US Housing Is Down For The Count


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    Lewis Wickes Hine Alma Croslen, 3, and mother. Both work at Barataria Canning, Biloxi, Miss. February 1911 Recent news, graphs and data confirm what w
    [See the full post at: US Housing Is Down For The Count]


    ” [snip] since it was crucial to lure mom and pop back in”
    Mom and pop believed the same story as the “bankerz and brokerz” did. The only difference is their relative place in the pyramid, Mom ans Pop are also onn the “credit” side, not on the “debt” side. From the point of view of a bottom “pyramider”, I personally see absolutely no difference between them, even though I acknowledge that debt is driving us all, from the top to the bottom, and no one has a choice but to participate….well, except those who could have the knowledge and also financial means not to participate. But even those are dismayed by how long this has been stretched, ant the consequences of this stretching having occurred at the top of the exponent.

    Do you (and I include Nicole here) honestly still think that preparing for a deflation with the same strategy you outlined since 2008 is still valid? Please be honest, because it is “only” a matter of survival.


    Looks like we’re going to need some amnesty to line up 25 million new household formers at the Fannie Mae FHA money dispensaries, and to help out the present crop of incumbents this election year. Might even fill some zombie properties so even more can be be built in preparation for the Crackup Boom which is sitting on the launch pad awaiting ignition.

    Since forever is considered one 4 year term in the eyes of most pols, why should they worry about the consequences of the increases in population growth upon the existing citizen population and resources.

    The more dependent voters, the better for them. As long as these new dependent voters don’t have access to the passwords of the gated communities in which they reside, the elitist pols will be fine with their new constituency, and will be handsomely remunerated by their Central Banking affiliated sponsors.

    Yet, still, one can hear cries from a marginally oppressed populace for their politicians to “do something.” Really, haven’t they done enough already? How much more micro management can humanity and it’s once vibrant market based economic system endure?

    Stockholm Syndrome ?


    All said, there is no way Yellen and company will let their creation die mid experiment. The nuclear money explosion option will be used first, covered by the wealth and power redistribution instrument of war. The outcome be damned.

    Certainly, any gains in house prices will be absorbed by official carrying costs such as property taxation, more regulatory and utility fee increases,,, the very reason for the Fed induced price supports from the get go. Direct bailouts of States and Municipalities makes for embarrassing headlines.

    And, no, renting is not an escape. Rents can easily be price supported by Section 8 increases, distorting market rents to the upside. This also pleases not only all the mom and pop landlords out there, but the single fastest growing landlord sector, Wall Street. No skin off the nose of the Section 8 tenant, but the minority, the out of pocket renter, pays the freight.

    Interesting. The Individual being the world’s smallest minority, yet .govs universally attempt to crush him in the name of equality?

    Brave new World?

    Diogenes Shrugged

    The patient has been responding nicely to all the drugs, but … wait … oh, my God! Look! The tumor! Oh, my God! No blood pressure!

    From American Banker: “More than 300,000, or 35%, of the roughly 1 million homes currently in the process of foreclosure are vacant and the servicer has not taken title to the home …”

    Why doesn’t Harry Reid get some Chinese fat cats to put solar panels on those houses and buy them up? That would at least avoid the civil war he’s starting in Nevada.

    From Ilargi: “Why are people so averse to even considering that perhaps this is not a long series of mistakes, but instead, a deliberate policy?”

    Would it be too cynical to suggest that all central banking and government “mistakes” are actually part of deliberate policy? I know most people would much rather be called “stooges” than “conspiracy theorists,” but I’m thinking of drone strikes against wedding parties and things like that. I mean, after all, we know something about the kind of morally challenged people running the show by now, don’t we?


    “Do you (and I include Nicole here) honestly still think that preparing for a deflation with the same strategy you outlined since 2008 is still valid? Please be honest, because it is “only” a matter of survival.”

    I don’t at all like suggestions that I wouldn’t be honest. Who do you think you are? And apart from that, p, I posted that graph twice. Which part of it you don’t you understand?

