thehousingbubble@gmail.com
Blog

Measures That Facilitate Speculative Activities That Caused The Problems We Are Facing Now

A weekend topic starting with the West Side Rag. “A Q&A With Upper West Sider Paul Krugman: WSR: When and why did you come to live on the Upper West Side? PK: Growing up on Long Island, I always had it in my mind that I’d someday be a New York City intellectual. Somehow or other that got deferred for about 40 years, but I finally managed it. My wife and I acquired a pied-a-terre on the Upper West Side in 2009. This may get me in trouble, but we looked at various parts of the city. We went to the Village and said, ‘We’re too old for this.’ We looked on the East Side and I said, ‘When the Revolution comes, these people get shot first.’”

“WSR: What about people who say we live in a bubble, that we’re detached from the rest of the country? In fact, a few miles from us, people are living in abject poverty. PK: New York is a hugely unequal place. But it is pretty good, by national standards, at making sure everybody gets essential healthcare. And a lot of people rag on Bill de Blasio, but he’s actually built a lot more affordable housing than people realize. But, if you’re the kind of person I am, which is an affluent, New York liberal, there’s always a little bit of guilt about how nice your life is, because you’re aware that other people are suffering.”

The Globe and Mail in Canada. “I predict that Canada’s housing market will crash next year, or in 2021 at the latest. A bold claim, you might think. But if we look at housing booms in the past, each lasted around 10 years and we’re reaching that boom end point in the next year or so. Canada largely survived the 2008-09 housing crash unscathed, which seemed – and still seems – like a good thing until you realize it just means this country has had another 10 years to embed housing assets at the heart of its economy.”

“And this is a major problem. It means people are more in debt than before, with the Canadian household debt-to-income ratio topping 170 per cent in 2018 – and this ratio is more than 200 per cent in Toronto and more than 240 per cent in Vancouver, according to Canada Mortgage and Housing Corp. A slight upswing in interest rates will put a lot of people under financial water, while new policy initiatives to cool overheated real estate markets are threatening the dream of ever-rising house prices.”

“Why might this matter? We have to think about what most people rely on nowadays to support themselves and secure their futures. And the answer is assets – housing assets in particular. It’s no longer our salaries or incomes, nor even our pensions. Rather, Canada has become an asset-based economy in which it’s now a viable choice to buy a house far above your income threshold and sit tight – renting out rooms to pay the mortgage you can’t afford on your own income alone – waiting for its value to appreciate.”

“But there are perils to relying on this sort of economy for our future. An asset-based economy is underpinned by continuous asset price inflation alongside the suppression of income inflation, meaning a rising debt-to-income ratio is built in.”

“Today, though, I think it makes sense to talk of a neoliberal ratchet in which asset prices are continually inflated, pushing the cost of things such as housing further out of reach of more people. So, while neoliberals sought to release markets in order to let them work their magic, paradoxically this had the unintended effect of forcing governments, business and everyone else to pro-actively and continuously raise asset values.”

“It’s increasingly difficult to see how Canada would be able to change economic course without a wholesale restructuring of our personal ambitions and expectations. And no one is going to propose political or economic solutions to climate change that might threaten the wealth tied up in our real estate assets. The current asset-based economy requires us all to protect asset values at almost any cost, so expect to see a range of policies this time next year designed to prop up a faltering housing market.”

From Independent Australia. “With the Government so focused on delivering its much-promised and talked about surplus, Treasurer Josh Frydenberg has begun looking at alternative avenues to stimulate economic growth at no cost to the Federal Budget. The thought bubble goal put forward by Frydenberg was encouraging housing prices to grow by 10% in the next 12 months, in order to promote economic growth through a ‘Wealth Effect.'”

“Aside from Frydenberg’s apparently poor grasp of Treasury research, there is an extremely serious issue with the Coalition’s plans for mortgage holders to come to the economy’s rescue. In the long term, the higher level of household debt that would result from pumping up housing prices would actually substantially damage the nation’s economic growth potential.”

“Rather than simply abandoning the goal of a surplus with little-to-no political cost to the Government, the Coalition is instead encouraging Australians to get out there and bid up housing prices. With the implicit encouragement of Josh Frydenberg that 10% higher housing prices are a goal for the Treasurer to promote economic growth, the allure of such high returns at a time when interest rates are at emergency record lows is too much for some to resist.”

