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California Housing And The Bubble At Hand

Tyler Durden's picture


Submitted by David Stockman of Contra Corner blog,

Janet Yellen is an officious school marm. She constantly lectures us on Keynesian verities as if they were the equivalent of Newton’s Law or the Pythagorean Theorem. In fact, they constitute self-serving dogma of modern vintage that is marshaled to justify what is at bottom an economic absurdity. Namely, that through the primitive act of banging the securities “buy” key over and over and thereby massively expanding its balance sheet, the Fed can cause real wealth—-embodying the sweat of labor, the consumption of capital and the fruits of enterprise—-to magically expand beyond what the free market would generate on its own steam.

In a fit of professorial arrogance, Bernanke even had the gall to call this the helicopter money process. His contention was that the rubes on main street would happily scoop up the falling bills and coins and soon “spend” the economy into a fit of expansion. In other words, according to Bernanke the essential ingredient in economic life is money demand, which is a gift of the state’s central banking branch, rather than production, savings, innovation and enterprise, which arise on the free market in consequences of millions of workers and businesses pursuing their own ends.

Indeed, under Keynesian dogma the latter can be taken for granted; the supply of labor, enterprise and output is automatic and endless until an ethereal quantity called potential GDP is fully realized. To achieve the latter requires that the state dispense exactly the right level of money demand so that the rubes on main street will not stubbornly remain poorer than they need be. This unhappy estate happens, of course, owing to their inexorable propensity to withhold the production and enterprise of which they are capable (i.e. keep plants idle and labor unemployed).

Stated differently, under Yellen’s primitive bathtub economics there is no possibility of inflation unless the central bank mistakenly over-dispenses money demand to the point where actual GDP and the job count overflows potential GDP and the full-employment of labor. Needless to say, we can trust the experts in the Eccles Building to stay on the safe side of this potential GDP divide—-an invisible boundary which can only be seen and calibrated by economics PhDs.

Once upon a time the world knew better. The pre-Keynesian rule was that when central banks hit the “buy” key they always and everywhere create monetary inflation. Ordinarily that resulted in the inflation of credit, which, in turn, caused prices to rise—whether of commodities, services, wages, real estate or financial assets like stocks and bonds.

Accordingly, the old-timers were always on the look-out for inflation and after the calamity of 1929 were especially attuned to inflation of financial assets and stock price manias. William McChesney Martin, the storied Fed Chairman of sound money beliefs and deeds, for example, famously took away the punchbowl in mid-1958 only a few months after the recession ended not because the CPI was yet rising too fast, but because Wall Street speculators on margin credit were getting too frisky.

The disastrous Great Inflation of the 1970s proved the case. After Nixon unshackled Fed Chairman Arthur Burns at Camp David in August 1971, US bank credit grew by leaps and bonds; the US and then the global economy rapidly and dramatically overheated; and commodity prices at first and then the price of labor and consumer goods soon thereafter soared at rates never before experienced during peacetime. During the sound money decade ending in 1963, for instance, the CPI crept up at a 1.2% annual rate. By contrast, during the 10 years after Camp David, inflation averaged nearly 9%.

Unfortunately, Volcker’s hard-won victory over wage, commodity and CPI inflation was thrown to the winds by Greenspan and his successors.  Like Arthur Burns, they hit the “buy” key over and over, causing credit in the banking system and capital markets to expand massively.  When Greenspan took office in 1987, for example, public and private credit market debt outstanding in the US was about $10 trillion or 190% of GDP. Today it is nearly $60 trillion or 350% of GDP.

Those extra turns of leverage—in effect, a national LBO—caused a vast inflation of financial assets. But this self-evident deformation was explained away by the newly ascendant money printers at the Fed on the spurious grounds that the CPI remained “well behaved”.

Well, of course it did. In part, this was due to the fact that the CPI was seriously tampered with during the 1990s under Greenspan’s auspices in a move to shorten the measuring stick so that old people would be deprived of their full social security COLA.

But mainly there was no abnormal CPI inflation because the US money printing disease was adopted by the newly emerging mercantilist exporters of Asia—-a maneuver that brought a billion peasants out of the subsistence economy of the rice paddies and into the east Asian factories and world trade. Needless to say, this 20-year outpouring of cheap labor and factory goods kept the CPI in check–even as the credit swollen US economy borrowed $8 trillion in cumulative current account deficits from the rest of the world.

The monetary and credit inflation, therefore, was channeled into the domestic housing market and the stock market. Twice this century these bubbles have violently collapsed. Both times they Keynesian money printers have had no explanation for the collapse and the resulting trauma among main street “investors” and spill-overs on real economic activity.

Indeed, the prescription has been to double down with more monetary and credit inflation. In the immediate aftermath of the September 2008 financial meltdown it was widely acknowledged that the US economy was burdened with far too much debt. Yet today total credit market debt outstanding is more than $8 trillion greater than it was on the eve of the last crisis.

So the problem with monetary inflation—a process that has taken the Fed’s balance sheet from $200 billion when Greenspan took office to nearly $4.4 trillion today—is that its deformations, distortions and malinvestments are cumulative.   Worse still, owing to the “recency bias” of players in the Fed’s financial casino, increasingly outlandish pricing errors are taken for granted. They are viewed as part of the bubble landscape, rather than as a screaming indictment of the monetary inflations’ insidious results.

On the theory that perhaps at some point a picture can overcome the dense dogma of our benighted Keynesian money printers in the Eccles Building, the two illustrations below from the Dr. Housing Bubble Blog are offered.  Arcardia and San Marino, California are most definitely not unique national treasures where cracker-box houses should be valued at $1-$1.5 million.  No, they are just at the leading edge of the renewed speculative mania that has been touched off by the Fed’s latest and greatest monetary inflation.

Dr. Yellen, of course, claims there are no financial bubbles to worry about because the Keynesian bathtub of potential GDP has not yet been filled to the brim.  Perhaps she would like to put in a bid for one of these.


The first area we should examine is Arcadia. Arcadia has benefitted from heavy investor demand and continues to be a target for hot money.



325 Laurel Ave, Arcadia, CA 91006

2 beds, 1.5 baths, 1,522 square feet

For Sale:               $960,000


Our final stop takes us to investor magnate San Marino.


san marino

1400 Winston Ave, San Marino, CA 91108

3 beds, 2 baths, 1,862 square feet

For Sale:                               $1,580,000


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Mon, 06/30/2014 - 21:30 | 4912396 AmericasCicero
AmericasCicero's picture

If that San Marino house doesnt have a retractable roof disguising a helicopter pad, an olympic sized pool, and a private bowling alley then im going to puke

Mon, 06/30/2014 - 21:44 | 4912439 Four chan
Four chan's picture

i live in the same house on winston st in detroit and just bought it from chase for 13,500. lol no joke.

oh wait mine's all brick and is a bit bigger.


