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Widening Our Idea Of What Prosperity Means

It’s Friday desk clearing time for this blogger. “Year-over-year median sale prices for existing homes fell 5.9% in Santa Clara County, 3.2% in Alameda County and 1.5% in San Francisco in May, according to CoreLogic. ‘After several years — six, seven, eight, years of consistent, in some cases double-digit price appreciation — buyers are finally saying, ‘hey, this is it. We’ve reached my pain point,’ said David Stark, spokesman for the Bay East Association of Realtors. Meanwhile, even residents who want to buy are taking their time about it, Stark said. Homes are sitting on the market longer, racking up fewer offers and selling for less than they did several months to a year ago.”

“‘For the first time in many years, we’re seeing homes on the market in the 30-day range, where just a year ago it would have been half that time,’ said Stark, who attributes the market slump to buyer fatigue.”

“Working in Las Vegas real estate his entire career, owner of Icon Realty Scott Pharris remembers the great recession all too well. ‘The market is in a much healthier place it seems like this time than it was ast time,’ Pharris said. ‘Buyers are going to have a little bit more sway in the transactions that we are seeing. Sellers are going to be a little more negotiable.'”

“‘It’s not that recession we saw 10 years ago,’ said Anna Usma, with online real estate company Opendoor. ‘It’s definitely not the same market we had last year, but home prices are keeping up with what the values are. They are not depreciating as rapidly as we have seen in the past.'”

“Median home sales prices fell in 10 of the Dallas-area districts included in the survey. Some of the biggest median home sales price declines this year from 2018 levels were in pricier neighborhoods in Coppell, North Dallas and Colleyville. That’s caused consternation for some home sellers who haven’t gotten the message that the big run-up in North Texas home prices is slowing. ‘We went from being overheated — which wasn’t sustainable — to where the market is more stabilized,’ said Paige Shipp, who heads the Dallas office for housing analyst Metrostudy Inc. ‘We have seen some price reductions. That was from sellers thinking they would be able to sell for more than their neighbors did.'”

“Vacation-home seekers in New York’s Hamptons are in luck: They have a record number of choices — if only they were interested in buying. There were 2,557 homes on the market at the end of the second quarter, an 84% jump from a year earlier and the largest supply in data going back to 2006, according to appraiser Miller Samuel Inc. Sales fell for a sixth consecutive period to 498, the fewest for a second quarter since 2011. Buyers ‘were waiting for the ultimate deal,’ said Todd Bourgard, Douglas Elliman’s regional manager of sales for the Hamptons. ‘The prices were a little higher than what they thought true market value was, and they were on the sidelines.'”

“Edmonton’s residential real estate has been in a downturn for the past five years, but Altus says it has noted weaker new home demand in both Edmonton’s suburban and inner-city market this year compared with 2018. Condominium apartment sales are down – at about half the level reached in 2017 – and total new multifamily sales are also down. Excess inventories continue to bedevil the condo market. The Altus report showed approximately 1,700 unsold condominium apartment units at the end of the first quarter of 2019 – a three-and-a-half year supply – one in three of which was in a completed project. Ten new condo projects were launched in 2018, representing more than 900 new units.”

“Michael Brodrick, chairman of the Realtors Association of Edmonton, says buyers are firmly in the driver’s seat in the city’s residential market. ‘Last year we saw record inventory levels in some months, so that makes it a buyers market because you can look at as many houses as you want to make an offer or don’t make an offer,’ he said. In June, construction was halted on project in the city’s northeast after Kingsett Mortgage Corp., which had lent developer Station Point Developments $17-million, was placed in receivership. The project, first envisioned as condo, then switched to purpose-built rental, is about 78 per cent complete and the developers say they require another $6.9-million to finish.”

“Buyers from Hong Kong, China and the Middle East are taking advantage of the falls in London prices and sterling, which mean they can get a 50 per cent discount compared with five years ago. ‘They often remark that Brexit is buttons compared to what is happening in other parts of the world,’ says Hannah Aykroyd, the founder of Aykroyd & Co, a buying agency.”

“Hong Kong’s inventory of unsold residential property rose to the highest in more than a decade. The figure stood at 10,000 unsold homes at the end of the second quarter, 1,000 units more than the end of March, according to data by the Transport and Housing Bureau. ‘Developers still need to proactively sell completed new projects to avoid special rates,’ said Centaline Property Agency’s senior associate research director Wong Leung-sing, referring to the vacancy tax. ‘The 10,000 completed unsold homes has just reached the warning level. Do not let the number rise.'”