From Malaysia Kini. “Many Budget 2020 wish lists are about the property market. In general, there are two main groups that call for some measures to incentivise the property market and they are the developers and the home investors. All these wish lists are in general but are these wish lists something that the government should fulfil? Aren’t some of these ‘wishes’ the very things that have caused the property market to be overheated (some call it a ‘bubble’)?”

“Essentially, these are all proposed reactive measures by the real estate industry (developers and investors alike) to tackle the overhang issue. But what about proactive measure to avoid this issue from happening in the first place? Fulfilling the developers’ and investors’ wish lists will probably resolve current overhang issues but will definitely contribute towards a greater problem in the near future. These measures are all things that facilitate speculative activities that caused the problems we are facing now. And as a responsible government, the government should no longer encourage speculative activities in the real estate market.”

The New York Post. “Stock up on canned goods! Ship your kids out of town! The apocalypse is upon us. Manhattan apartment prices are falling, a sure sign that streets will soon run with blood and The Bronx will burn anew. Brokers and media pundits have termed the situation a ‘free-fall,’ ‘a bloodbath,’ ‘the worst since the 2007 crash’ and ‘a harbinger of a new recession.'”

“But falling prices of luxury apartments are hardly unique to the Big Apple. They’re struggling everywhere, including in the Miami area despite a mostly mythical ‘exodus’ of New York money there.”

“Few New Yorkers will lament the sag if means the oligarch bubble has burst. Manhattan homes aren’t selling for less because of dirtier streets — the highest-end buyers don’t walk the sidewalks like the rest of us if they’re in town at all. It’s rather because the loose change dropped by foreign zillionaires seeking ‘safe haven’ investments is finite.”

“The slump is supposedly different than previous ones because it also hit ‘cheaper’ apartments under $5 million. Sales fell by 4.7 percent in the ‘modest’ $1 million to $2 million range. But unless the bottom truly falls out — which isn’t remotely the case — the market fluctuation is a good thing. What’s a bummer for sellers is a feast for affluent renters — people who actually reside, work and raise families in the Big Apple but can’t afford to buy.”

Related Posts
This Post Has 80 Comments

  1. “Douglas Elliman and Knight Frank presented the key findings of The Wealth Report and a panel discussion with U.S. and international luxury real estate professionals. Douglas Elliman Executive Chairman Howard M. Lorber said a problem in the Hamptons luxury market has been huge discounts from original listing prices. ‘People always say, ‘What’s the discount?’ The problem is, when people look at discounts, they figure in houses that were overpriced by 50 percent or more,’ he said. ‘And then, all of a sudden, when they sell for 50 percent less, they’re saying, ‘Well, that’s the discount.’ We know that’s not the discount. Discounts are more in line with 10, 15 percent.'”

    “According to Mr. Lorber, when a seller wants to put an inflated price tag on a property, a good broker will try to bring the seller down to reality. But they are not always successful. He said he can think of three or four examples of homes in the Hamptons that stayed on the market forever before finally selling for much less than the asking price. One was asking $75 million — and sold for $30 million. It never should have asked $75 million, he said, adding, ‘It wasn’t even on the ocean.'”

    “He said that while prices have adjusted downward, ‘nobody is giving anything away.'”

    http://www.27east.com/news/article.cfm/East-End/607245/Wealth-Report-Outlines-Both-Global-Concerns-And-Encouraging-Signs

  2. ‘We looked on the East Side and I said, ‘When the Revolution comes, these people get shot first’

    ‘WSR: What about people who say we live in a bubble, that we’re detached from the rest of the country? In fact, a few miles from us, people are living in abject poverty. PK: New York is a hugely unequal place. But it is pretty good, by national standards, at making sure everybody gets essential healthcare. And a lot of people rag on Bill de Blasio, but he’s actually built a lot more affordable housing than people realize. But, if you’re the kind of person I am, which is an affluent, New York liberal, there’s always a little bit of guilt about how nice your life is, because you’re aware that other people are suffering’

    ‘ The basic point is that the recession of 2001 wasn’t a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.’

