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The Saying ‘As Safe As Houses’ Is A Lie

A holiday topic starting with KJZZ in Arizona. “Phoenix is now the top city in the country for increases in annual home prices, replacing Las Vegas. That’s according to the S&P CoreLogic Case-Shiller Inde. Co-creator Robert J. Shiller talked about the slow rate of home price appreciation.SHILLER: Well, we have been in boom years in the housing market, increasingly since 2012. The big part of it is speculative. It’s people hearing about prices going up and bidding prices up so that they’re kind of too high and then the enthusiasm starts to wane and then they come down. It’s not necessarily a disaster but they come down somewhat.”

“SHILLER: I’ll bring up Seattle. Seattle was the hottest city of our 20 cities and a couple of years ago it was going up in double digits much more than Phoenix is recently. But now it’s dropping. You know, we’ve seen the same thing in other cities. It tends to be glamour areas that are a little more vulnerable to bubble thinking. You can get carried away and think that the world has just discovered that Phoenix is a wonderful city. Well, it is a wonderful city. What I am saying is that wonderful city’s prices can go down, too. Or, they can get too high.”

“SHILLER: One thing that I would add that I haven’t said is that housing over the long run has not made as good of an investment as the stock market. I did data from 1890 to 1990. And the housing market over the whole United States was increasing something like less than 1% in real inflation corrected terms and the stock market did spectacularly better than that. So, why is that? Well, housing is something like automobiles. It wears out. Often they get torn down eventually. They’re out of style. They have defects. They don’t last forever. So, why would one think that housing is such a good investment compared to companies that are trying to advance their investors’ interests?”

From The Province on Canada. “I am happy to be an Edmontonian. This is home. But Edmonton real estate has not been kind to homeowners. The average home in Edmonton is worth 6.8 per cent less today than was the case in 2014, five years ago. Going back 10 years, according to the city’s annual market assessment, my Edmonton residence is worth 15 per cent more today than in 2010. That’s a whopping 1.5 per cent average annual gain! (Property and education taxes are up 35%, but that’s a story for another day.)”

“There’s always another dog to kick. Over the last five years, all prairie housing has lost value. Calgary’s housing market has taken a worse pounding than Edmonton. A house in Cowtown is worth eight per cent less today than five years ago.”

From Moneywise on the UK. “Existing homeowners who find they fall foul of new, stricter lending criteria may not be able to remortgage to get a cheaper deal, leaving them with higher mortgage payments at a time when they can perhaps least afford them. There are 150,000 ‘mortgage prisoners’ in this situation in the UK – still living in their homes but unable to fulfil the affordability criteria to get a better mortgage deal.”

“Rae Radford, 56, is a social media consultant living in Kent. She says: ‘I’m not a traditional mortgage prisoner. I supported my ex financially while he studied, so I only paid a small percentage of the mortgage. But I split with him in 2017. I am concerned that because of my age and the amount outstanding on the loan, it is more difficult to remortgage. So we are stuck on a high-interest deal until we can sell the property. It’s a lovely home, but I think it’s a buyers’ market at the moment. We can’t sell our house and we are stuck with a mortgage charging 5.9%.'”

From ABC News in Australia. “The saying ‘as safe as houses’ is a lie, according to Townsville resident Heather White, who is about to lose almost $100,000 on the resale of her home in the north Queensland city. When Ms White bought her family home more than a decade ago, she thought the resale profit would fund her retirement. Now she is preparing to lose almost $100,000.”

“The five-bedroom house in Townsville was snapped up at the peak of the property boom in 2007 for $355,000. Twelve years later, instead of increasing in value, the home’s worth has dropped so dramatically, it has left Ms White struggling to comprehend the financial loss.”

“‘The latest we’ve heard is someone might offer $260,000 and that’s devastating, absolutely devastating,’ Ms White said. ‘You can’t get your head around it — it’s insulting and it’s heartbreaking.'”

“The property market in the north Queensland city crashed in 2008 and still has not recovered. House values have plummeted 27.6 per cent since the peak of the property boom and units have been hit even harder, battered by a loss of 41.6 per cent. In a desperate attempt to attract buyers, Ms White shelled out a further $35,000 for renovations, which she will never recoup.”

“‘We completely repainted, we put new carpet down, we put new lighting through, we put security lights on, we put up security fencing,’ she said. ‘All your hard work and all the effort you’ve put in over all those years, it feels like a kick in the teeth.'”

“Real estate agent Graham Lynham said the market ‘fell off a cliff’ at the end of the region’s mining boom. ‘It’s been a very slow erosion, and it’s continued to erode, and frankly we don’t know if we’ve hit bottom yet,’ he said.”

