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The Property Market Finally Succumbs To Madness

It’s Friday desk clearing time for this blogger. “Last year, 20,648 single-family and multifamily existing homes sold in Lee County and 10,527 in Collier — a 49 percent decline over 2017 when Hurricane Irma hit, slowing the market. There are still plenty of interested buyers in the market , but only four out of 10 of them are ready to act. In the earlier part of 2018, the number ready to act was closer to seven, said Denny Grimes, of Denny Grimes and Co. in Fort Myers. ‘It’s like asking someone on a date and not getting one,’ he said.”

“Cities like Denver and San Jose have begun to see some relief when it comes to the low number of homes for sale. Denver, in particular, experienced the biggest uptick in housing inventory of any metropolitan area in the U.S., with 155% more homes available for sale this month than there were a year ago.”

“This year’s spring home-buying season, when the frenzy typically kicks off for the year, appears to be off to a slow start—particularly in and around some of the nation’s most expensive, coastal cities. The nation’s most expensive market, Silicon Valley’s San Jose, CA, experienced a 125% jump in the metro area in February compared with a year earlier. The median home price in the metro is a whopping 1,079,800—and that’s down 10% from the previous year!”

“Many older waterfront homes currently for sale on suburban Chicago’s North Shore feature views. What these homes don’t have, however, is buyers. In the fall, real-estate broker Andra O’Neill, a listed a home in Lake Bluff, Ill for $6.995 million. The home has been on and off the market since 2014, when it was listed at $18 million, according to ‘There’s more inventory than we would love to have,’ she said.”

“Nearly two-thirds, or 63 percent, of millennial homeowners surveyed by said they had regrets about buying. That is more than any other age group. Other common regrets were that the purchase was a ‘poor investment’ and that the mortgage payments were too high. ‘Taking on a larger mortgage payment than you can comfortably handle is a recipe for disaster,’ Bankrate’s Deborah Kearns added.”

“There are signs that worst case scenario is happening more often as the Toronto-area real estate market continues to cool. It happened to Cynthia McLuckie and her husband, Brian, who had been trying to sell their ustom-built Caledon dream home at 2723 Escarpment Sideroad since 2017.”

“‘The market took a dive; my husband was out of work,’ Ms. McLuckie said. ‘We tried to sell it ourselves, but we couldn’t sell it for less than what we are asking because of liens on the house.’ Finally, earlier this year, the bank called the loan. The eight-bedroom, six-bathroom country house (with in-law suite) is on the market again – listed by their bank — for $2.75-million. Ms. McLuckie says her husband is working again, but they just couldn’t save the house.'”

“‘The UK property market remains firmly on its knees,’ said Jonathan Samuels, chief executive of property lender Octane Capital. ‘March could be the month the property market finally succumbs to madness.’ Sellers, though, are rightly nervous. ‘If there’s one common factor in Britain’s fractured property market, it’s that these are anxious times for sellers, and many buyers will want the reassurance of a low price in order to proceed,’ said Nicholas Finn, executive director of Garrington Property Finders.

“It’s a buyers’ market for Finnish real estate this year, according to the biggest Nordic lender. ‘It would appear that this year supply will grow faster than demand. This will have an impact on home prices,’ said Olli Karkkainen, an economist at Nordea Bank Abp in Helsinki. ‘If there are more and more flats for sale and selling takes a longer time, then buyers will have the upper hand.'”

“For the first time since the crash of 2008, Sweden’s housebuilders are having to buy back housing units that have not sold, Swedish TV station SVT reported. One developer admitted it was building too many homes for the higher-end market. HSB, a cooperative housing association, found that it was unable to sell apartments in the Stockholm area despite reducing their price 20%, and was then forced to buy back 120 of them – the first time it has had to do this for 10 years. Anders Lago, the chairman of HSB, said the state of the Swedish housing market was worse than during the crash.”

“Lago said: ‘We have built an incredible selection of apartments, and I will also admit they were offered at high prices. Now both we and others have reason to feel critical of ourselves and ensure that the prices are pushed to bring down the costs.'”

“Real estate developers will continue to build houses in Sabah although there have been no buyers for a fifth of developed properties in the state. ‘It will pick up soon,’ said Shareda president Chew Shang Hai. ‘Local developers are already planning to build more housing units.’ He said the proportion of built but unsold properties in the state seemed high only to those unfamiliar with the business. In fact, he added, the number was low relative to the total number of overhung properties across the country.”

