggler11's picture

Amen Brother !!! I moved FURTHER south about a decade ago from Fairfax. First to Charlottesville, then Richmond, then to Blacksburg, and further South to Charlotte then Atlanta. I would recommend Charlotte first, Atlanta second if you prefer the city. If not, anywhere in Southwest Va, NC Mountains say Asheville, Murphy, Adkins, or in TN around Chattanooga or Knoxville and towards Atlanta from there. Anyplace but NOVA !!!

Sun, 11/03/2013 - 09:15 | 4117053 stocktivity
stocktivity's picture

yuck...and spend the whole summer indoors in air-conditioning.

Sun, 11/03/2013 - 09:42 | 4117084 Wahooo
Wahooo's picture

Born a Yankee, spent many years in the Deep South. I never got used to the summer heat, but certainly didn't let it keep me from working and playing outdoors. No more than Midwest winters now keep me inside.

Sat, 11/02/2013 - 21:32 | 4116355 smlbizman
smlbizman's picture

15 yrs ago if i blindfolded you and dropped you off in ur area, you would have thought u were in tijuana(?)...i live across the river...their is no were to run in usa...look for a different country..

Sat, 11/02/2013 - 21:43 | 4116375 tarsubil
tarsubil's picture

FYI, an old timer contractor former CIA spook that I knew that was living very well in north NoVa moved to Texas a couple years ago. The rats at the top are jumping ship. Best thing to do is to get the hell out of dodge. Move to the midwest fly over country. The cost of living will blow you away.

Sat, 11/02/2013 - 22:33 | 4116482 Darksky
Darksky's picture

Left falls church for texas 2.5 years ago and glad i did. WRT to Manassas Park, was in real estate before i left nova and that area is and will forever be truly fucked. Last i remember the rumor was Wal Mart was going to buy the whole area up and flatten all the houses and build a store. I would wait for the $400k houses to reach $50k before i bought in that barrio. That place was as depressing as the fairfax County area of Falls Church. $500k houses for sale for $175k and the houses were remodeled by OTMs to have 10 bedrooms and 2 kitchens. Many areas of nova will be fucked for decades.

Sun, 11/03/2013 - 03:18 | 4116814 zebrasquid
zebrasquid's picture

I left DC 15 years ago after 45 years there (my family goes back to pre-Revolutionary War in VA).

I go back now and then and I think, wow, so glad I left.
It's lost its heritage. It's international now. Govt. parasites from every corner of the earth.

San Diego is where you want to be, North County coastal. Trust me.
It's still Cool America here with actual Americans..

Sun, 11/03/2013 - 11:19 | 4117188 Buckaroo Banzai
Buckaroo Banzai's picture

San Diego area is beautiful, but it's impossible to make the case for living in Kalifornia.

Sun, 11/03/2013 - 15:13 | 4117309 cbxer55
cbxer55's picture

Yep, left kalipornia 11 years ago. Live in flyover country in Oklahoma now. I see no need for my feet to ever touch california soil again in this life. Some Ca governor said once some time ago, that CA is a really nice place to live, sure it's going to cost more. Or words to that affect. Not sure who it was said that, or the exact words. But it came across as what Gerald Celente would call a  BULLSHIT ALERT!  ;-)

Celente's Trends In The News videos on YouTube have been ranting about housing prices for some time now. 

http://www.youtube.com/channel/UCCs_FjJR8A7rompHCnW0-3g

Sun, 11/03/2013 - 15:02 | 4117548 in4mayshun
in4mayshun's picture

Cali is freaking awesome, but...
Like everything else the Gov't manages my beloved birthplace is nearly ruined. Sky high real estate and taxes- red tape you need a chainsaw to cut thru-and UN agenda 21 being implemented everywhere. The Bay Area tech sector and tourism are the only industries supporting the whole state.
The last straw for me was the latest law passed that gave school children the option to choose whether they use the boys OR girls bathroom.

Sun, 11/03/2013 - 03:01 | 4116827 yofish
yofish's picture

Hey sport, your gibberish reminds me of the Palinbots here in AK with their distain for anything that's not amurican, including, of course, the original americans. Relax, put on some Barry White, close the garage door, kiss the kids, start the beemer and transition!