“A snapshot of property sales in Townsville over the last two months paints a disturbing picture of the significant price drops. It includes a luxury waterfront unit that sold for nearly $240,000 less than what it had previously been bought for. Further into the suburbs, a threebedroom suburban home lost $159,000 at sale.”

“The financial hit forced Ms White back into employment when she was planning to retire. ‘Without that money, I have to go back to work — I’m not a young woman — I’m 65 in March,’ Ms White said. ‘I don’t know when I’m going to be able to retire, because we were counting on that. And when you’re talking about a $100,000 loss, where do you go, what do you do? I get angry when I think about it now, because it shouldn’t be like this.'”

“The state’s peak property lobby group, the Real Estate Institute of Queensland (REIQ), has been urging the Queensland Government to boost the market by extending the first-home owners’ grant to second-hand homes. REIQ Townsville representative Wayne Nicholson has worked in the city’s housing market for 49 years and stressed buyers needed stimulation to help the city recover.”

“‘I’ve never seen anything as bad as what we’ve had — the market has been diabolical, without sugar-coating anything,’ Mr Nicholson said. ‘If you get a $7,000 grant from the Government, you could potentially own a house in Townsville for less than you’re paying rent.'”

This Post Has 121 Comments
  1. ‘I’ll bring up Seattle. Seattle was the hottest city of our 20 cities and a couple of years ago it was going up in double digits much more than Phoenix is recently. But now it’s dropping. You know, we’ve seen the same thing in other cities. It tends to be glamour areas that are a little more vulnerable to bubble thinking…What I am saying is that wonderful city’s prices can go down, too. Or, they can get too high’

    ‘One thing that I would add that I haven’t said is that housing over the long run has not made as good of an investment as the stock market. I did data from 1890 to 1990. And the housing market over the whole United States was increasing something like less than 1% in real inflation corrected terms and the stock market did spectacularly better than that. So, why is that? Well, housing is something like automobiles. It wears out. Often they get torn down eventually. They’re out of style. They have defects. They don’t last forever. So, why would one think that housing is such a good investment’

    Well Chairman Mao Shiller, I recall that when prices started to fall you were the first to start bleating about the gubermnet saving the poor shack prices. Shacks are actually a terrible investment, according to the study you published. And the only way somebody can run up some sweet equity is if some other poor bashtard signs up for a 30 year loan, with interest, to fund it.

    I remember well after the REIC admitted the bubble. Lots of moralizing and should haves could haves. But one conclusion stuck out: shacks aren’t investments and we should stop looking at them that way. Boy did the REIC manage to sell this horseshit idea to people again in a big way.

    1. Renting in Denver has allowed me to save enough money to move away and buy in a smaller town in Colorado.

      I have zero interest in buying property in Denver.

      1. But what about Los Chingones Taqueria? Surely having access to such establishments is worth the price of living in Denver 😉

        1. On the topic of food, is there anywhere in Broomfield to eat lunch that isn’t a corporate chain? We did some work at Webroot this summer and Jason’s Deli (yes, it’s a chain) was the least corporate place to eat lunch that I found.

          Front Range ethnic food is better in Aurora than in Denver, btw…

          1. and Jason’s Deli (yes, it’s a chain) was the least corporate place to eat lunch that I found.

            I used to love that place for lunch when I lived in Texas. The Beefeater, I think it was called, was quite tasty!

          2. On the topic of food, is there anywhere in Broomfield to eat lunch that isn’t a corporate chain?

            Back in the day the STK guys would drive into downtown Louisville to get bad authentic Italian-American at Blue Parrot or just plain bad Chinese at Double Happy. There’s now a decent BBQ place(Lulu’s?) there too. But yeah…in actual Broomfield I can’t think of anything other than the dim sum place that went in where the old Armadillo used to be. I kind of miss 90s Broomfield when I thought I would be in the area the rest of my life.

          3. Come to the DC burbs. Every tiny strip shopping center is filled with small Asian restaurants (next to a nail salon of course) and Mexican/Latino hole in the wall spots. Not to mention hundreds of tacqueria-pupusaria food trucks. Plus lots of ethnic small grocery stores.

          4. “Back in the day the STK guys would drive into downtown Louisville to get bad authentic Italian-American at Blue Parrot or just plain bad Chinese at Double Happy. ”

            Ugh, I had the misfortune of eating once at the “Double Happy”

            If you’re willing to drive down 36 to McCaslin, there is a decent Italian place called Parma. There’s also a “Shanghai Style” Chinese place on McCaslin.

          5. “Every tiny strip shopping center is filled with small Asian restaurants (next to a nail salon of course) and Mexican/Latino hole in the wall spots.”

            That’s the Santa Clara Valley (greater San Jose) in a nutshell.

    2. “And the only way somebody can run up some sweet equity is if some other poor bashtard signs up for a 30 year loan, with interest, to fund it.”