“Beijing’s city government offered two residential land plots for sale without specifying maximum prices for the apartments to be built on them, the South China Morning Post reported on Wednesday. The biggest slide in home prices this year may be a 5 percent decline in the smaller, tier-3 cities, HSBC analyst Michelle Kwok said in a report. National sales may tumble 10 percent. However, the residential market is ‘far from entering a severe downturn,’ she wrote.”

“About to retire from a leading PSU company about six years back, Devika (name changed) wanted to have her own house to spend the retired life. To fulfill her dream, she booked a flat in an upcoming housing project of Amrapali Group in Greater Noida, but, with the realtor becoming bankrupt, she is now forced to stay in a vacant flat of one of her relatives in Ghaziabad. According to ANAROCK data, investors in about 2,00,000 housing units in NCR are facing financial crunch with around Rs 1,26,000 crore of their hard-earned money stuck up in the projects that were launched in 2013 or before.”

“The latest CoreLogic CHIP Report indicated that NSW unit construction peaked at an unprecedented level in 2018. The latest indicators to the end of June, it said, showed 62 per cent of Sydney off-the-plan apartments were settling with a valuation lower than the contract price. Similar to NSW, the report noted that Victoria is also moving through a historic peak in unit construction and is experiencing some challenges due to an oversupply in specific sectors of the market.”

“In Melbourne, 46 per cent of off-the-plan units are settling with a valuation lower than the contract price, causing lenders to remain cautious of the lending/settlement risk that exists within this sector.”

“Do we laugh, cry or simply shake our heads that when growth in Auckland house prices finally ends, after many years of a sharp upward trajectory, economists talk as if this is a bad thing? Everyone who has borrowed huge sums – because that was the only way they could buy a house – worries about prices falling. Most concerned are those whose equity in their home would be wiped out if our largest city saw a correction such as those recently in Melbourne and Sydney.”

“For those alarmed about their hard-earned retirement savings dwindling before their eyes, the PM’s themes of ‘widening our idea of what prosperity means’ can feel not just fluffy but frightening.”

This Post Has 116 Comments
  1. ‘Edmonton’s residential real estate has been in a downturn for the past five years, but Altus says it has noted weaker new home demand in both Edmonton’s suburban and inner-city market this year compared with 2018’

    Oh no no no. I have been told repeatedly that Edmonton is to the moon Alice!

    One thing these craters have in common. The REIC has told us they bottomed and buyers were snapping it all up. But it just gets worser.

    1. San Diego marina district:

      2016 = 225 listings
      2019 = 463 listings

      We were looking at that market in 2016 and told for sale product had not gone over 225 in the previous 5 years. Now a 100% increase.

  2. ‘taking advantage of the falls in London prices and sterling, which mean they can get a 50 per cent discount compared with five years ago’

    Just this past week we read that London prices fell for the first time in years. Puzzling.

      1. Compare these inflated housing prices with the link I posted with the external debts of countries, it is an interesting correlation.

      2. One question I have about price to rent ratios is what is being compared. Is it just rent to Principal+Interest? Because Principal+Interest hardly the true cost that one pays for a house. And then on top of that, how do they calculate the size of the loan? 0 down? 3%, 5%, 10%, 20% down? Because that makes a huge difference.
        For someone who wants to get a true idea of what their monthly payment will be, they need to factor in the whole PITIUMF: Principal + Interest + Taxes + Insurance + Utilities + Maintenance + Fees (HOA, etc). A selling point is often that PI is less than rent (with a sufficient downpayment). Calculations I’ve run with that scenario on true monthly costs, even with 50% down or more and these sub-4-percent interest rates, shows that true monthly cost is way higher than monthly rent in my area.
        I’m guessing people who think they’ll just be paying PI wind up getting a very rude awakening, to the tune of a thousand or thousands a month.
        Also, for those “throwing money away on rent” types, the only component of the PITIUMF that goes towards net worth is the P. The ITIUMF, of which the TIUMF is permanent and growing, is also money that is “thrown away”, i.e. it doesn’t go towards net worth/paying down the loan.

