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Did China Just Crush The US Housing Market?
A few days ago we finally closed the door on any argument who the marginal buyer in the US luxury housing segment was - the answer: Chinese oligarchs, scrambling to launder their "hot" domestic money abroad (as we predicted first two years ago) and now that Switzerland is no longer a safe offshore venue where one can park cash, they picked US luxury housing as the best money laundering alternative.
This means that far from indicating a recovery, as the recent surge in the high end of the US housing segment had long been touted, all the relentless move higher in ultraluxury properties prices was simply a recycling of China's hot money, which unlike in the US, never made its way into the Chinese stock market (explaining why the Shanghai Composite has barely budged in years) and merely ended up in US real estate. If anything, this is simply another confirmation of the epic capital misallocation, and the complete lack of "trickle down" resulting from failed global central banking policies.
So now that the "who" has been answered, just one question remained: "how?"
How did millions of Chinese "buyers" manage to get tens of billions of yuan or dollars out of the mainland - a country which as is well-known has strict capital controls when it comes to individual and corporate offshore outflows? Under Chinese law, citizens are allowed take only the equivalent of US$50,000 out of the country each year: hardly enough to buy a storage closet in any of New York City's Central Park West duplexes.
Today we learn the answer and it has to do with officially sanctioned "money laundering" services by not one but two of China's largest banks: Bank of China and also Citic.
As Hong Kong's SCMP reports, A day after Bank of China (BOC) was accused by China's state broadcaster of breaking foreign exchange rules by helping people take money out of the country, it has emerged a second state bank has also been offering the service.
And the biggest irony is that Citic is ultimately controlled by none other than the "State Council" or China itself. In other words, while China was prohibiting the outflow of hot money with one hand, with the other it was providing the very services it had previously forbidden!.
Industry sources told the South China Morning Post yesterday that China Citic Bank - controlled by the Citic Group, which in turn is directly controlled by the State Council, China's cabinet - also facilitated the movement of currency overseas, including Hong Knog. "It is definitely not an illegal business," said one source.
"Both BOC and Citic Bank have been able to do this business only after they got approval from the Guangzhou branch of the People's Bank of China. So the PBOC definitely knows what the business is about," said the source, who declined to be named as he was not authorised to speak to the media.
"If there is any problem, it should not be a problem about whether this business is legal or illegal but more about how exactly the business is done, especially about internal risk controls and customer background checks at those banks."
On Wednesday, CCTV aired footage showing an employee of a BOC branch in Guangdong coaching an undercover journalist on how to channel large sums of money overseas.
CCTV accused the bank of "blatantly offering money laundering services" and fabricating information through its money transfer platform Youhuitong.
BOC said the Youhuitong service was part of a legal pilot scheme launched in 2011. It said the CCTV report "deviated from the facts" and had a "biased understanding" of Youhuitong.
What is disturbing is the implication that the PBOC not only was aware of these secretive and law-breaking deals, but was effectively encouraging them:
On the sidelines of the Sino-US Strategic and Economic Dialogue in Beijing yesterday, PBOC Governor Zhou Xiaochuan said the central bank would need more time to investigate the situation.
Analysts cast doubt on whether such a scheme that allowed for free currency exchange could exist. "The government is very concerned about hot money flows," said Teo Weechoon, a forex analyst at Nomura in Singapore. "If there was a pilot programme like this, I don't think the limit would be much higher than it already is."
Industry sources said BOC and Citic Bank were chosen by the Guangzhou branch of the central bank in late 2011 and late 2012 respectively to join the pioneer programme, which was part of Beijing's efforts to better manage its huge foreign exchange reserves - the world's largest at over US$4 trillion.
And sure enough, where two of the largest Chinese banks were involved, many other were sure to follow: "a report by the official Shanghai Securities News yesterday said China Construction Bank offered similar services." We expect to learn soon that virtually every domestic bank was breaking regulations, with the PBOC's blessing of course, and allowing residents to quietly transfer their funds from China to the US, London, Zurich and any other venue where Chinese oligarchs wanted to park their cash.
Finally, "why"?
Well, from the individual's standpoint taking money away from China's corrupt system and "investing" it in the US housing market certainly seems like far more safe proposition.
But why would the PBOC agree to quietly bless this activity which it has, at least openly, blasted vocally in the past?
Simple - to keep inflation in check.
Recall that China is a country which creates nearly $4 trillion in bank deposits every year. Also recall that back in 2011 China nearly chocked when inflation briefly soared out of control, leading to sporadic "Arab Spring" type riots in various cities. And since China simply can not reduce the pace of its loan creation at the macro level without crushing the economy, what it needs is to find outlets - legal or otherwise - that permit the outflow of funds.