      Not to worry, as negative interest mortgages are going to be here soon. Any day now, it will be possible to borrow the money to buy a home and repay the bank less than the original amount borrowed for the privilege of joining the Ownership Society.

      1. Mortgage rates
        Danish bank launches world’s first negative interest rate mortgage
        Jyske Bank will effectively pay borrowers 0.5% a year to take out a loan
        Patrick Collinson
        Tue 13 Aug 2019 16.15 BST
        Last modified on Tue 13 Aug 2019 20.25 BST

        Jyske Bank is the first mortgage lender to offer a negative rate. Some banks are considering moving to negative rates on deposits

        A Danish bank has launched the world’s first negative interest rate mortgage – handing out loans to homeowners where the charge is minus 0.5% a year.

        Negative interest rates effectively mean that a bank pays a borrower to take money off their hands, so they pay back less than they have been loaned.

        Jyske Bank, Denmark’s third largest, has begun offering borrowers a 10-year deal at -0.5%, while another Danish bank, Nordea, says it will begin offering 20-year fixed-rate deals at 0% and a 30-year mortgage at 0.5%.

        Under its negative mortgage, Jyske said borrowers will make a monthly repayment as usual – but the amount still outstanding will be reduced each month by more than the borrower has paid.

        “We don’t give you money directly in your hand, but every month your debt is reduced by more than the amount you pay,” said Jyske’s housing economist, Mikkel Høegh.

        In recognition of how puzzling the new mortgage is for customers, the bank’s FAQ is littered with questions and statements such as Hvordan kan det lade sig gøre? (How is that possible?) and Ja, du læste rigtigt (Yes, you read that right).

        The mortgage is possible because Denmark, as well as Sweden and Switzerland, has seen rates in money markets drop to levels that turn banking upside-down.

        1. This race to the bottom nonsense is killing the global eCONomy. Low rates are the problem, NOT the solution.

          1. If the credit gravy train stops, humanity will plunge into a darkness so bad you’ll be begging Elizabeth Warren to open the credit window 😀

            I agree with you though…it’s frustrating and despicable it was allowed to run this long.

      2. Not to worry, as negative interest mortgages are going to be here soon. Any day now, it will be possible to borrow the money to buy a home and repay the bank less than the original amount borrowed for the privilege of joining the Ownership Society.

        I suspect that will be tried. But if it works that “original price borrowed” will become breathtaking as we go around one more time.

      3. Negative yield Ebola is spreading throughout the Eurozone.

        Bonds News
        September 2, 2019 / 12:02 PM / Updated 11 hours ago
        Share of negative-yield euro zone bonds at new record high-Tradeweb

        LONDON, Sept 2 (Reuters) – The pool of negative-yielding bonds in the euro area expanded further in August, with almost half of euro-denominated corporate bonds on the Tradeweb platform now carrying negative yields, Tradeweb said on Monday.

        Of the roughly 3.4 trillion euros of euro investment grade corporate bonds traded on Tradeweb, 49.51% or 1.68 trillion euros worth, have a negative yield, data as of the end of August from the platform showed. This stood at around 12% in January.

  2. ‘Without that money, I have to go back to work — I’m not a young woman — I’m 65 in March…I don’t know when I’m going to be able to retire, because we were counting on that’

    Heather:

    Yip yip yip yip yip yip yip yip
    Sha na na na, sha na na na na
    Sha na na na, sha na na na na
    Sha na na na, sha na na na na
    Sha na na na, sha na na na na
    Yip yip yip yip yip yip yip yip
    Mum mum mum mum mum mum
    Get a job, sha na na na, sha na na na na
    Ev’ry morning about this time
    She get me out of my bed
    A-crying, get a job
    After breakfast ev’ry nay
    She throws the want ads right my way
    And never fails to say
    Get a job, sha na na na, sha na na na na

    1. People will say, Ben you are so meanie!

      After all that happened last decade, if people are still so greedy that they think some plain old shack in the middle of nowhere Australia is gonna pay for them to sit on a beach sipping toddys the rest of their life, they deserve to get their head handed to them.

      1. Not only that – where are they going when they do sell? You have to live somewhere, so that money is going to be plowed right back into some overpriced shack.

  3. When Ms White bought her family home more than a decade ago, she thought the resale profit would fund her retirement. Now she is preparing to lose almost $100,000.”

    You’d have to have a heart of stone to read about these speculator tales of woe, and not laugh.

      1. “Does anyone perform math before running their mouth?”

        “Anyone?”

        Math be hard. As a service to my customers my bank will happily perform all of the necessary financial calculations while my customers enjoy the pleasures offered up by a FREE cup of coffee.

        All my customers need to bring to the table is their signature on a dotted line especially prepared for their convenience.

