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Mortgage Payments Rise To 40% Of Consumer Incomes: A Five Year High

Tyler Durden's picture


Still think houses are extremely affordable? Still think rents, especially for rental stream-securitized offerings by Blackstone et al to widows and orphans , will continue rising in perpetuity? Think again. As the following chart from Bloomberg Brief shows, mortgage payments as a % of average consumer incomes has risen to 40%, up from the higher 20% as recently as a year ago, is still rising, and is now back to levels last seen in 2008.

Bloomberg has more:

The average monthly mortgage payment Mortgage Payments Now 40 Percent of Average Consumer Incomes for a new home in the U.S. rose by $300 between December and August, providing a potential red flag for U.S. Federal Reserve officials debating when to reduce their special asset purchases. The rise was due to a combination of rising home prices and mortgage rates.


In August an average monthly mortgage payment of $1,287.57 equates to about 40 percent of consumers’ average income, up from 31 percent in December, placing additional strain on household finances. While this jump is substantial, it is still far below the housing bubble peak of 65 percent registered in June 2006.

Yes, it can go higher. And it will. What is most ironic is that it desperately has to, at least according to boththe TBAC, Wall Street and the Treasury. Recall from the May TBAC presentation:

Simply stated, the Fed is desperate for housing to return to its status as a source of "high quality collateral", hence repoable credit money, instead of a byproduct of cheap credit affordable only to the 1%.  It is then and only then that the Fed can even consider to withdraw, and explains also why the Fed needs a housing bubble. After all, without the broader US population scrambling en masse into housing, there can by definition not be a bubble. Sadly for the Fed, the incipient housing bubble seems to have already popped, which is why a brand new concerted effort to make housing, paradoxically, less affordable and thus more disrable, is coming down the line, and why more and more people realize that Yellen's first flow adjustment will not be down but up.


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Mon, 11/11/2013 - 09:11 | 4142348 StychoKiller
StychoKiller's picture

I bang my head against the wall because it feels sooo good when I stop!

Mon, 11/11/2013 - 09:17 | 4142357 Headbanger
Headbanger's picture

Hey that's my line!

Mon, 11/11/2013 - 09:19 | 4142360 Ruffcut
Ruffcut's picture

Don't care who you are dat ain't a funny print. Peeps are house poor.

Mon, 11/11/2013 - 09:24 | 4142368 GetZeeGold
GetZeeGold's picture



Americans can afford it cause they're getting dumped off their healthcare.

No one is signing up for the new stuff cause it's wicked expensive.

Mon, 11/11/2013 - 10:08 | 4142401 hedgeless_horseman
hedgeless_horseman's picture



The average monthly mortgage payment Mortgage Payments Now 40 Percent of Average Consumer Incomes

I believe that is pre-tax income, ladies and gentlemen. IF you are maaking $100,000, then after fed income tax you are left with roughly $83,000. 

Subtract state income tax, property tax, and home-owner's insurance and you are left with ~ $75,000.  Now you are talking mortgage payments ~53% instead of 40%.

It is the land of the fee, home of the debt and tax slave.

Mon, 11/11/2013 - 10:09 | 4142446 Dr. Kenneth Noi...
Dr. Kenneth Noisewater's picture

Who are these morons?  My PITI comes in at about 19% of my _NET_.  And costs less than rents on smaller properties, or even rents in multifamily buildings in my vicinity, let alone anyplace hip or urban..  Same property in LA or SF would probably be more like 80% of my net..

Mon, 11/11/2013 - 10:55 | 4142503 LawsofPhysics
LawsofPhysics's picture

"Who are these morons?"- Follow the fraud/theft/money and you can see that these morons/criminals live mostly in D.C., Jew York, California, and Illinois.   The great thing about the coming collapse, unlike those throughout history, is that the flow of money/capital/assets is now well documented and can be found easily online.  There is no question what locations in America have been benefitting from the ongoing fraud.  Yes, some of the cronies will get away, but with a little effort it will be easy to see how the guillotines need to be applied.

Hedge accordingly.

Mon, 11/11/2013 - 11:01 | 4142573 Dr. Richard Head
Dr. Richard Head's picture

Many morons are right next door.  My wife and I are sitting at 11.79% mortgage to income.  Most in my hood are pretty upfront about how much they make and their house payment.  I can tell you the 40% mark is pretty accurate for most around me.  I watch in awe as they scrape by day-to-day, but then have enough cash and time to party till 3-4 am on weekdays.  I guess one just needs to medicate themselves to get through the shit.  I know I do.

Mon, 11/11/2013 - 11:53 | 4142587 Shocker
Shocker's picture

Consumers are squeezed in every direction.

Mon, 11/11/2013 - 11:17 | 4142612 odatruf
odatruf's picture

Zero divided by anything is zero, so I guess whether I double or half my income, I'm an outlier.

Mon, 11/11/2013 - 11:21 | 4142623 new game
new game's picture

and then you look out and a new hundyi in the driveway-nice purchase neighbor(thinking what an idiot they are)...

Mon, 11/11/2013 - 14:19 | 4143086 corporatewhore
corporatewhore's picture

I get a warm and fuzzy feeling when someone talks that way

Mon, 11/11/2013 - 11:30 | 4142626 Jreb
Jreb's picture

Us too.

Mother in law doesn't understand why we don't live in a bigger house since we can "afford it". 