“More signs are emerging that the party might be over for China’s property market, with one of the country’s two major housing agencies reporting a sharp drop in its profits last year. While Shenzhen Worldunion Properties Consultancy Inc. saw revenues of .55 billion yuan ($1.12 billion) in 2018, the actual profit attributable to shareholders was a relatively measly 447 million yuan, down 55.45% from 2017.”

“For several years, economists have warned of a bubble as speculators looked to make easy returns by betting on seemingly ever-rising home prices. Local and national governments began in 2016 to roll out policies intended to restrict sales.”

“Shenzhen Worldunion’s results are another sign that these policies are dousing market enthusiasm, particularly in first-tier cities. Shenzhen’s government says that last year first-time housing purchases were down 27% on 2016 levels. In Shanghai they were down 35%, and Beijing down 57% for the same period.”

“CoreLogic’s head of research Tim Lawless says price falls are now extending well beyond the previously booming Sydney and Melbourne markets. ‘Every market in Australia is losing steam,’ he told ABC News. ‘We are seeing this downturn becoming quite widespread geographically.'”

“‘We’ve seen a lot of new supply coming into the market from newly constructed housing, especially in the high-rise apartment sector, we’ve seen a real slowdown in foreign buying activity and, of course, we’re also still seeing affordability challenges in markets like Sydney and Melbourne, despite the fact that values have come down in Sydney now by 13 per cent and in Melbourne by nearly 10 per cent since the peak,’ he added.”

This Post Has 111 Comments
  1. ‘It would appear that this year supply will grow faster than demand. This will have an impact on home prices…If there are more and more flats for sale and selling takes a longer time, then buyers will have the upper hand’

    Where are the shortage people? Where are all those pundits who insisted for years “we need more shacks!” And why doesn’t the media catch on that these people had their heads up their a$$es all along?

    1. From the REALTOR dot com link:

      “when the frenzy typically kicks off for the year”

      So the frenzy is now (allegedly) typical, is that what you’re saying, REALTOR?

      So many lies, so many lies 🙁

    2. You write “shortage people” as a negative. Why? There was a clear supply problem for the last three years. Far more demand than available homes for sale in many areas. Construction per capita is way below historical rates for over a decade.

      The fact that prices are falling without the trigger of rapidly increasing unemployment is quite disturbing. That means marginal buyers were pressured simply from the ludicrous price.

      1. ‘There was a clear supply problem for the last three years. Far more demand than available homes for sale in many areas. Construction per capita is way below historical rates for over a decade’

        You forgot “priced out forever.”

        First of all, this is the same crap the REIC said last decade. So it’s been proven wrong – twice.

        There’s never been a shortage of housing in history. Sure, when they find gold in them thar hills, you can get a short term squeeze, but even when they hand-hammered nails they could put up enough housing. What we’ve got is a speculative frenzy. That’s why at the first sniff of price declines, here comes the inventory! Glut!

        I am critical of shortage people for two main reasons. They are never called to account for their BS by the media, so I have to so it. Second, they give cover to the corrupt REIC to carry on their plunder and suck in the feeble minded – you know, get rich quick! Remember the magnitude of what’s at stake. Millions of families getting buried in debt they will never be able to repay.

      2. The fact that prices are falling without the trigger of rapidly increasing unemployment is quite disturbing.

        No, that would be a housing bubble popping!

        1. SALT and MID caps drastically reduce the incentive to speculate on the coasts. The ripple effect on ascent will become a ripple effect on descent.

        2. The fact that prices doubled while Labor Force Participation rate never recovered from the last “recession” is quite disturbing.

  2. ‘The market took a dive; my husband was out of work,’ Ms. McLuckie said. ‘We tried to sell it ourselves, but we couldn’t sell it for less than what we are asking because of liens on the house.’

    Note, various posters who said “there aren’t any negative amortization loans so there can’t be foreclosures!” There aren’t any of those here. Just an FB who took on too large a loan, life happened and they walked away.

    Walked away! Another thing these same people said wouldn’t happen!