  4. “‘The latest we’ve heard is someone might offer $260,000 and that’s devastating, absolutely devastating,’ Ms White said. ‘You can’t get your head around it — it’s insulting and it’s heartbreaking.’”

    I totally agree. No one should be paying that much for your shack when the real cratering hasn’t even started yet.

    1. Im thinking investment in a good shoe company might not be a bad idea. Think of all the feet stamping that’s about to take place!

  5. “From ABC News in Australia. ‘“The saying ‘as safe as houses’ is a lie, according to Townsville resident Heather White, who is about to lose almost $100,000 on the resale of her home in the north Queensland city. When Ms White bought her family home more than a decade ago, she thought the resale profit would fund her retirement. Now she is preparing to lose almost $100,000.”’

    What would houses cost if it was true? That is why propping up housing prices when they were about to fall is exactly why we have unaffordable prices. If housing was the only investment where you were guaranteed to make money, houses would shoot to a one million dollar average across the US. When the country had banking accounts which paid 5 percent and were 100% safe that is where people put their money. Housing was affordable and the stock market was not through the roof.

      1. “Speculation in housing (shelter) needs to be ruthlessly punished and actively discouraged.”

        I will happily (and profitably) assist with the ruthlessly punished part.

    1. ‘When the country had banking accounts which paid 5 percent and were 100% safe that is where people put their money’

      The only way people can receive huge amounts of money for living in a shack for a few years is if someone else borrows it and hands it over. This alone means it will eventually fail. Shiller can say, “oh Seattle is falling”. What about the suckers who were in bidding wars a couple of years ago? Fooked I tells ya!

      “Ben you so meanie!” Oh yeah? Why does this bleeding heart media never go back to the REIC bashtards like redfin or Yun and say, “look at these fooked people in Seattle! You said it was to the moon Alice!”

    2. We no longer have a sound functioning economy….you can be a cashier at Walmart, become a Doctor, or speculate in Real Estate. With nothing to lose, it’s no wonder so many have plowed the last of their savings into a Real Estate hail mary.

  6. Seattle (King County) – The problems is that the govt agencies and schools have got used to the property taxes. If fair market value drops, they will increase the tax rates. We are stuck

    Median Property Tax
    $3,572 ± $14 (102nd of 3143)

    As Percentage Of Income
    3.88 ± 0.03% (261st of 3143)

    As Percentage Of Property Value
    0.88 ± 0.01% (1357th of 3143)

  7. ‘I would add that I haven’t said is that housing over the long run has not made as good of an investment as the stock market. I did data from 1890 to 1990. And the housing market over the whole United States was increasing something like less than 1% in real inflation corrected terms’

    I posted this study years ago when it came out. Not only did increases look pretty tiny, (you won’t believe this) some of these shacks became – worthless – in this 100 years! That’s right, no increase for you! Nothing, fell to zero. As a matter of fact, a big chunk of them fell to zero, just the land was left.

    Here’s something for you shack gamblers to consider: In 1890, they built some shacks to last for decades upon decades, with lots of maintenance of course. Nowadays, the Guatemalans throwing up this curvy 2 by 4 and sheet rock junk aren’t really the craftsmen of 1890. Look at the Phoenix stuff built in the 1990’s if you don’t believe me. The exteriors are already falling off.

    1. “…some of these shacks became – worthless – in this 100 years! That’s right, no increase for you! Nothing, fell to zero. As a matter of fact, a big chunk of them fell to zero, just the land was left.”

      And the ones that didn’t become worthless turned into money pits in due to maintenance and repair costs. Of course this is routinely ignored by the math challenged folks who choose to pretend that real estate is a good investment.

      1. That’s right. Bob has no way to know what monies were poured into foundations, roofs, plumbing, electrical rewiring ect. So the true return is – negative – ta da!

      2. Multifamily properties don’t stay pristine over the years. They too will turn into money pits due to maintenance and repair costs, and LLs will jack up the rent to pay for said costs.

        1. Every single SFR landlord I’ve ever talked to got out of it. Between maintenance and repair, and deadbeats not paying the rent, they didn’t make any money.

          1. The ones I know who stay into it either enjoy doing home maintenance work or else irrationally undervalue their free time.

    2. Ben, are you implying those starvation-wage illegal alien work crews don’t have the same pride and professionalism in their handiwork as the craftsmen of yore?

      Dat’s rayciss….

      1. And if the greedy shack builder is cutting corners and the port a potty is full, they’ll be doing number 1 & 2 in your future master closet. Hey, it works in Guatemala City!

          1. Long ago I was with one of my in-laws, who was working as a GC foreman at the time. We were at a build site and the finish plumber was there. In the back of his truck was a bag of TP.