Mon, 06/30/2014 - 21:55 | 4912483 cynicalskeptic
cynicalskeptic's picture

Hmmm.... In Westchester (pricey NYC burbs), a million will get you a third of an acre, well over 3,000 sqft, 5 bedrooms and 3.5 baths - in a place with decent (if not super) schools that are far better than 90% of the US - AND you get walking distance to a train station that'll get you into Grand Central in 30-40 minutes.


WTF is with California?

Mon, 06/30/2014 - 22:00 | 4912502 NidStyles
NidStyles's picture

It's where every immigrant and progressive wants to live. 

Mon, 06/30/2014 - 22:18 | 4912553 sylviasays
sylviasays's picture

"It's where every immigrant and progressive wants to live."

And in select California cities like Irvine and Arcadia, Chinese nationals investing with hot money...

Mon, 06/30/2014 - 23:02 | 4912690 Bunga Bunga
Bunga Bunga's picture

It's the radiation, stupid.

Mon, 06/30/2014 - 23:32 | 4912762 Troll Magnet
Troll Magnet's picture

Give me a printer snd I'll buy all of them motherfucking houses!
Whaddaya mean there are earthquakes in California?

Mon, 06/30/2014 - 23:43 | 4912781 CheapBastard
CheapBastard's picture

They’re throwing in a Free Geiger counter with every house purchase ... and IF YOU BUY WITHIN THE NEXT 48 HOURS, they’ll throw in Free annual leukemia and thyroid cancer check-ups for a lifetime [as long or short as that may be].

Tue, 07/01/2014 - 01:13 | 4912927 localsavage
localsavage's picture

They will all welcome the early death when they realize that they have a 800k mortgage and only make 80k a year.

Tue, 07/01/2014 - 01:27 | 4912953 quintago
quintago's picture

Where the hell is equilibrium? There are simply too many people, with too much money. It doesn't make sense, and soon, they will be parted with their money. That's the system. They giveth, and then they taketh.

People don't learn there lesson, and each subsequent turn of the wheel, the lesson gets bigger and bigger. Next one's going to be a biatch for most of the people out there.

Tue, 07/01/2014 - 01:31 | 4912960 vie
vie's picture

These houses are listed "For Sale"... who the fuck cares what people list their houses for sale at.  A market is only made when someone actually buys it at that price... the fact they're still for sale actually tells you it's not worth that much.

Tue, 07/01/2014 - 10:03 | 4913548 failure to perform
failure to perform's picture

check this out. According to zillow it's under the zestimate!!! Idiots.


Tue, 07/01/2014 - 00:13 | 4912830 thamnosma
thamnosma's picture

Sylvia, was going to post the same, Arcadia has a very large Chinese population.  Nevertheless, those prices are utterly utterly absurd.  Must be quite a few high cash flow businessmen....

Tue, 07/01/2014 - 06:31 | 4913172 StandardDeviant
StandardDeviant's picture

Absurd?  Bah; you call that a bubble?

Have a look at London, where your $960k (~£560k, stamp duty not included) might, just might get you a decent two-bedroom flat in the East End.

Tue, 07/01/2014 - 07:04 | 4913193 Not Goldman Sachs
Not Goldman Sachs's picture


Mon, 06/30/2014 - 22:08 | 4912524 SmackDaddy
SmackDaddy's picture

in a lot of places, you arent paying for the house, you're paying for the neighbors (the darker the cheaper)

Mon, 06/30/2014 - 23:44 | 4912786 greatbeard
greatbeard's picture

>> (the darker the cheaper)

Most of my neighbors are dark, particularly the Angus.



Mon, 06/30/2014 - 23:46 | 4912792 Dingleberry
Dingleberry's picture

Four chan,

You forgot to include the cost of your Dobermans, weapons, bullet-proof windows and other public safety necessities that are compulsory to live in scenic Detroit.

But you still saved a lot of money per square foot as compared to the shooting gallery out west.


Tue, 07/01/2014 - 00:42 | 4912884 Four chan
Four chan's picture

1 weapons are fun.

2 see 1

Tue, 07/01/2014 - 02:20 | 4913020 Gusher
Gusher's picture

All real esate is local and you overpaid for your Detroit real esate. Just sayin...

Mon, 06/30/2014 - 21:49 | 4912460 knukles
knukles's picture

Oh man, like uh, thats in LA, man.
What a dump of a city.
One time when the previews were on at our local cinema, they were showing something about the destruction of LA and our crowd went crazy with joy, screaming, yelling, cheering.
Nobody north of LA cares for LA

Plus, that house aside from being overpriced is too far away from the La Brea tar pits.
BTW, does anybody but me know waht La Brea means in spanish?
Tar Pit
So it's the "tar pit tar pits."

Whadda shithole

Mon, 06/30/2014 - 23:41 | 4912778 JohnG
JohnG's picture

Yeah but El Segundo has the nice view of a ten square mile Chevron refinery.....

Tue, 07/01/2014 - 00:10 | 4912828 sylviasays
sylviasays's picture

Richmond in the SF Bay area also has a nice view of the 2,900 acre Chevron refinery...

Tue, 07/01/2014 - 13:40 | 4914427 fedupwhiteguy
fedupwhiteguy's picture


El Segundo:

try staying out at Dockweiler sometime. If the wind is blowing offshore you get a miriad of lovely /s smells!! You get the jet fuel exhaust from LAX, oderous maximus from the water treatment plant, power plant (next door) emissions, and finally the Cheveron refinery emissions. Lucky campers!!!!

Mon, 06/30/2014 - 23:05 | 4912700 tempo
tempo's picture

traffic and schools determine value in So. CA. I live in Orange County and these are the facts. No new freeways will be built. Traffic congestion is terrible and gets worse by the day so you can't move out to Riverside. Only a relatively few public school district provide a safe and quality learning experience. Many Asia are buying homes for cash in Orange County as a way to "bug out" when the civil unrest hits. Homes in certain desirable areas sell in one day for cash to Asians. Its not about Americans buying their first home. Its about mature Asians (Koreans) wanting a safe place to escape when (not if) the US can no longer defend their homeland.

Tue, 07/01/2014 - 00:02 | 4912817 Lin S
Lin S's picture


The IE is collapsing: Trader Joe's closes down and is replaced by 7/11 with a big EBT sign in the window.  Same goes for the new super Wal-Mart: "welcome EBT customers."  Section 8 housing zones seem to be expanding, and English is seldom heard now.  More and more able-bodied men wandering through neighborhoods instead of working, heads on a swivel, as though looking for something.