    ‘we couldn’t sell it for less than what we are asking because of liens on the house’

    Actually Cynthia, you could have very well done so. But that would require you to bring money to the table and you weren’t going to do that. See this didn’t have to be a foreclosure, it was voluntary, like most of them when they go underwater.

    1. Lol. It is an “eight-bedroom, six-bathroom country house (with in-law suite)”.

      Just what everyone needs.

      1. “…country house…”

        That’s REIC code for “lots of maintenance”.

        Can’t even to begin to wrap my head around the total bill for taxes, insurance, general maintenance.

  3. ‘Every market in Australia is losing steam…We are seeing this downturn becoming quite widespread geographically’

    This one’s for you Redfin. Go ahead, they said the same crap in Sydney over a year ago. “Oh it’s bottomed, we’re off to the races any time now!”

    1. Here’s another one Redfin:

      ‘If there’s one common factor in Britain’s fractured property market, it’s that these are anxious times for sellers, and many buyers will want the reassurance of a low price in order to proceed’

      You know when London peaked? 2014! Five years later and the crater continues. Of course, the guberment pulled the rug out, like a lot of places.

      January 29, 2019

      “One of the principal gatekeepers to housing-finance markets is stepping up scrutiny of nonbank mortgage lenders, concerned that some may not have the financial heft needed to overcome stressed conditions.”

      “The increased oversight by the Government National Mortgage Association, or Ginnie Mae, comes as nonbank lenders play an ever-bigger role in making mortgages to Americans and as housing markets are cooling. Many of these companies flourished after the financial crisis as banks stepped back from the mortgage market but haven’t yet been tested by an economic downturn.”

      “For the first time in recent memory, the agency has asked a handful of these lenders to improve certain financial metrics before granting them full ability to continue issuing Ginnie-backed mortgage bonds, according to Maren Kasper, who stepped in as Ginnie’s acting head this month. In the meantime, it has been granting approvals with shorter time frames to the lenders.”

      “Ginnie has also undertaken its first stress tests of business partners. The exams look at how lenders’ and servicers’ monthly cash-flow obligations would hold up if they reduced loan production and margins while increasing delinquencies. The results are expected shortly.”

      “Ginnie is particularly exposed to nonbank lenders. These firms service 61% of loans in securities issued by Ginnie, up from 34% at the end of 2014. What’s more, Ginnie’s outstanding issuance of mortgage bonds has grown fivefold since the financial crisis to $2 trillion. ‘It’s uncharted territory,’ Ms. Kasper said.”

      “Neither Ms. Kasper nor others in the industry expect chaos in the mortgage market. But with mortgage refinancing recently falling to its lowest level in 18 years, nonbank lenders face new strains. Government officials and economists are concerned that many of these companies may not be able to tap the more stable sources of financing available to bank lenders if they face a cash crunch.”

      “Last year, there were 31 mergers and acquisitions in the mortgage industry, nearly three times the amount in 2017, according to Stratmor Group. Moody’s Investors Service said that about a third of the nonbank mortgage lenders graded by the rating company aren’t profitable right now, which means they likely need waivers from their own lenders to be able to keep accessing cash to make mortgages. It didn’t name the companies.”

      “While Ginnie executives have been flagging this issue for years, it is gaining a wider audience as nonbank lenders have struggled over the past year. In a paper last year, economists at the Federal Reserve raised concerns over unique funding challenges that nonbank servicers face, especially for those who manage payments on Ginnie bonds.”

      “‘This is not a system that has ever been tested in a time of stress,’ said Karen Pence, one of the authors, in presenting her findings at a Brookings Institution conference last year. ‘We question whether it is wise to concentrate so much risk in a sector of the economy that has little capacity to bear it and has a history, at least during the financial crisis, of going out of business.’”

      “There isn’t any single agency responsible for directly overseeing such nonbank entities.”

      1. The strategic default is loved by all, CEOs and overstretched millenials. I suspect a lot of those regretful borrowers are looking for any excuse to go to their spouse with the idea that they should walk away, or more likely, stop paying and live in the house for seven years for free.

        I predict we’re going to get some trending hashtag encouraging borrowers to default en masse, thereby burying the court system for a decade and allowing everybody to live free and die hard!