Told her "Debt bad - cash flow and hard assets good. House just place we live. Bedroom plenty big for bed. Ugh. Besides - jreb dumb."

She thinks I am a moron. I don't see her a lot as a result.

Lesson here is simple. Live in a smaller house and have lower stress, lower payments, lower overhead and fewer visits from your mother in law.


Mon, 11/11/2013 - 11:34 | 4142662 drdolittle
drdolittle's picture

Like the caveman/indian talk too.

Mon, 11/11/2013 - 11:36 | 4142673 Bearwagon
Bearwagon's picture

I would add that your lesson is also applicable to cars ...

Mon, 11/11/2013 - 14:05 | 4143056 Buffalo Bones
Buffalo Bones's picture

The change in the definition of "affordability" creates so much cognitive dissonance it makes me nauseous. This is an excellent illustration of the saying "a country gets the leadership it deserves."

All we want is instant gratification, long term consequences be damned!

Mon, 11/11/2013 - 10:09 | 4142447 jbvtme
jbvtme's picture

Do you think the mother of the architect who designed this is proud of him today?

Mon, 11/11/2013 - 10:20 | 4142470 ItsDanger
ItsDanger's picture

No, that front door definitely stands out too much.  Windows everywhere except there.

Mon, 11/11/2013 - 09:30 | 4142379 Keyser
Keyser's picture

One of the greatest lies ever perpetrated against the American people is that home ownership equates to acheiving the American dream. Success perhaps for the bankers and government for reaping profits, but a potential nightmare for the typical home owner.

Mon, 11/11/2013 - 09:40 | 4142394 CheapBastard
CheapBastard's picture

Overpriced houses packed with 3.4% down Debt Slaves.

Mon, 11/11/2013 - 10:03 | 4142439 Headbanger
Headbanger's picture

Another one is "BMW, The Ultimate Driving Machine" 

C'mon, let's hear it from you Beeeeemrrrrr pukes!

Mon, 11/11/2013 - 11:24 | 4142634 new game
new game's picture

ultimate vanity money pit...

Mon, 11/11/2013 - 16:00 | 4143398 Buffalo Bones
Buffalo Bones's picture

'98 Camry, gonna ride that bitch till the wheels fall off.

Mon, 11/11/2013 - 12:18 | 4142787 gobsmack
gobsmack's picture

Ha! I am a beemer puke but I bought it before I realized what was happening to us and now wish I had bought gold and a ford focus instead.  Still living in our first house though with an $800/mo mortgage so still feeling reasonably ok on average.

Mon, 11/11/2013 - 13:28 | 4142966 robobbob
robobbob's picture

i spent a lifetime driving hoopties and can tell you bmw earned that slgoan. they are aaaaawesome. until its time to fix anything.

now its hard to keep the hooptey mobile going after cash4clunkers wiped out all the spare parts.

Mon, 11/11/2013 - 11:57 | 4142723 Freddie
Freddie's picture

Well you are realizing the American Dream for the govt unionized county workers sitting at desks all day doing nothing but counting the days till their golden pension.  Ditto the local unionized cops and unionized fireman lifting weights on your property taxes. 

Mon, 11/11/2013 - 14:25 | 4143106 Bob Sacamano
Bob Sacamano's picture

Whatever was "perpetrated against the American people" was only effective because they just happen to not be particularly smart.  Blaming someone else for borrowing money makes no sense -- no one was forced to borrow.   Folks just need to take responsibility not to do stupid things.

Mon, 11/11/2013 - 09:25 | 4142363 Indian_Goldsmith
Indian_Goldsmith's picture

Why Americans need so many new houses is beyond my comprehension. joint Indian families live in the same house for generations. Sometimes we have 4 generations living in the same house. Thats how we're able to accumulate so much GOLD. And it also make for a great extensive social support system, where kids are kept in line easily, and the old dont have to shell out their life savings into nursing homes(prisons for the old)

Mon, 11/11/2013 - 09:29 | 4142374 new game
new game's picture

cultural thingy...

couldn't live with mom, no thanks...

Mon, 11/11/2013 - 09:35 | 4142389 Indian_Goldsmith
Indian_Goldsmith's picture

True, Cultural thing here.

But i guess Americans cant have that - u know- a culture. You people dont show your women their place. You have women doing Men's responsibilities, and men shirking those responsibilities. But in our country, women know their place and stay out of the business of men. Women stay in the kitchen, where they belong.

Proper seperation of Roles. Not like the social anarchy you guys have

Mon, 11/11/2013 - 09:41 | 4142395 Bobbyrib
Bobbyrib's picture

Nice sock puppet..who are you really?

Mon, 11/11/2013 - 12:14 | 4142774 Bay of Pigs
Bay of Pigs's picture

That is funny.

Thanks Tyler, Sac or whoever.

Mon, 11/11/2013 - 09:44 | 4142398 fonzannoon
fonzannoon's picture

I thought India was big on all those honour killings?

I thought India was a total fucking mess. 

Mon, 11/11/2013 - 10:00 | 4142427 Indian_Goldsmith
Indian_Goldsmith's picture

Wow, you really beleive all that MSM crap?

Mon, 11/11/2013 - 10:52 | 4142550 new game
new game's picture

yea dad rules with an iron fist! on your knees bitch-cultural thingy...