        1. Price to rent is simply a multiple of price divided by rent. In 2010 houses were 12 X’s rent.

          A friend of my son just paid 21.8 X’s for a rental in Folsom (Sacramento foothills). I counseled him not to do it, but he had Silicon Valley money burning a hole in his pocket.

          1. BTW, there is something wrong with the house price to rent ratio in these charts. 195 X’s means a $1,000,000 house will rent for $19,500/year? That does not make sense.

          2. A friend of my son just paid 21.8 X’s for a rental in Folsom

            What part of town? I just overpaid on rent for a house at the top of the hill off Iron Point Rd on the east side, but it fit what I needed and solved a lot of problems.

            Not sure I’m following your math, this house sold in 2016 for about $490k and would probably sell now for mid/upper 500s…at least a few months ago. My rent is 3k due to the dog. Are you saying my year of rent is 36k and if the house was priced at 720k that would be the 20:1 ratio you are talking about?

        2. Price = some measure of central tendency for the distribution of recent home sale prices. In principle, it reflects the myriad costs of ownership you mentioned.

          1. A decent monthly rent multiple may be 10*12 or 12*12 = 120-144.

            The chart says it is using annual multiples, which if true, is hugely it of balance.

          2. Carl, he paid $510,000 for a house that will rent for $2,000/Mon.

            $500,000 / $24,000 = 21

          3. OK. Not what we were looking for, but the 3 car garage and the extra/potential RV parking on the side is a big plus. The price seems in line with the current market. But yeah, I expect rents to come down eventually but maybe not as long as Intel as at full employment.

  3. ‘Year-over-year median sale prices for existing homes fell 5.9% in Santa Clara County, 3.2% in Alameda County and 1.5% in San Francisco in May’

    Eat yer crowz Thornberg!! Where did you go?

    ‘Homes are sitting on the market longer, racking up fewer offers and selling for less than they did several months to a year ago. ‘For the first time in many years, we’re seeing homes on the market in the 30-day range, where just a year ago it would have been half that time’

    That’s right, people are sawin’ and a slashin’ rather than wait 15 days for a big ol’ pile of that sweet equity!

  4. ‘The 10,000 completed unsold homes has just reached the warning level. Do not let the number rise’

    Stamp your little feet Wong. Oh and Hong Kong was another “to the moon Alice!” market just days ago.

  5. “Widening our view prosperity”

    I think that means you should be thankful that you have been feeding the squirrels as you promised the seller when you bought your property. Now, you get to reap what you sowed and have so many more squirrels.

  6. ‘Some of the biggest median home sales price declines this year from 2018 levels were in pricier neighborhoods in Coppell, North Dallas and Colleyville’

    Again, the most expensive areas fall first, faster and furthest. A sign of a bubble popping.

  7. Might want to check out CNBC web site as they have a couple real estate features including the Hamptons news. Also, reduced new construction activity and lowered loan volume despite falling interest rates.

    Of course, some conciliatory language to smooth out, but facts are facts.

  8. “‘We have seen some price reductions. That was from sellers thinking they would be able to sell for more than their neighbors did.’”

    But but but love letter?

  9. The 2008 crash was based on Wall Street not being able to sell their fraudulent rated subprime paper anymore.

    Mozilla ,CEO from Countrywide Mortgage was caught holding the bag on billions of dollars of subprime paper, as were some other big Investment banks. This is when he started screaming the government had to do something. All investment banks and regular banks were becoming unable to sell this junk paper and the Ponzi scheme was unravelling. This created a cash flow problem for these loan fraudster, and defaults were starting to pour in.

    Basically the cry was for the government to relieve them of their bad paper. AIG who was a big insurance Co. was also down in the billions for their betting on these Ponzi scheme loan paper.

    The whole idea was to pass off this subprime paper, not to get stuck holding it.

    This idea that these culprits didn’t see it coming or didn’t know the loan paper was pure fraudulent junk is a joke. Wall Streets leverage of the paper was up to 40 times also.

    Given normal Justice, these culprits would of gone bankrupt, everybody and their brother would of sued them , and major players would of ended up in jail.

    They didn’t even record the deeds in accordance with the law, rendering those notes totally defective.

    So , to the tune of trillons these crooks got bailed out by taxpayers.
    Now the government is set up to take any crap paper they hold.