    ‘From Paul Krugman, “Dubya’s Double Dip?” New York Times, August 2, 2002.’

    https://www.econlib.org/archives/2011/08/paul_krugmans_s.html

    1. September 24, 2019

      The Brooklyn Eagle in New York. “Mega-developer Toll Brothers admitted to the state’s ethical oversight commission in July that the company had illegally donated $25,000 to Mayor Bill de Blasio’s not-for-profit ‘Campaign for One New York’ at a time when the developer was working to develop a hotel and condo in Brooklyn Bridge Park. The NYS Joint Commission on Public Ethics fined Toll Brothers $15,000 for the donation at the time the city was overseeing approvals for the 1 Hotel and Pierhouse complex. Toll Brothers has agreed to the fine and has waived its right to appeal.”

      “The donation was just one of what appears to be a pattern of solicitations by de Blasio from real estate developers seeking to do business in the city. Another developer, an affiliate of Park Tower Group Ltd. also agreed in July to pay penalties for illegal donations to the mayor’s Campaign for One New York, as did Brookfield Properties. According to its settlement agreement, Park Tower Group was seeking to develop Greenpoint Landing in 2015 when a senior executive of the company was asked to meet de Blasio and one of his campaign officials, Russ Offinger.”

      “Brookfield Properties, which has developed many Brooklyn sites including MetroTech Center, was found to have donated $50,000 to the mayor’s not-for-profit, at a time when it needed city permits to develop Manhattan West in the Hudson Yards. The company was fined $30,000.”

      “‘My first thought was corruption pays: Toll Brothers make an illegal contribution, gets fined $15k and is allowed to double the size of the building,’ Save the View President Steven Guterman told the Eagle. ‘They likely made an addition $300 million in profits while stealing the view of the Brooklyn Bridge from the tourists and residents who walk along the promenade. The fine is a joke relative to the benefit they received. Furthermore, why wasn’t our mayor charged with anything? He was on the receiving side.’”

    2. affordable LUXURY housing, instead of paying $2400 a month a few will be set aside at $1750 a month but only if you are both working and make withing a certain range….if you make too little you cant even apply.

    3. ‘And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.’

      How did that work out for the bubble blowers at the Fed?

    4. Eee-bola is striking luxury housing globally. I believe this includes much of NYC.

      The Financial Times
      Opinion Property sector
      Luxury real estate has a long way to fall
      The commercial market, which has been in a bubble for some time, is finally deflating
      Rana Foroohar
      Real Estate Rise and Fall
      © Matt Kenyon
      Rana Foroohar
      4 hours ago

      Luxury real estate is over. I hate to say it and — as someone who has a large percentage of her net worth tied up in a Brooklyn townhouse — I’m talking against my own book. But it is true.

      For years, cities including London, New York, San Francisco and Los Angeles, have been largely disconnected from national property market trends. Such places seemed to be a class by themselves, buoyed by being at the right end of a bifurcated global economy. Former New York City mayor Michael Bloomberg once likened the Big Apple to a “luxury product” for which people are prepared to pay an exorbitant premium.

      Except they aren’t any more. The prices of luxury apartments in Manhattan are falling for the first time in 10 quarters, and it’s the fastest annual drop since 2011, according to Miller Samuel, a New York-based real estate consultant.
      …

    1. I need to reread that, slowly. Here a related essay by Matt Bracken titled Covington Gives a Glimpse of Civil War Two published earlier this year:

      http://freerepublic.com/focus/f-news/3723966/posts

      This was originally published on the American Partisan website but the link is broken.

      Real journalists, members of academia, and all the Twitter blue checkmarks, sorry, but you don’t get to script the narrative…

  4. ‘Today, though, I think it makes sense to talk of a neoliberal ratchet in which asset prices are continually inflated, pushing the cost of things such as housing further out of reach of more people. So, while neoliberals sought to release markets in order to let them work their magic, paradoxically this had the unintended effect of forcing governments, business and everyone else to pro-actively and continuously raise asset values’

    I’m not sure this writer knows what neo-liberal is. Neo-liberal is what the globalists call themselves. And globalists, which include central bankers, have set upon this asset based economy thingy for decades. It stumbles, and they gnash teeth, like Krugman, “oh we need a new bubble!”

