patrick.net

control point says

This means that what you are saying - when money supply grows faster than the economy, inequality increases - was not observed from 1947 through 1972. 25 years. Reference earlier graph - inequality fell consistently over that time period.

Money supply grew barely if at all during that period, only towards the end it accelerated. If you assume some delay for velocity and then look at the continued much higher growth of money supply into today, then the trend stays intact IMO. If you look at 2008 inequality was shrinking fast until QE was announced and started. Surely there are other factors, but injecting money at the top (banks) will always disproportionally benefit the wealthy, why do you think they didn't send the money directly to the middle class instead?

control point says

This means that what you are saying - when money supply grows faster than the economy, inequality increases - was notht observed from 1947 through 1972. 25 years. Reference earlier graph - inequality fell consistently over that time period. QED, you lose.

Where it is accentuated as during the 20s and since 2008 is where the rich can invest ahead of inflation.

control point says

By the way velocity is a useless point. It is calculated, GDP/Money. No shit money velocity fell during the recession - it would have with zero money supply growth.

Then why is it so low now with 6 trillion dollars printed.

control point says

Just give up. This is why I wasn't going to pull up the data - because no matter how hard it slaps you in the face you never give up your blind faith in the cult. You are doing EXACTLY what you accuse of others.

Why you are clearly better with the math and graphs yet I disprove your ideas.

mell says

Money supply grew barely if at all during that period, only towards the end it
accelerated.

The graph I posted shows otherwise. Consistently steeper slope for money supply growth than GDP.

mell says

Surely there are other factors, but injecting money at the top (banks) will
always disproportionally benefit the wealthy, why do you think they didn't send
the money directly to the middle class instead?

Except for 1947 through 1972 as shown.

indigenous says

Then why is it so low now with 6 trillion dollars printed.

Because money supply and GDP growth are not correlated.

indigenous says

Why you are clearly better with the math and graphs yet I disprove your
ideas.

This is a joke. You can take a student to class but you can't make him learn. Thanks for playing, but I view this as a two way street - I learn, I teach. I can do neither with you so I give up.

control point says

Because money supply and GDP growth are not correlated.

No we are talking about inequalitycontrol point says

This is a joke. You can take a student to class but you can't make him learn. Thanks for playing, but I view this as a two way street - I learn, I teach. I can do neither with you so I give up

Don't flatter yourself you just fade away like you always do.

sbh says

control point says

because no matter how hard it slaps you in the face you never give up your blind faith in the cult. You are doing EXACTLY what you accuse of others.

Can I get an AMEN!

I dunno. Did the State tell you that you may have an AMEN! Yet?

Blind faith in the cult lol

indigenous says

Don't flatter yourself you just fade away like you always do.

I fade away when I decide it doesn't look good to argue with retards anymore.

control point says

I fade away

Yea that is what I'm saying

OK Who had Cluster Fuck?! Anyone have "Cluster Fuck" for the "I bet Obamacare turns into..." Pool?

It's all a consipiracy that will end in death camps in swiss alps when these "employees" will be screened for the perfect specimen to be beheaded to receive the frozen head of adolph hitler. Then, you will see your "death panel."

It's all Obama's fault!!!

APOCALYPSEFUCKisShostikovitch says

What's the penalty for lying? I am running a business, what else am I going to say but THE GOVERNMENT IS RAPING ME, RAPING ME, I TELL YOU, I CAN'T DO ANYTHING BUT SHOOT EVERY EMPLOYEE AND SHIP EVERY LAST JOB TO INNER MONGOLIA just to survive the next quarter!

When a businessman makes a profit, it's due to hard work. When he loses money, it's the government's fault because they banned slave and child labor.

Everyone knows that!

Nothing will change until gene mutation ensures that there's only 1 fertile king, 1 fertle queen and everyone else a drone who will work for the colony.

CaptainShuddup says

OK Who had Cluster Fuck?! Anyone have "Cluster Fuck" for the "I bet Obamacare turns into..." Pool?