    So the moral hazard of this bail out was no correction and faulty lending will continue , and taxpayers will pay if anything goes wrong.

    That’s why I don’t want this creepy lending to even start again to prop up a false market.

    1. Unfortunately, this “creepy lending” is already here, and has been for years. Lately I’m becoming resigned to the fact that I will likely die before things ever go back to “normal,” if they ever do.

    2. This was my rant they bailed out AIG and not CIT which proved loans to small businesses, advances on AR, letters of credit to shipping companies, dont forget moneygram etc. all failed small business closed up dryships went from $140 to like 1 had Ohbahma saved small business he would have been a hero instead of a zero

    1. Apparently the schools there are excellent…and builders tend to put in-law units in the town houses to appease the desire for extended visits from extended family.

    1. It was an attempted coup.

      Zero effort into looking for “Russian interference” or fake FISA warrants.

      If it was an actual independent investigation – obama and Hillary would be both under indictment now. Along with about half of upper management of the FBI and DOJ.

      1. None of this fake investigation was acceptable. Trump got slandered and tainted while the power hungry traitors seem to be getting away with this. This could cost Trump the 2020, and I’m sure it cost him the house at the 2018 midterm.

        I think it might be one of the worse crimes to frame someone . In the last 21/2 years the true colors of one of the parties has come out that is mind-blowing.

        1. What an honor! Admiral Mike Rogers deserves a place in history alongside our Founding Fathers.

        2. Seems as if he was concerned the US wasn’t doing enough to counter Russia disinformation and propaganda:

          ““What I see on the Cyber Command side leads me to believe that if we don’t change the dynamic here, that this is going to continue, and 2016 won’t be viewed as isolated,” Rogers said. “This is something that will be sustained over time.””

          “He said of Russian interference: “We’re taking steps, but we’re probably not doing enough.” He said that sanctions and other measures haven’t “changed the calculus or the behavior” by Moscow. “They haven’t paid a price at least that’s sufficient to get them to change their behavior,” he added.”

          https://www.washingtonpost.com/news/the-fix/wp/2018/02/27/nsa-director-mike-rogerss-careful-indictment-of-trumps-anti-russia-efforts/?noredirect=on&utm_term=.666bd844ec8b

          1. “He said of Russian interference: “We’re taking steps, but we’re probably not doing enough.”

            The U.S. does their share of meddling around the planet.

  10. ‘They often remark that Brexit is buttons compared to what is happening in other parts of the world,’ says Hannah Aykroyd, the founder of Aykroyd & Co, a buying agency.”

    B…b…but our globalist overlords assured us that BREXIT would be a calamity that would result in mass starvation and tanks in the streets.

  11. EMPTY STORES: NYC faces ‘commercial vacancy crisis

    And with ground-floor retail spaces sitting empty, the apartment owners in the floors above must pay more maintenance fees to make up for the lack of rental income.

    Prices in New York City appeared to peak three years ago and monthly rents and vacancies are decreasing.

    “Trends shake things up and self-correct,” Abrams says.

    http://www.fox5ny.com/news/new-bill-hopes-to-help-nyc-tackle-empty-storefronts

    1. I am going to say it right here – 97.2% of the men lied in this survey so they didn’t look like a neanderthal to the survey taker.

      “Only 2.8% said appearance was the most important quality, compared to 12.7% who cited property as tops”

      1. Another gem from the article:

        “The study found that 11.8 per cent of respondents said they had stayed in a bad relationship because they had bought a home with their significant other, and another 9.3 per cent had stuck around because they couldn’t afford to buy alone.”

        And:

        “To know that millennials now are not making much more than our parents were making, but now have to afford homes that are double, triple the price — it can be daunting.”

          1. While large, it is still below the debt to gdp of the United States. And our budget deficit is exploding, with no new tax increases or spending cuts on the horizon.

        1. “11.8 per cent of respondents said they had stayed in a bad relationship because they had bought a home with their significant other, and another 9.3 per cent had stuck around because they couldn’t afford to buy alone.””

          ————–

          And back in the 60s and 70s, that percentage would have been a lot higher. Especially among women whose only job was to get married and raise children, and couldn’t afford to separate from their provider husbands.