Which is why it is not at all surprising that as SCMP reports, the scheme was launched in 2011, just as China's scary encounter with soaring inflation was unfolding and Beijing needed a fast way to solve the overabundance of domestic liquidity. Basically at that point the central bank agreed to keep its eyes shut as wealthy oligarchs transferred funds to developed world nations, something the US government and NAR were delighted by as it kept real estate prices (if only at the very top) soaring, dragging the entire housing market higher with them. Furthermore recall: the one thing the Fed has wanted more than anything for the past several years is inflation. And since the US economy is nowhere near strong enough to create the kind of inflation needed, with the bulk of the Fed's reserves ending up in the capital markets and the latest and greatest credit bubble, the Fed would be more than happy to import some of China's inflation from it, even if that means a housing market which at the upper end is no longer accessible to anyone but the 0.0001%.
Indeed, this summary explains everyone's intentions to keep the scheme afloat for as long as possible, at least until CCTV busted it and laid it out for all 1+ billion Chinese, most of whom are not oligarchs and can't take advantage of the PBOC-sanctioned loophole.
So what happens next? Assuming there is the anticipated resulting backlash and crackdown on Chinese banks, which will finally enforce the $50K/year outflow limitation, this could well be the worst possible news not only for Chinese inflation, which suddenly - no longer having a convenient outlet for the unprecedented liquidity formed in the country every month - is set to soar, but also for the ultra-luxury housing in the US.
Because without the Chinese bid in a market in which the Chinese are the biggest marginal buyer scooping up real estate across the land, sight unseen, and paid for in laundered cash (which the NAR blissfully does not need to know about due to its AML exemptions), watch as suddenly the 4th dead cat bounce in US housing since the Lehman failure rediscovers just how painful gravity really is.
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Where is this "market" you speak of? For the high-end (0.1%) buyer, maybe...
I don't think this author understands how mark to fantasy works.
/s
Near where I live is a very upscale golf course. And being built upon a lot along one of the holes is a humongoliod house. One of the ugliest abortions of a house ever designed and built. Yes, architect designed. One of my local buds said that it's owned by a China-man. A high ranking China-man.
"Communism been belly belly good to heeem"
What is disturbing is the implication that the PBOC not only was aware of these secretive and law-breaking deals, but was effectively encouraging them:
Premise: There are no accidents -->
China=Predator
so is the endgame the .01 own everything in housing, no more fannie and freddie and everyone rents from Blackstone?
Please do not worry.
I'm not surprised that china is buying our property. Who wants to live in the smog hell of china?
There wouldn't be any smog if we took global warming more seriously and outlawed cars, oil, gas, shuttered factories, farms, cattle and so on and so on.
What we need to do is to confiscate everyone's belongings and trust Michelle Obama to feed us carrots and spinach.
Will she also provide us with entertainment?
Well, from the individual's standpoint taking money away from China's corrupt system and "investing" it in the US housing market certainly seems like far more safe proposition.
Implying that the US honors "rule of law" better than other nations? A terrifying thought.
Chinese troops are allowed to drill here...
so they may guard their acquisitions?
Terrifying thoughts, no?
I bet that when bitcoin was in the upswing, Chinese used that window to bypass capital controls. Some even made money in the process, but most lost as the honeymoon ended abruptly.
These mansions and high end apartments will eventually dry rot as there will be fewer and fewer suckers to sell to. Between taxation, maintenance costs and many of them with no rental income they are doomed.
These Chinese could have been stacking and transferring gold bullion to HK banks with anonimity and very minimal storage costs.
Again: The game nowadays for people with money should not be to seek appreciation. Just wealth preservation is sufficient. Would you life change if you are worth 110m v. 100m?
You did not consider the human trait of flaunting, where saying "I own a mansion in London and a Park Ave. penthouse" does give you the "I have arrived" recognition.
Saying; "I have several thousand oz's of gold in the vaults" only gets you a "yea right"
Simmilarly: "I had fish eggs for lunch" gives you an "ou! yackie!" response.
Instead: "I had caviar for lunch" gives you an "oh! savvy!" response
Perception and image to many especially Asians is important, as every little secretary in Tokyo owns at least 4 different Louis Vuitton bags
Granted!
But you can still get some recognition when you check in at the Hotel de Paris presidential suite in Monte Carlo and get picked up in a Maybach on your way to Jimmy'Z's to rub elbows with the jetsetters.
You can also ask for Beluga fish eggs and "oeuf de neige." without checking the price in the menu. On Sunday mornings they may even have Dim Sum for the Chinese.
Uhhh, have you seen the potatoes who fly on jets these days?