    We’d be better off is we told them all to go pound sand. Looking back, was the dotcom bubble so bad? Or was it something that was bound to implode? These idiots think the world revolves around us filling up our garages with Chinese junk.

    1. Neo seems to be a tag indicating that the group its affixed to is being co-opted only to further its goals.

      Neo-conservatives – Wolfowitz, Kristol et. al. who felt that endless wars were the solution to everything
      Neo-liberals – Friedman, Krugman et. al. who feel offshoring all your manufacturing and importing millions from the third world will somehow lead to societal nirvana.

      Interesting theory one can apply to other Neo-groups as well, no?

  5. “These idiots think the world revolves around us filling up our garages with Chinese junk.”

    Their world does, thus their efforts to end the Us/China trade war. Their investments are in China or countries which supply China with raw material. China goes down and so do their assets.

    2. Yesterday I saw a headline that said, “US unemployment falls to a 50 year low, in spite of the trade war”. What if it is because of the trade war, along with pro-manufacturing policy, etc?

      1. “I saw a headline”

        Real journalists.

        At what point (if ever) will they realize that they’re gonna have to come up with something more substantive than Orange Man Bad?

      2. I suppose real journalists don’t realize that if you cut imports of stuff people need, then that same stuff has to be made by workers at home, which would require U.S. workers to make it.

        It doesn’t seem all that complicated, but then I am not a real journalist.

        1. Boo that is a good read. BTW 401, Bracken’s books will from time to time be offered for free. Krugman’s quote about revolutions is telling.

  6. ‘With the Government so focused on delivering its much-promised and talked about surplus, Treasurer Josh Frydenberg has begun looking at alternative avenues to stimulate economic growth at no cost to the Federal Budget. The thought bubble goal put forward by Frydenberg was encouraging housing prices to grow by 10% in the next 12 months, in order to promote economic growth through a ‘Wealth Effect.’

    Here we see the REIC hypocrisy. The Australian media has been on a non-stop blitz to restart their bubble. And the central bank/government too. Now this is after years and years of whining, “oh we need to build more shacks so prices come down!”

    Then when price do fall, they wet themselves. Just like California: how many tear-jerking columns and editorials over the years and chin stroking economists telling us we have to live in shipping containers and build 50 airboxes on a quarter acre or live in bunk beds with strangers, cuz that’s just supply and demand! Then prices fall and “waaaah”!

    There’s no shortage of land, no shortage of shacks. We read glut and oversupply more than anything nowadays. This is all a gigantic scam, taped together with phony Yellen bucks, subprime loans and REIC lies.

  7. From the previous thread:

    Professor Bear
    October 6, 2019 at 8:59 am

    “I have a hard time imagining the male half of the electorate backing Warren. What self-respecting man would vote for her?”

    They won’t. See also partial transcript of Warren’s speech in New York on September 16:

    “So I am especially glad to be here in Washington Square Park. I wanted to give this speech right here and not because of the arch behind me or the president that this square is named for, nope. We are not here today because of famous arches or famous men. In fact, we’re not here because of men at all.”

    1. Poor George Washington must be rolling over in his grave, especially given the ginormous Warren banners that were unfurled across the face of a monument to honor his* contributions to the founding of our country.

      * Little-known fact: America’s Founding Fathers are all dead white men.

    2. “I have a hard time imagining the male half of the electorate backing Warren. What self-respecting man would vote for her?”

      I’m not sure what kind of man would vote for her but the first 2 minutes of this video have me thinking the kind of man who married her was trying to hide something else.

      Elizabeth Warren’s husband speaks out in rare interview

      53,023 views•
      Sep 30, 2019

      https://www.youtube.com/watch?v=uHY5LjTqxvY

        1. It’s not so much what’s said but how it’s said and their interactions. A transcript wouldn’t be sufficient and watching it without sound wouldn’t be sufficient either. Either watch it and prepare to gag or pass.

          1. I didn’t find anything out of the ordinary. Seemed like a normal, if quirky relationship. Warren’s husband seems like a stereotypical scholar and likely an introvert who probably is a bit uncomfortable with the spotlight.

