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The Mystery Of The "Missing Inflation" Solved, And Why The US Housing Crisis Is About To Get Much Worse
Over the past few months (not to mention last 7 years), the topic of America's "missing inflation" has gained major prominence, because while supposedly every other aspect of the economy is humming along (which really just means that record numbers of waiters, bartenders and temp workers are hired and collect minimum wage salaries), CPI remains so low it (together with China to a lesser extent) was used as justification by the Fed to not hike rates for 55th consecutive FOMC meeting, even though 75% of polled economists said, after 9 years of ZIRP, Fed lift off would take place last week.
One problem with the Fed's measures of inflation, as we have documented in the past, is that they are wrong, if not with malicious intent, then purely due to definitional purposes. Recall our July comparison between CPI and PCE and our warning that "With The Spread Between CPI And PCE Blowing Out The Most Since 2009, Is The Fed Making A Big Mistake" in which we warned that "with a rate hike, as small as [25 bps] the Fed can and will almost certainly start a chain of events that results in the "ghost of 1937" waking up. We don't know if, like during the first Great Depression, it leads to a 50% plunge in stocks, but for those long risk here, it hardly makes sense to stick around and find out."
The Fed did not hike.
But a bigger problem for the the Fed's measures of how the overall economy is doing (and/or overheating) is that the Fed telling the vast majority of Americans that inflation is negligible, leads to riotous laughter.
The reason for this is a simple, if dramatic, one: the U.S. transformation from a homeownership society, to one of renters.
We hinted at the key features of this unprecedented conversion in June, when we wrote the following:
... by now everyone knows that the artificially suppressed, "hedonically-modified" and seasonally-adjusted inflationary readings is what has permitted the Fed to not only grow its balance sheet to $4.5 trillion but to keep rates at 0% for 8 years. Because "how will the economy recover if there is no broad inflation", the Keynesian brains in the ivory tower scream, demanding more, more, more easing just to push inflation higher.
There is only one problem with this: it is all a lie - just ask any average American whose cost of living has soared in the past decade.
Still, with reality diverging so massively from the government's official data, reality just had to be wrong somehow.
Turns out reality was right all along, as revealed by the latest "State of the Nation's Housing" report released by the Center for Housing Studies at Harvard, which showed that while inflation among most products and services may indeed be roughly as the Fed and BLS represent it, when it comes to rent - that most fundamental of staple costs - things have never been worse.
According to the report, for American renters 2013 marked another year with a record-high number of cost burdened households - those paying more than 30 percent of income for housing. In the United States, 20.7 million renter households (49.0 percent) were cost burdened in 2013.
It gets worse: a whopping 11.2 million, or more than a quarter of all renter households, had "severe cost burdens, paying more than half of income for housing." The median US renter household earned $32,700 in 2013 and spent $900 per month on housing costs. Renter housing costs are gross rents, which include contract rents and utilities.
At this point we should perhaps remind readers that according to the latest census data, the US homeownership rate tumbled to 63.4%, the lowest reading since the first quarter of 1967: the lowest in 48 years!
Peeking behind the headline number, an even uglier truth is revealed: the only reason the homeownership rate is as "high" as it is, is due to homeowners in the 65 and over age group. For everyone else, homewonership rates are now the lowest in history!
And with housing increasingly unaffordable for most, or mortgage lending standards so stringer the vast majority simply do no qualify, it means that record number of households are forced to chose less capital-burdensome rent as a form of shelter.
And since there is an unprecedented demand for rental units across the US (as the "owning" alternative has become inaccessible), the median asking rent not only soared at an annual rate of over 6%, it has never been higher, with the Census Department recently reporting that the Median US asking just hit an all time high $803.
What is odd is that according to the BLS, rent inflation is far less: at just 3% in the most recent print. One wonders what seasonal adjustments American renters should use to make their monthly paycheck smaller, the way the BLS perceives it. Still, at 3.6% this is the highest annual rent inflation since 2008.
And herein lies the rub: because it is not so much what the real, honest inflation growth rate of rent is, it is what the offsetting income growth. Unfortunately, while the BLS can seasonally adjust rent payments to make them as low as a bunch of bureaucrats want, the bigger problem is that US household income is not only not keeping up with rent inflation, it is far below it. In fact, as reported last week, real income is now back at 1989 levels!
Which brings us to the latest, just released joint white paper by Harvard's Center for Housing Studies in conjunction with the Enterprise Resource Center, in which we read that the US rental crisis is about to get far worse. In fact, in an optimistic scenario in which rental inflation rises by 3% annually (it is currently far higher at 3.6%), while annual income growth is rising at a speed 2.0% (it is currently far lower in real terms) the number of severely cost burdened households - those who spend over half of their income on rent - will rise by over 25% over the next decade, from 11.8 million to a record 14.8 million households!
Which means that is using at least somewhat realistic assumptions, the real number of households who spend more than half of their income on rent will likely be in the upper teens if not 20s of millions by 2025.
From the report:
if current trends where rent gains outpace incomes continue, we find that for each 0.25 percentage point gain in rents relative to incomes, the number of severely cost-burdened renters will increase by about 400,000. Under the worst-case scenario of real rent gains of 1 percentage point higher than real income gains per year over the decade, the number of severely cost-burdened renters would reach 14.8 million by 2025, an increase of 25 percent above today’s levels.
More depressing details about the state of the US housing rental market:
At the time of the decennial census in 2000, one in five renters were severely cost burdened, paying more than half of their gross income for rent and utilities (Figure 2). Meanwhile, another 18 percent faced moderate cost burdens, spending between 30 and 50 percent of their income on housing costs, exceeding the widely accepted standard that housing should not command more than 30 percent of a household budget.3 This represented a slight improvement over the shares burdened in 1990 as income gains outpaced growth in rents.
And here is the punchline: "in the years following 2000, gains in typical monthly rental costs exceeded the overall inflation rate, while median income among renters fell further and further behind (Figure 3). As a result, the share of renter households facing severe cost burdens grew dramatically, reaching a new record high of 28 percent in 2011 before edging down to 26.5 percent in 2013. Adding in those with moderate burdens, just under half of all renters were cost burdened in 2013. These rates are substantially higher than a decade ago and roughly twice what they were in 1960."
Here the white paper confirms what, as a result of the above dynamics clear to everyone but the Fed, we already know.