By jetsetters you may mean Gulfstreamers. But the new "setters" fly free on chartered 777s provided for marketing purposes; privacy is priceless and anonymity the most chic but the new nouveaux don't get it.
Fuck 10%. buys me a couple hectares in Uruguay,, it could change my life.
10% of what?
I bet you're thinking about your own weed garden don't you? Punta del Este drug consumption capital of the world.
Of course! Never before relased, STAR WARS: WOOKIEE'S FINAL VOYAGE will be available for viewing as long as you can prove that you've turned all your belongings in to the gov't for the greater good.
As long as Hong Tu Lo and Tu Phat Tu Phuk buy my $400,000 Cali house for $2.4 million with their ill-gotten money, realtors won’t rock the boat.
Why would Obama and Oprah buy your home?
I'm reporting u.
Homeowners: A new class of fools
When Kimberly walked up to the front door of a beautiful, 7,500 square foot colonial, anchored in a terrific cul-de-sac in northern Baltimore County, she said to herself: "All my life I thought this was what I wanted. But as beautiful as this property is, I see nothing but a money pit and a trap." Owning a home isn't just for suckers, as I stated in my CNBC column in November of last year; it's creating a class of fools for those who do buy, because so many Americans continue to think home ownership is the passport to the so-called American dream.
https://homes.yahoo.com/news/homeowners-class-fools-162600967.html
Looks like some peeples are finally waking up.
So much better to raise one's kids in multifamily housing in a densely packed city.
And then thy're going to remake "Return of the Sasquatch"
It would be awesome to see Lee Majors rip Michelle Obama's arm off.
I wish I could give moustache rides a thousand more green arrows.
6 000 000$ dollar man vs. wookie.
I would watch that.
You could watch this instead:
https://www.youtube.com/watch?v=6SZMn_711s4
"Bionic Bigfoot Fight Scene - Featuring Andre The Giant - Six Million Dollar Man"
She?
I thought that was Reggies job?
This has to be the most hilarious tounge-in-cheek account I've seen here yet. You're giving Harry Wanger a run for his money (wherever he is now).
Busted..in more ways than one
China looking into Bank of China money laundering allegations
http://mobile.reuters.com/article/idUSKBN0FG00P20140711
accused by State Broadcaster, you say?
Are we being soften up or what?
why outlaw oil gas & so long... you just have to kill banksters...
You sound constipated, eat kale.
@ Liberal
Getting my sarc Lulz on
You forgot cupcakes also have to go by the wayside.
Yes, and couldn't we use the money too...
Empty New York buildings purchased by Chinese as "investments".
http://www.myfoxny.com/story/25981714/changing-face-of-new-york-real-estate
Well we do need to house all those refugees from South America somewhere.
They're exporting their empty cities here to the US?
As Dirty Harry would say: "Marvelous"
And you get a free selfie of yourself giving yourself a hand job to go with it.
Perfect promotion for the narcissistic
Lets tax the life out of foreign real-estate transactions!
i been saying that for years. many countries impose a one time 20 to 40 percent tax on foreigners buying their RE. toobad our politicians are in the nar pocket.
Fook Mi!!!
They print too.....alot.
RIPS
China = Corrupt. Just like everyone else. "Everyone else" meaning, of course, everyone else who has "most favored nation" status with the US.
difference between china & occident :
to a EU/US/RUS man : oh, corrupt ? hey, whatever - from "i'm part of it, proud of it, fuck you" to " what ? corruption ? LAME ! "
to a chinese man: cooo...?corrru, oh !, me not know, lea'me, me no problem.
they are so scared & educated to not speak about some affairs they can literaly lick their own ass hole while they're walking. astonishing.
those same mother fuckers that self bid on their own auction on ebay to be sure you gonna buy what they sell the price they want.
just lol
i work in an industry that relies heavily upon capital flight from china, and im based in china. ive talked to a couple people at bank of china and they have all said this is temporary. just for show for the sheeple. will be back online within a couple weeks.
Of course. They must be able to export their inflation...like we do in America.
They have learned from the best...USA...USA...USA.
So...A MORAL POINT...Why are you complicit in FRAUD???
The guillotines await for you and your ilk when it all comes crashing down. It maters not where you are located.
There are many more Chinese than Americans. And they are more vicious over there.
Are you that myopic to be used as a tool and then advertise that here?
haha nice post. very logical. how about you go fuck yourself. im not complicit in any fraud. i help chinese people legally immigrate to and buy houses in the US.
You can justify your fraud any way that you want.
I am not too worried about it as I plan for the upcoming destruction.
You fraud the Chinese public while working for the oligarchy.
As I sharpen the blade of my guillotine...