Sun, 11/03/2013 - 15:05 | 4117553 in4mayshun
in4mayshun's picture

Hey jackass,
Every REAL ZH'er on here that is not a brain-dead LibTard knows that being a "real American" has nothing to do with skin color or ethnicity. More about taking personal responsibility for your life...and not being a retard.

Sun, 11/03/2013 - 10:42 | 4117152 RSloane
RSloane's picture

Greetings from the People's Republic of Maryland. Our governor is famous for inventing new revenue streams that do not exist. Case in point, a few years ago he proposed a very heavy tax increase on those individuals he deemed 'millionaires'. He was cheered and applauded until it was realized that those people had long since moved from Maryland. He kept going down the financial totem pole until he realized he was proposing the biggest tax hike ever seen in Maryland on the working middle class. Now he mostly fumbles around explaining why tax payers have to pay the college tuition for undocumented illegal immigrants. We stay close to our land, neighbors, and families and watch the insanity in Baltimore from afar. Better than television.

Fri, 11/08/2013 - 12:58 | 4135632 smlbizman
smlbizman's picture

really late in responding....but u are fucking making stupid statements...its not like we tax rain at .69 cents a foot for imperviable surfaces...grass is imperviable...just think when this motherfucker can .69 cents a foot to this entire country...."the baltimore connection"

Sun, 11/03/2013 - 11:39 | 4117207 CuttingEdge
CuttingEdge's picture

"where you don't have to listen to 100 different types of gibberish when you go out for dinner"

Which is where the UK is now at. 12 years of forced low skilled immigration to deliberately alter the demographic of the country, as confessed to by cohorts of T Blair Esquire (cunt).

Obama is just following Blair's handbook. 11 million illegals proposed being given citizenship? That 47% just became 50% when that shit goes down. Makes Hillary Clitnon's inauguration a cert...

Sun, 11/03/2013 - 14:29 | 4117485 patb
patb's picture

Sorry you were in ManPark,  it's been a cesspool for 30 years,

but, if you want just white folks speaking english, try Idaho.

 

 

Sun, 11/03/2013 - 16:37 | 4117689 MrButtoMcFarty
MrButtoMcFarty's picture

Or your local major bank....

Sat, 11/02/2013 - 17:23 | 4115911 Z_End
Z_End's picture

Brace for impact...

Sat, 11/02/2013 - 17:38 | 4115923 LetThemEatRand
LetThemEatRand's picture

Please put your futures options in the locked on buy position.  Turn off all electronic devices that would allow you to sell before landing.   Exercise caution unloading the account bins because your assets may have disappeared during flight.

Sat, 11/02/2013 - 17:43 | 4115957 Spigot
Spigot's picture

Sanitary bags have been provided in the seat pocket in front of you in case of in flight distress ...

Sat, 11/02/2013 - 17:45 | 4115960 LetThemEatRand
LetThemEatRand's picture

The Captain has turned on the no holding precious metals sign.

Sat, 11/02/2013 - 18:21 | 4116018 NoDebt
NoDebt's picture

In the unlikely event of a sudden loss of cabin pressure..... oh, you get the point.

Sat, 11/02/2013 - 18:57 | 4116066 0b1knob
0b1knob's picture

Your flight crew, Sum Ting Wong, We Too Lo and Ho Lee Fuk welcome you aboard.

Sun, 11/03/2013 - 11:27 | 4117197 Buckaroo Banzai
Buckaroo Banzai's picture

Thank you for choosing Wealth Confiscation Airlines...now relax, and enjoy the flight!

Sun, 11/03/2013 - 16:36 | 4117686 MrButtoMcFarty
MrButtoMcFarty's picture

Your inflight entertainment today is that classic tale of wonder and and risk, "Wizard of Oz"!!

 

Sat, 11/02/2013 - 17:27 | 4115917 americanspirit
americanspirit's picture

I see a lot of Jewish lightning on the horizon.

Sat, 11/02/2013 - 17:42 | 4115951 Spigot
Spigot's picture

... and Italian, Armenian, Lebanese, Chinese, Indian and other kinds of lightning, too.

Sun, 11/03/2013 - 03:07 | 4116833 yofish
yofish's picture

I pretty much scan for downvotes here because the likelihood of finding an intelligent post (or at least a good killing riposte) will ALWAYS be found there.