At the same time that the share of renters facing cost burdens was rising, so too was the share of households opting to rent. Over the last decade, the share of renter households in the United States has increased significantly as homeownership rates have fallen from a high of 69.2 percent in the second quarter of 2004 to 63.4 percent in the second quarter of 2015, the lowest level since 1967. We are now seeing more renters than at any other time in U.S. history.
Furthermore, rent inflation isn't going anywhere - in fact, it will only get worse: "as of 2013, the median rent of a newly constructed unit of $1,290 was equal to about half the median renter’s monthly household income, underscoring the urgent need for policy makers to consider enhanced levels of support for rental housing particularly for lowest income households but across a range of income levels."
Even the pinnacle of status quo thought, Harvard itself, is now mocking the 'recovery' propaganda:
While reports on the state of the economy have become more optimistic in recent years, the number of renters with severe cost burdens is not expected to slow. Even if trends in incomes and rents turn more favorable, a variety of demographic forces will exert continued upward pressure on the number of rent-burdened households. Rapid growth of the minority population is one key factor, driven by past and predicted high levels of immigration. By 2050, the U.S. is expected to have a majority-minority population, meaning a greater share of the population will be non-white racial and ethnic minorities. The Hispanic population in particular is projected to continue its fast growth, reaching 106 million (or doubling) by 2050.
With that said, racial and ethnic minority households are disproportionately burdened by housing costs, regardless of tenure. According to the Center for Housing Policy’s Housing Landscape 2015, working households that are headed by non-white individuals have a significantly higher rate of severe housing cost burden than white-headed households. According to this analysis, one-quarter of both African-American and Hispanic households were severely housing-cost burdened in 2013, compared to less than 20 percent of white households.
Sorry Europe, the US has its own refugee, pardon immigrant, crisis and it is getting worse by the day.
Finally, tying it all together, here is the reason why the biggest US generation by number of participants - the Millennials, at 82 million strong - and the one generation that was supposed to be the dynamo that pushes the US out of its post-crisis funk is, simply said, crushed.
Millennials are also expected to continue experiencing rent burdens as they age. Having entered the labor market during and following the Great Recession, those in the millennial generation have received lower wages and experienced higher rates of unemployment and underemployment than their older counterparts at this point in their lives. As a result, millennials have less wealth accumulated, have delayed forming new households, and are less likely to become owners at the age that older generations had previously. In combination, we are likely to see additional household formation by millennials over the next decade and expect a relatively higher share to remain renters during that period.
Bottom line: far from confirming the "bullish thesis" that Millennials will eventually move out of their parents basement and buy (or rent) their own housing while starting new households, just the opposite is taking place:
In 2015, 15.1 percent of 25 to 34 year olds were living with their parents, a fourth straight annual increase, according to an analysis of new Census Bureau data by the Population Reference Bureau in Washington. The proportion is the highest since at least 1960, according to demographer Mark Mather, associate vice president with PRB. "The phenomenon of young adults, facing their own financial challenges, forced to squeeze in the homes of their parents. And new data show the trend is getting worse, not better."
As Bloomberg redundantly adds, "It takes young people longer these days to find jobs with decent wages," Mather said. "Young adults need to spend more time getting the necessary education and skills before they can become self-sufficient. The recession likely exacerbated this trend."
The latest Census data show just 3.1 percent of Americans from 25 to 29 relocated in the last year between states, just half the share of 2002. While moves between counties in the same state — less likely to be for jobs — have increased some, they too remain below pre-recession levels, according to PRB's analysis.
For some like Goldman, there is hope: "There is a silver lining to the trend. Presumably, all the adult children will one day leave their parents' basements, and that household formation will prove to be a huge boost to a subpar housing recovery. There is already evidence this is occurring to some degree."
Actually, no. And as the Harvard report suggests, Millennials are not only not leaving their "parents basements", but even if they were, their financial situation would be even worse! At least for the time being, their parents cover the rental costs. Should tens of millions of millennials suddenly see their "disposable" income be crushed once the real world presents itself, that will be the end of the upswing in US consumer spending.
In conclusion, nowhere is the mystery of the "missing" inflation more obvious than in the following interactive map showing that in virtually all major seaboard metro areas, including the major cities in California, New York, and Florida, the number of households with a cost burden is 50% or higher.
All of this could have been avoided if only the Fed has observed the "missing" and soaring rental inflation that was right in front of its nose all the time, and which it did everything in its power to ignore just so the 1% can keep their ZIRP (and soon NIRP)and QE, and become even wealthier on the back of the middle class and the 80 million of 25-34 year old Americans who have found out the hard way that not only is the American Dream of owning a home officially dead, it has been replaced with the American nightmare of completely unffordable renting.
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Jesus is a lie. Does that mean the country is also?
I am no bible thumper but it sounds as if you have issue with Christianity? I dunno if any of the Religions have it right, I suspect not. There are gonna be billions of pissed off Muslims, Jews, Christians etc if the Flying Spaghetti Monster wins out.
Prophecy is the proof you are looking for.
THERE IS NO INFLATION
we are simply seeing an increase in the silly little stuff that we need just to survive. But hoorah for the new ever lower prices for a flat screen tv. If they would only come in a box big enough to live in, a bargain indeed! And fuel prices are down but if you have no job and no money to spend, it is kind of irrelevant, unless your car is big enough to live in and you need to run the A/C.
How about RV sales. How are they doing?
They sell them on credit don't they? They should be doing just fine!
In a consumerist society, the only cure for depression is buying stuff. Yes, it of course creates more debt...and depression, but as with an alcohol, booze is a depressant that seemingly is the only cure for an alcoholic's depression. It never ends well but there is absolutely nothing better than self medicating!
That's a good description of us today. And take it a step further...the children (next generation) of alcoholics either become a drunken mess themselves, or very often become extreme teetotalers who view alcohol with disgust and contempt.
If even a third do the latter with our debt-addiction, it's going to be a different world.
Silly wabbit, everyone knows the prime real estate is near the steam grating within walking distance to the liquor store.
I know a nurse who inherited her parents nice older Cape Cod 2 story free and clear in Conn. but was forced to sell because she could not keep up the 40k in annual taxes plus outrageous insurance.
40k a year in taxes? Was the house worth 8 figures?
My parents live in CT and their 200k house has annual property taxes of about $3,800. I wonder what town that nurse lives in, and what the house value/is.