People who can are moving to the beach.  Those who cannot are leaving for Idaho.

Staying in CA means standing waist-deep in massive socio-economic fuel load, terrified of a stray spark...

Tue, 07/01/2014 - 02:03 | 4913004 mjcOH1
mjcOH1's picture

"Section 8 housing zones seem to be expanding"

A couple of friends have recently told me they now rent only to section 8 tenants. Enough people have walked out on their mortgages the last few years where getting paid has become a chronic problem. They view free housing as an entitlement after a year or so of not paying the mortgage. And after a year of stiffing the bank, there's not much reluctance in fleecing some poor schmuck trying to run an apartment block.

Tue, 07/01/2014 - 02:32 | 4913028 Lin S
Lin S's picture

Good info (disturbing, but useful).  Thanks for this...

Mon, 06/30/2014 - 21:35 | 4912406 One And Only
One And Only's picture

I would absolutely buy those homes with the money of someone other than myself.

Very well written article.

Mon, 06/30/2014 - 21:35 | 4912410 SF beatnik
SF beatnik's picture

A friend and I view houses in Albany, CA, near SF.


It's open house day. A steady of stream of people arrive to inspect.


Small houses, tiny yards, asking prices $800,000 a piece, give or take $2,000. 


Two houses look as though 1080-square foot manufactured double-wides have been fastened atop existing boxy structures. 


Improbable, but I ask the realty reps at each location whether the houses are entirely stick built. They say they don't know.  (Eight hundred grand, and they don't know? WTF?)


Commiting to pay $800,000 at this late date is insane, unless you're pretty sure the U.S. is headed for hyperinflation.


It's mania. The Bay Area has only so many people who hold real jobs. And their numbers are probably declining.  Banks no longer lend to deadbeats.  And investment firms who buy to rent are starting to lose money because there only so many families who can afford to pay $4000 per month to rent.



Mon, 06/30/2014 - 21:52 | 4912436 Soul Glow
Soul Glow's picture

It's not a fear of hyperinflation.  Most people dare not question the King, the Dollar.  You are witnessing the death rattle of the American Dream.

Must.  Take.  One.  More.  Breath.

Mon, 06/30/2014 - 22:20 | 4912558 Bay of Pigs
Bay of Pigs's picture

That would be King Doelarr my friend.

FREE Lennon Hendrix!

Mon, 06/30/2014 - 22:39 | 4912633 graneros
graneros's picture

I wish like hell your post was wrong.  It's not. It's just not. We have simply arrived at one of those very ugly points in our history. I have no doubt that the feeling we are collectively experiencing is identical to that which those who were alive in 1914 or 1939, or thousands of other times in history when the winds of change are working up to gale force.

Mon, 06/30/2014 - 23:49 | 4912795 Lin S
Lin S's picture

An unsettling yet poignantly-stated post.  Well said.

Tue, 07/01/2014 - 01:44 | 4912980 conscious being
conscious being's picture

Re. Impending world war with attendant slaughter.

Maybe 10 years ago, I read SteppenWolf by Herman Hess.  Great read.  Trippy and insightful.  Towards the end, the narrator goes off about the impending, unstoppable slaughter that's about to emerge.  I checked the copyright page at that point and saw the book was first published in 1928!!

What I'm trying to say here is that this Cassandra problem, where clued in people can see the impending horror approaching, but are powerless to stop it, or make the wider public wake-up an see what awaits ... It seems to be part of the human condition.  Same as it ever was.

Mon, 06/30/2014 - 21:50 | 4912467 i_call_you_my_base
i_call_you_my_base's picture

Housing is not a reasonable hedge against hyperinflation. And it's because housing is not like other assets - someone has to live in that home and someone has to pay for it. Under hyperinflation, if wages don't inflate at the same rate, no one could afford to live in it anyway. Owning property is a reasonable proposition if society is still together, or it can be a hedge against armegeddon, but if that's your play, it would be stupid to buy in SF.

Mon, 06/30/2014 - 21:55 | 4912477 One And Only
One And Only's picture

What if I buy a home and rent it out?


If there is enough acreage, rent out the home and either i. lease the land to a farmer, or ii. turn it into productive land via crops or other agricultural means?


Mon, 06/30/2014 - 21:58 | 4912496 i_call_you_my_base
i_call_you_my_base's picture

Rent will still track with wages. If your math is wrong over time it won't shake out. You can't charge 120% wages if your buy was in the wrong spot.

It's hard to predict what hyperinflation would mean. The economy would probably crater and most people would lose their jobs anyway. So good luck getting the rent you thought you could. 

Tue, 07/01/2014 - 01:49 | 4912990 conscious being
conscious being's picture

It's hard to predict what hyperinflation would mean?

Well, it sure is likely to mean higher RE taxes.  Unless you takd the Bundy approach, you can't win on Homeland RE going forward.


Tue, 07/01/2014 - 06:24 | 4913166 goldsansstandard
goldsansstandard's picture

In hyperinflation taxes are simple to evade just by the built in delay between assesment and tax due date.

In the book When Money Dies , the history of Weimer inflation, they described how for all practical purposes , tax revenue disappeared in real terms for just the reason cited above.

Mon, 06/30/2014 - 22:34 | 4912611 malek
malek's picture

Well the floor for rents in CA is section 8.

Lots of folks will then be quick to tell you "hey, you can make monthly money by buying that $800,000 mini house and renting it out to section 8 folks" (at least the state always pays on time - so far), but the forget to mention that you will need a 30 year mortgage to get to such low monthly payments... good luck with that!

Tue, 07/01/2014 - 00:09 | 4912822 One And Only
One And Only's picture

If I owned a property I would never rent to section 8.

I'd burn the property down and collect the insurance if a gun was put to my head by the USG.

I would be particular to who I rent to.

I would also look to invest in homes in countries other than the U.S if it came down to that.

Tue, 07/01/2014 - 00:22 | 4912852 sylviasays
sylviasays's picture

Upside: The amount of a Section 8 housing voucher will be between 90 percent and 110 percent of the Fair Market Rent.

Downside: Section 8 tenants 

Tue, 07/01/2014 - 00:49 | 4912891 Four chan
Four chan's picture

learn from donald sterling dont rent to blacks or mexicans. its messed up but hes right, they will turn your investment to garbage.

Tue, 07/01/2014 - 02:13 | 4913012 One And Only
One And Only's picture

I agree.

