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I am not explaining it right, this was NEVER going to workout in the long run. Our unfunded liabilities on Social Security and Medicare was always awful. It's just our bill is due years from now.
That simply isn't the case. Like I said, had we not spent the surplus when the population was overwhelmingly working age (1965-2005), there would have been little to no problem. The worker:retiree thing is a red herring, since almost everybody who reaches SS age paid a lifetime of SS withholdings, and the economy grew over those decades. Many people never collect SS, and some get it for a very short period of time. SS is basically pooled risk, a pretty much like a fixed annuity.
Not all wage income pays into S.S. and M.C. Remove that artificial cap, and require all salaries to be subject to withholding, and much of the problem disappears, even with the looting.
And, taxes are at post WW2 lows. If our taxes were at all time highs, AND if the S.S/MC surpluses hadn't been spent, there might be a case that S.S. is unsustainable.
Let's compare Soc Sec to the General Budget. Which one has been running a deficit for the past few decades and which has been solvent since the moment it was created?
SS projections are an accounting trick, like the USPS going bankrupt, but only because they are forced to pre-fund the retirements of people they haven't even hired yet. Nobody in the private or any other public sector does 75-year projections. And the idea that nothing will change in 75-years is absurd.
If our taxes were at all time highs
Good luck on getting any party to raise taxes on middle class. I agree that taxes need to go up, but both parties are in fantasy land on taxes.
With Clinton tax rates, Marginal rate increase on the middle class brings 3 times more revenue than that taxing the rich.
Raising taxes on the rich brings only 800- 837 Billion over 10 years ( White House Numbers) next 10 years
Where raising it on the middle class is roughly 2.4-2.7 Trillion next 10 years
So you need to raise taxes on the middle class and both parties won't go there.
See, the problem is that both parties are addicted to Bush Tax Rates for the middle class
http://loganmohtashami.com/2012/12/30/fiscal-bluff-shows-addiction-to-bush-tax-cuts/
Good luck on getting any party to raise taxes on middle class.
Don't need to.
Raising taxes on the rich brings only 800- 837 Billion over 10 years ( White House Numbers) next 10 years
I don't know what this means. Is this income taxes? Eliminating loopholes? Capital Gains taxes?
The top 1% own 90% of the wealth, and 80% of the income. It's impossible that taxing the middle class - if the taxes are levied as a percentage of income - would produce more revenue than increasing the taxes on the wealthy.
I suspect Obama, the good neoliberal Democrat that he is, was not intending to raise capital gains taxes or eliminate the plethora of new loopholes since Clinton, but simply raise the marginal rate.
The top 1% own 90% of the wealth, and 80% of the income. It's impossible that taxing the middle class - if the tax is a percentage of income - would produce more revenue than taxing the wealthy.
Not even close. See marginal tax rates go based on income. So, when you raise taxes on the marginal side for incomes above $250,000 that is only for incomes after that 250,000 level.
So, if you made $251,000 your income of only 1,000 gets taxed at a higher rate.
Most people don't know that even today on the marginal tax side.
I am all for tax reform and killing a lot of deductions. However, the revenue is in the middle class tax rate because majority of the income base is from that $250,000 level and below.
We simply don't have enough rich people to tax. I believe the last number I saw is that if you taxed the rich 100% it will provide 121 days of funding and that's it.
You want more revenue you need to get tax reform and the middle class has to pay more taxes period.
There is a sale inventory shortage but maybe not a house shortage. If you look at the "overbuilt" in the boom years (compared to the baseline), it roughly compensates the "underbuilt" for the past 5 years. Inventory is surpressed b/c of underwater houses and the foreclosure pipline. The supply will come back in a couple year when prices raise.
"underbuilt" for the past 5 years.
The last 4 years have been the worst construction levels for new housing starts dating back to 1959. This is a by product of the housing crash.
This whole debate we were having on this thread was that the on sale inventory is low.