Come to Joisy where the taxes are very affordable - I'm only paying $9100.00 yr. and that's considered reasonable!
$40K seems really steep, although some, ahem, "urban" parts of CT have extraordinarily nasty housing tax rates, such as Waterbury, CT. People pay up to $5K/year for a house that's worth $125K. The city is a complete POS, with more than 50% of the population on the dole.
So if it's a house worh ~$1M in a shitty city like that, $30K is plausible, but the norm, even in shitty CT, is around 1%-2% in city property taxes. Not sure about insurance, but again if it's a shitty zip code, that's gotta be another $5K, maybe even $10K.
BTW, Westchester, NY, property taxes are roughly DOUBLE the CT rate. I know because I live on the state line and my neighbors complain about it every day...
All going exactly according to plan. Debase the US demographically, add in centrally planned economic destruction of the middle class and voila, an angry public gets restless. Phase one will see the the new and expanded welfare class (ex middle class) get restless enough to "require" additional measures from the police state. Phase two will see the furthering of the economic meltdown divide people into three classes, the wealthy, the white collar welfare gov worker, and the underclass. Class warfare will become those surviving on the gov teat courtesy of endless fed money printing vs. the minimum wage servant level underclass. The decline in living standard will be huge, the ensuing police state epic.
I would like to see Janet living in a van down by the river.
being raped by a gang of large black men
"Fuck all that. Never been a better time to buy a house." - NAR
Correction: There's never been a better time to BUY and/or SELL a house.
Just like Cramer and Goldman Sachs. The way to make REAL money is to be on BOTH SIDES of the trade.
You should see canada, USA is not that bad. Iam from Miami and Vancouver
I guess your reality is where you are and who you hang out with:
Canadians have significant equity in their home, averaging about 74 per cent of the home’s value (2015)
This means of all that high value real estate in Canada....there is only 26% owing. In fact over 40% of Canadian home owners have no mortgage.
Shut the F up. YOu're basing that on sky high property valuation whose only basis is oil (how's that going?) and property valuations. Canada's done. Hopefully, there will be moose burgers and good whisky at the wake. Canadians, if you own property sell it now. CMHC has your buyer's back, but won't for much longer.
I can tell you were the "missing inflation is" It is in asset prices. The ORIGINAL quantity theory of money which is MxV = P x T relates money to the prices of EVERYTHING money can buy, can be spent on- ALL transactions so that the correct measure of P in the above equation is on ALL prices, which are inmeasurable since it it impossible to calculate weights. The mistake by Keynesians and monetarist is to use a simplified version of original theory MxV = Px Y. This simplified version is nonsense economics. Its foundation is stupic theory. So that the P in this equation and the P in the original equation are NOT the same P.!!!!
Roger that. Shrinkflation - buy a new cereal box that is half empty for the price of a formerly full one. No inflation... BAHAHAHAHAHAHAAA
I can't help buy question increased rental rates. As having owned a couple of rent houses for the last fifteen years in Dallas, I have not seen much increase at all. Maybe I should pay better attention? The thing that is interesting is that they are building big multistory rental complexes all over and I know their rates ARE high. My sense of it is that many want these higher priced units for their location, especially young people looking for "opportunities" in the social scene. How does government subsidized housing play into this? Is the government paying higher rents?
The younger gen. to a certain extent, is eschewing cars as transportation. The oil price hikes started driving them into the cities a few years back, out of necessity. Who can buy a $30,000 POS plastic car when they're already loaded w/ credit & student loans?
What happens when your number 1 policy goal is to raise the value of the "security" backing $10 trillion in loans, thus keeping the bankers alive and happy.
We've priced the middle class out of the market.
The American Dream was never owning a home. They came here to be away from meddling governments.
Heard yesterday that Seattle housing costs are up 23% y/o/y. That's sustainable. Good job Bernanke you fucking piece of excrement. Hope you die soon
I'm living in mining camps by summer and the cheapest 3rd world countries by winter...looking into buying an RV as I have just sold my house ahead of the Canadian housing crash...made Cdn$94k...bought gold with most of it.
awesome handle
So let's say we're out there flying around the universe one fine day, and whilst traversing worm holes we find ourselves being 'tractor-beamed' into a black hole. If we simply change the definitions of what Black holes are and what they do, can we just fly by and have our lunch, undisturbed, instead of being disintegrated at the molecular level by a force already pre-defined as inescapable...?
AS long as your medications hold out
These come to Jesus articles have a function.
Designed to warn you of bad days ahead.
Hoping I make it to 2050 when whites are a minority - so I can reverse all those 'discrimination' and 'equal opportunity' and 'quotas' laws and sue the sh*t out of the new 'majority'!
The term minority has already shifted to not mean what you think it means. Minority has become a determiner of entitlement based on past injustices, real or perceived. Whites will NEVER be a minority in newspeak. Like the polio virus we will be dogged until we just disappear like the neanderthal we are portrayed to be. The white race will be co-opted by cross breeding with "true" minorities through political correctness as well as genetic survival, but there will always be trace elements left to be a constant reminder of our potential threat.
Like this Afghani girl, where all the Jews and Christians were driven out.
http://1.bp.blogspot.com/-Mk6Dlnb6d4U/Tm6nE3uyXyI/AAAAAAAAB1s/ahLQWhznqD...
Interesting story about Steve McCurry's photo.
http://ngm.nationalgeographic.com/2002/04/afghan-girl/index-text
AT first I thought you were referring to a great and pure sensemllla, 100% Sativa.
'scuse me.
Except that the new 'majority' would rather shiv you than take dat sheeet! Besides, they don't have any money to take.
With so many people stating get out of stocks does that also include PM mining stocks?
Unless it gives actual title to something, its just as useful as any other gambling chip. Its such a fucking joke to talk about values and fundamentals when the thing you own is only valued by what other people think they can sell it to someone else for. Is that like anything else you might purchase in your life? The whole idea of "investing" is about buying something you will NEVER or could NEVER use, simply what you think someone else might buy and pay more for AND STILL never use, consume or do anything else with it other than sell it. If you invested in real estate...you can use that. If you invest in food or equipment or seed or any number of other things, you might be able to sell OR consume them. But not the stock market, not ANYTHING that has any play in the casinos other than possibly commodity markets, but even they are so heavily manipulated as to lose any real time meaning.