            “You preload the TP holders? That’s nice…”

            “Nah, they’re for the load test me and my apprentice conduct. Did you have lunch already? We need some help.”

    1. Perhaps.

      Chinese buyers pull back from U.S. housing market, hurting home sales
      Yan Zhang USA TODAY
      Published 12:38 PM EDT Aug 26, 2019

      Home sales are hurting. Even with lower mortgages rates and a sales pick-up in July, purchases of homes are still down significantly compared with 2018.

      But while analysts typically blame high prices and growing worries about a possible recession, another factor is also playing a prominent role: Foreign buyers, particularly the Chinese, have pulled back sharply from the U.S. real estate market.

      Foreign investors purchased $77.9 billion in residential property in the 12 months ending in March, down 36% from the previous 12-month period, the National Association of Realtors said in a recent report.

      1. Why are our enemies, the Chinese, allowed to speculate in our shelter, driving up the cost of living for our citizens?

  8. The crux of the matter.

    “SHILLER: One thing that I would add that I haven’t said is that housing over the long run has not made as good of an investment as the stock market. I did data from 1890 to 1990. And the housing market over the whole United States was increasing something like less than 1% in real inflation corrected terms and the stock market did spectacularly better than that. So, why is that? Well, housing is something like automobiles. It wears out. Often they get torn down eventually. They’re out of style. They have defects. They don’t last forever. So, why would one think that housing is such a good investment compared to companies that are trying to advance their investors’ interests?”

    – Globalists off-shored many millions of jobs to developing nations all in the name of corporate profits. Coinciding (not coincidentally) with high public/private debt/leverage in the U.S. Middle class gutted. Since “consumer” spending is 70% of the U.S. economy and middle class wealth declining, must find a way to keep the spending engine going. Enter the bubble phase at around the turn of the century. The Fed and gov’t. targeted housing and stocks (i.e. FIRE sector replaced Manufacturing sector) as new economic engine. Problem: Debt and leverage don’t replace real wealth creation through manufacturing, productivity gains and exports. Once started, debt must keep growing. Consumer must keep borrowing, else economic collapse. Targeting asset prices only gives short-term gains. Problem: All asset bubbles collapse. Welcome to insane economics enabled by central banks. This is not sustainable, as we’re about to learn again for the 3rd time this century (so far).

    – As Dr. Shiller said, houses are a depreciating asset. He didn’t mention the high carrying costs of maintenance, property taxes, insurance, HOA/COA fees, etc. Nor did he mention that it’s also an illiquid asset; normally takes weeks or months to sell, even in a “normal” market (whatever that is in the age of central bank machinations/interventions).

    – Well, now speculators are bailing out (while the can), the pool of greater fools is close to empty, interest rates are near historic lows, and housing prices are at or near historic highs. What happens next to sales volume and prices (rhetorical)?

    – Recap.: Central banks enabled giant asset bubbles; three times in the 21st century. We’re now at the end of bubble #3, the everything bubble. The global impact of this insanity will take many years to recover from as all asset bubbles deflate in roughly the same time frame. This is all just getting started. Populism must win. Statism and the State and their central bank henchmen must fail. Free markets and sound money must once again prevail or we’re doomed.

  9. Lifestyle
    A Recession Is Coming. Is It Dumb to Think About Buying a House?
    Daniel Kurt
    August 30, 2019, 7:27 PM

    My wife and I have started looking for houses. But I’m not sure it’s a good idea. A recession is coming. Interests rates are low. Be frank with me: Is this a really dumb time to spend a bunch of money on a home? Should we wait? —Sam R., Orlando, Florida

    Let’s start with the disclaimer: That the U.S. economy will sputter into a recession isn’t yet a forgone conclusion.

    Now that that’s out of the way, I’ll state the obvious. It’s hard not to hear about the deluge of troubling economic news — the slowdown in second-quarter GDP, the ongoing trade war with China, the near-recession in Europe’s largest economy — without getting jittery. Real jittery.

    So you’re right to give the economic climate we’re in some serious thought before heading into a major financial decision. I’d be foolish to give you the clear-cut answer you’re probably hoping for here. But sometimes questions have a way of answering themselves, and the fact that you’re hedging this much should tell you something.

    First and foremost, you should ask yourself whether you need a new house at this exact moment. Are you moving because you have a kid who’s heading to school and you want to put down roots? Or is home-ownership simply a goal you’ve always had stuck in the back of your head — a reassuring symbol that you’ve “made it”? If it’s more the latter than the former, I’d be hesitant.

    Then there’s the question of job security, both for yourself and your wife. Unless you work in a relatively recession-proof sector like health care or education, it’s hard to feel confident about the next 12 or 18 months. The last thing you want is to take on the biggest loan or your life, only to realize you can’t pay it back.