Mon, 11/11/2013 - 09:46 | 4142400 pods
pods's picture

Gee thanks. That means alot from the country with the highest number of slaves.


Mon, 11/11/2013 - 09:49 | 4142407 fonzannoon
fonzannoon's picture

plenty of upvotes for that comment, and it comes from a guy representing the country that commits such awful crimes against women. Freaks on here this am.

Mon, 11/11/2013 - 09:52 | 4142414 Bobbyrib
Bobbyrib's picture

As opposed to every other morning?

Mon, 11/11/2013 - 10:06 | 4142442 Indian_Goldsmith
Indian_Goldsmith's picture

"commits such awful crimes against women"..You're another mindless MSM believing Drone, arent you? India worships women, We have goddess dedicated temples. A few families punishing wayward women and a few maniacs targeting little innocent girls doesnt really tell you anything about a country of 1.3 billion people, does it?

Mon, 11/11/2013 - 10:13 | 4142462 fonzannoon
fonzannoon's picture

MSM crap aside, because you may be right, I don't live there so I don't know.

To say that a woman's place is in the kitchen, and say that you worship women at the same time just confounds me. So please clarify something. If one of these women that you worship decides she wants to leave the kitchen and start a career etc. What would your culture's reaction be?

Mon, 11/11/2013 - 10:30 | 4142488 Bearwagon
Bearwagon's picture

Lighten up, Fonz. Didn't he clearly disqualify himself? I mean, come on, I am a few days older, and I know a little about cooking. I assert that every man who knows at least as much about cooking as I do would agree that a womans place is exactly not in the kitchen. :-)

Mon, 11/11/2013 - 10:32 | 4142495 fonzannoon
fonzannoon's picture

His avatar's shirt bought him one extra comment.

Mon, 11/11/2013 - 10:38 | 4142507 Bearwagon
Bearwagon's picture

I thought you would know me better ... this was NOT dedicated to him, avatar or not, but you. And by the way: Have you lost your sense of humor or wasn't that downvote from you?

Mon, 11/11/2013 - 10:41 | 4142519 RSloane
RSloane's picture

I'm going to take a guess and say "I-adore-women-as-long-as-they-stay-in-the-kitchen-and-do-exactly-as-I-tell-them-to-do" downvoted you.

Mon, 11/11/2013 - 10:48 | 4142544 fonzannoon
fonzannoon's picture

The women on my wife's side have ridiculous talents. They can design, sketch, build, write code....all sorts of shit. 

When tshtf and we get the great reset their talents and my ability to drink beers and yell at everyone that I saw this coming will be an awesome combination.

Mon, 11/11/2013 - 10:56 | 4142563 RSloane
RSloane's picture

OMG! That's my husband's plan too. :)

Off topic, but I read a follow up to the story you posted on Sunday. The guy was shot at the rink over his coat by a sixteen year old with an extensive rap sheet who then tweeted about the killing, both before and after. Get as far away from the city as possible Fonz. It may be your shoes, next.

Mon, 11/11/2013 - 11:03 | 4142578 fonzannoon
fonzannoon's picture

That was the thing RSloane. I don't go to the mall anymore. I never take my daughter into the city. Now I know the old timers on here will tell me the city was more dangerous years ago. Maybe. But nowadays the cops add a dynamic. When something happens now you have to run from the bad guy and run even faster from the cops who will just spray and pray.

It won't be me, because I won't put myself in that situation anymore. Think about it by the way. That shooting happened at 11pm and it was a 14yr old that got hit. When I was in Junior High I was not out at 11pm.

I am a bit frozen in place. I'm not in the city, but I am not in a great area should something serious go down. I need to reconcile this.

Mon, 11/11/2013 - 11:13 | 4142600 RSloane
RSloane's picture

Yes you do, Fonz. You are describing living in an area that has a lot of amenities that you can't take advantage of because its too dangerous. I didn't think about the time of night it occured, but you are right. In Baltimore, the nearest big city to me, gangs of girls as young as 8 are rushing into convenience stores and robbing them, taking everything their little arms can carry. They usually show up around 2 or 3 am. How can people not know their kids are out there at that time of night? I don't get how a 14 yr old is out at that time of night, either, let alone a 16 yr old who tweets his murder. Its so bizarre its difficult even to think about rationally.

Mon, 11/11/2013 - 11:20 | 4142621 fonzannoon
fonzannoon's picture

In parts of Brooklyn and the bronx these "families" just pop out one kid after the next to keep the checks coming. If the kid manages to survive to 16 it is not surprising that they end up killing someone else, themselves or both over something like wanting a jacket. 

This was the song Diblasio was introduced to.  NYC is totally fucked.

Mon, 11/11/2013 - 12:15 | 4142777 Hulk
Hulk's picture


"When tshtf and we get the great reset their talents and my ability to drink beers and yell at everyone that I saw this coming will be an awesome combination"

Best/funniest post eva !!!

Mon, 11/11/2013 - 10:42 | 4142524 fonzannoon
fonzannoon's picture

Of course I did not downvote you. I barely ever downvote people. I am one of your upvotes.

The only thing I have left is my sense of humor. I lost my mind a long time ago

Mon, 11/11/2013 - 10:48 | 4142546 Bearwagon
Bearwagon's picture

That's fine (you are one of the people whose downvotes I would seriously consider).