".........Its such a fucking joke to talk about values and fundamentals when the thing you own is only valued by what other people think they can sell it to someone else for..........
Indeed.....
Everyone got out of mining stocks long ago. Easier to hedge using GLD which is the only reason most owned mining stocks in the first place. There was good article here about that in the last few weeks.
Nobody 'needs' a house. Nobody needs much of this material world at all.
Aside from the parasites and intestinal worms, anyone can survive on bugs and tree bark soup. Live in the park for free….
Few have any idea what they need...they only know wants and cannot distinguish the difference. In fact they will sell their souls (and liberties) for absolutely worthless shit. While it pisses me off to see what has happened to our healthcare costs, it also amuses me to think how little value put on their health yet are scared to death of dying. Kind of opposite of yesteryear where there was zero assumption of healthcare which directly influenced personal health to some degree. People understood that their health and life was theirs and only their responsibility. If they didn't do it no one would. Now healthcare is a right, and never more expensive, and yet, many will spend their money on sports and entertainment long before allocating anything to healthcare or their health.
What is it that we NEED?
To feel special
Squirrels and pigeons are tasty additions to grubs and roots.
A paint can rocket stove with some tree limbs and your in gourmet paradise.
They taste like chicken.
A fool proof gage of inflation---the size of the cardboard tube inside a roll of toilet paper. A tattle tale on TPTB and their "no inflation" propaganda. Everyone uses it everyday and they think about the size of the tube in the middle cause muscle memory (when they grab the roll) tells them the size is not the same---"I paid the same but got less" goes through the mind and the lie is exposed-----
TPTB cannot control the game after it reaches a size limit. They have the most to lose and lose it they will. Just saying.
They now sell TP without the cardboard roll altogether...what does the 'muscle memory' think of that?
Inflation? Nonsense, it's all in your imagination! Why just yesterday I went to the grocery store and bought a 12 ounce pound of bacon and it was in the same size package as last year.
Barne Frank is not around to suck on dicks for NIJA loans expansion plan.
I'm calling first dibs on the White House, & New York State.
You mean my 10/hr CNA job wiping old people's asses isnt enough to buy a $500,000 shit box? That's fucking bullshit man.
The Rent Is Too Damn High.
Wage growth has lagged most other costs for at least a decade or more. Inflation and other cost increases are compound functions. The correction will take care of itself. Healthcare and rent are taking more and more of peoples $$ You can only stretch it so far - at some point there is no more money.
Either incomes will rocket up OR housing, including rent, will crash huge. You cannot get renters to pay for something they have no money for. No one is going to rent and choose not to eat or to eat ramen noodles permanently. You cant even get rid of health insurance now or the IRS comes after you - no matter how much it increases each year (estimated 15-20% increase next year). You can get 1 roommate, then 2. But most cities limit the number of renters based upon the number of bedrooms - this only goes so far.
The solution is to stop working or only work a bare minimum - get benefits. Section 8 housing. EBT. Free healthcare. Welfare benefits.
Something is wrong in the US when a working mother making 29k has a better standard of living that someone making 69k per year. If anyone thinks this is not lost on the population as a whole, they would be mistaken. As costs keep going up it is more lucrative to NOT fight anymore. Let the govt pay for it.
I had a relative saying the same thing when Clinton was still stuffing cigars. His argument was to get on welfare and collapse the system, like the USSR. If not for borrower bail-outs and/or loan extensions, it would've already happened. The debt slaves are given just enough hope (carrot) to keep them pulling the cart. Next up? Student loan forgiveness. A Communist Sanders election would probably push the country over the edge, by creating an intentional widespread sort of work 'stoppage'. So crooks, like Soros, will probably spend a fortune on Bernie's campaign.
The only thing we need to impose tyranny is the ability to convert demand into force.
Tyrannies are almost always put in place by public demand.
It is the enabled use of force that keeps them in place.
This is the real threat of politicians in that given the size and scope of our government, even the most justified of public demand will be converted into force and become irrevocable. To find any of them willing to follow the restraints of the constitution should be our primary test, above ALL OTHER CONSIDERATIONS.
Something is wrong in the US when a working mother making 29k has a better standard of living that someone making 69k per year.
Down voted for the utter stupidity of the above comment. You obviously don't know to many single mom 29K earners. Or 69K earners apparently...
the most devasting component of the article is 34-44 year olds are crashing fastest - in terms of ownership - should be prime marriage and children years - i understand people get married later but this is well beyond 29 yrs old - this means the 1099 income instability and level of wages preclude a lot of these guys getting married at all.
Wow! who will the boomers sell to as the real estate taxes go exponential - making housing more unaffordable ?
I don't have the answer to your question, but one thing I have learned is that there is very little that is truly rational about our economy and purchasing decisions. Every bit of it seems to be based on emotion and that emotion is by far the easiest thing to manipulate....as we experience every fucking day. No one has a clue what to do because they are looking for an emotional response to every problem, rather than a rational one. It is an addiction just like any other mind manipulating drug. Everything happens because we NEED it, be it our diet, our spending, our politics. Trump's success is based largely on this emotional aspect, which does not make it wrong, but very suspect.
If media tells us we need bigger fancier homes, then those homes WILL SELL. Spending, consumption, is the ONLY thing suspending us from the abyss. It really doesn't matter what we spend on, only that we spend and spend lots, more than we have, more than exists, as that is growth to infinity.
I hear the FEMA apartments are very affordable.
That increase in household income back when has to be from an increase in two-income households.
Average wages, once you factor out the 1%, has to have been pretty much straight down since 1990, maybe longer.
1981 saw the beginning of the end for the middle class.
The 70s began their moral decline, which they eagerly bought into by killing their children, legally, in trade for a lot more orgasms.
Cotton is down to a quarter a pound and I'm busted!
Did anyone actually use the interactive map to check rental prices? Most areas of the CA coast are under $900. WTF - me thinks there are major errors on that map.
Tyler has successfully predicted 20 of the last 2 crashses.
Sorry, Chicken Litttle, the sky is not falling.
Call us when you know something.
So why are you here?
Somebody paying you?
"According to this analysis, one-quarter of both African-American and Hispanic households were severely housing-cost burdened in 2013, compared to less than 20 percent of white households."