    1. Pretty good advice I’d say. It’s always good to do some introspection and try to identify any psychological motives behind one’s purchases.

    2. LOL at all the DebtDonkeys in that Yahoo Finance thread thinking it’s “to the moon, Alice!” for real estate. How soon the dumb masses forget…

    3. Should markets panic over the inverted yield curve?
      Yield curve inversions’ reputation as a recession indicator is well deserved
      The New York Stock Exchange. Last month, major US indices suffered their biggest one-day falls of the year after 10-year bond yields fell below their two-year counterparts for the first time since 2008.
      Photograph: Johannes Eisele/AFP/Getty Images
      Proinsias O’Mahony
      17 minutes ago

      Not so long ago, only finance insiders worried about yield curve inversions – an obscure-sounding piece of market jargon denoting when long-term yields are lower than short-term ones. These days, it’s headline news; even Donald Trump has tweeted about what many view as the most reliable indicator of a looming US recession. So how worried should investors be by plunging long-term bond yields?

      Last month, major US indices suffered their biggest one-day falls of the year after 10-year bond yields fell below their two-year counterparts for the first time since the dark days of 2008. The trend, notes Pictet Asset Management’s Luca Paolini, isn’t confined to the US – UK yields inverted on the same day, Swiss yields had already inverted while Japan is a “whisker away”, triggering panic among investors who fear a global recession.

  10. 50 years ago, this man would have been in a mental institution. Then, One Flew Over the Cuckoo Nest was made into a movie and Hollywood and the ACLU convinced America that even pedophiles should not be detained for their good and the good of society. Now, the answer is not to correct the mistake and make it easier to put wingnuts into an institution, it is to take our first amendment rights, the story just scratches the service but as more comes out it is clear this is just not someone who just snapped this is long term dangerous nutcase:
    https://hollywoodlife.com/feature/who-is-seth-ator-suspect-odessa-texas-deadly-shooting-spree/?fbclid=IwAR2-68VLos3-d6szcDEYpg1ZtGdGzoAUUCSoNRHhy3WhbzIF1ljL4DjgKOY

    1. the answer is not to correct the mistake and make it easier to put wingnuts into an institution, it is to take our first amendment rights,

      “the answer is to take our his first amendment rights.”

      There, fixed it for you. Rights come with responsibilities. When you start threatening people with violence, you lose your right to bear arms.

      This behavior should have warranted the authorities taking his assault rifle:

      Veronica Alonzo told CNN that she called the authorities on Seth last month after he allegedly came to her house with a large rifle and screamed at her for leaving trash in a nearby dumpster. She told the outlet that they never responded because Seth’s “property does not show up on GPS and is difficult to find.” The property is in a rural community about 15 miles from the movie theater where the suspect was killed. She added that Seth’s home had no running water or electricity.”

      1. The left wants to take our rights. They want the New Zealand solution. That is not just taking guns from nutcases which I do support.

      2. Sounds like this guy was living a life of desperation. No electricity or running water in Texas during the summer? That can’t be fun. Imagine how hot the house would be…

  11. This was written liberals with a liberal perspective. However, reading between the lines it is clear who has been driving the deinstitutionalization on the violent mentally ill. The article clearly is a fan of community based services over institutions but anyone reading a newspaper can see we have gone way too far in that direction. We can lose our constitutional rights or we can put a few hundred thousand real nut cases back into institutions against their will. Sorry I support the latter:
    https://www.tiki-toki.com/timeline/entry/37146/A-History-of-Mental-Institutions-in-the-United-States/#vars!date=1802-10-03_10:56:39!

    1. I visited San Francisco for the first time in May, stayed near Union Square by the Powell Street BART station.

      The Tenderloin, Civic Center, Mid-Market Street areas were some of the dirtiest urban areas I have ever seen in the U.S. Everything that the Real Journalists (reluctantly) report about this is true.

      There’s alot of people on the streets of SF that don’t seem like drug rehab, a jobs training program, etc. would transform them into productive members of society. Some people may just be too far gone to save…

      1. Some people may just be too far gone to save…

        That’s something the current (progressive) narrative doesn’t allow people to say. Even if it’s true. There seems to be segment that wants to lock us in to a narriative which is going to drag us a whole down further. I can only assume the leaders of that segment will gain power, money or otherwise profit from it.

  12. Well I am waiting for real estate prices to drop in primo areas of Sacramento! I am sick and tired of renting crappy overpriced 1 bedroom apartments. I wish prices would drop and inventory increase in midtown, east sac and curtis park areas.

  13. Odessa gunman “was on a long spiral down” per the FBI. Still not clear how he managed to procure a firearm, since he reportedly failed a background check and should’ve raised red flags due to both a previous criminal conviction and indications of mental illness. But scdave assures us the shooter was a deranged Trump supporter and that legions more MAGA-cap wearing shooters will run amok if Trump loses the election in 2020.