Enjoy. That place is going to go up like a dry tinder box. You deserve everything headed your way. May you live in interesting times...
you have yet to identify the fraud that i am committing. where is it? specifically who am i defrauding? bunch of nonsense and tough internet talk. god people like you are the worst. bunch of vague preachy bullshit.
this is temporary. just for show for the sheeple. will be back online within a couple weeks.
That is a sham and a fraud. The laws apply to EVERYONE or there is no Rule of Law.
You know that I live at
12223B Woodside Avenue, Lakeside, CA USA.
There is no anonymity here. You can visit me anytime that you wish.
Let's go hunting.
the crackdown on capital flight is temporary, and the government is doing it to pretend to the sheeple of china that they arent letting it happen. i have zero control over that. also, how is it morally wrong to support the chinese government allowing people to send their money overseas? if anything the law itself is morally wrong and the fact that the government has provided a loophole to their own immoral law is a positive.
your argument is basically that i called the chinese people "sheeple" and that therefore i am committing fraud and should be executed via guillotine. nice. strong thought process there boss.
It's ok, he's not aware that those Chinese Billionaire's are using USD that the feds exported to pay them for junk goods for Walmart in the first place.
Oh I am more aware of that then you believe I am, NidStyles.
And when it all comes crashing down, and it will, there will be hell to pay.
The entire system was built upon fraud. The USD is fraud.
Yes the US Government has been actively exporting inflation. But the Petrodollar is on the way out. Now China does the same. Yes the people here traded worthless currency, for decades, for hard goods and services. I was aghast at that as well.
It will burn. You can be assured of that. Those involved in the fraud, post collapse, need be aware.
Your level of complicity and participation is up to you. The ones whom are most complicit, those involved in the Financial Sector, will suffer the worst consequences.
The oligarchs will not have long to live. That happens in every revolution. That is just a historical fact.
When America goes hungry it will be over...Americans will experience famine on a greater scale than is imaginable for most. That is what happens when a Nation loses World prominence and World Reserve Currency status.
Revolution approaches.
Hedge accordingly.
Got guns and lead?
Personally I will rather be ready to manufacture Frag Grenades and RPGs in quantity, quickly. (Never have the finished product as it is against the law. But have the materials ready.)
I have been educating everyone that I can to demonstrate how easily it is done.
How many innocent Chinese did Mao starve to death, with the blessing of David Rockefella? I believe the number approaches 60 million or so. Corrupt isn't proper word for these bastards. Satanic, pedarast psychopaths, the whole lot of them
Communism=Corruption
If China begins to limit capital flight in earnest then kiss the Major RE Bull Market good bye. London, Canada, and major US cities especially on the west coast plus NYC and even Boston will get hit hard.
Some 30%+ of RE transactions in these markets are Chinese buyers w/ cash. The impact of any real Chinese capital controls on RE prices in these areas would be substantial.
My guess is that Chinese capital controls will happen. Likely because capital would then have to be utilyzed inward toward China's own domestic RE markets where there are now large and growing problems. If they limit capital flight then those funds will seek internal investment options and RE is one of the few people there have.
It is not only the major RE markets. They are buying up Detroit block by block. They are not getting the high end penthouses. They are buying flamed out blocks and run down houses of the serfs that decided to flame their houses after not making their payments and getting kicked out.
Thought processor, agreed. It should also help gold demand, "should" ...
The Chinese know the dollar is imploding.
The will spend those dollars like there is no tomorrow in order to get out from under them. Real Estate is not any kind of reportable asset, and they don't want low rent property that has to be carefully watched and protected from the free shit army.
when you buy the neightbour estate with the same neighbour's money, knowin the same neighbour is collapsing, you have to consider the neightobur can becore your enemy and you can still be exproriated.
i 'd be chinese, i would just exchange with real gold or european estate, not american, nor japonese.
Has anyone considered that no one, including the Chinese havs allodial title to property. If your lucky, you have a deed, which is the "color of title", a rather huge difference. All real estate serves as collateral on the loans from the banksters. The plebs will not be allowed an escape hatch.
"China = Predator"
I would add that the predator's teeth were supplied by the "printed" lucre of the FedRes.
Define Crush.
If yuan reprace dorrar you need spread yaun around very riberary.
Why is your China-man spoken of with a Dominican accent? Should I wait for ZH to disclose the connection and its implications?
"Communism been belly belly good to heeem"
"From each according to his ability, to each according to his need"
Apparently that guy "needed" a humongoloid house...so they gladly took it from the productive members of society to oblige. And our corrupt crony capitalism gladly participated as well. Cronyism works great on either side of that coin. Great, huh?
The chinese american candidate for Lt Gov in
calif, was a great story teller.