    3. Bernie’s ticker is ticking toward midnight and Biden has too much baggage. Warren will be the nominee. IMO the election will ride on Warren’s choice of running mate. 100% he/she/ze will be a POC to bring out the Obama voters. My guess is Booker.

      I would have voted for Warren in 2016. Say what you will about her background, she was an advocate for the middle class, especially in banking. She, unlike Obama, would have put bankers in jail. If she goes back to her roots and builds a platform based on helping out the middle class, I might consider voting for her. But I refuse to play the identity politics game, and open borders are the opposite of what the middle class needs. Who’s going to do the jobs that Americans won’t do? Americans, that’s who.

      1. Some on the left are having a meltdown over this: https://www.yahoo.com/news/ellen-degeneres-george-bush-cowboys-game-105057504.htm

        The left still does not understand how it has been played. Bush and Obama shared the globalists’ agenda. Open borders and world trade matter to them, abortion and gay rights were just issues to divide and prevent people from seeing how their economic futures were being stolen. The left use to be against multinational corporations, and labor unions were staunch opponents of massive immigration due to its impact on wages and the ability to organize. Somehow the MSM was able to really dumb the leftist down.

        2. Somehow the MSM was able to really dumb the leftist down.

          It’s amazing what hatred of the other side can accomplish. With any group.

          1. There is a non-partisan group that I came across a couple of years ago entitled Better Angels. Their entire goal is not to make people on the right agree with the left or vice versa, it is simply to try and get people of different political viewpoints to get the other side to agree that the opposing side isn’t the enemy. It struck me as a worthwhile goal in a healthy, functioning democracy.

          2. For a while I had registered the domain and social media pages for BlanketParty.org. Half-joke, half-serious idea for creating a group/party that if nothing else could agree on dislike of politicians that make choices for their own convenience that actively hurt the country. Based on the idea of an old school military blanket party for people who are hurting the group. Decided not to waste effort on it :-).

          3. Based on the idea of an old school military blanket party for people who are hurting the group.

            I like the idea. It reminds me of the premise of Independence Day (old movie with Will Smith). The central theme is that the only way the world unites is in the face of a common enemy. I guess we just need to be invaded by aliens.

  8. I was thinking about that LA “mansion” in foreclosure I posted in the comments last night, with the filthy carpets. I mentioned that it took me back to the foreclosure biz. But we would never have listed a shack with those carpets. They hadn’t even been cleaned. It couldn’t cost more than a few hundred dollars. Carpets that dirty stink. And this lender wants over a million? The paint too. We almost always would at least slap some paint on a shack that was peeling as bad as that one.

    Either they are approaching things completely different, or that lender is broke.

    I’m not saying we always replaced or cleaned carpets. But at least we would tear it in that condition. But I’d bet those carpets just need to be cleaned from the photos.

    1. Either they are approaching things completely different, or that lender is broke.

      Anecdotal, but it makes you wonder what’s percolating under the surface (and going unreported). The Fed extending its repo liquidity operations through November 8th is also highly irregular and looks like a finger-in-the-dike measure on top of the “emergency measures” that have been going on for the past ten years.

    2. The ceiling in the kitchen was ripped out. Makes me think there was water damage, and maybe that affected the carpets too. What turned me off was the lawn. Obviously the place hadn’t been taken care of in years.

      I not longer wonder that banks allowed deadbeat FBs to stay in the houses for years without paying the mortgage. The cost of repairing an abandoned house is more than the banks lost on the mortgage.

  9. “Canada has become an asset-based economy in which it’s now a viable choice to buy a house far above your income threshold and sit tight – renting out rooms to pay the mortgage you can’t afford on your own income alone – waiting for its value to appreciate.”

    At what point did the California household path to real estate investment riches get exported to Canada?

  10. ‘And then, all of a sudden, when they sell for 50 percent less, they’re saying, ‘Well, that’s the discount.’

    What happened to all the bid wars?

    1. “ In fact, buying at current prices could easily result in losing $100,000s if prices revert to historic levels relative to incomes and rents.”

      The median home price in Greensboro NC is 147K$. So losing $100,000s on a house in Greensboro is probably actually quite difficult. The median household income in Greensboro is 41K$ so the median home price is in the range of historical norms. So the rent vs buy decision is a bit more nuanced than it would be for bubble zones like California.