          1. #theyhadnobusinessgivingmethisloan


            May 25, 2018

            “In his corner of American finance, where hard selling meets hard luck, Angelo Christian is a star. Each time Christian sells a home loan, the company he works for, American Financial Network Inc., takes as much as 5 percent. Many of Christian’s customers have no savings, poor credit, or low income—sometimes all three. Some are like Joseph Taylor, a corrections officer who saw Christian’s roadside billboard touting zero-down mortgages. Taylor had recently filed for bankruptcy because of his $25,000 in credit card debt. But he just bought his first home for $120,000 with a zero-down loan from Christian’s company. Monthly debt payments now eat up half his take-home pay. ‘If he can help me, he can help anyone,’ Taylor says. ‘My credit history was just horrible.’”

            “Christian can do this kind of deal because he is, in effect, making the loan on behalf of the federal government through its most important affordable housing program. It’s a sweet deal: He gets his nearly risk-free commission. Taylor puts no money down. If things go south, the government ultimately bears the risk. Many borrowers ‘are living paycheck to paycheck and, if they lose their jobs, they go into default immediately,’ says John Burns, a housing consultant.”


          2. #itrustedchristhornberg!

            January 19, 2019

            ‘We don’t have a debt problem. We don’t have an overbuilding problem. We don’t have an economic problem — prices are not going to fall,’ said Christopher Thornberg, founding partner of Beacon Economics, who called last decade’s housing crash.’


          3. #JingleMail

          4. #NoMoreTacoTuesdays

        1. w FLorida’s 2012? law changes how long can you linger after defaulting?
          MIL is on the verge, refi at age 75

          1. I listened to NPR’s Planet Money Indicator and Chris Thornberg was on. This is the part that made my jaw drop:

            Chris Thornberg: “What matters more – how much mortgage debt you have or how much your mortgage costs you on a monthly basis? You could have a half-million-dollar loan at 10 percent per year, or you can have a million-dollar-loan at 4 percent per year. Well, guess which one is actually less burdensome? Well, of course, the answer is the larger loan at the lower interest rate.

            Yeah, a larger loan is less burdensome. The way these people think is comical.

          2. It’s a strawman example, as nobody alive has a 10 percent mortgage. And if rates returned to that level, we would be collectively screwed, especially homeowners, who would find it even more impossible than now to find a buyer willing to pay what they believe their homes are worth.

          3. OneAgainstMany: You could have a half-million-dollar loan at 10 percent per year, or you can have a million-dollar-loan at 4 percent per year. Well, guess which one is actually less burdensome? Well, of course, the answer is the larger loan at the lower interest rate.”

            The larger loan, if it means a higher house price, means higher property tax and insurance costs. So, while from an accounting perspective you may be richer, from a personal finance perspective, you’re poorer, as more money leaves your pocket.

  4. “It’s like asking someone on a date and not getting one,’ he said.”

    What was that other analogy we recently heard:

    “It’s like throwing a party but no one shows up”

    Loving it!

  5. ‘Other common regrets were that the purchase was a ‘poor investment’ and that the mortgage payments were too high. ‘Taking on a larger mortgage payment than you can comfortably handle is a recipe for disaster’

    But. Senator Running Deer? Robert Francis “Cheech” O’Rourke?

    Seriously, are these butt hurt millennial being loaned more cash than they can pay back? Poor investment!

    1. “Seriously, are these butt hurt millennial being loaned more cash than they can pay back? Poor investment!”

      Prime investment! This is the way debt slaves are created.

      Debt slaves work, lenders reap. If a lifetime of debt slavery can be created then a lifetime of reaping can be enjoyed.

    2. “Other common regrets were that the purchase was a ‘poor investment’”

      Your single-family owner occupied residence is not an investment. Your parents should have told you, if not for their own indoctrination.

  6. The collapse in sales in SoCal is more sudden and calamitous than I was anticipating, even as a “bubble watcher”. Anyone out there in the mortgage biz? How long can this be sustained before wholesale carnage begins in the mortgage origination/lending business?

    1. “Crispy&Cole” posts here sometimes, and months ago he, as well as another poster I forget the name of, were highlighting that the mortgage business in SoCal was dead, and layoffs were the flavor of the day.

        1. JPMorgan Chase & Co. and Movement Mortgage this month were the latest companies to announce layoffs of hundreds of mortgage workers due to a downturn in business. Many more people in the industry can expect to lose their jobs in the coming months, Fannie Mae says.