In the hallway , he told me how to get the money out.
You have a shoe factory. It makes pretty good shoes.
You have a cousin in Long Beach.
You ship the shoes to the cousin at the lowest price you can get away with.
He sells them for a lot more.
Plus, he will probably tell you that the shoes were defective, and demand another shipment to replace them.
You get on a plane and get the cash from your cousin.
Who gave CCTV the "ok" to run this story?!?
Or am i just being to cynical?
This story doesn't make the light of day unless......
This is good question. How did what everyone know what was going on become "this is what is going on"?
Might have to add this outlet to the app farm too. Right between Al Jazeera and RT.
ZH has been tearing it up of late actually.
You could have given me an up disabledvet - but i'll take it.
Yes this is a big story - but I don't believe China's media is any better than our MSM. No way is China's media suddenly doing hard hitting investigative journalism.
So who gave the "OK" for this piece? And why now? This story is old = minimum 3 yrs old.
Who can holla back at me?
Define Crush
just like the rest of the world, it would seem that China too has a multi-tiered notion of legalities. the very wealthy will always get special treatment closed to the rest of us.
it's no longer communist vs capitalist, it's the oligarchs vs the 99.9999%. perhaps it always has been.
It works that way for everyone. The cop who tickets you speeds every day...every day. Eliot Spitzer busts you or an enemy for prostitution while he keeps an expensive hot college girl on the side. Capital controls in China are a theory and not beneficial to those who have the most influence.
This is a fundamental problem in the reasoning of the Left. They say give more power to the government to take down the powerful and even things up. What happens is the exact opposite as a rich guy can do more favors for them compared to some nameless voter who is one of millions. In countries like China, favors are a way of life at all levels. Connections to government, the Party and family are the three things that will get you favors and it is expected. It is normal. Everything else is for show and public consumption.
LL (lumber Liquidators) down 21% today after announceing a severe slowdown
All hail the hosing....in mean Housing recovery
It's the weather...
I thought housese were all 3D printed with synthetic resins nowadays.
"I thought housese were all 3D printed with synthetic resins nowadays."
Nope, They move them to the cloud!
Americans will now live in virtual homes. Games like "Second Life" will become the only life!
it already the case for thousands of people.
they live & make money on that crap.
youtube is full of drama on this game, it is like good old days AOL chat in the 90'.
but now it is in 3D & you can sell you .3DS files
sad.
revenge of the trees....
Listen this cuntry is so close to turning a corner to easy street. Stay positive and don't be a cynic. A strip-mall Fireworks store job for everybody and a Tesla in every garage is in our future.
Brazilians and Venezuelans are flooding the southern Florida market from Tampa to Miami.
Zombie condos all around.
Vancouver is a Zombie Chinese nightmare up in Canada Land.
There is market distortion EVERYwhere in North America.
These "hot" dollars haven't made their way to my DEEP in the Heartland part of Merika yet. But if one of these Chinese oligarchs were to make me an offer, I wonder if I could convince him to pay in gold and silver?
And then straight to lake with my new boat and all that shiny metal...
i 'm sure you can sell your shit in dollars then go buy gold you silly bug.
Also..you can't BELIEVE the number of shell companies (mostly LLC) that are being created in Delaware, Nevada and Wyoming so that these guys can cash buy these houses for whatever purpose.
I wouldn't be suprised that 100's of billions of dollars are being laundered in the U.S. with FED/GOV/CORP knowing everything about it. Simply because it adds to the tax base and it provides construction and real estate jobs. And to goose the housing numbers which gooses GDP.
Wholly corrupt this system and country is.
Actually, it is not corrupt. Not at our end. Anyone can buy the properties. Unless they are engaged in an illegal activity like drugs or mafia, it is not illegal.
Secondly, I will justify this behavior in economic terms. As Austrian economics would predict, there is a misallocation of capital precisely because of government intervention. Chinese, Americans, all of us are acting in our own best interest. If a Chinese guy wants to pay me double for my home, I would take it and laugh all the way to the bank. If he were S. American, European, anyone I'd do the deal. These is nothing immoral in it.
What happense is central planners playing with currencies, markets, capital controls, etc. cause unexpected effects. These are people trying to make their best decisions for themselves based on their expectations of the future. If I were a rich guy in China, where you actually cannot legally own property forever, I would probably do something similar.
I agree with the article is that this is just setting up another large international property bust.
But until that happens...if there are any Chinese guys out there who want to buy my home for a mere 150% of FMV...call me.