2013 the inventory crisis was going to be with us because, we have too many homes underwater, starts aren't big enough yet and distressed homes still take too long.
2014 has a better profile for real inventory coming back
How does the supply come back when the prices rise if wages don't rise along with them? Wages have been falling, so what's going to support higher prices?
This is the crucial part for housing for the future years. Prices are rising, but rates haven't budged too much higher from the lows of last year.
However, if we don't get income growth here in the US, we will see a negative effect for first time home buyers who are already 10-13% below historical levels for the purchase market
2013 the inventory crisis was going to be with us because, we have too many homes underwater, starts aren't big enough yet and distressed homes still take too long.
We also shifted to apartment construction.
We over built, that's just a fact shown in your charts. The housing units that were built are still there, they didn't go away, and like I said we are in a period of alternative choice.
The point is that no one needs to buy. There is no reason for the price of housing units to increase, because it just causes debt.
The consumer, even though they may pay a lower payment on a mortgage, is still saddled with debt.
Everything you have posted here shows that consumers should be smarter to pay down debt.
Holding Real Estate at this point isn't a great idea.
We over built, that's just a fact shown in your charts.
I am curious too see what your beliefs are on household formation then. Also, this discussion really was about on sale inventory and how it was low due to the multiple factors displayed.
In regard to renting, I have always believed that we simply don't have enough qualified home buyers here in the US ( excluding cash buyers)
even though 70% of all purchases are done with mortgages, first time homes buyers are very weak considering where rates are and it doesn't surprise me one bit. We never had the capacity to own all those homes, hence it was an excess in false demand.
However, we do need to build more homes ( multi family or SFR) population growth doesn't stop because we had a bubble in housing.
you claim your business success...
According to this site, you're rated the worst real estate agent: http://bit.ly/11T8KJD
even though 70% of all purchases are done with mortgages
When I started in Real Estate in the 1970s I could buy a house for cash. Me, a kid, working a trade job, could save enough to buy a house.
I had to do a couple of trades to get into my first one, I had partners, but it was pretty easy to buy a house.
In the 1980s I bought a house two blocks from my folks for $35K. I bought it on an owner contract with $10K down, and paid it off in 5 years.
By the end of the 1980s when you owned Real Estate you had equity. In the 1990s you had a lot of equity, until 1998.
The flow of cash into property from tech stocks first drove up prices, until the Community Reinvestment Act took over with the easier financing of property.
Now it is all about the house payment, or car payment, or student loan payment. Banks took over Real Estate.
In the 2000s I was saying banks weren't making loans, they were buying Real Estate. Banks now own the residential Real Estate market.
Banks have made a ton of cash with these mortgages, even without the government help.
So you would be banking on creating equity with leverage. If you banked on your cash making higher returns you would be betting against a fully funded banking system, that is global, and has already collected it's profits.
I am curious too see what your beliefs are on household formation then
I think people should avoid, use, or abuse housing to get to an end of no debt. If it takes ten to a household then that's what people should do.
That household formation is kind of contrary to the claim we have an aging population that isn't productive. Do you see immigration in there some place?
More lies from the liar...
OK, take a look at my over all package, and read what I write. My whole thing is to get rid of debt.
I'm one of those very bad people Roberto who thinks banks are scum, and I will use every legal means to screw them.
Did you see a bankruptcy in my records? No? It's because it's not needed.
I follow all the laws the rest of corporate America uses, and bankruptcy is still one of my options.
I'm liquid professor. I sold in 2005, 2006, and 2007 for a little bit more than you did, and kept the cash.
You on the other hand didn't time the Residential Real Estate market.
If you read my stuff I would have told you to sell in 2005, 2006, 2007, so you could buy back in to the panic of 2008, 2009.
You waited, you hesitated, and bought in 2010, from what you tell us.
You bought into a stable market place with the idea it might go up in price, but you weren't sure, you took a chance, you were lucky.
I come here to learn something from these great people who post comments, and threads. You have nothing to say, so why bother with me?