        1. The I agree is to 2 banana. My response to One is it depends how you define public debt, when you back out debt owned by the US to itself our debt is far below Europe’s as my link shows. Also, we do not have large SOE in our country which are common in the socialist countries what about their debts? they are not included on your link but they are partially included in the external debt calculations.

          1. But she is too intelligent and independent to need a man. Husbands are overrated, anyway … especially the kind who continuously demean their wives to make themselves feel superior.

      1. Maybe you could dial back the “donk” snideness, MB. Gratuitous insults and disparaging comments against fellow HBB posters who happen to hold different points of view is bad form.

        1. “I bet you wish your inflatable woman was half as attractive as her”

          I meant that to post under MB’s comment.

        2. Oops…

          “Gratuitous insults and disparaging comments against fellow HBB posters…”

  12. 25% of bonds in the world make lenders pay for the privilege of owning them, chart shows
    Published: July 26, 2019 2:32 p.m. ET
    Some $13 trillion of the world’s government bonds bear negative yields
    Author photo
    By Mark DeCambre
    Deutsche Bank, Bloomberg

    Much has been made of the outcropping of negative yielding bonds across the globe.

    Some $13 trillion in sovereign debt now bears a negative yield, which means that investors get back less than their original investments for the privilege and perceived safety of owning government-backed debt.

    It’s an odd dynamic in markets but one that has proliferated after more than a decade of monetary-policy unorthodoxy intended to juice stubbornly low inflation and anemic growth in Europe and parts of Asia.

    Deutsche Bank Securities’s Chief Economist Torsten Sløk does a good job putting a finer point on the state of the fixed-income market, noting that 25%, or one out of every four bonds in the world, now yields negative rates.

    1. The Logic Behind the Bonds That Eat Your Money
      By John Ainger
      July 24, 2019

      One of the basic assumptions of debt is that ­borrowers pay interest to lenders. That idea has been upended in the global bond market. There’s now about $13 trillion in negative-yielding bonds. Investors who hold them to maturity will end up getting less money than they paid for them, even including interest.

      The prevalence of negative yields pulls down the rates on all kinds of debt—including riskier loans—creating a bonanza for borrowers and some pain for lenders and savers. Yet these less-than-zero rates are largely a symptom of deeper problems in the economy.

      Negative-yielding bonds make up about a quarter of the investment-grade debt tracked by the Bloomberg Barclays Global-Aggregate Index. Investors have to pay to own more than 80% of Germany’s federal and regional government bonds; almost the entire Danish government market is negative. The U.S. is one of a dwindling number of nations with no negative-yielding sovereign debt.

      1. The external debt of European countries is beyond stunning, they are walking dead. It very much matches their inflated housing costs. What is happening in the blue states in this country with inflated housing values supporting their economies and given the illusion of prosperity is the European model. I used to think that high housing prices was just one of the bugs of liberalism/socialism but I have come to believe it is one of the features. High housing prices are created to support the state and consumption by the masses. In any event, check out this:
        https://usdebtclock.org/world-debt-clock.html

          1. The CIA fact book states this about public debt:

            “Public debt should not be confused with external debt.”

            Here is a good diagram of the difference between a country’s public debt vs their external debt:

            https://en.wikipedia.org/wiki/File:The_structure_of_nation%27s_debt.png

            EU countries will necessarily have higher external debt because their citizens often will take loans cross border. Compare that to the US (how often do you get a loan from a Canadian bank?). So looking at gross debt as a % of GDP is going to be a better measure of debt, unless you are worried about liquidity freezing up. But the EU and Draghi largely resolved those issues giving the European Central Bank more emergency lending powers akin to what the Federal Reserve has (though not as much).

            If you want, you might want to compare countries by net debt. The US is still behind most EU countries in debt because some of the debt is owed to itself (mostly the social security trust fund). However, it’s not as if this money is sitting there right now (e.g. the trust fund was raided), so I prefer to use gross debt because taxes will be needed to pay those social security obligations.

    2. How good can it get for borrowers when savers have to pay them for the privilege of loaning them money, and at the end of the loan, they need to repay less than they borrowed, even before considering the ravages of inflation or currency devaluation?