Mon, 11/11/2013 - 10:57 | 4142565 new game
new game's picture

50/50 is my vote - my wife has street smarts and can be a true survivalist. she is the shit man.

wouldn't have it any other way. she is right if ya can listen in.  besides look who runs america - a bunch sociopaths with very few women at the helm.  maybe if women were in charge we would see some changes overdue.

hope i pissed a few of you off...

downvote, please-tia.

Mon, 11/11/2013 - 11:13 | 4142599 Bearwagon
Bearwagon's picture

Let's see if it won't be you, who's to be pissed off a bit, when you get a "woman" at the helm of the FED, hehehe ...  ;-)

Mon, 11/11/2013 - 11:15 | 4142607 RSloane
RSloane's picture

I prefer to think of Yellen as sexually ambivalent. Also, I'm fairly certain she in her face.

Mon, 11/11/2013 - 11:45 | 4142695 MachoMan
MachoMan's picture

The sociopaths come in both sexes...  The issue is with the selection process for our leaders and the inevitability that those desperate for power eventually find it. 

Mon, 11/11/2013 - 11:43 | 4142691 drdolittle
drdolittle's picture

Yeah but you spouted off that gender role bs, that tells me something.

My wife is my partner. We love and respect each other. We also have an agreement and understanding that only one person can be top dog. Sometimes things have to be resolved. This does not mean that I run roughshod over her or bully her. Without her respect and cooperation I could not stay at the top. If I started always being an ass (instead of sometimes) she'd resist and there would be anarchy. Most all of our decisions are together and/or compromise.


Mon, 11/11/2013 - 11:46 | 4142698 MachoMan
MachoMan's picture

We also have an agreement and understanding that only one person can be top dog.

And either she resents you for it or you're bottom dog and just don't know it.

Mon, 11/11/2013 - 14:44 | 4143158 NickVegas
NickVegas's picture

The caste system, slavery, honor killings, treating woman like slaves. We all have a lot of fixing to do in our respective societies. Both have merit, both have problems.

Mon, 11/11/2013 - 10:00 | 4142432 Indian_Goldsmith
Indian_Goldsmith's picture

Highest number of slaves? Isnt Debt = slavery? In that case, all americans with credit cards are slaves!!

Mon, 11/11/2013 - 10:11 | 4142454 ExpendableOne
ExpendableOne's picture

My slave quarters are pretty nice though.  Mom in law is far away...  And the company store (walmart) is just down the road.

Mon, 11/11/2013 - 12:38 | 4142841 Freddie
Freddie's picture

This is done in other countries including Germany where they may have a three story house with all the generations in the house.

Mon, 11/11/2013 - 09:29 | 4142376 fonzannoon
fonzannoon's picture

We need so many homes because deep down we generally don't like each other.

Mon, 11/11/2013 - 09:35 | 4142388 cossack55
cossack55's picture

Generally or genuinely?

Mon, 11/11/2013 - 10:12 | 4142457 jbvtme
jbvtme's picture

we trade housing as if it is a commodity. economies can't run on that model

Mon, 11/11/2013 - 13:44 | 4143006 Buffalo Bones
Buffalo Bones's picture


Mon, 11/11/2013 - 09:52 | 4142415 ATM
ATM's picture

Indians own so much gold because there are sooo many Indians. Per capita ownership isn't so high.

Mon, 11/11/2013 - 10:04 | 4142440 Non Passaran
Non Passaran's picture

They own so LITTLE gold on a per capita basis because there are so many of them (great majority of them being very poor)

Mon, 11/11/2013 - 11:38 | 4142676 drdolittle
drdolittle's picture

at indian goldmith re housing many generations


Yeah, the US is gonna come back to something like that and it'll be a good thing. Kids are already living with parents much longer. I will be happy to keep my kids and grandkids with me. Not to sit in my basement and smoke pot but to save their money and mine plus be surrounded by people I love and like.

No nursing home here. When I get too old they're gonna take care of me or I'm gonna go outside wearing thin cotton on a cold rainy march or april day. They will be forewarned not to call an ambulance but if you find me still breathing, take a long walk and check back later. Hypothermia will not be a bad way to go, you stop feeling cold after awhile.

Mon, 11/11/2013 - 14:47 | 4143164 NickVegas
NickVegas's picture

Quit worrying about the end, and change things now, for yourself, for everyone around you. You will not get this day back, and you will have wasted time worrying about things that are out of your control.

Mon, 11/11/2013 - 10:11 | 4142451 GMadScientist
GMadScientist's picture

If you did it with any sincerity, you'd never need more than one blow.

Mon, 11/11/2013 - 09:12 | 4142349 Shizzmoney
Shizzmoney's picture

Wall St: "WE NEED MOAR FIAT!!!!!!!111111"

Mon, 11/11/2013 - 09:26 | 4142372 Headbanger
Headbanger's picture

That's not going to happen now that the Big Banks (who are the Federal reserve) now see that all their efforts to prop up this retarded economy are failing.

Don't you sheeple get it?  This country has been run into the ground by a bunch of la la land liberal idiots who gladly sold their governing powers out to greedy banksters who made a fortune on it!

So get a clue you mooks!  The banks, the Federal Reserve and the Federal Government are all crap now and they know it.

Mon, 11/11/2013 - 10:19 | 4142468 NihilistZero
NihilistZero's picture


Liberal.  You keep using that word.  I do not think it means what you think it means.