    News flash, Beaker: If Trump loses the 2020 election, Trump supporters will simply shrug and go about their lives

    https://apnews.com/eef251ac02a74cb7ba195f83a9494c45.

    1. If Trump loses the 2020 election, Trump supporters will simply shrug and go about their lives

      If Trump wins 2020, I will shrug my shoulders and go back to life as usual. But as long as the nominee included Warren/Sanders and there was genuine debate over ideas, then I’ll be satisfied. Won’t be happy to see a Biden vs DJT matchup.

      1. But as long as the nominee included Warren/Sanders and there was genuine debate over ideas, then I’ll be satisfied. Won’t be happy to see a Biden vs DJT matchup.

        Agree. I’d like to see a real debate with the best ideas the Ds have. IMO Warren/Gabbard would be better than Sanders, but either way…

  14. It turns out that negative yield bonds are a good support for zero yield assets, like gold. Who’d’ve thunk?

    1. Negative yield on bonds globally pushing up gold prices to new highs
      By: Aasif Hirani
      Published: September 3, 2019 7:06:12 AM
      If growth worries persist due to trade war, gold prices would go even higher driven by large ETF gold holdings

      The price of gold jumped above $1500 when total value of negative yielding debt touched $15 trillion. Out of approximately $30 trillion bond debt, $16 trillion are yielding negative return. Gold is trading at all-time high in over 20 currencies like Indian Rupee, British Pound, Canadian Dollar, Australian Dollar, Russian Ruble, South African Rand, etc.

      Negative yield on global bonds
      Last week, 10-year US Treasury nominal yield fell below 2% and below 0% on an inflation adjusted basis though it bounced back. But this is a warning sign. First time in history, the US 30-year Treasury yield fell below 2% and 30-year Germany Bund is also for the first time offering negative yields.

    2. The Financial Times
      Opinion Markets Insight
      Why central bankers may be hurting rather than helping lenders
      Cutting rates below zero distorts the market for banks and for investors
      Huw van Steenis
      The European Central Bank in Frankfurt © EPA-EFE
      Huw van Steenis 2 hours ago

      As central bankers weigh up cutting interest rates deeper into negative territory, investors should consider when the risks of this trend will begin to outweigh its benefits.

      With almost $17tn of negative-yielding debt already out there, I fear we have already hit the reversal rate — the point at which accommodative monetary policy “reverses” its intended effect and becomes contractionary for the economy.

      Conventional macroeconomic models typically take banks and other intermediaries for granted. As a result, the overall benefits of cutting rates below zero may have been exaggerated.

      Like steroids, unconventional policy can be highly effective in short dosages, but just as long-term usage of steroids weakens bones, so below-zero rates can weaken the financial system.

      1. Negatives yields and even low interest rates more generally can destroy net interest margin for banks and make it very hard to be as profitable as they would like.

    3. The Financial Times
      Opinion FT Wealth
      Rich people are hoarding cash, and wealth managers are getting frustrated
      Some wealth managers are genuinely frustrated that clients think cash is the safest bet in a world of negative interest rates
      Alice Ross
      © PA
      Alice Ross 2 hours ago

      A friend of mine has relatives in Germany who converted some of their not insubstantial family wealth into gold bars and buried them in the woods of Bavaria. This was at a time before negative interest rates so was not a reaction to today’s uncertain global economy, rather mistrust of the financial system in general. Yet it highlights a propensity on the part of the wealthy to hoard that is increasingly frustrating wealth managers.

      High-net worth individuals (HNWIs) — people with at least $1m in investable assets — are increasingly shunning equities. In the first quarter of this year, HNWIs held nearly 28 per cent of their portfolios on average in cash, according to the Capgemini World Wealth report. A year previously, that figure was 27.2 per cent.

      Overall cash holdings of clients at UBS, the largest wealth manager in the world, are now 26 per cent, according to its quarterly investor sentiment survey — up from 25 per cent at the start of the year. Credit Suisse’s chief executive Tidjane Thiam told analysts in July that clients were holding 29 per cent in cash — albeit a slight dip from 30 per cent at the start of 2019. Wealth managers say the uncertain environment for the global economy and the outlook for equities are why clients are keeping their powder dry. More recently, fears over the trade war between the US and China have led some investors to increase their cash holdings: a third of investors in UBS’s quarterly survey thought the skirmishes could last a year or longer, and while 45 per cent thought diversifying their portfolio was the best solution to a prolonged trade war, 37 per cent said holding cash was the answer.

      1. Would you rather lose money in stocks or housing, earn negative yields on bonds, or safely park your money under the mattress?