The problem is that the reform ran contrary to what's expected in darwinian paradise. These social engineers had the audacity to expand coverage when in reality they should have taken the opposite approach and started denying access to emergency rooms....

Why does the government need to set up Death Panels, when private insurers can deny care more efficiently?

Generalissimo Monsignor Cabron says

Why does the government need to set up Death Panels, when private insurers can deny care more efficiently?

And when hospital corporations can kill you more profitably. Even more efficient: drug companies can chemically induce people to kill themselves.

We need to define what a sick housing market is. I would argue that it means something other than an organic real estate market (regardless of what prices are), but most people in government, the finance/real estate industry, and the media use that term solely to mean that prices aren't rising.

An organic real estate market has pricing and valuation such that new home buyers are able to buy and existing home buyers can move up. It shouldn't have undue subsidies (as is the case currently) or ridiculously loose credit (think the recent boom cycle)

If you believe in an organic housing market, foreclosures after a large boom are good because they lead to more accurate pricing and provide restorative pressure to get back to a normal market. If you are a typical government, realtor, or media person, foreclosures are bad because it means a lower-priced sale has been recorded on the books. We should have had more foreclosures and short sales, but we didn't because of various subsidies and regulatory efforts to stop them. These subsidies and regulatory efforts prevent us from having an organic market and mask the "sickness."

Investor home sales are a symptom of the overall subsidies and distortions affecting the housing market right now. There should be fewer investors, but interest rates are very low, and institutional and other large investors are borrowing money cheaply and looking for yield.

Generalissimo Monsignor Cabron says

Something tells me the young generation won't be paying the boomers the prices they demand for their shacks.

Either the boomers will rot in place, with special property-tax grandfathering giving them 1990 taxes on their 2025-priced houses, or they will sell at much lower prices, as in: prices the younger generations can actually afford.

Unless there is wage inflation - hahahahahaha! - I see no sale at current prices.

That is a factor no one is paying attention to; no one can make generation Y buy homes at artificially inflated prices. The boomers can only trade up between each other for so long before they will need first time home buyers to enter the market. I've seen so some $800,000 homes labeled as "great starter homes" by the real estate agent. Just many subtleties that show the complete disconnect the people in real estate have with reality.

corntrollio says

An organic real estate market has pricing and valuation such that new home buyers are able to buy and existing home buyers can move up. It shouldn't have undue subsidies (as is the case currently) or ridiculously loose credit (think the recent boom cycle)

If you believe in an organic housing market, foreclosures after a large boom are good because they lead to more accurate pricing and provide restorative pressure to get back to a normal market. If you are a typical government, realtor, or media person, foreclosures are bad because it means a lower-priced sale has been recorded on the books. We should have had more foreclosures and short sales, but we didn't because of various subsidies and regulatory efforts to stop them. These subsidies and regulatory efforts prevent us from having an organic market and mask the "sickness."

But what about the politicians? The budget would have to reflect the true health of our economy, and those poor politicians would never get voted in again. The ignorant majority need to see good numbers right now, at any cost. Long-term stability is not even on their radar. Do you want those poor politicians to loose their jobs? What about the real estate agents? What about the people who dream of flipping their homes and living off the sale? Some people are born lazy, it's not their fault. Do you really want to take away their right to sit on their butts? Have a heart.

Paying cash for investment is OK if you bought for 10% of asking price.

To those that take a mortgage & then rent,how long before you build any equity? How much of the payment is interest? Oh,that's right after 5 years you paid $3.75 in principal.

another (more objective) way to look at this: investors and equity firms are a lot more savvy than the average joes. if they jump in the market must have bottomed. just because most people are fearful or unqualified doesn't the mean it isn't a GREAT time to buy. face the reality!

Call it Crazy says

Experts warn fundamentals just aren't there

by the time fundamentals are there, prices are no longer a bargain. that's how the market works. you buy when nobody wants to buy.