Tue, 07/01/2014 - 05:28 | 4913019 New World Chaos
New World Chaos's picture

Any Section 8 tenant should be a red flag. There is a good chance they will have an entitlement mentality and/or poor coping skills. Either way, expect extra expense and aggravation from them. Breaking things is just the beginning. They could turn your house into a meth lab / toxic waste dump / smouldering crater.  Or even just get caught dealing.  Cops have been known to use "civil forfeiture" to steal houses even if the owner isn't the one dealing drugs from the place.  California is desperate for cash.  This will only get worse.  Cops and starving bureaucrats will become the worst gangs around.  Your house will be a big fat target.

At some point, liberal states will impose rent controls indexed to the rigged CPI, then they will impose eviction controls to force you to babysit the FSA for them.  See New York.

At some point it may even become standard FSA policy to redirect the Section 8 payments to their dealer, dick you around for as long as they legally can (a few months?) and then stripmine your house for copper right before eviction.  They will never be punished for this.  It would work well as part of the puppetmasters' grand plan to trash America, bankrupt the middle class, and reward sociopaths at all levels of society.

Tue, 07/01/2014 - 11:16 | 4913830 malek
malek's picture

While all of this is true (and you forgot marihuana farming), you fail to mention why a normal, non-section-8 renter would never do such things.

Tue, 07/01/2014 - 16:10 | 4915000 SF beatnik
SF beatnik's picture

Roger, all that.


They'lll wreck the place and then they'll sue you for not fixing it up fast enough.



Mon, 06/30/2014 - 22:55 | 4912671 tecno242
tecno242's picture

You have not studied the Hyperinflation in Germany.  During any inflation of signifigance, large debtors are the winners while savers of currency or those on fixed income are the losers.

In a hyperinflation, large debtors holding real leveraged assets such as real estate are big winners because at some point in the inflation they can satisfy the debt for an entire house for the price of a loaf of bread.

Precious metals can be risky because government may choose to ban citizens from possessing it during the inflation to try and save the currency, as they have done in the past. They will no such thing with real estate.

Beware being a saver when government is the largest debtor.


Mon, 06/30/2014 - 23:53 | 4912804 CheapBastard
CheapBastard's picture

"When Money Dies," the author says CEOs were big winners since they could get a hard foreign currency fo rthier products. Also, portable hard assets were big winners like silver, gold, etc. Houses were lost b/c taxes skyrocketed with hyperinflation and usually the house owner could not pay the property taxes and maintenance, etc.

Bottom line, hold at least some hard currencies backed by a solid hard assets [besides someones promise tp pay] and some hard portable assets imo.

Tue, 07/01/2014 - 00:17 | 4912840 stacking12321
stacking12321's picture

"In a hyperinflation, large debtors holding real leveraged assets such as real estate are big winners because at some point in the inflation they can satisfy the debt for an entire house for the price of a loaf of bread."

there is a substantial non-zero probability that the currency will be re-valued and mortgages translated over in order to save banks, that is to say a "new dollar" will be introduced and you'll have to pay off your mortgate in new dollars, i've heard currency / financial experts discuss this concept before, if i'm not mistaken jim rickards, jim sinclair, possibly even jim willie IIRC.

they've also spoken about holding precious metals during hyperinflation and say there's little risk of confiscation / outlawing, as the us govt does not back its currency any longer with gold so it does not need gold like it did in 1933 under FDR in order to create more currency.



Tue, 07/01/2014 - 03:34 | 4913050 socalbeach
socalbeach's picture

I don't see hyperinflation, just substantial, continued high inflation compared to the interest rates offered on bank balances.

As far as high inflation hurting banks, it's the savers with their money in banks who get shafted.  Banks have deposit liabilities (customer deposits) which are reduced in value with high inflation.  That reduction in the value of their liabilities offsets the loss they take on their assets due to inflation. In other words, their losses get passed on to depositors.  The following article explains it pretty well, although it's somewhat simplistic.

How Do Banks Use Low Interest Rates To Take Billions From Savers & Investors? (05-16-2014)

"For over six years now, one of the greatest redistributions of wealth in the financial history of mankind has been in process. Vast sums of wealth are being redistributed away from average savers and investors, and are flowing into banks and other financial institutions around the world. Unfortunately, however, the normal financial education even for a reasonably well-read individual investor does not include how this works. It has instead traditionally been more the province of professionals..."

Mon, 06/30/2014 - 23:15 | 4912728 SF beatnik
SF beatnik's picture

@ I call you...


Agreed. It's not my play. I'm trying to persuade my friend that it shouldn't be hers, either, even if it involves her dad's money. 


Now, there ARE deals in Central Cal., once you get out of commuting range of SF.


But the coast, with it's exc climate,  is rather expensive all the way up and down.


And there might still be deals in slummy SF areas that are destined  to be gentrified. But that's a tricky call.


Tue, 07/01/2014 - 00:21 | 4912850 stacking12321
stacking12321's picture

there are.

i have a friend who buys foreclosures cheap in manteca, tracy, stockton, and has a property management company rent them out.

Mon, 06/30/2014 - 22:00 | 4912505 Kaiser Sousa
Kaiser Sousa's picture

im in Oakland...

same fucking retarded narrative add one thing...

mother fuckers r getiing shot and robbed over here in these new gentrified areas like it aint nothing...


Mon, 06/30/2014 - 22:11 | 4912536 SmackDaddy
SmackDaddy's picture

it's like having a zoo right outside your front door.....

Mon, 06/30/2014 - 23:04 | 4912694 SF beatnik
SF beatnik's picture

A friend lives near downtown Oakland. One eve, last year, both of his cars, parked on the street, were ridden with bullets. Shootout at gang funeral, across the steet. But he came out ahead on insurance.

Tue, 07/01/2014 - 00:53 | 4912902 Four chan
Four chan's picture

detroit has the most murders per capita but its all black on black and we have insane winters that prohibit the chip house gang members from hanging around outside 6 months of the year.

Tue, 07/01/2014 - 00:17 | 4912838 Jerk_Store
Jerk_Store's picture

im in Oakland...

same fucking retarded narrative add one thing...

mother fuckers r getiing shot and robbed over here in these new gentrified areas like it aint nothing...


But on the positive side, you're close to some good rib shacks

Tue, 07/01/2014 - 03:03 | 4913053 tempo
tempo's picture

It is near jobs and good schools. Very rare these days.

Mon, 06/30/2014 - 21:40 | 4912421 Rubbish
Rubbish's picture

Mother-in-laws death has forced the sale of her pad in Arcadia. $1.9mm asking, sure it will go over 2mm in a few days.