Interesting to observe - no matter the context, how 'whites' are always referred to by their 'color', whilst other demographics are consistently referred to by their ethnic qualifier. Example: Is there such a thing written as a 'Brown' household? How about a 'Yellow' one? Can you imagine the editorial 'license' to get away with even suggesting that...?
Political-Correctness trips all over itself - to the point of absurdity, with the exception of 'Whites'. That's where 'consistency' reigns supreme...
You make a good point.
How about those Emmy’s last night?
“Viola Davis Makes History, Moves The Damn Line For Women of Color”
Um, is a ‘woman of color’ a colored woman?
Here's another one.
"Detroit Carjacker Tells Black Bystander, ‘You Good, I only Rob White People’"
For a woman of color (Viola Davis), she'd give the wookie a race to the bottom in the looks department.
Does anyone even watch the Enema's anymore?
Education??
Here's a paraphrase from, Mrs. Steven Jobs, the multi-billionaire widow of the Genius who, along with another genius, Steve "Woz" Wozniak, founded AAPL and made tens of thousands of multimillionaires and other billionaires commonplace all over the world.
Mrs. Laurene Jobs: "What education? These Fucking kids entering high school are about to enter the worst wasted 4 yr period of their lives, the biggest waste of time in a century. Bigger even than the jillions of employee hours lost to Pac-Man, Bertie the Brain, and Pong in an earlier generation.
I am seeding a fund to re-jigger the fuck out of the Public education system, with an intial donation of $50,000,000 to develop new high schools from the basement--- where the kids do their dope---- all the way to the principal's office and on thru to the school boards, and the School Taxes so easily confiscated from the parents of these kids.
The current system is perfect for developing the kinds of students that we needed 100 years ago.
I am hopeful that this will allow the revolution in education to begin. Long live le Revolucion!"
http://www.nytimes.com/2015/09/14/us/laurene-powell-jobs-commits-dollar5...
A-the-fucking men, Sherlock!
NYT means she seeks image enhancement. Too many vested interests for real change before a wholesale collapse(reset).
I sorta agree with this;
“The system was created for the work force we needed 100 years ago,” Ms. Powell Jobs said in an interview here Friday.
If she meant mind numbed robots who won't question authority. I fear she's just thinking of factory floor workers. Abolish state-run schools.
Ms Jobs is in the hunt for a political office ----going public with a political agenda and financing it is about as big a "hat in the ring" as you could throw --- just a guess---
The map at the end has an interesting dynamic. A number of out-of-the-way places show up red because they contain Universities. Students obviously have little income and yet are forced to live fairly close to the U, so they jack up the count of severely-burdened households. This kind of skews what the map wants to display (families).
For those who don't know:
cheaper bread is better than expensive bread
cheaper computers are better than expensive computers
cheaper booze is better than expensive booze
cheaper house is better than expensive house.
Just in case people don't that, just in case
The proposition that inflation is under control is rediculous and intended to mislead. Most control of inflation is by reducing the quantity and quality of product.
Was going to purchase gym shorts for my daughter. They were pure liggt gauge nylon Nike and asking about $28 at sports authority. That china crap would cost about $2 to manufacture and import I would estimate. I could by equal or higher quality (tho poor fitting) at walmart for about $6.
Inflation under control if you dont eat or wear clothes or need medical care. They will use the brief decline in fuel prices to allow ratchet up other prices. Then fuel will rise again of course. Waters getting warm.
I always shop at Walmart for clothing consumables... (I can get a cheap pair of sneakers that lasts 6 months for under $15, and they still have a dual use function as a dog chew toy after I get my next pair.)
Make sure you check your pride at the door.
I dont derive any pride based on where I shop.
Im not a pig fucker.
Two of the people that I know in my apartment complex are moving out because they just had their rents increased.
Check out the completely twisted fucked up logic in the statement they were told as to why their rents went up...
"We are raising your rent in order to be competitive with other apartments in the area"... Seriously WTF?
These apartments are at least 25 years old, and as I walk my dog around I count the number of empty units which keeps increasing.
When my lease is up I'll be looking at renting a house for less money.
The modern method of calculating profitability is not based on actual revenues and expense but on theory of "potential" earnings. What we might consider Non-GAAP accounting. So much corporate accounting is to elevate value, either to sell stock or to sell the related assets. An apartment complex will sell based on its potential profits, calculating established rent times number of units. All they need is a portion of units bringing this high rate and the empty units are all future profit. The only way this makes sense is if they are trying to maximize the property value at expense to current profits. every investment scheme is based on "potential" profits, not actual current profits. Look at Tesla, look at Amazon, look at all of them. Many corporations profits suck, but their "value" is based on what people think will happen in the future. When gambling dominates the economy, nothing will make any sense except the understanding of blatant greed.
Sounds like a good time to get into the rental game.
Seriously though, I have a house that I rent for extra income. I tell my tenents the same thing, when the property tax goes up, your rent goes up. Otherwise I never raise it. My profit is fixed as far as I'm concerned but they get a raise every single year! it isn't me raising the rent it's the state raising the property tax.
Renters, absolutely, should be reminded of this at every lease signing. Many of them, never having owned anything, think money grows on the landlord's tree.
Tyler! "Missing Inflation" is not a mistake or a misunderstanding or an accounting glitch.
Inflation really is low. People have insufficient money.
Do not confuse asset inflation with real inflation. Stock overvaluations and real estate over-evaluations do not create real inflation because prices drop when people sell. Assets are self correcting and non-inflationary.
You, are an idiot and have no idea what you're talking about. Have you been to the grocery store lately, how bout your typical fast food joint, pay a utility bill, how bout insurance (health, auto, etc)...? It goes on and on buddy! Take your cryptic drivel elswhere.
Inflation....we got no stinkin INFLATION! Just look a the grocery a bag of coffee has only gone up $.25 in a year, Oh that's for 12oz bag not the 16oz bag sold last year!
Inflation....we got no stinkin INFLATION! Just look a the grocery a bag of coffee has only gone up $.25 in a year, Oh that's for 12oz bag not the 16oz bag sold last year!
I won't lie. I'm in this exact millenial situation. You can't ignore the lack of a stable job history - WHICH MEANS ALWAYS HAVING A TYPICAL DAY JOB TO PROVE YOU'RE A GOOD LITTLE ROBOT.
If you go down the self-employed route it's almost as bad as being unemployed when it comes to a resume. This makes finding a good job that much more difficult. The key word being good job. And being a dude, nobody wants an unshaven computer geek as a secretary, nor would I lol.