Mon, 11/11/2013 - 10:56 | 4142562 Shizzmoney
Shizzmoney's picture

That's good ole statist programming for you!

Mon, 11/11/2013 - 11:05 | 4142582 Vendetta
Vendetta's picture

if he used the word 'neoliberal' then he might be on the right track however he probably doesn't realize both political parties are diehard neoliberals no matter what the cost to Amerika is

Mon, 11/11/2013 - 14:44 | 4143159 Oracle 911
Oracle 911's picture

neoliberal=liberal idiot

Mon, 11/11/2013 - 09:13 | 4142351 RSloane
RSloane's picture

The "broader US population" cannot scramble into the housing market because wage suppressive, part time, no benefits jobs will never support that type of scrambling. Scrambling back to multi-generational houses is more like it. They want to desperately create a bubble that has no chance of inflating. They might as well try to desperately create a bubble on pink iguanas.

Mon, 11/11/2013 - 09:42 | 4142397 Bobbyrib
Bobbyrib's picture

I would say housing will become a hell of a lot cheaper. Economics will outlast the Fed.

Sorry Bernank/Yellen that whole supply and demand thing means you can not win.

Mon, 11/11/2013 - 09:58 | 4142425 RSloane
RSloane's picture

Don't you ever just stop and wonder where the hell those people at the Fed come from? Its like a planetary invasion happened while we 'slept' and our new overlords are aliens. Do they ever walk down a Main Street, or go shopping for food, or attend a PTA meeting, or live in middle class neighborhoods where they actually talk to people? I'm starting to be like that guy on Ancient Aliens......I'm not saying its aliens, but its aliens.

Mon, 11/11/2013 - 09:15 | 4142355 KidHorn
KidHorn's picture

The FED will taper for a few months and then untaper for a while, then they'll taper again and untaper later.

Mon, 11/11/2013 - 09:48 | 4142404 pods
pods's picture

Reminds me of a (supposed) quote by a founding father about banks controlling money/credit issuance.


Mon, 11/11/2013 - 11:10 | 4142590 Vendetta
Vendetta's picture

Yeah, that Madison guy... apparently he was more wise and ethical than all the knuckleheads in DC combined

Mon, 11/11/2013 - 09:16 | 4142356 new game
new game's picture

whip-a-shitty economy - round two of the housing roil...

Mon, 11/11/2013 - 09:18 | 4142359 Its_the_economy...
Its_the_economy_stupid's picture

Gonn sell those securitized rental streams to the CHinee. Nobody stupid enough to buy them in this country. What a joke!

Mon, 11/11/2013 - 10:11 | 4142456 GMadScientist
GMadScientist's picture

Yeah, because they have absolutely no experience with a property bubble and empty apartments in China. Uh huh.

Mon, 11/11/2013 - 09:21 | 4142361 Its_the_economy...
Its_the_economy_stupid's picture

Gonna be a lot of houses filling w mold. Already is in my neck of the woods. Sad. really sad. Tempted to squat on 'em and rent them out! Dirt Cheap! Anybody still got the link on the guy in FLA who did it in a big empty sub-division?

Mon, 11/11/2013 - 09:38 | 4142391 AlaricBalth
AlaricBalth's picture

Here is the ZH article on Loki Boy.



Adverse possession is a principle of real estate law that gives anyone who possesses the land of another for an extended period of time in an 'actual, open, hostile and continuous' manner the right to claim legal title to that land.


The exact elements of an adverse possession claim may be different in each state. In Florida, the law prescribes continuous possession of at least seven years. In New Jersey, a squatter must be in possession of the property for 30 years, while in New York it's 10 years.


In some states, the trespasser must have paid taxes on the property during this time period. Other states don’t require payment of property taxes, but will apply a shorter time requirement for occupying the land if the trespasser has paid taxes.

Mon, 11/11/2013 - 11:57 | 4142722 MachoMan
MachoMan's picture

Paying the taxes is a pretty huge impediment...  Practically speaking, it ensures that no adverse possession will occur.  I see quite a few of these cases (few a year) and the only ones that have any teeth are the claims by adjacent landowners.  You can either pay the taxes on the subject property or, if you own adjacent land, then you only must have paid the taxes on your own land.

Setting out to adversely possess property in these types of jurisdictions has been rendered practically impossible...  [for example, who is going to pay the back taxes on a property with the hope that no one dispossesses them of the property over the next 7 years?].  You might get into a situation where turnips everywhere allow others to squat and pay the taxes (the taxes are probably easily changed to another name so long as the bank hasn't been paying them directly)...  an adverse possession swap if you will...  but adverse possession can't arise through permissive use, so the structure of the transaction would be incredibly tricky and would practically require related persons to conduct...  

Mon, 11/11/2013 - 10:12 | 4142459 GMadScientist
GMadScientist's picture

Kindling. Make way for the new forest floor.

Mon, 11/11/2013 - 10:58 | 4142568 Oleander
Oleander's picture

Winter in the NE means freezing pipes if the heat is not kept on. That is if the copper pipes are even there. Still a lot of copper theft occuring here. They have even taken them from occupied homes wihile people are at work. 

Mon, 11/11/2013 - 09:21 | 4142362 NoDebt
NoDebt's picture

Buy a house?  No thanks.  I have my new healthcare premiums and deductibles to pay for.  They make my old mortgage payment look cheap.