You remind me of the 1980s when I bought two condos in Hawaii. One year later sold them to the Japanese for 250% over my price. 16 months later when the market collapsed I bought them back for my original price. Nice profit over a fairly short time. I lucked out; it was 90% luck and 10% skill. Timing of these collapses is very difficult b/c of CB intervention these days. Collapse will definitely happen but hard to predict exactly when.
RE Collapse is inevitable. History teaches us that.
Congrats and good call. Kyle Bass whom I admire and is famous for calling the last bust says that (paraphrasing) even when you can tell what is going to happen it is very difficult to time it.
There was really no down side to your trade once you sold. You could have just kept the cash but you even got the downside trade right.
Most people would have written a mass market investment book based on their luck, haha!
those moves in real estate happen in decades.....
Buy this.....today only(guns included)
The first chart does not take Russia into account.................
Fatal error
Define Crush.
First you have buy, buy, buy (pump, pump, pump)...
@LoP,
what are No. 2, 3, &4 (Kerry Lew Yellen) in there talking to them for...
could be more flow, liquidity rein supreme, no?
Now that's mark to fantastics, for the 0.1%.
HEY WAIT !! I haven't sold my 1970's 2000 sq-ft (near cardboard) box in my bucolic California College town for 800K yet? WAIT!!!!
This comment is 100x funnier for anyone who has seen or lived in a bucolic California college town.
It's all Chinese to me
Skateboader, I didn't know there were "bucolic" college towns in the People's Republic of Somebody Else's Money.
I'm thinking Fresno.... Chico... Well, OK Santa Barbara, but that's not really "bucolic" except for a small portion thereof.
Last time I was in Santa Barbara, we were staying at some hotel that wanted a godzillion dollars for a soda in the room bar thing. So I walked a couple of blocks to a liquor store to get some ginger ale, chips, etc. keep the kiddies happy till din din..... As I was walking out, this chick of indeterminate age with facial bruising ... I mean somebody had pummeled the crap out of the poor girl... wanted to keep me company for the night. Scared the crap outa me. I didn't expect it in that bucolic place, LOL...
Come on, Cali is (again) the 8th largest economy in the world (and, that's not using the Italian accounting methodology of including hookers either). We've got vast numbers of Trash Class peasants but also lots of hidden towns, suburbs, and (at least) one entire city filled with the top 10% winners.
UCSD. LaJolla is very nice, and I think the 2000 sq-ft (near cardboard) boxes are all way north of $1M.
That's true.. if you can put up with the 16 y/o botoxed lipped false tittied girls (Kimberly, look! My new titties daddy got me for my birthday!) stumbling about on 6" stilettos saying "Duh" and "whatever" repeatedly.
Like uh... whatever...
I got relatives down thata way. Greatest pleasure in life is driving through LA Fuck me!
Better than the 46 y/o botoxed lipped false tittied women (Kimberly, look! My new titties alimony got me for my birthday!) stumbling about on 6" stilettos saying "Dahhhrling" and "Nordstrom's" repeatedly?
Oh boy. Now you're makin' this hard, my friend.
Lemme see....
Maybe the 46 y/o is better because she'll not be here as long desecrating the planet and is less likely to procreate than the 16 y/o?
Yeah... I'll go with that.
Plus, she'd be more likely to have a costume malfunction, driving along I-5 at 123 mph in her new Benz (alimony induced expenditure, from plastic surgeon ex who did the 16 y/o's boob job) on the way to play Cougar for the sailors in Tijuana, when a false eyelash detaches into her left eye and in a flight of panic thinking the people in the next car will see her, drives smack fucking dab into a bridge abutment.
LOL
Very plausible scenario Knuks. Wait, your not reading from the local news site are you?
Not really.
But hey, Tyler might like this one, too.
http://sandiegoface.com/fattransfer/
It's all good in the Land of Nuts
" RIPPED from the headlines ! "
Wait, that is my life!!!!
True story...the girl at the Subway down the street (Henderson, NV area) told me this week that it was hailing at her house the night before and she couldn't figure it out...becuase "it's been so warm".
As I'm standing there, all I could think to myself is that she's as dumb as a sack of rocks.
Come on Knukles.
The SoCal chicks are hot Man.
Yes, tdogg...
....but dumb never had it so plentiful
Word.
Hey did you see me earlier post to your eearlier post?
Who gave the CCTV green light on posting this story??
And why now?
Somting doesn't add up on this.
CCTV doesn't get the ok unless somebody says to print.
University Heights is where the Professors live. It is not La Jolla as that is where the extremely wealthy are. Mitt Romney lives in La Jolla. His kids are in Rancho Bernardo.
I prefer Del Mar or Carmel.
But I am slumming it in Lakeside...looking forward to watching it all burn.
I would sell ahead of the border invasion, before it becomes bubonic California.