Oh and that's the tear down price.

Tue, 07/01/2014 - 01:08 | 4912924 ForTheWorld
ForTheWorld's picture

Sydney, Australia - Is that You?

Mon, 06/30/2014 - 21:38 | 4912426 Soul Glow
Soul Glow's picture

Lest they ever give a thought of unwinding.  Ah what such horrible consequences would abound, unless we were in a "recovery".  Such happenstance if a Black Swan were to decend onto the financial scene.

Has anyone ever asked Yellen why she is still buying MBS and USTs when the stawk market is a leading indicator?  Dare anyone challenge the establishment's own paradigm!

Mon, 06/30/2014 - 21:44 | 4912445 buzzsaw99
buzzsaw99's picture

that is exactly what yellen wants

Mon, 06/30/2014 - 21:46 | 4912452 starman
starman's picture

in my part of Commifornia the median sales price dropped $105,500 or -12% y-o-y and well, sales droped -59% y-o-y as well. RECOVERY! Is what's for dinner.

Mon, 06/30/2014 - 21:53 | 4912472 Kaiser Sousa
Kaiser Sousa's picture

yeah, i know people who "really" believe that this re-inflated fraudulent bubble here in Cali is actually making them "really" wealthy because of the idiotic valuations... the banks would never extend to them a Heloc cause that shit is over with and they know mother fuckers despite the phony equity build up r broke as a fucking joke...

ultimately they will never see any of that "real" (phony) paper wealth cause no "real demand" from gunuine first time buyers who qualify is there... mind you this in neigborhoods were these "real" newly rich home owners r surrounded by folks living underneath freeway overpasses and where shopping carts end up abandoned in ther front yard...

wealth effect is in affect...


Mon, 06/30/2014 - 21:52 | 4912474 novictim
novictim's picture

Stop and think a moment.  

Keynes believed you should grow the economy from the middle out.  What has Yellen of her predecessors ever done to accomplish this? NOTHING.

I might add that you cannot have Keynesian policy without the Congress agreeing to infrastructure spending.  It just cannot be.  Keynesian economics is the entire deal, not just low interest rates.

Keynes would call for these things to happen in 2014:

1) Low interest rates to continue

2) Massive jobs programs to rebuild bridges and roads all over the land.  And recall that the SF Bay Area rebuilt the bay bridge by bidding it out to China.  Public dollars went into the filthiest regime on this planet.  Keynesian economics calls for capital controls to stop that shit.  

3) Trade tariffs to eliminate the trade deficit which would force jobs in manufacturing back to our shores.  Do you see that happening?  Then it is NOT keynesian.

I know that you idiots call all deficit spending "Keynesian" here at ZH.  Why you are not shamed by the stupidity of this short hand is beyond my understanding.  

Of course, since a large number of you are Russian paid bloggers working for the Kremlin I can see how keeping the American public confused on these economic issues might fit your current needs.  But really, Comrades, America's political corruption is sufficient to destroy us without the trashing of economic understanding.


Mon, 06/30/2014 - 22:02 | 4912510 NidStyles
NidStyles's picture

If you had actually read Keynes, you would be aware that you are incorrect.

Mon, 06/30/2014 - 22:08 | 4912526 Dr. Destructo
Dr. Destructo's picture

You oughta take on the impossible task of explaining socialism to ZH while you're at it.

Mon, 06/30/2014 - 22:15 | 4912543 kowalli
kowalli's picture

Im from Russia and im not a paid blogger. And i still don't know who is "Keynesian"or what it is. We don't give a fuck about "Keynesian" in Russia because it doesn't matter - only matters Fed and banksters.

Mon, 06/30/2014 - 22:18 | 4912551 SmackDaddy
SmackDaddy's picture

why dont you get off keynes' dick?

Mon, 06/30/2014 - 22:39 | 4912632 malek
malek's picture

Hey dumbshit, you will need a find a better figurehead than Keynes to back your demands of unlimited money printing.

Mon, 06/30/2014 - 22:44 | 4912641 bjfish
bjfish's picture

Novictim, you're an idiot.  I logged in just to down vote you.

Tue, 07/01/2014 - 04:27 | 4913103 Serenity Now
Serenity Now's picture

novictim is largely correct.  But he left out the most important fact about Keynes.  Keynes did advocate most of the above.  But he also advocated saving and even cutting taxes during economic good times.  He had a yin to his yang.  

He was still advocating monetary central planning, which is not to say that I agree with it.  But in my best knowledge, his FULL theory has never been put to the test.  Only half....the bad half.

Tue, 07/01/2014 - 11:13 | 4913809 malek
malek's picture

More disinformation bullshit.

Only half....the easy half.

There, fixed it for ya!
No tell us of a way to attract implementation of the other, hard half too - as otherwise the Keynesian crap is just another unworkable theory.

Mon, 06/30/2014 - 21:54 | 4912478 enforcer92677
enforcer92677's picture

Can't wait to sell my condo here in SoCal.  For my little sardine can I'll buy a ranch in Texas with a 3000 sq ft. home, 10 acres, and fencing.

Mon, 06/30/2014 - 21:58 | 4912495 cynicalskeptic
cynicalskeptic's picture

check and make sure water rights come with all that......  

Mon, 06/30/2014 - 22:19 | 4912555 SmackDaddy
SmackDaddy's picture

maybe the sellers will throw in a few mexicans for free.  or i suppose you could bring your own from cali

Mon, 06/30/2014 - 21:55 | 4912484 mrblah
mrblah's picture

I have so much faith in the economy, due to Auntie Janets success thus far, that I will now put in offers of the asking price PLUS 10% to secure the two properties above.

If any billionaire tries to out-bid me, I WILL BID MOAR!

Mon, 06/30/2014 - 21:58 | 4912498 Jstanley011
Jstanley011's picture

Uh, the Fed's machinations are not Keynesian. They're Friedmanian, or something... Yeah okay, better go with just "Monetarist."

Keynes prescribed fiscal stimulus; it was Uncle Milton who pushed manipulation by the Fed.

Mon, 06/30/2014 - 22:00 | 4912506 mrblah
mrblah's picture

I'd go with shit personally.

The feds track record can't be summed up in any other way, nor by any other word/label/system.

Mon, 06/30/2014 - 22:07 | 4912523 Jstanley011
Jstanley011's picture

Personally, I'm not so big on privacy. I want "them" to know exactly who I am, right before I pry the gun out of their cold dead fingers.

Mon, 06/30/2014 - 22:13 | 4912541 mrblah
mrblah's picture

Hmm, I'd wager we could all be allocated usernames 1-10000 and they'd still know who we all are.