Sun, 11/03/2013 - 15:06 | 4117554 l8apex
l8apex's picture

Well then congrats, I welcome you to Mensa

Sun, 11/03/2013 - 11:29 | 4117199 Buckaroo Banzai
Buckaroo Banzai's picture

...as long as the insurance pays off, you can call it whatever you want!

Sat, 11/02/2013 - 17:33 | 4115932 ImReady
ImReady's picture

Must be the govt shutdown... Er, sequester... Er, umm... Bush's fault! 

Sat, 11/02/2013 - 20:59 | 4116284 Bananamerican
Bananamerican's picture

W. was, and remains, an all amerikan DICKHEAD...One of the greatest dickheads this country has ever produced.

Anyone who posts "it was Bush's fault" will get reds from some ZHers because the nagging suspicion remains.... that you may pine for the motherfucker...


Sun, 11/03/2013 - 00:22 | 4116676 funwithstocks
funwithstocks's picture

You  must think Bush has supernatural powers to control Obama's fuck ups 4 1/2 years later. 

Sun, 11/03/2013 - 11:31 | 4117193 Al Gorerhythm
Al Gorerhythm's picture

Still locked into that fantasy, eh? His fault/her fault bullshit. When are you guys going to realize that they're on the same team, working for the same outcome?

Get the fuck over it already.

Ever heard of the private-for-profit Fed and their cartell mononopoly on money creation? You think these miserable cunts, career politicians actually give a flying fuck about little ole you. You are not in their club and are just a plantation worker wondering how the fuck you got so poor (as a nation). Watch Mike Maloney's videos on the hidden secrets of money and cease being a deluded moron, both of you. The fucking lot of you. You're being screwed and you seem to like it.

Sun, 11/03/2013 - 12:46 | 4117302 Non Passaran
Non Passaran's picture

Bananamerican didn't say anything wrong, so be specific

Sun, 11/03/2013 - 13:25 | 4117366 Al Gorerhythm
Al Gorerhythm's picture

Sigh.

Sat, 11/02/2013 - 17:36 | 4115940 vote_libertaria...
vote_libertarian_party's picture

surely this is bullish...I mean, the nice guys on TV always say everthing is bullish...buy buy buy!!!

Sat, 11/02/2013 - 17:37 | 4115943 fonzannoon
fonzannoon's picture

10yr heading to 2.7%

Sat, 11/02/2013 - 17:54 | 4115974 Everybodys All ...
Everybodys All American's picture

and back over 3% ... that would make Yellen print like a mother. No pun intended.

Sat, 11/02/2013 - 18:07 | 4115995 fonzannoon
fonzannoon's picture

It will be interesting. I think the fed has ripped the faces off the shorts enough to keep them at bay. I think we just bang around between 2.6% and 2.8% for a while.Almost every other major thingy....crude....eur/usd....gold....etc etc has topped out, headed back down and then settled into a centrally planned range. just enough volatility for traders to have some fun and boring enough for the fed to keep the machine running without interference until it owns the bond market.

Sat, 11/02/2013 - 19:39 | 4116149 kaiserhoff
kaiserhoff's picture

True enough, there are no solvent bond vigilantes left,

but the Fed can't bail out everything, even though they will try.  The shear number of bankruptcies will eventually do them in.  At least, I hope it will.  Getting really tired of fakaroozy rigged markets.

Sun, 11/03/2013 - 12:09 | 4117233 RSloane
RSloane's picture

Thanks for putting that into words which I had a hard time finding. That is exactly right, Fonz. if there is a crash it too will be centrally planned.

Sat, 11/02/2013 - 17:40 | 4115946 Spigot
Spigot's picture

In the US, half of existing housing sales are cash ... REITs buying or distress sales. And, yes, 30 yr mortgage rate rising to 4.3% is fucking up people's ability to put a noose around their necks. Pity, that. In a few months they will be thanking God they couldn't buy. 80% of Britian's GDP is directly or indirectly from the FIRE complex ... and they are peaking out right now. When I saw this back in 2007 I knew we were fecked, 'cause those crazy Brits are a leading fail indicator when it comes to gambling. Now they are at it again, so this WILL be the Ass Kicking - Part Duex (in the continuing series) coming to a community theater near you (USA).

Sat, 11/02/2013 - 19:03 | 4116076 tawse57
tawse57's picture

What does FIRE stand for?  Thanks.