      1. Fair enough.

        Given how far and fast California prices have risen from 2012 to the present, it will likely be a long, fast ride down from the temporarily high plateau to the bottom.

        1. PS Needs to say, $147,000 will not get you into a house in coastal California. It will, however, cover five or more years of rent on a good enough house.

          2. But NCsteve was asking about Greensboro not Santa Monica or Malibu. After living for 20 years in CA it’s hard to imagine places where you can buy a decent house with 3x income but they are out there. And apparently Greensboro is one of them.

          3. And remember…. 3x annual income is 50% higher than long term trend.

            2.5x annual income for new

            2x annual income for resale

          5. It applies in most cases. I remember Muggy, the teacher who lived in Pinnellas county FL. Despite grousing HBB, he finally bought the house he was renting. At the time, small 3-bed shacks in Pinnellas were ~$150K. That is not unreasonable. It’s less than 3x income for a teacher, and an even better deal if his wife worked (which I believe she did). No it’s not a mansion. But he was a teacher, not a CEO. Even in my nabe, houses are attainable for a household making $100K. Again, that’s two teachers. It’s doable.

          7. MB I am not sure what you mean by long term but since about 1970 housing prices have averaged between 3-4 times income in the US. Before the GSEs etc maybe it was lower. It’s possible we will go back to preGSE prices but seems unlikely to happen in the foreseeable future. Unless there is a systemic collapse that wipes out the entire financial system…which, true, is not beyond the realm of possibilities. But timing those kind of events is notoriously difficult and the best you can do is to be prudent and make sure you have a back up plan rather than putting your entire life on hold and betting your nest egg on timing a systemic collapse.

          8. Just to clarify I am using median income. Mean (or average) income in higher than median so the ratio would be lower if you use the mean rather than the median.

          9. John G don’t forget interest rates. The real constant — at least pre-bubble — has been the ratio of PITI to income. ~28% to be exact. In fact that’s all the 2x 3x is, a quick and dirty means to calculate a house price where the PITI is 28% of income.

            Mafi seems to think that interest rates are still 8%.

          10. a house price where the PITI is 28% of income

            Banker’s Rule of 28.

            Based on this no sane banker would lend you the money to buy a house over 3 x your gross income. Even at 3 x, after maintaining the house, paying income taxes and a car payment, you’d be living in poverty Mr. & Mrs. Median

        2. I am waiting and waiting for this. Seems like the market here in Placer County has just completely stalled out. Inventory higher than normal. Many houses sitting. It’s like a stand-off between sellers and buyers.

      2. Just in case anyone else is interested to see what a median priced home looks like in Greensboro here are a couple picked off realtor.com.

        https://www.realtor.com/realestateandhomes-detail/810-Valley-Oak-Dr_Greensboro_NC_27406_M59979-23953?view=qv

        https://www.realtor.com/realestateandhomes-detail/4808-Yellow-Locust-Dr_Greensboro_NC_27455_M92839-35984?view=qv

        For Californians this is what you can buy in Greensboro for equivalent of a median priced home in CA.

        https://www.realtor.com/realestateandhomes-detail/5000-Quincemoor-Ct_Greensboro_NC_27407_M57868-86218?view=qv

        https://www.realtor.com/realestateandhomes-detail/1604-N-College-Park-Dr_Greensboro_NC_27403_M65377-94958?view=qv

        https://www.realtor.com/realestateandhomes-detail/807-Blanton-Pl_Greensboro_NC_27408_M57798-46103?view=qv

        https://www.realtor.com/realestateandhomes-detail/8408-Lillys-Ct_Greensboro_NC_27455_M52500-16571?view=qv

        What that buys you in San Diego.

        On busy street in college/La Mesa area.
        https://www.realtor.com/realestateandhomes-detail/3664-College-Ave_San-Diego_CA_92115_M25483-76255?view=qv

        https://www.realtor.com/realestateandhomes-detail/3585-Boston-Ave_San-Diego_CA_92113_M20687-78096?view=qv
        National city two blocks from the freeway.

        2. John G, thank you for looking all this up. I’ve done the zillow thing myself and I appreciate the time it takes to assemble those links into a post (and for Ben to moderate!)