Why? said privacy seems to be a myth. Maybe not automatically, but if "they" want to know, its theirs to look at/discover.

Tue, 07/01/2014 - 01:17 | 4912932 ForTheWorld
ForTheWorld's picture

Behavioural patterns based on meta data and linked to a devices unique identifier is where it's at. There's absolutely no such thing as privacy anymore, at least where electronics are used.


Mon, 06/30/2014 - 22:03 | 4912514 29.5 hours
29.5 hours's picture



Stockman writes with steaming hydrochloric acid and can be effective and precise--when he controls his verbosity--as he did with this article.



Mon, 06/30/2014 - 22:05 | 4912516 socalbeach
socalbeach's picture

It's a mistake to use asking prices to determine whether or not you're in a bubble as they can be completely divorced from reality.  Case in point, this house was initially listed for $849K in March, 2010 when the market had already dropped significantly, and was within a little over a year of a bottom.  It eventually sold for $405K, a 52% reduction from the asking price:

A current example is this house that they were initially asking $1.2m for, but a slightly inferior but similar home just a block away sold 7 months ago for $780.5K:

Around here prices have peaked and are overpriced, but we're not in a bubble based on recent sales, long-term interest rates, and rents (both current and anticipated).  I have no opinion on other areas of the state or country.

One thing to keep in mind about CA real estate is that we are a high income tax, low property tax state.  So many investors just buy for the long-term because they don't want to pay high income tax on the sales. That income tax is levied not only on appreciation, but on non-cash expense depreciation which is taken every year on rentals and is used to reduce income tax on net rental income.  Furthermore, property tax increases are limited by Prop 13, so as home prices rise, expenses stay more or less constant compared to rents which have been increasing. This dynamic keeps for-sale inventory low and supports prices, all other things being equal.

Unlike other areas of the state like Silicon Valley, we still haven't reached 2007 peak prices (and we won't since like I said before I think we've peaked), but we're about 50% above the bottom in late 2011.

Mon, 06/30/2014 - 22:11 | 4912537 Soul Glow
Soul Glow's picture

Bubbles aren't bubbles ubtil they pop.  If they were before then, they wouldn't be bubbles.

And as for interest rates, please note Janet Yellen has her dick so far up the economiy's ass it couldn't find P* if it were alive and well.

Mon, 06/30/2014 - 22:11 | 4912539 NidStyles
NidStyles's picture

We are not in a bubble, but then you listed a bunch of other heavily manipulated metrics...


A bubble can be a lot larger if you start taking into account of the value of the currency the trade is being made in. $400K seems like not much to you, but to some guy making $9/hr it might as well be a billion dollars. 

Mon, 06/30/2014 - 22:30 | 4912577 socalbeach
socalbeach's picture

Interest rates are manipulated, but that's why I listed long-term interest rates. If they rise to market levels, the purchaser who locked in a low rate wouldn't see his interest rate expense rise. I don't know what other manipulated metrics I mentioned that you are referring to. Prop 13 was passed about 35 years ago despite many attempts to overturn it since then.  AFAIK, the taking of depreciation "expense" is common throughout the country.  I guess that law could be overturned but I don't see it.

$400K is a lot to me, but this happens to be a wealthy area.  All that money the Fed is printing, and the money created by subsidized interest rates, has to end up somewhere.  For better or worse this is one of the areas that seems to get more than its fair share of it.  There are a lot of foreigners, mostly rich Asians, who have moved here.

Finally, I only said this particular area isn't at bubble level prices.  That opinion is based on rents (current and anticipated) vs expenses (interest, prop tax, insurance, maintenance) of buying a house.

Tue, 07/01/2014 - 00:16 | 4912814 Dingleberry
Dingleberry's picture

I hear you Socal. I lived in socal (a few times) and saw the bubble firsthand the last time.

It's a bubble because all you have to do is look at a chart and see it.

Nothing goes verticle like that on it's own and stays like that forever.  

You say interest rates won't affect those who are long-term RE holders.

But if rates did not matter, they would not be surpressed.

Why? Because RE values (like ALL other biz) is based on the MARGINS.

In RE, it's called "comparable sales", among other variables.

So if rates were where they should be (2-3% about actual inflation), you would have mortgages today around 8%, and that is being very conservative. And it is also in line historically.

The RE market cannot even handle 5% rates. 

Not to mention the cash taken out for refi's due to inflationary "equity" compliments of the fed's interest rate gift.

When people owe more than what they can sell it for today, I do not need to tell you what happens. Even in socal. People have a strange aversion to paying on something worth hundreds of thousands less than they bought it for, even if their monthly payment is static. Psychology, I guess. I recall that, the multi-million dollar homes that I lived across from were full of about 4-5 adults each house when I lived near La Jolla. It got so bad that the complex that I was living in had a locked gate for our cars since the people living in the big houses could not fit all of their cars in their driveways and streets, so they tried to use ours.  These are not RE investors. They are taking a call option on RE.

The weather, scenery, etc. has been the same since I first went to socal in the 80s. I was primarily in Laguna and San Diego areas.

NOTHING CHANGED to cause the prices you have now.....except the lowest forced interest rates anyone has ever seen in their lifetimes. Or ever will again.

And it looks like it's here to stay, until it cannot.

But when does it end?

That's the million-dollar crack house question.

I would also add that many of the places that I considered quite nice back then are cesspools today. Even LA was relatively nice back then (except south central).  Irvine was beautiful too, instead of gang infested. Cali is quickly becoming a tale of two cities: one scenic and rich within enclaves, often born there and under the tax radar (prop 13-which doesn't help those who bought at the top)), and the other full of teeming, unwashed masses living on the economic edge.  Peter Schiff is correct when he says that the only way Cali gets away with pulling its stupid liberal shit is because of the weather and scenery.  That shit would not fly in Nebraska. People would move. I did.

Stay safe out there.


Tue, 07/01/2014 - 00:19 | 4912845 thamnosma
thamnosma's picture

The Cali trend is definitely feudal....

Tue, 07/01/2014 - 01:57 | 4912987 socalbeach
socalbeach's picture

Good point about if prices drop enough, equity will become negative causing a change in psychology and even lower prices.  Most loans here are at least 20% down and FHA loans that allow lower down payments aren't used much because of required mortgage insurance for low down payment loans.  Since prices have risen 50% from the bottom, I can't rule out an over 20% drop, although I don't see it since rents are a lot higher. A 33% drop from here would put prices back to where they were at the bottom (1.5 * 2/3 = 1).