Sat, 11/02/2013 - 19:10 | 4116086 Ralph Spoilsport
Ralph Spoilsport's picture

Finance, Insurance, Real Estate.

Sat, 11/02/2013 - 19:26 | 4116109 brettd
brettd's picture

Cool.  Thank you.

Sat, 11/02/2013 - 19:16 | 4116092 James
James's picture

.

Sat, 11/02/2013 - 19:19 | 4116099 HappyCamper
HappyCamper's picture

A FIRE economy is any economy based primarily on the Finance, Insurance, and Real Estate sectors. The origins of the term are unclear. Barry Popik describes some early uses as far back as 1982.[1] Since 2008, the term has been commonly used by Michael Hudson[2] and Eric Janszen

http://en.wikipedia.org/wiki/FIRE_economy

Sat, 11/02/2013 - 19:56 | 4116177 tawse57
tawse57's picture

That pretty much sums up the UK - house prices are like a religion and the bubble never collapsed like what happened in the US. Now the UK govt is ramping a bubble on top of the bubble to try and create the illusion that all is well in the economy.

It is not going to end well for Brits with huge mortgages so it is interesting to see people on the other side of the Atlantic have pickdd up on that the UK is heading to disaster.

Sun, 11/03/2013 - 10:35 | 4117143 Winston Churchill
Winston Churchill's picture

just completed the sale of my UK propery on Friday.

Looks like my timing was spot on.

Going to see if I can move the PM prices on Monday all by myself.

Sun, 11/03/2013 - 01:18 | 4116753 Oldwood
Oldwood's picture

I'm old. Why I'm so old I can remember when a house wasn't an investment, it was a home. Most of my family members bought one house and lived in it until they died.

Sun, 11/03/2013 - 01:46 | 4116818 Rock On Roger
Rock On Roger's picture

Aye, a house for a home is not an investment, a home is actually a liability. Its only true value is shelter, it doesn't create an income or feed you.

I live in my Grandpa's house, which I have known over fifty years and it is where I have lived for more than 25 years. I'll never sell, I'll pass it on to my grandkids as long as the world keeps turning.

 

Stack On

Sat, 11/02/2013 - 17:43 | 4115952 Bay of Pigs
Bay of Pigs's picture

The housing market never cleared in the first place. Millions of empty homes and condos all across the country.

Sat, 11/02/2013 - 17:45 | 4115958 Spigot
Spigot's picture

That is a fer sure correct statement.

Sat, 11/02/2013 - 17:47 | 4115963 fonzannoon
fonzannoon's picture

I don't think we will have a normal real estate environment again. same thing for stocks. same for pm's. It's bizarro world from here on out. 

Sat, 11/02/2013 - 19:36 | 4116137 Everybodys All ...
Everybodys All American's picture

Here on out ... The G20 wants to discuss US monetary policy at the next meeting. The here on out will come when no one suspects it.

Sat, 11/02/2013 - 19:58 | 4116183 RiverRoad
RiverRoad's picture

So true.  And owning a home today is like owning a yacht with all the expenses of maintenance that go with it and little to no appreciation.

Sat, 11/02/2013 - 20:16 | 4116215 stant
stant's picture

not a investment anymore at best its a durable good

Sat, 11/02/2013 - 21:30 | 4116354 CrashisOptimistic
CrashisOptimistic's picture

I know of 3 different places in Colorado that sold this summer.  For sale sign went up.  And came down.  Sold.  Owners moved out.  Listed as sold.

No one moved in.

It wasn't flipped.  No For Rent sign appeared.  No one moved in.  They are vacant.

I don't know what's going on there, but I know what I see.

Sun, 11/03/2013 - 08:42 | 4117016 Snoopy the Economist
Snoopy the Economist's picture

Did you see the record of sales for these houses? Isn't that simple to find out?

Sun, 11/03/2013 - 11:54 | 4117219 Yes_Questions
Yes_Questions's picture

 

 

 

That may not reveal much.  But Denver Area RE has been subject to cycles of demand that can now be predicted somewhat reliably by shocks occuring to other regions of the country.

 

If homes (SFR in particular) are being purchased and not occupied right away, its possibly a bet on trouble elsewhere by the buyer.  Based on past trends, its a short on "Conditions" in California fer sure, Texas possibly as well.