The only jobs I see right now are secretarial jobs, warhouse, custodial, food service and i would think it's impossible to rent anything on those wages. Or almost all your wage would go to housing and then you'd really be stuck..
I have a technology education but I can't find anywhere to use it that won't push me to suicide.
Attitudinal adjustment may be required.
lol @ get a shave.
I'm just not what you envision as a secretary, shaved or not. Younger, prettier women and guys tend to get those clericial jobs. I resemble "Q" from Impractical Jokers.. LOL
Right now I'm doing computer repair and internet marketing but like any at home business - it's so up and down I don't feel confident being able to rent/own anything. Especially when we all know the next market bust is always right around the corner.
I just applied at Geek Squad, so prepare the suicide note.
Obvioulsy he's not very wise, he fell for the college scam.
Don't discount parental pressure. I've met more than one who were forced thru 4 years by well meaning dolts(parents). More recently, I met one who quit UNC Chapel Hill after one semester because of the ridiculous expenses, like a +$1000 per year parking permit (that's what they told me, anyway). They got a scholarship that didn't cover all the 'misc. fees'.
In Seattle huge amounts of high rises are going in with all the 600 ft2 lower units with no view going for 300K-400K being bought up by Amazonians and other young, and single techies.
Never certain, but you are probably better off waiting....
It would help even more if you were black.
Never should have bailed out the fucking banks - as all those hedge fund sales types and economists were claiming that the world would end, the truth is housing prices and rents would have ultimately regressed toward a more reasonable mean and loans would have been made increasingly by small/regional lenders.
But the very name of the debt-money system is the ongoing theft of productive labor by passive capital.
You don't have to be a dirty commie to appreciate that naked capitalism, and especially crony or quasi-fascist corporatism uses power of the government to even further incentivize bad loans backed up with collateral and backstopped with tax dollars.
Meanwhile, you can still get a good deal on a house in Detroit, but you're gonna want a good security system.
As long as rents are subsidized at the margin, by .gov, there will be a floor under them, and therefore a floor under house prices.
I earned a huge once-in-a-century profit recently when I sold out of all my financial assets after riding the QE elevator back up after the 2009 crash caused me BIG losses, ie the FED taketh away (2009) and the FED giveth back (QE).
I used to be a bond investor, but now the yields are a farce, and if the FED did raise the FFR, then all bonds will lose far more in value that you would ever earn in interest.
So I hunted around for good alternative investments - I would NEVER enter the equity casino - and decided on investing in residential real estate by buying properties, renovating them and renting them out. There is a HUGE problem with fraudsters in the rental biz, ie people who lie about their background just to get into the property, and then never make any rent payments, destroy the property, extort payments from the property owner to move out, and exploit the hyper-liberal courts to protect them.
One of my friends in the property rental biz had HORRIFIC losses due to these rent scammers, including houses that were stripped of EVERYTHING THAT COULD BE RIPPED OUT AND SOLD BY THE SCAMMERS - INCLUDING COPPER WIRING INSIDE THE WALLS !
In the property rental biz it is ABSOLUTELY ESSENTIAL to do DEEP background checks on all renters and get deposits and advance payments large enough to cover damages, unpaid rent, court delays, etc.
So far I have been fortunate in my applicants and DEEP background screenings ave been earning 12% ROI. But the amount of work, time, hassle, risks and anxiety involved are so great that I will be selling the properties rather than expanding my rental inventory. Based upon my experience, I think it is better to renovate houses and rent them ONLY with the intention of completing a sale because the rent scammers now have far too much protection from the hyper liberal legislators and courts.
Screw you fag, go get a real job. Stop living off the backs on others. I feel sorry for your soon to be losses, not, lol I am really, really looking forward to you savy investors take a huge bath when the housing market drops off. I can not wait. My Wife and I jsut got an RV and put it on my friends 38 acres. Scam landlords can suck it and this trend will continue. You are going to be stuck with some huge liabilities. hahah
You are obviously a social parasite, trying to blame successful people for your incompetence and failure, living like a rodent.
So you bought a teensy-weensy decrepit used RV and are squatting on someone else's land because you are not man enough to get a real home. Then you have the arrogance to come here and shit on real men who earn real money who own their own property and are successful.
Whatever kind of business you claim to own, it is obvious that you are a pathetic failure at it and come here only to relieve your frustration and bitterness by flinging shit on people who are more successful than you. That won't help you escape yourself - you will still be just the same ill-mannered rodent tomorrow that you have been all your teensy-weensy life - probably mostly because of your attitude.
So you're living off of your friend. Who do you think pays the property taxes for the 38 acres that you enjoy? Why don't you man up and pull your own weight?
Agree 100%, friend had the same experience, renters kept trashing his 2 family, finally he gave up, gave the bank the keys the renters ended up buying the house that was in foreclosure. The rental market is a big scam. Beware of renters, especially if you live in some states i.e. MA
HA, what a dumbass. His credit just got wacked. You landlords know the risk. Get a real job if you can't handle the heat.
Homes were made to be lived in not speculated on or finacialized.
1 Timothy 6:9 ESV / 2 helpful votesBut those who desire to be rich fall into temptation, into a snare, into many senseless and harmful desires that plunge people into ruin and destruction.
I also had to fire about 3/4 of the construction-trades workers that i hired due to them:
1. not showing up for work, not calling in at all, much less far enough in advance to get replacements
2. billing for hours/work not done
3. taking more breaks to smoke, drink, gossip than actually working
4. stealing materials and tools because they have the expectation that these things are "fringe benefits"
As a result, my respect for the American construction-trades workers is near zero.
LOL so you are going to turn into a house flipper now, good luck. Those days are over. Time to get a real jop. Let me guess, you are going to become a real estate agent now. LOL
I am not a house flipper, a person who just buys and then sells in expectation of an arbitrage profit. I have invested large amounts of MY capital in the renovation of the properties that I bought before I put them out to rent or sell, and I did considerable amount of the work myself, in addition to hiring and supervising construction-trades workers.
That IS a REAL JOB - obviously you do not have a real job yourself and have never done any real work yourself, otherwise you would know how much REAL work and capital risk is involved.
Stop suckling on the government's entitlement teats, open your eyes, ears and mind, stop being a reactionary idiot.