          1. Guilford County
            Textile, apparel, Mack Truck, Volvo Trucks, Lumber/forest products. Looks like a hub for US textiles.

          2. Very little with high paying jobs to sustain the mortgage payment on a $500k house. Hence why you get more for the money. No free lunch. Good if you can telecommute, until they realize someone from India/Philippines can also telecommute to your job.

        4. Damn, that 1926 Italianate home on College Avenue is a masterpiece. It would be a great place for a FAANG programmer to W@H and for wife to “entertain.” Of course, I’d spend a $10K just getting all the wallpaper off the walls. (unless it was original, in which case it would stay.)

        5. Okay, I’m clearly being a dumb dumb, and missing something obvious here — why aren’t any of the Greensboro listings showing the square footage of the house, only the size of the lot they’re on?

          1. Yeah, that’s weird. You have to look deep into the listing to find a range(?) of sq ft. FYI Zillow has sq ft front and center. The 1926 Italiante on College Park Drive is 3233 sq ft.

    1. “As one homeowner laments, I took out a HELOC to pay for acting classes and a boob job for my stripper girlfriend. Now she’s dumped me and I’m underwater.”

      There.Fixed it for you.

      1. one walked away from the relationship with bigger boobs and the other just walked away a bigger boob.

  13. ‘SoftBank is under fire, with a prominent Silicon Valley venture capitalist querying the way the $97bn (£79bn) mega-fund behind the WeWork debacle proposed to pay investors returns.’

    ‘The charge was levelled by Chamath Palihapitiya after part of a SoftBank investor presentation was put online.’

    ‘The post showed SoftBank offered to pay a fixed return to preferred investors, but this might come from their cash, not from growth in the value of companies in its Vision fund. In effect, investors would be paying themselves. Palihapitiya tweeted: “SoftBank Vision Fund is essentially running a Ponzi scheme if this is true.”

    https://www.thetimes.co.uk/article/warning-from-venture-capitalist-chamath-palihapitiya-on-softbanks-payments-to-investors-78q6mgmk3

    1. I kind of always thought that is what the WeWork valuation was based on. I mean, they kept ratcheting up their valuation based on consecutive funding rounds. But as far as I can tell, the performance was contrived because SoftBank was simply buying at loftier valuations and then making the case that since their earlier investments were worth so much more because they had purchased later. It boggles the mind.

      1. Executives are saving their ego. They can’t admit that they threw bad money at a scam, so they throw more good money after the bad to justify their earlier mistake.

        1. I agree. It’s a classic sunk cost fallacy which is very easy to fall prey to, in investments, relationships, etc.

  15. “Paradoxically this had the unintended effect of forcing governments, business and everyone else to pro-actively and continuously raise asset values.”

    If you could be magically transported back to fall, 2008 and ask Paulson, Geithner and Bernanke what they hoped to achieve, what the world would be like in 2019, I guarantee that this isn’t it.

    They might rationalize it after the fact. That’s human nature. But if they could have seen the future back then, I’m sure they would have been shocked and disappointed.

    1. But if they could have seen the future back then, I’m sure they would have been shocked and disappointed.

      Really? Either I’m way too cynical or you are not nearly cynical enough.

    1. This is funny,

      On some main stream news article this morning they said in summary that Warren and Sanders were being counseled by a couple of French economists.

      In essence they said that Globalism doesn’t work. Further they said that the policies from the 50’s and 60’s were the most favorable for income equity.

      Those were the days in which they would give tax write offs if business invested in the USA work force.

      It cracks me up that this isn’t obvious, and this is what I preach all the time.

      You got to penalize Companies that outsource jobs and manufacturing . To try to charge them a wealth tax after the fact is stupid.

  17. “My wife and I acquired a pied-a-terre on the Upper West Side in 2009.”

    I thought those were for the mistress?

  18. You got to penalize Companies that outsource jobs and manufacturing . To try to charge them a wealth tax after the fact is stupid.

    One good GOP idea that never saw full implementation is the Destination-Based Cash Flow tax:

    https://en.wikipedia.org/wiki/Destination-based_cash_flow_tax

    It would have effectively aligned incentives such that companies couldn’t offshore their profits and the creation of their goods while still taking advantage of selling to the US consumer base.

Comments are closed.