That household formation is kind of contrary to the claim we have an aging population that isn't productive. Do you see immigration in there some place?
So is that your answer on household formation. I am saying this in regard to Boomerang kids and the fact that they need leave their parents home ( Buy or rent) most likely rent because they can't buyt. A reason why the number is going up excluding population growth
Has anyone told Ben?
FMOC minutes today looks like more discussions about a possible end of QE. I still think Q2 2014 the Fed calls it quits. More of a debate on cost benefits between the FOMC members
Boomerang kids
You're a good guy, and I appreciate all of the information you have posted.
Those kids can take over the family home, and might, you're in another area that doesn't have statistics.
My take, since the first tax credit, is that Real Estate had a fundemental shift away from practical application to a contrived bubble.
I see large investors cashing out.
FMOC minutes today looks like more discussions about a possible end of QE.
A rise in interest rates would make other investments more attractive.
What I really think is that these investors will cash out here first, then move on to Europe, Asia, India, Russia, and South America. There is tons of untapped equity in the "emerging markets."
Cash is king, and investors will suck as much cash as they can while they still can.
At some point with prices rising those that aren't looking for yield will cash out on their investments
The one item with household formation is that we got to an epic level and these kids need to leave their parents home even if it's rent.
You can see that the major players in housing still have a rental theme out there and that no matter how low rates are out the demand for housing isn't that strong because simply put Americans can't buy homes.
DTI is too high and liquid assets are soft. Rates made a strong move in early 2011 from 5% to a low of 3.25% and you didn't see a big rise in demand from MPA
This is why if you don't get income growth this next decade here in the US, it's going to have a real impact in housing because rates can't stay below 4% forever
I still think Q2 2014 the Fed calls it quits
...and Ben will be there to soak up all the Glory "Ere", I mean
Yellen will take the heat for the fall
Sure...
judgements settled irs negotiated, your point?
what was my take on that debt mess?
in early 2011 from 5% to a low of 3.25% and you didn't see a big rise in demand from MPA
What you saw was a decrease in inventory. What I suspect is that is when big players came into the market place, borrowed at low interest, and built portfolios. Banks were doing the same by pulling properties from auction.
It has driven up prices and banks have been getting more, and more from distressed properties.
Where will it top out? 2014, and the end of the Easing.
What you saw was a decrease in inventory.
So you agree then there was a decrease in inventory for on sale inventory since Middle of 2010
Take a look at week 31 in 2010 and chart it out to now
So you agree then there was a decrease in inventory
No, what I'm saying is that the inventory got sold. Sales are steady.
According to this last chart "inventory" is steady also for 2013.
and then
new home sales fell:
http://www.bloomberg.com/news/2012-11-28/sales-of-new-homes-in-u-s-fell-0-3-in-october.html
It all adds up to robust market, but it's still a bubble.
The shadow inventory is still there, all the homes built are still there, and we are building alternative choices to housing.
It's all there.
Seriously if you wanted to go for a thread you could say that demand is super high.
• 1,927,000 properties that are 30 or more days, and less than 90 days past due, but not in foreclosure.
• 1,483,000 properties that are 90 or more days delinquent, but not in foreclosure.
(Future Inventory) not everyone of these homes will end up in foreclosure or a short sale but most will
• 1,694,000 loans in foreclosure process. ( Shadow)
a href="http://patrick.net/?p=1223313&c=951133#comment-951133">Logan Mohtashami says
• 1,927,000 properties that are 30 or more days, and less than 90 days past
due, but not in foreclosure.
• 1,483,000 properties that are 90 or more days delinquent, but not in
foreclosure.
(Future Inventory) not everyone of these homes will end up in foreclosure or
a short sale but most will
• 1,694,000 loans in foreclosure process. ( Shadow)
The inventory that you cannot possibly count, those that have been underwater for years that will sell as soon as they are not upsidedown..............
he inventory that you cannot possibly count, those that have been underwater for years that will sell as soon as they are not upsidedown..............