Mon, 11/11/2013 - 09:29 | 4142375 RSloane
RSloane's picture

Within the last couple of years, two couples that we know have sold their homes, chucked their jobs, and now live in a Class C RV. They go south for the winter to pick up odd jobs and go North in the summer and do the same. One of the couples has children who they home-school. There are two very large websites that I know of which post part time work in camping sites or near them, everything from waitressing to construction to nursing. These camp sites are both private and public. We have other friends who are considering doing the same. Times are changing.

Mon, 11/11/2013 - 09:33 | 4142386 fonzannoon
fonzannoon's picture

My cousin's husband just chucked his job as a fixed income trader (he is about 40) making about 500k and decided to go back to school to be a psychiatrist. They live in San Fran with 3 kids and god knows how much it costs them to exist. The wife does not work. They are head cheerleaders for the "we love Diane Feinstein and don't realize we are promoting fascism" club.

I laughed so hard when I heard this. They think life is just so good he can chuck that job and reinvent himself. I only bring this up because I can see them in an RV pretty soon too.

Mon, 11/11/2013 - 09:50 | 4142409 RSloane
RSloane's picture

I don't blame you for laughing, I did too when I read your post. I would guess that they think life is just so good because he was making 500K a year, which he will never do again in his lifetime. So stretching ahead of them are years of medical school, internships, a residency and specialization, where he will be competing with 20 yr olds who feel that being a doctor was a natural progression of their talents and skills. With the kind of debt they are about to take on, she will either have to work or pretend life is still just great in a Class C and shopping with an EBT card is awesome. I hope they are very flexible, their quality of life is about to take a dive.

Mon, 11/11/2013 - 10:08 | 4142444 bullmarket
bullmarket's picture

I bet that is news to them

Mon, 11/11/2013 - 10:22 | 4142466 GMadScientist
GMadScientist's picture

They bought before the 80s, when housing in San Fran was affordable, and have been stacking Bay Area income for who knows how long. The guy probably has an income stream that'll cover the mortgage on his place which is now worth 10X what he bought at, and has surely been leveraged out the whazoo for HELOCs etc to maintain the metrosexual image.

He'll lose some money on student loans (pay for it? don't be silly!) and get bored with other people's problems in short order, then go back to clocking six figures plus once he's less stressed out.

Call it a working vacation.

Mon, 11/11/2013 - 10:31 | 4142491 fonzannoon
fonzannoon's picture

He is about 40. Bought in 2005 and has been working his way up to 500k for a decade. His avg 10yr income is prob in the 300k range. They have a stash for sure. But not a fortune. It will go fast. Their famly coverage has to be insane.

Mon, 11/11/2013 - 10:46 | 4142540 GMadScientist
GMadScientist's picture

That is a much less enviable position; the San Francisco market is bizarre like Tokyo, so it's bubble-ness is better-masked than say Las Vegas, but that's not a good time to have bought and be playing the "what I want to do with my life" game. I don't think I'd ever do that just because it would be like stepping off a boat in a fast-moving stream then racing along the bank to get back on due to the pace of tech and software dev, as nice as it might feel to step away from the rat race and "be" rather than "have" for awhile, if you've read any Fromm.


Mon, 11/11/2013 - 10:49 | 4142547 fonzannoon
fonzannoon's picture


Mon, 11/11/2013 - 11:06 | 4142584 new game
new game's picture

sis live in san fran and is walking down the ladder from 150k to 100k to 65k. each job is more demanding and more iffy.

the shit is crawling up the ladder and the rungs are broken as in no where to climb but down. the new normal hitting the upper middles that were smug as a bug 3 years ago....

Mon, 11/11/2013 - 11:13 | 4142603 fonzannoon
fonzannoon's picture

The people who said it was smug and not smog were right.

Mon, 11/11/2013 - 11:41 | 4142686 new game
new game's picture

nice nose hit-lol. my shit don't stink!

the host is going after where the money still resides...

waiting for the host to turn on the host with the most.

final act

Mon, 11/11/2013 - 11:30 | 4142652 GMadScientist
GMadScientist's picture

Parasites on a decomposing host.

Mon, 11/11/2013 - 11:11 | 4142593 GMadScientist
GMadScientist's picture

Her insights are decidedly less helpful; blame Charlie.

Mon, 11/11/2013 - 12:36 | 4142838 Hongcha
Hongcha's picture

A job like that, maintaining clients and being paid for churning, it's not the stress of the trading but the lying that gets to you.

Mon, 11/11/2013 - 15:10 | 4143234 firstdivision
firstdivision's picture

If he was a FICC trader about 40 yr old, he left not at his own free will.

Mon, 11/11/2013 - 10:14 | 4142461 GMadScientist
GMadScientist's picture

Working snowbirds. That's new. There are thousands of families living in tents and cars from CA to WA; San Jose practically has a city within a city now.

Mon, 11/11/2013 - 11:25 | 4142637 RSloane
RSloane's picture

The two families I was speaking of work almost all of the time. Their usual 'rent' on a campsite that includes both electricity and water is about 350$/month depending on the location. They both tow a car they need to get to and from work if they are working outside the camp grounds. They pick and choose where they want to live for awhile, and if they don't like the area, they move again. I'm not sure if I could do something like that, but they chose to do so and so far it seems to be working for them. One guy is an electrician and the other a plumber. They are rarely out of work.