Rising interest rates don't necessarily imply lower prices however.  In the mid to late 70's, we had rising home prices and rising interest rates, along with massive price inflation.  If rents were to stay static or even drop, rising interest rates would lower prices because the risk-free return would be more favorable compared to real estate's current yield.  If rents were to continue to rise, that negative effect would be mitigated, the amount depending on the numbers involved.

I see a lot of price inflation so I'm going to hold rather than pay taxes on my gains.  Inflationary gains from the reduced real value of mortgages are not taxable. But if I had surplus cash now, I'd be buying gold, based on the US dollar value of above ground gold vs the monetary base of about $4.4 t.  That ratio is about at the same level as it was in 2002 when gold took off to the upside.


Tue, 07/01/2014 - 08:34 | 4913328 GrinandBearit
GrinandBearit's picture

You must live in Cali... you people never think you're in a bubble  -lol


Sorry, this reply was meant for socal

Tue, 07/01/2014 - 10:46 | 4913674 socalbeach
socalbeach's picture

Check this out.  BTW, he turned bullish on CA r.e. in late 2011 to early 2012, as well as at the bottom in 1998 or therabouts.


Bruce Norris on Channel 9 News February 2006 Predicting Crash

Mon, 06/30/2014 - 22:21 | 4912566 world_debt_slave
world_debt_slave's picture

would anyone expect any less from Yellen but Keynesian tripe?

Mon, 06/30/2014 - 22:27 | 4912584 Proofreder
Proofreder's picture

FOAF bought a little bungalow in the hills well south of San Fran for $38k.  Added over the years were landscaping, an office space, garage converted into an additional bedroom and laundry, with a deck on top.  The couple did all the work.

On a clear day, one could see the Pacific Ocean from the deck.

The house sold in the fall of 2007 for $860k ...  I remember him calling about the mania ... Open House signs brought a constant stream of lookers, many oriental, and the over- and out-bidding was almost unbelievable.  Up, Up, and Away.

Friend moved back to Iowa, built a rural palace on 40 acres of good soil.  Happily ever after.

Looks like Deja Vu all over again.

Mon, 06/30/2014 - 22:29 | 4912592 bankonzhongguo
bankonzhongguo's picture

A lot of hot Chinese money in those markets.

Mon, 06/30/2014 - 22:39 | 4912630 Billy Shears
Billy Shears's picture

Yellen is Yiddish for Asshole!

Mon, 06/30/2014 - 22:46 | 4912645 AdvancingTime
AdvancingTime's picture

America imports around five hundred billion dollars more from other countries every year than they export. This means we have a giant trade deficit, when we add this to our massive government deficit it is easy to see that we are living far beyond our means. The Fed has been superbly entrepreneurial when it comes to Ponzi schemes or pseudo-economics hocus-pocus that has allowed the current situation to develop.

The Fed  must at some point begin to ponder a real exit strategy and end the massive and corrosive stimulus that the economy has come to expect. To make matters worse little has been done to address our structural problems and make America more competitive, this will thwart growth going forward. More on this subject in the article below.

Mon, 06/30/2014 - 23:09 | 4912712 IronShield
IronShield's picture

This housing bubble won't be over until we have retraced at least 90%; peak to trough.  You heard it here first.  ;-)

Mon, 06/30/2014 - 23:17 | 4912734 Civilization
Civilization's picture

San Marino is an exceptionally beautiful ultra-high income tax haven city, and the pictured dump probably lies on the outskirts out of view of the mansions. As for the price, this is 20-year-old news. Prices were at or above this level pre-aerospace bust in the 1990s. You can have Detroit; good luck keeping your copper pipes and surviving the daily commute. down the street. As f@&#-ed as LA is, it still has decent climate, and some people actually work there. All that is not to say that I don't agree with David Stockman's premise. He is right on about the motivation behind messing with CPI being to deprive the seniors of their COLA adjustments

Mon, 06/30/2014 - 23:35 | 4912766 slvrizgold
slvrizgold's picture

Where will housing equity prices be if stocks decline? Maybe you can find a new marginal buyer for these houses if the Dow goes to 25000 and some guy who's been dollar cost averaging 10 shares of Google will find a good $800k shanty appealing.

I will be there with the real money when we find out what things are really worth.

Mon, 06/30/2014 - 23:44 | 4912785 Luckhasit
Luckhasit's picture

I know i'm not OGed out like many on this board, so i can ask my seniors a question, whats the end game with Keynesians economics?

 When Keynes was asked that magically question and he paused like a deer in the headlights.  

Tue, 07/01/2014 - 01:08 | 4912923 AUD
AUD's picture

Bankruptcy. One day it will be obvious. Just don't hold your breath.

Mon, 06/30/2014 - 23:53 | 4912807 CheapBastard
CheapBastard's picture

Are these houses Fuki-resistant? Namely, walls lined with lead?

Tue, 07/01/2014 - 00:08 | 4912827 Lin S
Lin S's picture

<--- Chinese home buyers are wise and will do well.

<--- Chinese home buyers don't understand RE is a scam and they will be fleeced.

Tue, 07/01/2014 - 00:17 | 4912839 thamnosma
thamnosma's picture

A lesson the Japanese were taught in the 80's.

Tue, 07/01/2014 - 15:01 | 4914701 malek
malek's picture

But it's less likely to happen if you live here and achieve US citizenship...

Tue, 07/01/2014 - 00:16 | 4912835 thamnosma
thamnosma's picture

Dr. Housing Bubble has always been an inspiration.   Before the previous bubble blew up his daily reporting on the surreal absurdity of the LA housing market was not to be missed.   Great sense of humor and my god, slum houses with windows covered in bars were literally selling for over $500K despite the area median income of like $25K.

Tue, 07/01/2014 - 00:18 | 4912842 imapedestrian
imapedestrian's picture

I used to live in Arcadia.  In all fairness the whole story of how this city got such high price real estate and it's neighbor, San Marino has not been told.  But then the story is told in Chinese and you will not understand anyway.

I sold my house in that area for $750k last year.  It was 1500 sq yard.  I bought a house in an actually very nice, paradise like place called La Costa near San Diego.  It cost $100k more, but it is 3100 sq ft with an actual community, perfect weather, top schools, and great people.  It just might be one of the last bastions of decent life left in the US...maybe.

Anyway, the place in Pasadena got over 20 bids at the first open house...all Chinese.  My realtor and I decided to only consider cash offers (15) who bid at least 10% more than asking(5).  Thank you Chinese!!!!!!!