Everything is artificially inflated. A good time to buy is when things look less volatile. Investors were dead wrong before the crash, I am not gambling that they are right this time.

Also, all this speculation on why homes are not moving off the market even though inventory is low? How about a simple answer? The prices are still too high and too risky.

These two charts sum it up http://patrick.net/?p=1237918

These "Investors" are slimey parasitic middle men, usually bankers and hedge funds who use fed induced printed money to manipulate the market and in the end produce nothing. Their greatest aspiration (they get insanely excited about this) is to flip properties as soon as they can and stick a young family or some poor sap with their "profit" bill (added in along with the realtor fee as part of the family's 30 year mortgage) Please never buy or rent from these bloated pigs.

sbh says

Hey ListingAtHalfMast,

Did you re-do your double up on your double down?

I'm back to even from your look-out-below call of the century. Neener, neener, neener.

Thanks for not selling, makes the cost of shorting the shit out of this market much cheaper to me. Every cent I am saving from renting from the owner is now going on the short side. I'm talking 100's of thousands of dollars over my time in the crappy SFBA. The banquet is starting soon, hope you find a seat.

donjumpsuit says

I am gambling that

1. Rents will crater when the amount of available rentals increases due to new construction of multi family dwellings comes to market, or investment properties bought to be rented are advertised.

2. Interest rates will rise and ruin the current flipper business, making it undesirable to purchase a distressed property for the purposes of making a quick profit.

3. Something terrible will happen that forces the banks to liquidate or deal with the amount of distressed properties on the books.

4. In 5 to 10 years, house prices will remain at this exact pricing, yet incomes will double based on how the financial system is acting.

1. Why would that help you? You are only paying $1000 ($2000 with the other person) on a property worth $600,000. That sounds pretty low. And do you really think rents will collapse? Is there anywhere that that has happened?
2. Maybe rates will rise. Maybe flipping won't be attractive, though I'm not sure of what importance you think that latter aspect is.
3. They've dealt with the inventory pretty well so far. Things are obviously better than they were 4 or 5 years ago, so that sounds like a large dose of wishful thinking on your part.
4. They may or may not be at this exact pricing, though I'd bet a lot of money on the fact that if salaries do double in that 5-10 year time period (they won't), then they will be substantially higher. Even if houses simply track inflation (and that isn't an unrealistic expectation if salaries follow the same path), then at the very least sale prices will be higher though not necessarily in real terms.

hrhjuliet says

The prices are still too high and too risky.

May be the cash rich Chindians have finally figured that out.

The Professor says

If the government would openly investigate, most "truther bullshit" would
disappear

You're kidding right? Any government investigation would be immediately disbelieved. There are always "discrepancies". Most of them are easily explained, but that is irrelevent. That's why it's pointless--no matter how much effort is expended to refute the truthers, it will never be enough.

Exhibit A: bgamall.

bdrasin says

I'm afraid I have to agree, at least for the places I've been looking. Rents are pretty much in line with mortgage payments

Mortgage payments assuming 20% down? That's quite possible, but mortgage payments are not the only cost of buying a house. If you internalize the true cost (including taxes, insurance, transaction costs, opportunity cost, maintenance, etc.), then that's probably not the case everywhere. Nonetheless, part of the issue is that people are having trouble with rents too due to the weak economy, and the move-up market seems to be relatively dead.

Bigsby says

They may or may not be at this exact pricing, though I'd bet a lot of money on the fact that if salaries do double in that 5-10 year time period (they won't), then they will be substantially higher. Even if houses simply track inflation (and that isn't an unrealistic expectation if salaries follow the same path), then at the very least sale prices will be higher though not necessarily in real terms.

It's not particularly controversial to suggest that prices could stay flat while incomes catch up. Look at the 1989-1990 peak and then look at the bust through the early 90s until 1997, particularly in California.

Mark D says

another (more objective) way to look at this: investors and equity firms are a lot more savvy than the average joes. if they jump in the market must have bottomed.