    Diogenes Shrugged

    Ilargi, it’s certainly possible that I could have missed something along the way, but I’m curious where you think the second-safest place to put my savings would be. I assume short-dated U.S. Treasuries are still in first place, but if that investment starts to look risky, where to go next? I’m really, really hoping you say O-motta. “What’s O-motta,” you say? Nothing at all, what’s O-motta with you? Believe it or not, I got that from Eddie Haskell in an episode of “Leave it to Beaver” long ago, and I was just aching to finally spring it on someone. Anyway, please answer honestly :), because I’m not at all sure that hundred-dollar homes in Detroit are the right choice. (By the way, I’m serious about my question, and thanks.)

    Ken Barrows

    The tricks will no longer work once the price of oil that the drillers need exceeds what the economy can bear. They may fail before that point.


    The Coming Mortgage Delinquency Disaster:

    Just look at the two graphs!


    Why HELOC Resets Will Undermine Any Housing Recovery:

    For three years, I have been writing about the looming home equity line of credit (HELOC) disaster. The media pundits paid little attention. Then a Reuter’s article about HELOCs resetting to fully amortizing loans appeared last month. Finally some commentators took notice of the problem. Unfortunately, most pundits have tried to reassure their readers that it will not be much of a problem. One influential writer actually said that many of these HELOCs were already paid off, refinanced or extinguished because of foreclosures and short sales. Really? What nonsense. […]

    You had better prepare for what is coming in the next four years with the HELOC resets. Almost all of these HELOCs are second liens. When the borrower defaults on an underwater property with a HELOC, the loan is not simply written down. It is written off as worthless. Some of the largest banks will regret that they handed out millions of HELOCs during the bubble years.”

    Carlos Jimenez

    Ilargi, just today, while listening to National Propaganda Radio I couldn’t help but smile in listening to this one reporter from “The Marketplace” give a rosy report about the state of R.E. and mentioning only in passing that “Blackrock has cut down a little bit on their property buying”. The level of deceit even in public radio is disgusting.


    ProfLockLoad-“Rents can easily be price supported by Section 8 increases,….”
    Possibly, although with this Congress, I sort of doubt it.

    As a talking point, though, let’s say they (whoever ‘they’ is, lol) figure out how to keep rents high in price. The obvious reaction of the rent paying marketplace will be to avoid new household formation. You can see this is already in play in one of Raul’s graphs, above.

    This lack of new household formation is also a key factor in the decline in new and existing home sales. The key to a robust housing market is the first time buyer. They buy a small starter home. The seller of the starter home moves up to 2000 sq-ft middle class home, and the seller of the 2000 sq-ft place moves up to a 3500 sq-ft dream home. A tiny $10,000 or $15000 down payment starts all that buying frenzy in motion. But today’s young folk have, in their possession, a negative down payment of ($50,000), also called a student loan.



    Treasuries will be less, not more, risky for the near future. Other than that, it’s increasingly what you expect a physical as opposed to a financial return from, i.e. a farm, arable land. I’m still not a gold or silver guy, other than at the other side of the crash, years from now. Gold is for those who can sit on it for 10-20 years, not for those who have to sell it in that timeframe just to survive. And that is 99% of people.


    Raul-“Treasuries will be less, not more, risky for the near future.”

    I disagree. Everyone that has purchased 10-yr treasuries (the USA benchmark, w/ stockcharts symbol $tnx) since Aug. 2011 is even or underwater. Theoretically, you can hold them to maturity, and not lose any DOLLAR DENOMINATED principal.

    But CPI inflation, as it was measured prior to 1980, is running 8.5%, compounded annually. You are getting a small yield, but you will still lose over 6% compounded annually.

    You could argue that there will be a huge crash of 1929 proportions. But in that case, you will probably never get your principal back. Just the opposite, you will probably see a lot of forced savings’ conversions to treasuries. This could be overt, or simply by making the tax consequences prohibitive to do otherwise. I doubt they would ever default on the interest payments, but nothing is certain.

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