          1. I tend to think of it as a variant in mattress money, though your point is taken that it is a time-tested safe haven against cirrency destruction.

      2. “Yet it highlights a propensity on the part of the wealthy to hoard that is increasingly frustrating wealth managers.”

        “Hoard”. Note the choice of this word. A substitute word to describe these actions could be “save” or “protect”, but these words have a positive ring to them. As for the word “hoard”, this words projects a bit of negativity, a bit of evil.

        Saving or protecting is seen as “good” if you are doing it but it is seen as “bad” or “evil” if somebody else (who has more money than you do) is doing it.

        1. I think it is a matter of degrees. I’ve always taken greed to work this way. If I don’t share my resources with another because I barely have enough for my own family, that is not greedy or selfish. On the other hand, if I have more than I could ever want/need and I still do not share, then that is greed.

          1. The problem is that big gray area in the middle, where people feel like they barely have enough yet those below them think they have it made. It’s easy to get a lot of accusations of “greed” thrown around really quickly.

          2. The problem is that big gray area in the middle, where people feel like they barely have enough yet those below them think they have it made.

            Good point. In the US, we have traditionally had the “have-somes” (e.g. middle class) interspersed with the “haves” and the “have-nots”. No matter where you are in the social strata, there will always be those above and below you.

            Still, income and wealth inequality is as bad as it’s ever been. That does need to be acknowledged.

          3. Still, income and wealth inequality is as bad as it’s ever been. That does need to be acknowledged.

            Perhaps, but that doesn’t mean it’s due to some evil, or those with well-paying jobs and assets deserve to be punished or have their savings stolen from them.

            Just because inequality exists doesn’t mean it’s wrong or needs to be remedied. Perhaps there’s just a widening divide between those who made good decisions and those who made bad.

            (Note that I’m specifically not going into corruption or legality issues, etc. The .01% is a whole ‘nother issue, but that’s not who the pitchfork-carrying mob is after)

          4. Just because inequality exists doesn’t mean it’s wrong or needs to be remedied.

            Your presumption is that those who are poor have simply made bad choices. In many cases, the worst choice they made was to be born to poor parents.

            Some level of inequality is fine, perhaps necessary. But extreme income and wealth inequality is corrosive and immoral in my view. We have a rigged economy that is not working for the vast majority of Americans. If the rising tide were lifting all ships I would think differently. Unfortunately the rising tide is only lifting yachts.

  15. I take it all back. I’m glad I’m a renter.
    My neighbor is, right now in the middle of the day, arguing with people on NextDoor about guns. All someone did was post that since Walmart is discontinuing carrying ammo, maybe people would like to stock up.
    Anyway, the conversation is deteriorating, and I’m even more freaked out by her than I was before. This is the second time in a NextDoor post that she’s mentioned her CCW and once again, implied that she will shoot someone if she deems it necessary. She also said her great-grandmother killed herself with a gun. She’s nuts – I know from personal experience.
    I hope my idiot cats haven’t left any tootsie rolls in her yard lately – I’m pretty sure I’m definitely in her hit parade top ten.

      1. Hi RR
        No. He’s the one who is convinced my yard is the source of all scorpions in the neighborhood. They are friends (in nuttiness). This one has had her panties in a twist almost since we got here about cat poop in her yard. One of my idiots may be, well, probably is, guilty but there’s plenty of them around.
        She has personal problems – too gossipy to discuss here. One of the other neighbors felt free to tell me all about it even though I had met her only about three minutes before. Echh. So now we stay far, far away from all of them.

          1. I’ll say. I find it fascinating how deadly serious and humorless they are. Maybe we just landed on the bad side of the neighborhood 🙀

          2. Neighbor drama is no fun!

            Don’t get the Next Door app. Takes it to the next level. What FB did to family gatherings ND is doing to neighborhoods.

          3. Agreed. I never joined or have even read Facebook. I said to myself there’s a one way ticket to misery. I read NextDoor for self-defense, as I have nutters surrounding me.
            I think it’s my lack of exposure to FB that makes ND so fascinating to me. My brother said to me yesterday, “What’s the big deal, happens everyday on FB.”

          4. “What’s the big deal, happens everyday on FB.”

            True…but friends and family mostly still want to maintain a relationship and a certain level of civility if possible. And look how ugly it gets with them. This is going to be bad if it gets popular.

          5. Yeah. Instant ugly, without the family bond.
            IDK if it’s been my bad luck, but even face to face contact around here goes south almost immediately (you have to do this, I don’t like that you’re not doing that. etc.) Jeez, how about a few smooches first 🤣
            I met one normal neighbor, very nice guy, older UNLV prof. He also tsk, tsk’d a bit about the local attitude.
            Prices here are dropping steadily. I doubt that will improve the mood.

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