 

 

 

 

 

 

Mon, 11/04/2013 - 01:18 | 4118588 nwowatcher911
nwowatcher911's picture

"can't you search the record to reveal?"

"may not reveal much..."

 

Actually, the new buyers, if they are an llc or lp, with some funky name like west holdings something lp with corporate docs stating ownership is by another lp etc.. these are the people who are fronts for fannie and freddie. THey are shadow llcs, and the chicoms get to move their money out of china..fannie gets to suck up the debt money, and the wash cycle continues.

Sun, 11/03/2013 - 00:01 | 4116640 StychoKiller
StychoKiller's picture

Hmm, do "durable" goods require maintenance?  Houses sure do!

Sun, 11/03/2013 - 01:02 | 4116732 Oldwood
Oldwood's picture

I know mine is not so "durable". But it does make a large sucking noise most of the time.

Sun, 11/03/2013 - 17:31 | 4117737 patb
patb's picture

never was supposed to be an investment, it was supposed to be a utility good.

 

One could invest in a kitchen or always eat at buffet cafeterias.

 

One could rent a hotel room at Ocean City or have a cottage.

 

Rent vs Buy is a standard investment analysis.  

 

People went crazy.

 

 

Sat, 11/02/2013 - 20:19 | 4116229 garypaul
garypaul's picture

What do you all think of this:

1. In the future, all taxes (income, sales, etc.) will work down towards zero (just like interest rates have). 

2. There will be a permanent QE that causes a certain amount of money debasement (say 25% per year as an example).

3. Thus, everyone winds up paying a hefty tax, even if they earned no income or bought anything.

The government really doesn't need any taxes since it can just create what it needs. But the lowering of tax rates every year would get people happy and working harder, which is the goal of any 'capitalist' system.

Sounds crazy but it could work, no?

Sat, 11/02/2013 - 20:48 | 4116273 CrashisOptimistic
CrashisOptimistic's picture

ZH never gets this right.

QE is not debasing currencies because there is a drain.  QE creates money.  Ongoing mortgage defaults destroy money. If Ben didn't print, ATMs would stop working as the banks fold.

THIS is why there has been no hyperinflation.  There is no increase in total money.  The ongoing defaults are astronomical.  The car subprimes and student loans will follow mortgages.

Ben is just trying to keep the wheels turning and blood from flowing.  He knows he isn't improving anything.

Sat, 11/02/2013 - 20:58 | 4116286 garypaul
garypaul's picture

Call it whatever you want but it could work in principle perhaps?

Sat, 11/02/2013 - 23:11 | 4116548 evokanivo
evokanivo's picture

Thank you. You one in a hundred here on ZH who gets this. No one ever talks about the drain.

To paraphrase, there is not enough money in existence to pay for all the debt! Central banks create the money to pay the loan principal, but the money to pay the interest is not created. The borrower pays the latter only through taking on new loans. (This happens in aggregate, i.e. central banks issuing and everyone else borrowing).

The inflation/deflation argument must take into account the rate of creation AND destruction.

 

Sun, 11/03/2013 - 11:19 | 4117189 JimS
JimS's picture

Correct, evokanivo. Additionally, non-central bank run governments around the world, are doing the same damn "printing money" thing. When everyone else is doing it, is it the first country that jumps back from this maddness, the winner?

Sun, 11/03/2013 - 01:06 | 4116736 Oldwood
Oldwood's picture

I haven't defauted but i could use a little help on the mortgage. Any chance of any Benny bucks headed my way, or is that just friends and family money?

Sun, 11/03/2013 - 01:11 | 4116747 Oldwood
Oldwood's picture

On a serious note, if the fed is simply printing to clear defaults, why are forclosures relatively low right now and all of these empty pre-forclosure properties still out there. In understand they are buying up mortgage backed securities, but if these are mortgages in default why don't they clear? If the banks are being bailed out because they are holding bad loans, why aren't thsoe loans being cleared? I don't get it. What bad loans are being covered?

Sun, 11/03/2013 - 01:09 | 4116801 I Write Code
I Write Code's picture

Banksters are paid beaucoup to sit on bad loans quietly.

Sun, 11/03/2013 - 07:21 | 4116958 Singelguy
Singelguy's picture

You fail to appreciate two things. First, banks hold their mortgages on the books at 100 cents on the dollar. If they foreclosed quickly and resold the homes, they would be forced to realize the actual value and write off the losses. Many of the banks would be insolvent if that happened or if they were forced to mark the value of their mortgage portfolios to real market value.