Actually I have owned my own business for 8 years. But anyway start a real business, one that is respectful. Never taken a dime from the government. The good news is the housing market is about to fll off the cliff and you will be stuck with the inventory. Eat it pal. Wow! You hired some contractors, impressive stuff right there! LOL.
Respectable? Like Section 8 leaches (I'd sooner burn the house down!), taxpayer funded liberal judges and most RE agents who would sell their grandma into slavery for a commission. Sounds like somebody got 'schooled'. I hope the landlord renews the judgement when it runs out.
Exactly it's your capital, you know the risks. They are many and you are about to be exposed to them.
It's not a real job man, stop lying. You provide no service to better society. You hope to make money off of some shitty finacialied overpriced box by putting some crappy new floors and other garbage and sit there and collect rent checks from people who are having a hard time making ends meet. You claim to be a capitalist but you are a parasite living off what the government created. You did not innovate anything, you are not smart enough to do so. You are what is wrong with America today.
Over the years, I've done everything myself. Re-roofs, new cabinets, counter tops, electric, hvac, plumbing and legal, to evict the real leaches. Here's hoping the landlord renews the judgement when it runs out. Post their name here and I'll remind them myself!
I hear ya, Inn. Besides the bonds, I could've written the same post in the 80's. Luckily, the internet makes background checks nearly painless, these days. Back then, I had to be a member of the merchant's association to get credit reports. Since the internet, I actually found a 20 year old applicant who had declared bankruptcy! You can eliminate 90% of scammers by telling them that you do credit checks. There are still a few who think they can get in, like that 20 yr old.
There has never been a better time to rent your parents basement!
There are MANY areas where you can buy very cheaply.
Areas in NJ where SFH are under 30k, within an hour from NYC, and minimal violent crime
Shitty schools, high taxes, but still affordable
tax payments are higher than the house payments. No point in living in NJ
This is all to setup QE4 which is going right out the door of the helicopter.
People will pick the money off the ground and give it to the Bankster businesses which have been prepped for them in QE1-3
May the assholes at the federal reserve burn in hell.
Essentially if you have a Mortgage you are nothing more than a renter yourself. FHA being the biggest landlord in the Country.
Government Tit for the win!
hell yes there's inflation in rents in america. it's easy to figure out, if state of the nation would include the most important factor into the equation.
it boils down to the same equation as college tuitions are sky-rocketing, and why we have Obama-care.
qe-student-loans, qe-HUD.
where I live, all older fixer-upers, or decent smaller homes, are gone within days of being on the market, the 1%ers, in my rural community buy them,and regsister them with HUD.
I know people who can't find hud housing, and can't afford rent.
with 10's of millions of people HUD eligible, this makes rentals in high demand, and scarce, inflation
qe-HUD pays rent to the 1%ers, to pay the mortage, and tax deductions for repairs, keeping them in good shape to flip when they want.
everything will break, or inflate when politicians pick winners, and losers, and the fed redistributes.
??
I shouldn't have to worry about affording somewhere to live with the job I have, yet because of where the job is I have to.
The entire Northeast is fucking insane.
Absolute shit one bedroom apartments rent for $800 a month. A decent two bedroom apartment goes for $1600. A FUCKING APARTMENT. Not in the city of Boston or suburbs like Cambridge, but 40 miles west. A "three" bedroom 1100 sq ft house in a crap city like Fitchburg can rent for $1400.
I posted a three bedroom ranch that was renting for $3200 a month a little while ago. What do millionaires rent shitty 1950s ranch homes in a hick town?
Then you have property taxes. Up 100% in five years in almost every town even though assessments are actually down. I saw a home listed with a 2009 value of $364k and property taxes of $2800 a year. The current assessed value is $289k but taxes are $5200.
How are you supposed to live?
Condos in Southie listing for $800 or $900 PER SQUARE FOOT. $900/sqft so you can walk to an Irish Pub (hey I'm a mutt Irish/Scottish mix so I'm not banging on Micks here)?
The first thing I said to myself when I saw the headline to this article is from where will new buyers emerge? There are no new buyers! Wait for ZIRP and negative interest rate mortgages which could very well arrive around the 18-24 month mark from the peak which may have been this June/July. Places like Boston metro could be down 40% or more.
Whitey Bulger never would have stood for that shit happening. A couple of public kneecappings and prices would come down.
"All of this could have been avoided if only the Fed has observed the "missing" and soaring rental inflation"
This conclusion does not follow the "argument" which, amusingly, attempts to pretend that "history" only extends back to the first entry in any given data set and even more absurdly that mortgage-holding tax slaves are "owners" rather than voluntarily indentured lessees.
"the U.S. transformation from a homeownership society, to one of renters."
Nonsense. It's plain and simple mean reversion. The home "ownership" dream was a parellel marketing scam to that of universal car ownership - consumption (demand) created (via easy credit) to rationalize excess production (supply), a credit conduit scheme, completely non-remunerative, entirely for the sake of lifestyle. No bottom in the ownership rate is as yet even possible.
" No bottom in the ownership rate is as yet even possible."
absolutely correct - that is the scary part - the property taxes could be any number going forward so the property value will impute the tax payments in the sales value - boomers will have to get out with ZIRP gross income and prop taxes impact to their net income
Let's create more TV shows with fruitcakes selling multi-million dollar homes to oligarchs.
You think the northeast is insane for a 1bd at 800 come on down to Irvine California. 1bd 1685 and you get to live with a bunch of indians on h1'b visas with their stinking kids screaming and crying. California is a brown immigrant cesspool of shit!
hey instead of calling kids millennials....we can call the next group SERFS
Serfs had property interests and right of redress in courts. Americans have been reduced to landless peasantry.
And here I thought Patriarchs and TPTB made all the systems more complicated year after year so they could stay in power, make jobs inaccessible even as the Labor force was expanded with women, computers & automation displacing workers, overseas labor, and STEM work VISAs.
"As Bloomberg redundantly adds, "It takes young people longer these days to find jobs with decent wages," Mather said. "Young adults need to spend more time getting the necessary education and skills before they can become self-sufficient. The recession likely exacerbated this trend."