Totally agreed about the 'bucolicity' rating knukles. Only re-used the word to preserve the intended meaning.
I went to UC Davis (home of the pepper spray cop, though I had left by the time of that incident) and stayed in the 'quaint' bubble town for five years. Saw the housing prices double from the '04 bubble during my stay. Cardboard box houses. The remainder of the county is shit.
If you go up north, to Humboldt State and some of the other California State schools, I'm sure those towns are closer to 'bucolic' than any UC school town would ever be.
For fuck's sake, Evil Jan is prezzydent of the UC regents.
Re: I went to UC Davis
HA!! Interesting. That's my bucolic College Town, what years did you attend (roughly, in case the NSA is tailing us).
Haha, I figured there would be more than one 'Aggie' townie (fuck if I associate myself with a mascot) here. Recently. '06-'10.
Noticed the recent uptrend in homeless and street people? I still visit a few times a year for a good friend.
take chinafornia
Bucolic ... bucolic ... Hmmm. Isn't that one of those franken-veggies that is a cross between cauliflower and brocoli?
Funny cuz its true. In my town (CSU village) a 1600 sq ft on a modest lot in the hood is listed for 625k. Everyone on the block is shocked but pleasantly gratified.
hey not real.
are you waiting for prices to drop?
You had to be of the Family to get this service...it was not open to everyone I bet..
Does this mean the Fed will jump into real estate now? Or, will EuroClear?
So they buy them and do what with them?
Good question. How is it not clear since 2008 that houses are a value sink?
You can always live in a house.
You can always live in a house.
Or five of them?
Right. If you don't hold it / live in it, you don't own it. Maybe?
As far as I know they're buying up Detroit which they plan to rebuild and also high end R.E. next to rich Democrats who know how to keep the peasants at bay with their bullshit.
"You can always live in a house."
Unless one cannot pay the "rent" to the local pol and crat masters.
The Fed has been buying up foreclosures...the MBS...for quite awhile. They sit vacant and deteriorate as the ranks of the homeless and unemployed, as well as the neo unemployable, grow.
By the time that the Fed releases these houses on the open RE Market they will be in an unoccupiable condition.
Sooner or later they will have to divest of these toxic assets on their Balance Sheet. The longer it takes for that to happen, the more actual Physical Destruction of those "assets" occurs.
I wish it were that easy but some cannot ever afford to live in a house at this point and the damage to the people of the USA by the actions of the Fed will take Decades, if not a Century, to overcome.
We need to execute these bastards. Long Guillotines...
My city has been talking about rent control.
That's enough to make a Landlord's Hardon go very very limp.
I second this, I don't see how luxury housing in a collapsing america is a really good place to put your dough, no matter how easy it came or even if it's stolen funds.
Why would they put their funds into this segment? IF I had a extra million of ill-gotten gains I would have at least bought old-ish buildings with positive rental cash-flow not luxury shit.
What sense does this make?
None.
Pure ignorance on their part. I would have put the money in precious metal, operating oil fields, and railroads. Once the US goes to full third world status, the money will be in resource extraction, and moving those resources to market.
7.62 - You seem wise.
Peak Finance - Because they are THAT rich where they don't need to. Currency, corporations, stock - paper promises in other words can be devalued by perhaps 40% from here.
Housing maybe 20% Rough figures. Some will abandon such depending how long the downturn lasts. I know this by considering these amazing mansions in Ogunquit ME that were abandoned in the Great Depression because of maintinence costs and taxes. It depends on location too I suppose and demand.
I will wager though that a large percentage of super wealthy buy and hold making out just fine. Just opinions based on history and observations.
Personally, I wouldn't pay $8M for a luxury apartmemt on Manhatten, I would buy my own island off the East coast somewhere for that. To each his own I suppose. Some want to be in the heart of a city and act like a bigwig, some prefer more quiet reflection but means to have the party come to them occassionally.
You mean the houses? They slowly move into them. In my bucolic California College town, the houses are bought (big ones 3500+ sq ft), the kids attend college, the grandparents stay for 6 months at a time (alternating), the parents do too, slowly - over a few decades - they move in and absorb the town. It's all described in "The Art of War by Sun Tzu" ; read the section on Chinese Restuarants and it will all become clear what's going on.
I missed that chapter on resturants. I got lost in the part on the binding of floating female pig's feet.
The verses in the book of I Bling.
OK I got this one,,
My life is sunshine, lollipops and rainbows,
That's how this refrain goes, so come on, join in everybody!
Sunshine, lollipops and rainbows,
Everything that's wonderful is sure to come your way
When you're in love to stay.