Secondly, the Fed has been buying up mortgage back securities to the tune of $40 billion per month. In effect, the Fed is buying the toxic mortgages from the banks and paying 100 cents on the dollar. Since the Fed printed the money out of thin air, there is no sense of urgency to foreclose on the bad stuff and liquidate the loans. Pushing foreclosures would lead to lower home prices, creating deflation which the Fed is scared to death of.

There was $7 trillion in loan originations during the bubble build up. At $40 billion per month it would take the Fed about 15 years to buy it all up. Needless to say, the banks still have a lot of shit on their books.

Sun, 11/03/2013 - 09:45 | 4117085 Oldwood
Oldwood's picture

Not all of the seven trillion are bad loans, and to my question, if they are paying off some of these bad loans, I assume they are for homes, so where are those homes? If the note is paid off are these free and clear homes sitting on bank's balance sheets empty? Even if 50% of these loans were bad, its not like there was no equity in them. housing prices fell but few were devalued by half, but even if, 50% of 50% default is still just a couple of trillion and they have printed a shit load more than that and the houses are still sitting there empty. It just doesn't make sense.

Sun, 11/03/2013 - 11:11 | 4117178 JimS
JimS's picture

You have a good point, Oldwood, but.... No one has a clue as to how many of these properties have multiple loans tied to them, via all these MBS/RMBS/(and who knows what other derivative)...., and because all the paperwork has been shredded, it will never be cleared up. That is another reason that the banks are loathe to clear the homes. Many of these properties will end up in court trying to solve who owns what, with lawyers eating up whatever is lying around. Because of mutiple claims of ownership, it's a total clusterfuck.

Sun, 11/03/2013 - 11:17 | 4117184 Oleander
Oleander's picture

Have you ever searched the Negitive Equity Infographic on Zillow? You can see how many homeowners in your area are underwater and how many are behind.  In my town 13% are underwater, 6% of them are delinquint. Home prices are down 20% from peak.

 

I searched  a random area in Atlanta. In Stone Mountain 74% underwater. 8% are delinquent. Prices are down 63% from peak.  All  based on 2nd quarter 2013.

Sun, 11/03/2013 - 14:26 | 4117477 Professorlocknload
Professorlocknload's picture

  Oldwood, my guess is even though these mortgages are now held by the Fed, some entity is delegated to decipher any equity value in this paper and ultimately liquidate it.  Or maybe the Fed plans on just liquidating the entire portfolio a dime at a time at some future date when inflation is heating up, as a means of sponging up the money excess.

  Given Bureaucrats timing track records, in the end it will all come unraveled, but what the hell, the Soviets held a Centrally Planned Economy together for 60 years.

 

Sun, 11/03/2013 - 11:34 | 4117204 swmnguy
swmnguy's picture

Exactly.  People forget, or never knew, how this works.  I have a personal example.  I bought my current house in 2009 for $200k.  It was owned by an old couple until they both died in about 2003.  Their daughter sold it for 260k in 2004 to a guy who was a fringey mortgage broker.  He overpaid, refied at least once, and took out a second mortgage AND a HELOC.  By 2007 subprime was cratering here in Minneapolis already so this guy went bust and lost the house.  The lender who held his 1st mortgage foreclosed and the guy left.  The bank transferred the title to MERS.  Some other financial entity bought it from MERS.  By early 2009, they sold it to a flipper for about 110k.  In fall of 2009, I bought it for that 200k.

By the weirdest coincidence, the guy who bought my house in 2004 for 260k and owed well over 300k what with one thing and another?  A week before I bought this house, he walked into a pawnshop here while it was being robbed.  The robbers shot him and he died as he walked in the door.  It was big news here.

So today I get letters every month from Ocwen Financial, trying to collect on his SECOND mortgage.  I won't respond directly, but I have sent them printouts of stories about the guy's murder from the local paper.  They know damn well he's dead but they keep trying to get somebody to acknowledge them so they can armtwist somebody into paying some of the debt (which is otherwise completely worthless).  Every so often they call on the phone, and I rarely answer.  One time I did and they tried to tell me my phone number (which I've had for 17 years and three addresses) was in their files as the contact number for the dead guy.  I told them I knew that was a lie, and if they had Google to use to get my phone number, they knew their deadbeat was in fact dead, and that particular guy has never called back.