- Good Governance is to Simplify, Streamline, and Standardize, not make systems more complicated, require expert assistance in banking, taxes, accounting, and finance,... not increasing the labor force to suppress wages ... not to force spending on education or trade schools which also have inflated prices each year
- Good Governance would look at drug prices, cost of medical care, cost of mal-practice, cost of liability, cost of health insurance, cost of housing going up as a burden not a tailwind, cost of education, cost of Lawyers and their effects on Laws and transferring the wealth from middle class people into their own pockets, Anti-Trust Laws and our giant corporations and the monopolies that kept Gas prices so high for 15 years,
Edit: Yeah, Open Borders, Outsourcing, Offshoring Production, H1B STEM Work VISAs... expand the work force. The competition forces you to get advanced training and degrees.
Come on Bloomberg!
Edit 2.0: Is it possible that Jobs Overseas and now being automated, Job Losses, Cause the Housing Market to Collapse?
The return of "since Lehman?"
One solution is secession.
How many levels of .gov and school boards are being supported by main street?
The federal government is guilty of war crimes, spending untold billions on uneccesary military, CIA and so on. Swap the state gov for the fed and a whole layer of expensive bullshit disappears including 2 year multi billion dollar presidential campaigns.
This centralization meme has gone too far, it is much, much worse that what the original tea partiers faced. Remember the call, taxation without representation.
It is actually much worse than you describe:
https://youtu.be/0gVLv5eg4Xg?t=5093
BUY MOAR HOUSES NOW!
- National Association of Reality-Denying Realtors
The inflation #'s are total BS. I will use cars for example. Yes overall, the base price of a car might show negligible inflation. Yet the insurance costs are up more than 2%. Cost of repairs is up way more than 2%. Frequency and amount of repairs is definitely up a lot as well. Even the cost of my license plate registration is up 50% in the last 5 yrs or so where I live.
If you rent, or pay a mortgage (AND TAXES), whatever... It doesn't matter.
The facts is - THE RENT IS TOO DAMN HIGH.
Once again... THE RENT IS TOO DAMN HIGH.
DAMN that "home ownership by age group" chart is a mind blower. That's just fuct.
I know my rental properties provided a nice bump for me this year. Especially the California condo.
The Fed and Goldman Sachs thought that the money they printed for themselves would never leak out of the large asset classes that the Owner Class in the US dominates. Or if it did, they could just lie to the peasants about it. What are the peasants going to do about it?
Inflation is an increase in the money supply, and nothing else. These price increases that we have grown used to for the last 100 years are the inevitable result of that theft by oligarchs.
They print, they steal. That's the way the world works.
Here are some signs of a coming recession.
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record/
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
http://michaelekelley.com/2015/02/24/would-you-pay-39-more-than-asked/
http://www.zerohedge.com/news/2015-07-27/when-will-we-ever-learn/
Here is how to respond.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
"not only is the American Dream of owning a home officially dead, it has been replaced with the American nightmare of completely unffordable renting."
http://www.marketwatch.com/story/hundreds-of-full-time-new-york-city-wor...
Even fulltime workers in NY can be homeless.
We are not only wage and salary slaves, we also have the privilege of having to house ourselves. Thank you Banksters and 1%ers.
Scooby was roaming through a local neighborhood the other day. Low income Hispanic and black. I saw this guy building a modest new home and just out of curiosity I stopped to check his posted building permit. The county had a total build cost calculated at $245k. 3 bedroom, about 1500 sq ft.(excluding land which I assume couldn't be more than $8k)
There was not one house in a 20 block radius worth more than $45k.
5 years after he gets his CO that house isn't going to be worth more than --?-- How could it not drop like a rock. The cost of construction in Obama areas are seriously going to ruin the Travon's.
Obama needs to issue a subsidy for the disadvantaged home builder or this will never work! The new home should not cost that disadvantaged man more than his neighbors home value. A $200k subsidy is the answer.
Just Burn The Motherfucker Down Already!
For Fed, Nothing Going on but the Rent, 26 April 2015, by Justin Lahart (Wall Street Journal)
http://www.wsj.com/articles/for-fed-nothing-going-on-but-the-rent-143007...
Home renters face biggest price hike in seven years, 16 September 2015, by Jeffry Bartash (MarketWatch)
http://www.marketwatch.com/story/home-renters-face-biggest-price-hike-in...
One landlord told me "We are moping up all those dollars, they have to go somewhere"
I said "it's a dirty job that was assigned to you"
More Indians More H-1B visas. Americans are stupid and we misst fire them so we can bring in even more Indians@ 265,000 a year is NOT ENOUGH!
Crisis, what crisis
with tunes lke easy does it, Poor boy and Just a normal day
Two aspects of the current (non) inflation that may be overlooked would be the following:
The prices of non-durable clothing have declined as commercial buyers find ever cheaper sources such as Thailand, Bangladesh and Central America. But because these items are often poorly made, they come apart and have to be replaced more often by the consumer, resulting in no real reduction of expense notwithstanding lower prices.
Electronic devices become commoditized at an ever increasing pace. For example, if one compares the capabiity of a computer bought 5 years ago with one of similar features currently, the price could easily be half.
More enlightened governments have found solutions to the housing problems of folks with limited resources far better than the US, with its religious dedication to the "free" market. Where I currently reside, for example, the government administers a program in which projects are planned and approved with very strict building and environmental codes. These houses are relatively small, but are build to last and be safe for the occupants. Prices range from $60,000 to $100,000 (!!!) and the government subsidizes the mortgage interest rate, which may be as low as 2% to the buyer. The US could easily do the same were it not wasting its billions of taxpayer dollars on warmaking. (I can hear the cries of "socialism," but if this is socialism perhaps we need more of it.)
Guess what. SOMEONE is making up the difference. Everyone taking advantage of those artificially low costs and rates is STEALING from someone.
Also, you are likely stealing from your own future, which you don't much notice, because all you care about is TODAY... the short term. When you are screwed tomorrow, you won't be so happy. However, you won't understand why you are totally screwed tomorrow, because your intellectual time horizon is too short to understand what you've done to yourself... and everyone else.
EVERYONE who borrows and spends a huge pile of money this year (or decade) enjoys great living conditions this year (or decade). When you reach your borrowing limit, not only do you not have all that extra unearned money to spend and enjoy, but you need to pay back the freaking loans... even if they were only 2% or 0% interest. THEN you get to live in abject poverty for the rest of your life to offset your "party year/decade" when life seemed great... and maybe even was great... in the short run.
Socialism is corrupt and terrible.
Stupidity is even worse... though they often occur together.