Sunshine, lollipops and rainbows,
Everything that's wonderful is what I feel when we're together,
Brighter than a lucky penny,
Oh Yah,,,,Drank WAy to much coffee this morning.....
Coffee?
I need some of your coffee.
Oh yeah...that should be good for another 200 point gain in the DOW.
Good evening Mr Tyler, Going DOW-N.
http://www.youtube.com/watch?v=eofh-tUKOyk
Fixed it for ya. You were missing a N Alien.
RIPS
This is how China plans to dump the 1-3 trillion dollars it currently holds. It can't dump them into the market because it would cause the $ to crash and they would in effect be shooting themselves in the foot. So, they buy gold and U.S. RE, both of which need to be purchased with dollars. This will still cause the $ to crash, but at a slower rate, so that by the time it becomes worthless the Chinese won't really care. Their holdings (gold/RE/hard assets) will increase in inverse porportion to the $. Take a cue folks.
They don't realize that in all non-judicial states a bank can basically foreclose on a house with a gum wrapper as their proof of title. In judicial states it's just a mre slightly formal process: the bank has to authenticate the gum wrapper, which they do by having it notarized.
The Chinese are fucked.
I am Chumbawamba.
Chumbawamba,
Does your glee and argument fall down whenever the house is bought outright with no mortgage lien available to foreclose on?
Ah....that's where 'Eminent Domain' comes into play !
or executive order.
He is right, Gold is a smart move but RE is not, subject to outlandish taxation, and confiscation. The Chinese are betting that the US is less corrupt than their hometown government, I think they are going to be suprised and not in a good way.
When Governments go broke or through a regime change, the first thing they do is start nationalizing every foreign owned asset in sight.
Try explaining that to the robe when the bankster's attorney to the left of you has a notarized gum wrapper in hand.
You people think I'm silly, just wait. I don't care if you pay with fucking gold, the chain of title on every foreclosed house in the US for the past decade at least are tainted. The fools who exchanged cash for a Trustee's Deed Upon Sale purchased a lien, and a fraudulent one at that. At some point there's going to be a quiet title action on a previous foreclosure where a cash buyer "owner" holding a notarized gum wrapper loses, and it's going to set a precedent, and it's not going to be overturned, and that's when people will realize that in an age where all the old rules went out the window, "cash is king" won't end up being one of them that's spared.
Ya been had.
I am Chumbawamba.
This is 100% accurate.
MERS scooped up more or less everything they could get their hands on, burned the paper and destroyed the chain of title. It's not just foreclosed homes either, it's every single home for the last decade that has had a mortgage, including mortgages taken out prior to that time which had not been paid off. Speaking plainly, unless the house was fully paid off pre-2000, the property is toxic. For large chunks of land, mineral rights have been sold off, also making the property toxic.
MERS destroyed the chain of title, cheating local governments out of their fees and when paper was needed, they just forged it. The crime was large enough that the impact was more or less universally felt. Allowing the impact to fully hit the market would cause panic, so they pretended this never really happened.
Try paying off that mortgage and see what happens when you do. The banks don't want you to pay it off, as long as they hold claim to title, the fraud never has to see the light of day and they can just keep shifting it around. The buyer knows there's a mortgage to pay to someone, and that's all the banks need. Here's this for experience... family got tired of the games, cashed out some underperforming bonds and paid it all off. 2 years later.... still waiting for the papers. The bank cannot produce them and continue to give a run around claiming such and such documentation needs to be sent to such and such a place. Such and such a place then just passes the buck and claims something else. The reality is, of course, that the chain of title is long gone, and as the property was purchased "pre-innovation", we have an actual copy of the title. Anything they attempt to produce will be a visible forgery, and as such, they don't want to do it. Current status is preparing a lawsuit against the bank demanding they eithre produce the original title or return all payments plus interest for their fraudulent claim to title. A nice idea, but surely the judge is long since bought off and will "validate" the forged title as "good enough".
I wouldn't buy a damn thing in the festering shithole of a "market" that is the US. Over here, there might be corruption, there might be crazy shit... but all our titles are original and 100% legit.
Here's what to expect: The next downturn, when the banks start going bust again once people stop paying, you'll start to see more of those "a funny thing happened" stories, where banks bulk "foreclose" on properties they have zero legal right to. And sure enough, the sheeple will sit down and take it up the ass for the sake of "faith in the legal system". Here's how it goes down here when someone tries to seize property they have no legit claim to: fire, explosions, blood and death, people don't accept that shit. In the US... oh well, don't want to give the sheriff a reason to beat/arrest/murder me for disobeying an unlawful order... surely, the courts will settle everything eventually... in the meantime I guess I'll just live out here in the street with my things, must have done something wrong to deserve this. Fucking sheeple.