          “I do believe you will see more layoffs,” Fannie’s chief economist, Doug Duncan, said during a telephone interview. Hiring in the mortgage business has traditionally been boom and bust. Companies add staff during refinance booms and then lay off workers when the rates tick up. Given the cost to hire and fire people, the companies tend to wait and see if the downturn is permanent, Duncan said. There is usually a six-month lag before the layoffs pick up steam.

          That time has arrived, Duncan said.

          1. From last January …

            Ditech runs into trouble with creditors; boots COO after just 9 months | 2019-01-18 | HousingWire


            “The company also disclosed that it did not make a scheduled interest payment on some of its debt, despite apparently having ‘sufficient liquidity’ to make the payment on time.

            “According to the filing, Ditech was supposed to make a $9 million payment on Dec. 17, 2018, but elected not to make the payment because it is still in ‘active discussions’ with creditors and ‘other parties’ about the company’s future. The company also did not make the payment within 30 days of that, which would trigger an ‘event of default’ on the debt.

            “The company said that it has been in discussion with its creditors and has agreed to enter into forbearance on the debts in question while the company continues to discuss ‘strategic alternatives.'”

    1. Rip,

      We’ve been in recession for a good decade-and-a-half now.

      Where have you been?


    2. My guess is the end of summertime. I said back at the end of 2017 when the Tax Cut was passed that when people do their taxes in 2019 and realize what a poor investment real estate is they’ll bail out.

          1. That’s what’s so nutty about this whole thing – builders have managed to drive the price of worthless desert scrub lots up into the hundreds of thousands of dollars. You can’t farm it, you can’t do anything, yet here we are.

          2. I know all of these California equity locust are coming to Boise and paying $500,000 for houses in Boise. When in reality the home is worth $200,000 at the most. I hope they all get burned!

  7. From the CNBC article:

    “Some of the problem may be that millennials are much more likely to use social media in their home searches than any other generation.”

    Push button, get mortgage. And then “you gotta roll with it” from Kaightlynne Millennial dumb@ss in Portland.

    How can I be underwater? That pic of my new house from the day of closing got over 9000 likes on Instagram 🙁

    F’ing loosers. You deserve everything you’ve got coming.

  8. Copenhagen suburbs to lead sputtering housing market charge
    Meanwhile, prognosis suggests that apartments in the capital will stagnate over the next couple of years
    Bornholm will be cheaper than this (photo: Pixabay)
    February 19th, 2019 11:09 am| by Christian W

    Over the past decade, the prices of apartments in Copenhagen has soared to untold heights while other parts of the country have struggled to keep up. But things are changing now.

    A new prognosis by Nykredit bank estimates that apartment prices in Copenhagen will stagnate over the next two years – minus 1.9 percent this year and minus 0.2 percent in 2020 – while the price of houses in the capital’s suburbs will see growth at 3.2 percent this year and 3 percent in 2020.

    Currently, the average price per square metre for an apartment in Copenhagen, Frederiksberg, Dragør and Tårnby is a 40,500 kroner, compared to 29,000 kroner for houses in the suburbs.

    “Owner apartments have been making the running in recent years, while single-family houses have been left behind. The year 2018 was when the roles were reversed,” the prognosis report stated.

    “Single-family homes and summer houses are ripe to take the lead in the field and promote continued progress in the nationwide housing market in the coming years.”

    Meanwhile, houses in Copenhagen will continue the upward trend over the next two years with an average rise of 2.55 percent in price and aside from apartments in Copenhagen and Aalborg, prices are expected to see slight growth across the country.

    But for the moment at least, gone are the days when housing prices would shoot up by over 10 percent annually. Bornholm, which enjoyed a nation-leading 11.2 percent price increase last year, will fall to 2.3 percent by 2020, while second place Odense apartments will fall from 7.8 percent in 2018 to 2.1 percent in 2020.

    “The high prices have led to fewer being able to afford to buy as incomes haven’t increased as rapidly – that in itself leads to lower demand. Credit rules have been tightened as well, so it’s become more expensive to finance loans for housing,” the report found.

