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Housing is tricky. To a large extent inventory is low because people can't sell so they take their homes of the market. I did lots of research on this because I was in the market for a purchase but concluded prices were much too high relative to income levels. If you think about it, wages have gone no where in the last 40 years so where does the increase buying power for homes come from. The answer is lower rates, lower down payments and this increase risk.
Yes, wages again have not kept up with home prices that have been going up in many areas over the last 3 or so years. A lot of the homes were being bought by foreign or big investors (Blackrock for example). Fannie Mae was even giving bulk deals at cents on the dollar to get rid of lots of distressed properties. The banks did get smarter and instead of flooding the market with foreclosures like what happened in 2008 and 2009, they are slowly letting the foreclosures out and many are sold without even going on MLS.
There has been some articles out there about how many are now spending almost 50% of their income each month on rent. It used to be they were "house poor" because of this, but now they are "rent poor". What will be interesting is what happens when some of the investors want or need to sell a lot of their properties. Will they flood the market or try and be the first one selling?
Pento's another idiot who keeps predicting massive inflation, keeps being wrong, and somehow maintains credibility among certain circles.
There is massive inflation in some parts of the world. In other parts there is slow, debilitating deflation.
It's easy to predict that historically unprecedented and unsustainable levels of debt will destroy am economy. What is difficult to predict is timing and what will bebthe ultimate effects. One thing for sure, everyone sifters except the top 1% that have billions stuffed away safely in cash instruments.
Yes, wages again have not kept up with home prices that have been going up in many areas over the last 3 or so years. A lot of the homes were being bought by foreign or big investors (Blackrock for example). Fannie Mae was even giving bulk deals at cents on the dollar to get rid of lots of distressed properties. The banks did get smarter and instead of flooding the market with foreclosures like what happened in 2008 and 2009, they are slowly letting the foreclosures out and many are sold without even going on MLS.
There has been some articles out there about how many are now spending almost 50% of their income each month on rent. It used to be they were "house poor" because of this, but now they are "rent poor". What will be interesting is what happens when some of the investors want or need to sell a lot of their properties. Will they flood the market or try and be the first one selling?
I agree. There is lots of illusory wealth and just because someone was able to sell a home in an area to some foreign buyer who is looking to launder money doesn't mean everyone will be able find a similar buyer.
Such a situation is creating havoc in Toronto and Vancouver where local denizens who can no longer afford to live in their homes are declaring these cities the money laundering centers of the world. Of course most is coming from China. Some now have a 2 or 2.5 commute and are paying outrageous prices for food which translates into a lower standard of living.
I expect my funds are covered by FDIC and backed by prudent loanns with reasonable reserves. It's crazy to use taxpayer money to fund wild speculation by Bankers, a game where they get their profits off the top and taxpayers are handed all of the losses. What's going on here?
Bingo. The FDIC coverage is what allows the banks to "get away" with what they're doing. Equity actually is wiped out. But you don't have bankers running for their lives from angry mobs.
Bingo. The FDIC coverage is what allows the banks to "get away" with what they're doing. Equity actually is wiped out. But you don't have bankers running for their lives from angry mobs.
No. What is needed is a wall between commercial speculation and historically prudent lending which the 1930s laws pretty much enforced but which were successfully lobbied away by the banking industry.
Throughout history their have been major bank panics and bank runs and the only thing that can stop it is handcuffs on Bankers. They have to have their hands tied and closely watched. What we have today is a return to the Roaring 20s and bank panics of the 19th century because Bankers paid off politicians to get their handcuffs removed.
Monetary reset is long overdue. New monetary instruments are created and virtually given away to investor class, yet the mavericks are unable to generate the economic growth necessary to repay the windfall.
New Money (i.e. just faith in their value) is supposed to generate enough of Real output giving the value to the new money created. Just like a carrot in front of a mule should encourage the mule to move and do some work. Except, a mule is excited about a real carrots and humans would work for symbolic financial "carrots" backed by nothing except faith in their value.
Issue#1, real goods and efforts expressed in current prices dont offset the "value" of the financial carrot used to encourage laboring. My bet is that Money-Goods-more Money sequence is broken. Investor class invented a cutting edge Money-More Money sequence that doesnt need to interact with real world. All is fine and dandy until somebody start yelling "The emperor is naked".
Monetary reset is long overdue. New monetary instruments are created and virtually given away to investor class, yet the mavericks are unable to generate the economic growth necessary to repay the windfall.
New Money (i.e. just faith in their value) is supposed to generate enough of Real output giving the value to the new money created. Just like a carrot in front of a mule should encourage the mule to move and do some work. Except, a mule is excited about a real carrots and humans would work for symbolic financial "carrots" backed by nothing except faith in their value.
Issue#1, real goods and efforts expressed in current prices dont offset the "value" of the financial carrot used to encourage laboring. My bet is that Money-Goods-more Money sequence is broken. Investor class invented a cutting edge Money-More Money sequence that doesnt need to interact with real world. All is fine and dandy until somebody start yelling "The emperor is naked".
Yes, I agree. The bottom line, and it's not too difficult to understand is that if the distribution of new (free) money is going entirely too the top 1% and they are not creating any new compensatory wealth with it, the the new money merely becomes a transfer of wealth from the middle class to the top 1%.
Indeed, I believe this is the plan all along because it is so obvious what is actually happening, that is, growth is stagnant while the percentage of world wealth owned by the to 1% continues to grow rapidly. We now have a situation where the top 1% own as much as the 99%. A staggering redistribution of wealth occurring entirely within the QE timeframe.
When I read articles about doom projections I think about the quote "my predictions are right, unless they are wrong?"
I think the usual method in this forum by the doomsdayers is "my prediction are right, and if facts shows I'm wrong then the facts are lies."
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