So Ocwen is holding a dead guy's SECOND mortgage on their books at 100% face value ($40,000) despite the fact the guy's been dead for 4 years and probably hasn't made a payment in 6.  How many millions of such loans are on the books to this day? I mean, obviously $40 billion per month hasn't made enough of a dent in it, for years.  So a number of Trillions of dollars in absolutely worthless paper?  The largest financial fraud in human history, no doubt.

It's all fraud.  The second the little boy in the crowd shouts that the Emperor is naked and everyone starts to admit what they all already know, it's going down like a submarine with a screen door.

Sun, 11/03/2013 - 12:26 | 4117268 Deo vindice
Deo vindice's picture

+1 for the "like a submarine with a screen door" simile.

Sun, 11/03/2013 - 13:55 | 4117421 swmnguy
swmnguy's picture

Thank you.  I've gotten bored with some of the more colorful sexual references.

Sun, 11/03/2013 - 12:39 | 4117285 CrashisOptimistic
CrashisOptimistic's picture

In April 2009, the Financial Accounting Standards Board declared that banks no longer had to list mortgages' value at mark-to-market amounts.  They declared the banks could value the mortgages at a level which, in the bank's opinion, would be the level "in more normal times".

This was supposed to be a temporary measure because "valuing these mortgages at a mark-to-market level would benefit no one" -- meaning the banking system would collapse.  But it's still in effect.

Go to the wiki for mark to market an dsee what a joke it is, particularly in the paragraph that starts: Problems can occur when the market-based measurement does not accurately represent the underlying asset's true value.

So in effect we don't know what is on bank balance sheets.  They are lying beyond any rational thought in order to keep their bonuses flowing.  Also, measures of delinquency are bogus.  Like so:

Banks contact an underwater homeowner who is 12 months delinquent and say "we will cut your interest rate and extend the years of the loan.  This will reduce your monthly payment.  Do you agree?  You have nothing to lose in this.  What?  No, we won't reduce the principal, but the rate will reduce and your payments will reduce.  There is no downside in this for you . . . AND . . . we'll fix your credit history from being in arrears."

Of course the homeowner says yes.  There is indeed no downside.  He was underwater.  He stays underwater.  But no worse so. 

BUT THE BANK CAN THEN REMOVE HIM FROM DELINQUENT STATUS.  It looks like he got a job.  And caught up on his late payments.  Nothing like that happened.  It's all camouflage.

Sun, 11/03/2013 - 15:19 | 4117567 Pareto
Pareto's picture

+1 wow. fuck.  what a story!  the shit is piled so high and so thick that no shit shovel will be large enough to put a dent into this burgeoning moutain of shit.

Mon, 11/04/2013 - 01:22 | 4118595 nwowatcher911
nwowatcher911's picture

Since MERS was invovled at some point, there may be investors out there and the title may not be clear even though it appears to be.

Texas Fat Man has the MERS attorney on with the book, Clouded Titles, and the vids on youtube break it down..

Tue, 11/05/2013 - 15:12 | 4123625 swmnguy
swmnguy's picture

Thanks a ton for the tip.  I'll check that out.

Sun, 11/03/2013 - 01:32 | 4116765 FreedomGuy
FreedomGuy's picture

In my city they are building huge condo units virtually everywhere. It blows my mind. They are acting like there's a gold rush and a million new people are going to move in...all while incomes are falling (in the nongovernmental sector) and Obamacare is about land in force.

The irrational exuberance is amazing. Oh, and of course it is another opportunity to raise property taxes.

Sun, 11/03/2013 - 03:36 | 4116851 PT
PT's picture

Always very strange how we can afford to build it but we can't afford to buy it.

You have to remain homeless while we build more empty homes. 

Sat, 11/02/2013 - 17:47 | 4115964 q99x2
q99x2's picture

Yo Yellin. Get those legs a peddling. Use gots to inflate me into a home. Up my FASFA yellin mother fukka. If you're going to do it, do it now.