      1. Bonds News
        July 26, 2019 / 6:15 AM / Updated a day ago
        Worldline debt issue takes negative yields to new frontiers
        Abhinav Ramnarayan
        * French payments company raises 600 mln euros
        * Bond has yield of minus 0.96%
        * Growing investor interest in burgeoning sector
        By Abhinav Ramnarayan

        LONDON, July 26 (Reuters) – French payments company Worldline broke new territory this week by issuing some of the most negative-yielding debt on record in Europe, showing the levels of market distortion caused by central bank stimulus.

        The payments sector has been fertile ground for merger and acquisition activity over the past year and attracted growing interest from investors looking to tap into the rapid increase in the proportion of cashless transactions by consumers and businesses.

        Investors will pay nearly 1% for the privilege of lending Worldline 600 million euros ($668 million), convertible into shares after seven years.

        The debt will be used to repay a bridging loan related to its buyout of the remaining 36.4% stake in equensWorldline, taking advantage of the bouyant investor interest in both acquisition finance and the payments industry.

    3. I expect this burgeoning supply of negative yielding bonds to eventually a big story when viewed through the lens of economic history, as nothing like it has ever previously occurred in the history of money lending.

      1. Davos
        July 26, 2019 / 9:26 AM / Updated 21 hours ago
        Factbox – Month of milestones: bond borrowing rates evaporate in July heat
        Sujata Rao, Dhara Ranasinghe, Ritvik Carvalho

        LONDON (Reuters) – Sovereign borrowing costs have sunk deeper below zero in July, reaching a series of historic milestones as central banks signal another wave of monetary easing and forcing global investors to take on riskier debt for lower and lower returns.

        Almost $13 trillion of global debt was yielding less than 0% in early July, a record. And for the first time, that now includes some higher-risk debt categories — junk-rated corporate bonds and emerging market debt — alongside top-rated sovereigns.

        On Friday, a day after the European Central Bank indicated it was ready to unleash further stimulus, unrated French payments firm Worldline sold some of the most deeply negative-yielding debt on record. Investors will pay nearly 1% for the privilege of lending it 600 million euros, convertible into shares after seven years.

        More such ground is likely to be broken as investors search out assets that provide at least a few basis points of yield.

        “The negative-yield environment has completely changed the investor paradigm,” said Fahad Kamal, chief market strategist at Kleinwort Hambros.

        “To see a real return you are going to have to go far out on the yield curve, take on risk to get a return, and that’s not ideal … One of the great pillars of this market is TINA — there is no alternative.”

        1. TINA

          That’s interesting, as some regulars here regularly point out that the headline Wall Street stock market indexes have regularly hit new records all year. What is it that negative yield bond investors don’t get about the stock market always goes up ?

      2. The Fed seems to be emulating the Bank of Japan, about 20 years apart. Japan’s property bubble reached insane proportions in the ’90s, then crashed hard. The BoJ has been trying to reinflate the bubble and fund all manner of malinvestment with unlimited “stimulus” ever since, while failing to address structural economic deficiencies such as an aging demographic and not enough young workers/taxpayers. Nothing the BoJ does seems to work and only defers the inevitable financial reckoning day, so it’s a mystery why the Fed would lead us down the same dead-end road.

        1. Twenty years of deflating real estate prices to come would go a long way towards explaining the puzzle of negative yielding bonds!

  13. So the question is why can’t it reach 50 percent or higher? Also, since it makes the dollar go up in value why should we have interest rates higher than necessary to compete for investment? To me this is all about America first. BTW, the NASDAQ just hit another record, what is Mr. Market saying about the chance of a recession in the next six months to one year. In September of next year early voting begins in some states, time is running out for a recession to impact the election.

    1. Dan, weren’t you saying yesterday that Trump’s economy was 2.9% growth, higher than Obama’s? Today’s headline in Washpost: “Trump struggles to achieve 3 percent economic goal as growth slows.” Heh.

      1. The growth rate in 2018 was 2.9 percent. Of course, the media is bending over backwards to show it lower so it is trying to use a fourth quarter to fourth quarter estimate to reach a lower amount. Most likely you can find a quarter to quarter comparison which finds 3 percent or higher growth but the MSM will not find that. First quarter growth this year was 3.1 so with this quarter we are averaging 2.6 percent in 2019 compared to Obama’s 1.9 percent average growth rate of course all this is occurring when statistically we should be in a recession. It is unprecedented to have a speed up this late into a recovery.

        1. which finds 3 percent or higher growth but the MSM will not find that ??