  9. Ben Bernanke, father of Millennial socialism

    The Financial Times
    US Quantitative easing was the father of millennial socialism
    Federal Reserve’s bid to stave off depression sowed the seeds of a generational revolt
    Former Federal Reserve chair Ben Bernanke’s quantitative easing scheme spawned a new generation of socialists, such as Alexandria Ocasio-Cortez
    David McWilliams yesterday

    Is Ben Bernanke the father of Alexandria Ocasio-Cortez? Not in the literal sense, obviously, but in the philosophical and political sense.

    As we mark the 10th anniversary of the bull market, it is worth considering whether the efforts of the US Federal Reserve, under Mr Bernanke’s leadership, to avoid 1930s-style debt deflation ended up spawning a new generation of socialists, such as the freshman Congresswoman Ms Ocasio-Cortez, in the home of global capitalism.

    Mr Bernanke’s unorthodox “cash for trash” scheme, otherwise known as quantitative easing, drove up asset prices and bailed out baby boomers at the profound political cost of pricing out millennials from that most divisive of asset markets, property. This has left the former comfortable, but the latter with a fragile stake in the society they are supposed to build.

    As we look towards the 2020 US presidential election, could Ms Ocasio-Cortez’s leftwing politics become the anthem of choice for America’s millennials?

    But before we look forward, it is worth going back a bit. The 2008 crash itself didn’t destroy wealth, but rather revealed how much wealth had already been destroyed by poor decisions taken in the boom. This underscored the truism that the worst of investments are often taken in the best of times.

    Mr Bernanke, a keen student of the 1930s, understood that a “balance sheet recession” must be combated by reflating assets. By exchanging old bad loans on the banks’ balance sheets with good new money, underpinned by negative interest rates, the Fed drove asset prices skywards. Higher valuations fixed balance sheets and ultimately coaxed more spending and investment. However, such “hyper-trickle-down” economics also meant that wealth inequality was not the unintended consequence, but the objective, of policy.

    Soaring asset prices, particularly property prices, drive a wedge between those who depend on wages for their income and those who depend on rents and dividends. This wages versus rents-and-dividends game plays out generationally, because the young tend to be asset-poor and the old and the middle-aged tend to be asset-rich. Unorthodox monetary policy, therefore, penalises the young and subsidises the old.

    When asset prices rise much faster than wages, the average person falls further behind. Their stake in society weakens. The faster this new asset-fuelled economy grows, the greater the gap between the insiders with a stake and outsiders without. This threatens a social contract based on the notion that the faster the economy grows, the better off everyone becomes.

    What then? Well, politics shifts.

    Notwithstanding Winston Churchill’s observation about a 20-year-old who isn’t a socialist not having a heart, and a 40-year-old who isn’t a capitalist having no head, polling indicates a significant shift in attitudes compared with prior generations.

    1. The faster this new asset-fuelled economy grows, the greater the gap between the insiders with a stake and outsiders without.

      The insiders will be jumping out of high rise windows when the debt Ponzi implodes. So much leveraged vanity. It will just be another good day to go fishing for me.

    2. Ben Bernanke was wrong:

      Bernanke’s job was to “bail-out” the oligarchs and he did his job well. However, I highly doubt that this “keen student of the 1930s depression era” will survive more than a few months when the chaos that he personally helped to create really starts to heat up.

      I wouldn’t count on much mercy for Yellen or Greenspan from the unhappy masses either.

      1. much mercy

        It won’t matter to them. They got paid in advance to take blame. Placing blame is denial, that we allowed them to do what they did. Allowing bankers to run the country is really stupid. That’s us.

        1. “Allowing bankers to run the country is really stupid. That’s us.”

          You use what works. The totally dumbed-down population of the United States: The gift that keeps on giving.

      2. Sadly, the unhappy masses don’t know who Yellen, Greenspan, and Bernanke are. Honestly, what percentage of the population could tell you who Janet Yellen is? My guess is significantly less than 10%.

    3. “Mr Bernanke, a keen student of the 1930s, understood that a “balance sheet recession” must be combated by reflating assets.”

      This is the lie that the entire scheme is predicated upon.

      1. The 1930’s is ancient history. If he had looked at the more relevant example of Japan and how they reacted to a stock and real estate bubble, he would have seen it differently. I said this here over 10 years ago too.

        1. I remember well, but it bears repeating as much as possible. These Fed guys are a fraud, and so are all of their talking points.