Mon, 11/11/2013 - 11:33 | 4142660 GMadScientist
GMadScientist's picture

Sounds like my life between the ages of 2 and 6. It's stressful. Sadly, I think they're just doing dry-runs for what the rest of us may face before long.

Mon, 11/11/2013 - 12:32 | 4142804 Hongcha
Hongcha's picture

California's future is Mexico City.  Fly down for a visit.  That's LA in 5 years.  I'm not saying it's all bad; but that is how LA is going to function - a large lawless expanse with a few isolated and surrounded enclaves for the well-to-do.  Nowhere to hide in LA.

Mon, 11/11/2013 - 10:52 | 4142552 whatthecurtains
whatthecurtains's picture

"...Times are changing..."


Sounds more like a modern version of the Grapes of Wrath.

Mon, 11/11/2013 - 11:34 | 4142667 GMadScientist
GMadScientist's picture

"Look in their eyes, Ma; you'll see me."

Mon, 11/11/2013 - 12:22 | 4142798 Bay of Pigs
Bay of Pigs's picture

Wealth disparity has never been worse. Checks ever stop coming its game over in days (as people begin to starve).

Mon, 11/11/2013 - 12:24 | 4142795 Hongcha
Hongcha's picture

Nowhere to hide in the U.S.

When gasoline goes to $6,7, 10 a gallon (which it most certainly will) RV owners will be parked along the dusty interstate foraging for road kill to cook in gas fires under the overpass.  And those will be the good times.

Mon, 11/11/2013 - 13:52 | 4143022 rwe2late
rwe2late's picture

 If gas/transportation costs ever go up high enough,

a lot of people may be out "foraging".

Mon, 11/11/2013 - 11:28 | 4142647 Vendetta
Vendetta's picture

mortgage latin for 'death pledge'.  If I had to get private healthcare insurance, it would run roughly $300 more per month than my  PITI on a 15 yr mortgage which is slightly more than 10% of my gross income.   Its a fucked up system with corrupt assclowns running the show.

Mon, 11/11/2013 - 09:22 | 4142364 firstdivision
firstdivision's picture

At least gasoline is cheaper (for now).

Mon, 11/11/2013 - 09:32 | 4142385 GetZeeGold
GetZeeGold's picture



Shhhh.......they'll hear you!

Mon, 11/11/2013 - 09:22 | 4142366 apberusdisvet
apberusdisvet's picture

And disposable income keeps falling as the retail sales numbers seem to imply.  It seems that Obamacare will be the final straw to break the back of the middle class; all according to plan

Mon, 11/11/2013 - 09:28 | 4142373 firstdivision
firstdivision's picture

What are you talking about?  Retail Sales are booming

nevermind that it is due to price increase and not volume of sales

Mon, 11/11/2013 - 10:00 | 4142431 RSloane
RSloane's picture

Kill joy. The next thing you'll be saying is that inflation has far outstripped wages. Heresy.

Mon, 11/11/2013 - 09:25 | 4142370 new game
new game's picture

exactly what i am trying to do with cash. sold my two properties and going to cash only basis. just doing my part. nodebt!

small balance in the checking, some phys and credit union bank. opt out if you can. mortages are a bitch, bitcheez...

Mon, 11/11/2013 - 09:42 | 4142396 Keyser
Keyser's picture

I dumped all my real estate holdings in the summer of 2008, just months before the crash. Small cash balance in fiat and the rest in physical assets outside the US. I'm ready for them to bring it as I can be out of the country within hours of the SHTF. Until then, I'll continue playing the game by being a mega-corp fiat whore so I can keep stacking.  

As far as home ownership, bah. After liquidating my holdings, including my primary residence, I rented a home less than 1 mile from my previous residence. My overall cost for housing is now reduced by 40% by this one move. Yeah, I'm not building equity, but that is a zero sum game once you factor in total cost of ownership. It's all been a lie to blow pretty bubbles and fund big government. 

Mon, 11/11/2013 - 11:12 | 4142596 new game
new game's picture

keyser-valid comments for sure. i hear you and look only to seeing a cloudy future too. but i will be damned if these fuck sticks are driving me from MY homeland. i will take a last stand if it comes to that. only taking they got is property taxes and if the shtf everybody, EVERYBODY in the same boat. what are they going to take millions of homes from pissed off people with high power rifles. - I THINK NOT.

Mon, 11/11/2013 - 11:15 | 4142608 rwe2late
rwe2late's picture

 It is not simply about the equity.

Another possible reason is to hopefully have a paid-off affordable place to live when retired and/or widowed.

("Hopefully" the taxes & upkeep will be less than renting someplace in the future that won't even allow keeping one's pet dog.)

Mon, 11/11/2013 - 09:32 | 4142381 Seasmoke
Seasmoke's picture

I just tell everyone my house is worth 2 million and all my troubles go away. 

Mon, 11/11/2013 - 10:10 | 4142449 Hail Spode
Hail Spode's picture

Someday you will be right.

Mon, 11/11/2013 - 10:23 | 4142476 GMadScientist
GMadScientist's picture

Works for the TBTP (too big to prosecute).