Investors and private equity definitely don't always get it right. Look at the story of Stuyvesant Town in New York, where Blackrock and Tishman Speyer put miniscule amounts of money down and then walked away. The whole boom/bust cycle shows you they don't always get it right. The investors jumped on this stuff a few years ago, so even if the market bottomed then, it's not at bottom now, so I'm not sure why this matters. Simply not being right at bottom isn't a buy or sell indicator in and of itself.

hrhjuliet says

Do you want those poor politicians to loose their jobs? What about the real estate agents?

You are exactly right -- this is why a "recovery" means that housing prices are up and ideally back to where they were at peak. That's nonsensical.

What a recovery really means that we've normalized the market. That might mean lower prices for a while, which produces more transactions and more normal market-clearing transactions. Real estate agents should have embraced foreclosures as clearing out the trash because it would have meant more transactions for them. They always want a higher commission through a higher price, so they always try to prop up the numbers, but a volume business is a volume business.

corntrollio says

bdrasin says

I'm afraid I have to agree, at least for the places I've been looking. Rents are pretty much in line with mortgage payments

Mortgage payments assuming 20% down? That's quite possible, but mortgage payments are not the only cost of buying a house. If you internalize the true cost (including taxes, insurance, transaction costs, opportunity cost, maintenance, etc.), then that's probably not the case everywhere.

I was taking all of this into account, using the "rent/buy" calculator on patrick.net (thanks, Pat!) My statement applies to the areas I've been looking, namely Rockridge, Albany, and Alameda. Results may vary by location.

WOW! The UNtrustworthy are certainly in control of what information is apparent to the people!

Say hey! This was in the Wall Street Journal on March 30, 1999. Note "... how much it will buy."

Holy cow/interesting/compelling ...!

And where is it up to date??? Right here ... see the first chart shown in this thread.
Recent Dow day is Friday, February 7, 2014 __ Level is 101.2

WOW! It is hideous that this is hidden! Is there any such "Homes, Inflation Adjusted"? Yes! This was in the New York Times on August 27, 2006:

And up to date (by me) is here:
http://patrick.net/?p=1219038&c=999083#comment-999083

WOW! The UNtrustworthy are certainly in control of what information is apparent to the people!

And http://patrick.net/?p=1230886

Call it Crazy says

HEY YOU says

To those that take a mortgage & then rent,how long before you build any equity? How much of the payment is interest? Oh,that's right after 5 years you paid $3.75 in principal.

Plus, you get to spend a bunch of money ripping out and replacing the carpet and appliances the tenants trashed as well as having to paint all the walls.... And that's before you have to fix/replace any of the major systems in the shack like HVAC, roof, Bathrooms, Kitchens, etc.

Yep, WINNING!!!

OH, but the landlord gets to keep the gain in equity... Sure, ask the landlords during the 2008 to 2012 time period how well that worked out...

Why in the hell would you bother with housing when you can sit behind a keyboard and ride the Dow Jones up up and away.

Call it Crazy says

Analyzer says

Why in the hell would you bother with housing when you can sit behind a keyboard and ride the Dow Jones up up and away.

Crap.... Now you tell me.....

How many rental homes did you buy?

What a relief, to know that you are never too old to steal vast sums bankster style.

Moron just didn't know how to get away with it.

Judges are kissing cousins to REALTORS, the judge probably admired his spirit, but gaviled him anyway.

Call it Crazy says

Analyzer says

Call it Crazy says

Analyzer says

Why in the hell would you bother with housing when you can sit behind a keyboard and ride the Dow Jones up up and away.

Crap.... Now you tell me.....

How many rental homes did you buy?

Ha Ha... None... I'm not that stupid...

I just bought the one I'm living in :)

I should of just put all the money I spent on down payments, closing costs and upgrades into the stock market.... I could be rich!!!!

Yep, Google and Apple when the Fed started pumping QE in would have done you well. Waste of time dealing with realtors, lier banks, lier inspectors, and sketchy tenants. Don't fight the Fed is what the big boys knew on Wall Street.