Sat, 11/02/2013 - 17:58 | 4115979 Kamehameha
Kamehameha's picture

This is the part in the business cycle where the Federal Reserve system was designed to step in and start loosening monetary policy in an effort to restart the housing market.  For example, they can lower interest rates for home mortgages to make it possible for more people to be able to afford to buy a house.  This in turn will make it possible for builders to build more houses, and employ more carpenters, etc.  The end result of this will be restarted economy, banks will be in better shape, and more tax revenue will be generated improving government finances at all levels.  Given the current situation the banking system could also make it easier for government to acquire the funding to restart the economy, for example with a stimulus package that will be financed out of future tax revenues.  Although these theories have never, ever worked in 100 years of examples, we will employ them full force for the foreseeable future, and when they do not work, we will double down and claim it must be the market's fall for not working.  Unfortunately all of this is by design — to bankrupt and reduce to poverty the average citizen while parasitically siphoning wealth to the banking cartels.  It works like a dream over and over, in nation after nation, since human generational memory is about 25 years or less. 

Be prepared for inflation and deflation.  You know what that means - PMs.  As a little guy it is your only option anyway.

PS-- looks like their plan for handling inflation is bail-ins.  Kind of hard to have inflation when everyone's bank account is locked.

Sat, 11/02/2013 - 19:25 | 4116105 HappyCamper
HappyCamper's picture

Ah, who cares?  The Broncos are play football next Sunday night.

Moar beer!

Sat, 11/02/2013 - 19:48 | 4116147 HappyCamper
HappyCamper's picture

Ok, I'll be serious.  Yes, these guys have been wielding and manipulating money for hundreds of years.  They know how to create it and how to destroy it, and they how to siphon off the wealth both ways.  They know how to create bubbles, and then pop them when they're ready and want to.  BTW. nothing that's happening at the Fed right now is an "experiment."  That's bogus.  These guys know exactly what will happen down the road because for centuries it's happen over and over again.  The game is more sophisticated now, the vehicles are more complex, and the stage is much bigger, but the fundamental game is still the same.

Invest, inflate, cash out, destroy, then do it again.  Rinse, lather, wash, and repeat.  Watch as the wealth moves from your family to mine.  Have a nice day.

Go Broncos!

Edit:  You make a good point about the bail-ins.  Don't forget about our 401ks and IRAs.  The government unions have their sights set on those.

Sun, 11/03/2013 - 00:06 | 4116652 StychoKiller
StychoKiller's picture

If I were to take leave of my senses and buy another home (perhaps a cabin by the nearby lake), just WHO holds the correct title?  Can I get title insurance (meaning insurance protecting MY munny, not the banks!)?

Sun, 11/03/2013 - 11:19 | 4117186 lasvegaspersona
lasvegaspersona's picture

I doubt the USA could afford the hit to confidence that bail-ins  would do. We can just print more and get the same effect. Why air your dirty laundry when you can send it to the Fed for cleaning?

Sat, 11/02/2013 - 18:02 | 4115986 QQQBall
QQQBall's picture

I'll summarize stall speed for the real estate market, particularly CRE...

 

Anyone who could, refi'ed, many imes below 4%. The people that absolutely had to sell. which was reduced by the refi binge, have sold. Existing owners therefore don't have to sell and buyers don't want to pay such low cap rates - sellers are aggressively pricing offerings... so you have unmotivated sellers and unmotivated buyers... and a shitty economy where juicy yields involve risk and leverage. you take SBA out of owner-user CRE financing and you'd see a smoking crater. 

Sat, 11/02/2013 - 20:14 | 4116212 HappyCamper
HappyCamper's picture

Good point.  A thinly traded market does not necessarily mean a market crash.  But who is more motivated now?  Buyers or Sellers? 

Who will be more motivated after Obamacare goes full postal on our economy?  Could we see RE interest rates sub-one percent in a year or two?  (Shout out to you, Yellen.)  I would not be surprised. 

 

Sat, 11/02/2013 - 18:03 | 4115990 ebworthen
ebworthen's picture

Cue Joe Bologna of Deutsche Bank saying that if home builders increase the supply of new homes it will pull demand regardless of income stagnation and higher rates.

Sat, 11/02/2013 - 18:04 | 4115992 hangemhigh77
hangemhigh77's picture

I'm shocked...SHOCKED!!  Housing going DOWN????!!  I'm shocked...SHOCKED!!!  It says housing will never go down in Alan Greenpukes new book.  Housing MUST go up!!!!  SHOCKING. Whodda thunk it?

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