Tue, 07/01/2014 - 00:45 | 4912887 stacking12321
stacking12321's picture

"Anyway, the place in Pasadena got over 20 bids at the first open house...all Chinese.  My realtor and I decided to only consider cash offers (15) who bid at least 10% more than asking(5). "

my friend Wi Tu Lo who is chinese told me he made an offer on that house but he was outbid!

Tue, 07/01/2014 - 00:18 | 4912844 Grin Bagel
Grin Bagel's picture

A "ranch" in Texas of 10 acres "and fencing"!!!! Whadda dipshit.

Tue, 07/01/2014 - 00:30 | 4912868 boeing747
boeing747's picture

"Unlike other areas of the state like Silicon Valley, we still haven't reached 2007 peak prices (and we won't since like I said before I think we've peaked), but we're about 50% above the bottom in late 2011."

My dear ZHer, where have you been in last seven years?

Same house in cupertino asked for 1.2m at the peak of 2007 now asked for 1.6m. In 'good' school districts, house prices already well over the peak of 2007.

Tue, 07/01/2014 - 14:29 | 4914572 I Drink Your Mi...
I Drink Your Milkshake's picture

I'm with you, I'm seeing sale prices exceeding 2007 peaks in my neck of the woods.

Funny thing I do see are Berkshire Hathaway RE signs planted in some really shitty properties. And they're not moving.

Guess they had to buy a mixed basket of forclosures.

Tue, 07/01/2014 - 00:48 | 4912890 boeing747
boeing747's picture

I can tell you section 8 renters are 'animal', they thought they are the owners and you are 'the handyman on call'.

Tue, 07/01/2014 - 00:49 | 4912894 NOZZLE
NOZZLE's picture

1400 Winston Ave, San Marino, CA 91108, 1.5 Mil, if I couldn't check it on I would never believe it, no fucking wonder I have shitheads from the coast trying to buy one of my low rent slums for 12 times gross.

Tue, 07/01/2014 - 00:53 | 4912901 boeing747
boeing747's picture

They destroy a house faster than a termite can.

Tue, 07/01/2014 - 01:28 | 4912957 intric8
intric8's picture

That arcadia place better have a lot size of 30,000 sq feet or i'll egg that friggin house for having the gall to list it so high

Tue, 07/01/2014 - 02:44 | 4913034 boeing747
boeing747's picture

At the lease end of section 8, your investment turns into a pile of 2x4s and sheetrocks along with a skeletion of washing machine.



Tue, 07/01/2014 - 02:46 | 4913036 ihatebarkingdogs
ihatebarkingdogs's picture

My dump of a house needs a re-pipe. Still has galvenized from the 70's when it was last re-piped. I'm gonna' use plastic now that it's finally allowed in Los Angeles County. Screw the "strip-miners". Nothing here but galvenized, to be replaced by plastic.

Tue, 07/01/2014 - 03:58 | 4913088 Memedada
Memedada's picture

I’m personally neither a monetarist nor a follower of Keynes. But I can’t see how the current economic paradigm can be attributed to Keynes. It’s equally – and in my opinion more so – a paradigm of the monetarists (the Chicago-school). The excessive money printing can be rationalized by the monetarist as an attempt to keep the inflation (not the technical definition: money-supply, but the common-man definition: prices) steady (their – stated – main goal). In a deflationary spiral (debt implosion) the need to print, print, print becomes a self-sustaining trend (since the money created is in itself new debt that causes deflation, which again demands more money printing).

Keynes argued for expansive financial policy – government projects. But in his writings he stressed, that the projects should have lasting value for the society that implemented them (and only in recessions). That is: infrastructure – energy, roads, bridges, communication etc. – education, health (not transfer of wealth from sick people to insurance companies as in Obama-‘care’) etc.

In that sense none of the policies pursued by the US central administration (including its employer the FED) can be attributed/blamed on Keynes.

Tue, 07/01/2014 - 06:22 | 4913163 ghostzapper
ghostzapper's picture

Arcadia $630/sqft lol. Granted nice area I've been to Santa Anita several times but holy shit nothing to see here move along sheeple . . .

I'm in a great city in Mass (I'm biased I realize that) and I'm busting balls of realtors telling them certain things need to drop to $90/sqft or lower at least.

Tue, 07/01/2014 - 07:01 | 4913189 Last of the Mid...
Last of the Middle Class's picture

Actually heard on Foxnews yesterday while driving to work, the negative GDP is not a problem as GDP numbers are rearward looking while the stock market is forward looking so things will continue to recover. Same guy also said inflation numbers were "noise" and that oil and food should never be considered in calculations for base inflation rates. I'm not sure what is left to calculate inflation other than maybe panties at Wal Mart but I'm smart enough to know these guys are selling us a massive line of Bulls*it and the repercussions could one day be violent if it isn't stopped. Politicians have invaded the realm of true economists and we're screwed. That's the bottom line.

Tue, 07/01/2014 - 07:02 | 4913191 Dr.Engineer
Dr.Engineer's picture

Based on the comments, this is an indictment of the global money printing and laundering practices.

"It is man's heart that needs refining."  Guess who said that.  Guess why it applies here.

Tue, 07/01/2014 - 08:07 | 4913273 deflator
deflator's picture

The Winston Ave. house last sold for 500,000 in 2008. Property taxes are $13,875 in 2013.

Tue, 07/01/2014 - 08:29 | 4913316 GrinandBearit
GrinandBearit's picture

I used to live in San Diego and I find it amusing how most home owners and landlords who live in Cali never think they're in a housing bubble no matter what proof you show them.  I was telling them it was a bubble in 2005, 06 and 07.  Most got extremely defensive... some were hostile... a few even wanted to beat me up -lol

Tue, 07/01/2014 - 09:17 | 4913402 Fix It Again Timmy
Fix It Again Timmy's picture

That's a lot of money for a PLACE to sleep, shit, shower, screw, boil water, cook food, wash clothes and watch TV...

Tue, 07/01/2014 - 14:17 | 4914536 I Drink Your Mi...
I Drink Your Milkshake's picture

That whole San Gabriel Valley is going full retard.

Huge influx of Chinese nationals getting their money off mainland and into hard assets here in the Yew Ess. I know a young married couple looking for a home in this area and the every little shoe box that they put a offer on in met with multiple offers that go into unimaginable territory. And the contaigon is spreading west of Pasadena along the foothills. I've heard the same situation is happening down in south OC as well.

This bubble is cash-driven, so the crash will manifest a little differently then the last.

May you live in interesting times.

Tue, 07/01/2014 - 21:49 | 4916189 SweetDoug
SweetDoug's picture




You ain't seen nuttin' yet!


Come to Toronto! Yikes.



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