          Well Chit…Tell Trump to put in an emergency call to Hannity…Lets get this corrected asap…

        2. Obama handed Trump an economy which was growing at 1.6% despite the .25-.50 feds rate and a multitrillion dollar expansion in the Fed’s holdings of mortgages and treasuries. Despite the Fed raising interest rates eight times since his election and reducing the balance sheet by as much as $50 billion a month, Trump has managed to increase the GDP growth rate. Obama had nothing but tailwinds and Trump nothing but Fed headwinds. He is fighting the Fed. Had the Fed not made the last two interest rate increase the economy would have easily exceeded 3% in 2018, I think and he thinks they deliberately did it to avoid him being able to hit the 3% rate. Obama averaged 1.9% growth despite the fact that he should have had a sharp bounce from a recession. The question that needs to be ask but the PC press will not ask is why did Obama fail to have a normal recovery from a recession? The follow up is what did Trump do so late into the recovery to increase the rate of growth despite significant interest rate increases and the reduced balance sheet?

  14. Here’s an American family from Missouri who has managed to stay off their iPhones, eschew the Kartrashians and actually spend time learning something productive. I’m starting to think flyover country is where it’s at as compared to the degenerate behavior I’m witnessing on the left coast.

    https://www.youtube.com/watch?v=viQx4KDivPY

      1. There are apparently a number of family acts in Branson, including these Utah transplants. Word is the family patriarch was an econ professor who abandoned his university faculty position to pursue the family music business. One of the daughters lived near us in San Diego before their act went viral…

        1. Impressive. I dated a girl in college whose family was like those two. They were oozing musical/vocal talent and every family member would just get around the piano and sing or play something. Our family’s talents are in the sporting area, not music. But I love to see how amazing humans are.

          1. We’re definitely in the music camp, though were never sufficiently organized or unified to cook up a family act like those. Looking on the bright side, I doubt any of our kids are at risk of struggling to eek out a living as a professional musician. (Time may prove me wrong, though…)

          2. I thought I remember you mentioning that you had a son who was a cross country runner?

    1. Flyover country has it’s share of whackos, druggies and creeps. It doesn’t seem to have the same level of leftists that have invaded the coasts though. They pretty well understand that the “elites” have been screwing them over for a long time now and wish to continue to do so.

      1. Ben… so many of my comments get flagged for moderation, even short, benign ones without links. Any suggestions to lower the flag rate?

        1. Any suggestions to lower the flag rate?

          There’s a link on the right side-bar of the blog that should help 😀

          I’ve not been able to discern a pattern yet of what triggers moderation, aside from links and some words.

          1. It’s probably a wordpress validation scheme, and the queue probably loads-up during other scanning processes with a higher execution priority.

        2. Rule #1- Don’t pimp housing.

          Rule#2- No DonkeyMath

          Pretty straight forward really.

  15. Wages aren’t keeping up with home price growth. Moreover, the Fed’s debasement of the currency and destruction of Americans’ purchasing power makes the average shack even more out of reach of the increasingly pauperized middle and working classes.

    Note claim that a good realtor will tell people a good rule of thumb for buyers is 2.6 times their annual salary. Yeah, right! Maybe that was the rule of thumb during the Eisenhower administration, but now it’s “You guys can do this!” a la Suzanne.

    https://www.housingwire.com/articles/49637-wages-arent-keeping-pace-with-home-price-growth-and-its-putting-a-dent-in-the-housing-market

    1. “Wages aren’t keeping up with home price growth.”

      The fed is well aware of this problem, but they continue with their easy-credit asset-inflation and weak dollar policies. It’s not going to end well.

  16. SoCal is officially in the parabolic price blowout phase of Housing Bubble 2.0, as evidenced by all-time record prices on steadily declining sales volume.

    Business Housing
    Southern California home prices break record – despite 11-month sales slump
    The median price of a Southern California home hit $541,250 in June, real estate data firm CoreLogic reported.

    The median price of a Southern California home hit $541,250 in June, real estate data firm CoreLogic reported. But sales fell for an 11th straight month. (File photo by the Orange County Register/SCNG)
    By Jeff Collins | JeffCollins@scng.com | Orange County Register
    PUBLISHED: July 26, 2019 at 9:46 am | UPDATED: July 26, 2019 at 6:07 pm

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