    4. Very insightful article professor, I think the op-ed writer is definitely onto something here. I think the observation of different classes of people who get their income from wages vs rents and dividends.

      1. The Fed’s job is supposed to be maintaining low unemployment and inflation. Bailing out greater fools who speculated on housing was a discretionary excursion well outside the limits of their traditional mandate.

        1. Bailing out greater fools

          The Fed bailed out the banks, not the FBs. That is their mandate.

  10. I spit out my Acai bowl’s almond milk reading this:


  11. If you are a career congressweasel, do you ever wake up and think, “durn, AOC has had more ideas and press in 45 days, then I have had in 9yrs?” Good or bad, it gets the discussion going vs the good ol boys just raising money for re-election 24/7 and feeding at the trough.

  12. The frequency of medicine doses is commensurate with the amplitude of howling pain. 🤣

    1. (another snip)

      “Hyperinflation of as much as 500 billion percent in 2008 made savings worthless …”

    2. Rhodesia is what happens when you take things from a group of hard working productive people and give them to a non-productive people. It really isn’t the result of a “giant Ponzi scheme” that originated under Mugabe.

      From breadbasket of the African Continent to a sh#thole in less than 25 years.

      Not that I would expect the truth coming from an oligarch mouthpiece like Bloomberg.

      I’m sure that things will work out better regarding the forceful takeover occurring in South Africa currently.

      We’re not going to kill White people, yet:

      1. Pretty much like the U.S. when democrats imprisoned Asian Americans after the Pearl Harbor attacks… many lost everything they owned.

      2. The Inca would remind them that their water abuse and shortage issues will eventually transcend the country’s politics.

  13. The Federal Reserve Bank of Atlanta is projecting a real GDP number of …


    … point three percent.

    GDPNow – Federal Reserve Bank of Atlanta

    “The growth rate of real gross domestic product (GDP) is a key indicator of economic activity, but the official estimate is released with a delay. Our GDPNow forecasting model provides a ‘nowcast’ of the official estimate prior to its release by estimating GDP growth using a methodology similar to the one used by the U.S. Bureau of Economic Analysis.

    “GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available data for the current measured quarter. There are no subjective adjustments made to GDPNow—the estimate is based solely on the mathematical results of the model.

    “Recent forecasts for the GDPNow model are available here. More extensive numerical details—including underlying source data, forecasts, and model parameters—are available as a separate spreadsheet. You can also view an archive of recent commentaries from GDPNow estimates.

    “Latest forecast: 0.3 percent — March 1, 2019
    The initial GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2019 is 0.3 percent on March 1. The initial estimate of fourth-quarter real GDP growth released by the U.S. Bureau of Economic Analysis on February 28 was 2.6 percent, 0.8 percentage points above the final GDPNow model nowcast released the previous day.”

      1. Here’s a link to the commentaries that help explain how the GDP is estimated as time moves forward and here’s one example of a commentary …

        “JANUARY 25, 2019
        “The current GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2018 is 2.7 percent, down from 2.8 percent on January 18. The nowcast of fourth-quarter real residential investment growth declined from -2.6 percent to -4.3 after the existing-home sales release on Tuesday, January 22, from the National Association of Realtors.”

        Archive of Past GDPNow Commentaries – Federal Reserve Bank of Atlanta

    1. Luckily for stock investors, Mr Market has recently exhibited a considerable degree of immunity to developments in the real economy.

  14. At least the No. 1 regret among buyers is not becoming aware they overpaid, or realizing that they can’t find a buyer willing to pay what they did.

    The No. 1 thing buyers regret about purchasing their home
    By Catey Hill
    Published: Mar 1, 2019 6:58 a.m. ET
    ‘This can be a rude awakening,’ one analyst says
    FREDERIC J. BROWN/AFP/Getty Images
    What to beware of when buying a home.

    Homeownership often comes with a side of regret.

    Fully 44% of home owners say they regret some part of buying a home, according to a survey of nearly 1,500 homeowners released Thursday by personal finance site Bankrate. The No. 1 thing they regret: Not understanding how expensive the maintenance, repairs and other hidden costs would be.