Mon, 11/11/2013 - 09:32 | 4142382 MyBrothersKeeper
MyBrothersKeeper's picture

Obammy also says healthcare costs will average about 20k a year per family in 2016.  If true, that's close to 40% of annual income as well.  Doesn't take a Nobel prize winner in economics or peace to figure out discretionary spending will dry up. But not yet as Yellen will ramp up ahead of elections

Mon, 11/11/2013 - 10:31 | 4142492 NihilistZero
NihilistZero's picture

The Bernanke ramped up ahead of the 2008 elections. It didn't do much good.  I th8nk it's hilariously poetic that SHTF will likely be right before an election,  again.  TThe proles will be looking to blame somebody...  If T3am Red captures the senate I expect the Kabuki Theatre to be fairly entertaining the final 2 years of Bronco Bama's presidency.

Mon, 11/11/2013 - 10:59 | 4142570 Hubbs
Hubbs's picture

The big inference will be if the home mortages are going up, forget about people also being able to pay for Obamacare policies.  Finacially, they will be mutually exclusive.


Mon, 11/11/2013 - 09:32 | 4142383 papaswamp
papaswamp's picture

So we are stuck in this cycle...of continuing bubbliciousness. The next pop is going to be huge. More chips!

Mon, 11/11/2013 - 10:47 | 4142543 yogibear
yogibear's picture

Bernanake/Yellen and the 12 PhD stooges are good at only one thing, blowing ever-larger bubbles and transferring wealth from the 99% to the 1%.

Mon, 11/11/2013 - 09:39 | 4142393 SheepDog-One
SheepDog-One's picture

What fool is still paying their mortgage? Just don't! 

Mon, 11/11/2013 - 09:49 | 4142405 Ratscam
Ratscam's picture

in Switzerland banks do not give you a mortgage if the long term interest rate (5%) exceeds 33% of your income, translating into income of roughly 20% of the mortgage amount. And max. financing limit is 80%.

Mon, 11/11/2013 - 09:55 | 4142419 FubarNation
FubarNation's picture

Shame on Swiss banks for being so responsible.

Mon, 11/11/2013 - 09:59 | 4142428 Keyser
Keyser's picture

This used to be a requirement in the US also. That is until the halcyon bubble blowing days. 


Mon, 11/11/2013 - 10:36 | 4142499 GMadScientist
GMadScientist's picture

No variable rate loans? No interest-only loans? No NINJNA teaser rate pay-what-you-want (because we don't really care and don't plan on holding onto this mortgage any longer than we'd hold onto neutron-activated plutonium ben-wa balls)?

How are you supposed to have a functioning market with capitalists hands tied that way? And in conclusion, Jamie Dimon makes more money than you do. Good night.

Mon, 11/11/2013 - 11:23 | 4142630 RaceToTheBottom
RaceToTheBottom's picture

Such reasonableness of Swiss mortgage holders only puts more pressure on the Swiss banksters to fractionally lend by a higher % to make their gains and keep their risk ratios astronomical.

But don't worry, the US FED is there to backstop them....

Mon, 11/11/2013 - 10:02 | 4142438 Debt Slave
Debt Slave's picture

I see the Senate is going to quiz Yellen on her plans for tapering. Bwahahaha.

Mon, 11/11/2013 - 10:23 | 4142475 ItsDanger
ItsDanger's picture

These stats make me laugh.  40% of consumer incomes.  Not everyone has a mortgage (poor, older, wealthier).  So that rate is not accurate.  Anyways, the bad news from your analysis is that we need to get to around 60% before any reconciliation.  Hope Im wrong.

Mon, 11/11/2013 - 10:28 | 4142484 orangegeek
orangegeek's picture

Use food stamps to pay for your house, right Barry - you fucking piece of shit!!!!

Mon, 11/11/2013 - 10:51 | 4142549 GMadScientist
GMadScientist's picture

Because none of the people using foodstamps are working poor, and none of them were working in 2008 building houses because banksters were making money making shitty loans using the liquidity from a central bank appointed by a do-nothing congress (would you like some tea?) and getting bailed out when the shit hit the fan so that whiny bitches like you could get a return that was an extra 1% above already rising inflation and feel smug about how you don't need to use foodstamps.

They thank you kindly for playing along with the ruse, jackoff. Now go collect your 'coupon' like a good little capitalist and enjoy your playpen.

Mon, 11/11/2013 - 11:15 | 4142606 orangegeek
orangegeek's picture

"Because none of the people using foodstamps are the working poor..."   Really?  Can I quote you?


Obviously you voted for Barry, so it appears that my comment has upset you, right asshole?

Mon, 11/11/2013 - 10:40 | 4142515 Fox-Scully
Fox-Scully's picture

BUT But But with the equity in my house, I can pay off my student and car loans soner so that I can buy a second car and the sailboat!  Sarc off

Mon, 11/11/2013 - 10:44 | 4142535 yogibear
yogibear's picture

NAR is back on the radio again advertising it's the best time to buy a home again.

The roaches where hiding until Bernanke and the Fed came out with food to feed them.

I see many areas where the prices were higher than the housing bubble prices. Nice setup for housing bubble #2 to come crashing down. This time the Fed has used up all of it's tools.

Mon, 11/11/2013 - 11:36 | 4142671 Vendetta
Vendetta's picture

"This time the Fed has used up all of it's tools"  Yeah right, they then instruct the politicians to use the military to snuff out the restless natives.

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