    1. Hidden costs . . .

      My cousin and her husband “bought” a 4BD/2.5BA two-story house in San Diego County in July 2014. In July 2016, they had to dry out wet walls with some mildew. Within the last month, her husband came home to find it “raining in the garage.” The Quest plumbing in the upstairs common bath had ruptured. On further inspection, it was also found that the upstairs master bath was leaking into the walls of the downstairs kitchen. All three rooms now need to be torn down to the studs. As if this isn’t enough of a headache, my husband knows from 30+ years of professional experience as a property manger that they should be concerned about being dropped from their insurance company and not being able to find another one to pick them up for at least 3 years.

      1. Yeah, that C.L.U.E. database will follow you anywhere and everywhere for your entire life. The insurance companies hire some of the smartest people in their upper echelons.

          1. Funny thing, some addresses must be possessed too, i.e., they always have frequent claims despite ownership. Hence, higher rates for that address! Do your homework. 🙂

      2. I’m secretly hoping this story, his experience as a property manager and the ultimate realization of likely losing hundreds of thousands of dollars if we buy a house later this year convinces my husband to just move into the house I inherited 2.5 years ago. That home is in a trust with an outstanding mortgage slightly more than what we’re considering for a down payment. The biggest drawback is that the school district isn’t good for our son. Other than that, it’s a no brainer decision for everyone but him.

        1. Homeschool. Public schools, no matter how highly-rated, do not teach children anything but braindead repetition, obedience, and box-checking. Added bonus: lessons in hard core porn, drugs, and antisocial behavior from their age-segregated ghetto (the school). Source: public high school teacher 16 years. And dont give me the “but our schools are different” line. The “it’s different here” line doesn’t work in RE or public schools; the problems are systemic and you can’t overcome 8 hours of them in four hours after school even if you had your kid’s undivided attention, which you won’t. (And yes. I suffer from massive cognitive dissonance in my job, which is really code for guilt for legitimizing the system by participating for pay.)

          1. Ghettos, by definition, are areas segregated by group. The connotation leads toward impoverishment. In high school, kids are impoverished socially and mentally by restricting their access to older, wiser, more experienced people, who could provide necessary guidance and differing worldviews. Teachers should play this role, but there arent enough of us, and our opinions tend to be monolithically left-leaning, to offer that to our students. Homeschoolers and unschoolers with integrity seek out these opportunities through church, family, and community. Additionally, they are cut off from younger kids whom they could teach and guide, so their learning lacks meaning and they miss out on the esteem-building and socioemotional growth that comes from mentoring those less experienced than themselves.

            Even if your school is highly ranked, you wont overcome these problems.

            And we havent even begun to discuss grade inflation and total lack of mastery of coherent, concise writing across disciplines which, systemically is impossible because there are too many kids to properly teach. But you, as a parent, can manage ed the writing load of your children. No one has more incentive than you to educate your children.

            At base, incentives, as always, are the root of the problem.

          2. Econ_teacher,

            I appreciate your expanded explanation and understand what you are saying. I notice the lack of writing and critical thinking skills in our younger generations.

            I have a 9yo autistic son who appears to be immune to peer pressure but has trouble tolerating gen ed environments. I anticipate that his limited expressive language and his fundamental problems with sequencing will begin to limit his ability to stay at grade level. I struggle with placing him in a more restrictive environment in which all of his peers have special needs to better meet his educational and sensory needs. I would welcome any other advice you may have to offer with this added information.

  15. You use what works …


    “The photos were removed by the Houston Association of Realtors, but not before the listing went viral.

    “Gyldenege, who still has some of the photos on her Instagram page, said there’s no such thing as bad publicity.

    “‘When I found out I had 100 complaints, I’m like ‘Sweet, that’s like 10,000 people that have seen it,'” Gyldenege said.

    “She said there haven’t been any offers yet, but the listing is finally drawing attention.”

    Watch: Underwear-clad models pose for real estate listing

  16. Again, you use what works …

    “Five-bedroom house listed for $1 in Texas”

    “The home on Berry Leaf Court in Houston is going viral online and capturing the attention of passers-by thanks to a large sign posted outside with the $1 asking price.

    “Listing agent Wes Stoyanov revealed there is a catch to the asking price — the seller is seeking a best offer, with the $1 set as the minimum.

    “‘The seller wanted the current market to determine the selling price — please submit your best offer,’ the listing reads.

    “The home was valued at $250,000 in last year’s tax appraisal.”

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