This is true, 10 million plus homes underwater. However, we can't expect people to put there homes onto the market right when they turn positive. Have to look at after transaction cost. This is why a lot 90-99 LTV homeowners are still in limbo.
This is true, 10 million plus homes underwater. However, we can't expect
people to put there homes onto the market right when they turn positive. Have to
look at after transaction cost. This is why a lot 90-99 LTV homeowners are still
in limbo.
True, when they can cover transaction costs they are out.
Doesn't matter. they can't sell, except at prices higher than today (or per
your logic, they would be selling today) hence they cannot crash the market, but
merely limit appreciation beyond some price higher than today...
They can short sell, and if it is cheaper to rent they will as their run down shit shack that they have done no maintenance or repairs on in 5 years falls apart around them......
No income qualified you for a loan in 2005.
Yes... back then, pulse, social security number, fico score and you're all set. Thankfully, we are back to reality and DTI now.
Honestly, people should stop crying about lending standards being too tight
http://loganmohtashami.com/2012/09/26/stop-crying-about-lending-standards/
No income qualified you for a loan in 2005.
Yes... back then, pulse, social security number, fico score and you're all set. Thankfully, we are back to reality and DTI now.
Honestly, people should stop crying about lending standards being too tight
http://loganmohtashami.com/2012/09/26/stop-crying-about-lending-standards/
Why do you hate poor people? RACIST!
Why do you hate poor people? RACIST!
In that context, I never want to see poor people buy a home ever if they don't have the capacity to own the debt. This is why I took a shot at Bernanke on Bloomberg with his crazy talk that lending standards are too tight even though FHA and Fannie Mae have programs out there with 3 and 3.5% down
True, when they can cover transaction costs they are out.
They can short sell, and if it is cheaper to rent they will as their run down
shit shack that they have done no maintenance or repairs on in 5 years falls
apart around them......
This is heavily dependent on the local housing market. Take the house I am renting now as an example, I knew the owner wanted to sell the house because we had some discussions. But he decided to keep renting it b/c I knew he did not feel like he could get the price he wanted. The rent covers his PTIT though and he bought the house in 2004. I believe there are markets that prices have been back to 2003-2004 level but not many of them. Also, even when that happens, I can see price leveling off or even decaying a bit but I do not see a national collapse. I am more worrying about the Europe and the US job market rather than the housing market.
Experts Warn About An 'Outbreak Of Delayed Foreclosures Down The Road'
More recent foreclosure prevention efforts in other states have drastically increased the average time to foreclose, which could result in a similar outbreak of delayed foreclosures down the road in those states."
Read more: http://www.businessinsider.com/foreclosure-starts-rise-for-second-month-2013-4#ixzz2QjXcTESL
http://www.businessinsider.com/foreclosure-starts-rise-for-second-month-2013-4
The Faster we can get the zombie homes out the better in the long run. 5.1 million homes in delinquency and foreclosure is a lot inventory. Time to let the zombie homes die.
However, following the trend it will be a slow timed release to maximize the current marketplace
However, following the trend it will be a slow timed release to maximize the current marketplace
Cali has always been known for being trendy, so the banks are finally starting to learn the ins and outs of the home owners bill of rights and "weez be seein a new trend..."
California Foreclosure Starts Up 73% Since January
http://www.dsnews.com/articles/california-foreclosue-starts-up-73-year-to-date-2013-04-12
We have the new Home owners Bill of Rights act here in CA, it will be interesting to see how it plays out by the end of the year on time frame of the foreclosure process
That household formation is kind of contrary to the claim we have an aging
population that isn't productive. Do you see immigration in there some
place?
Don't know what's going on in coastal cities. But here we are still very productive in terms of generating heirs. 2+ children averagely for a family. Even when I was on east coast a few years ago, 2 or more children was common. Immigrants definitely play a role but our domestic reproducing rate isn't so bad either.
interesting to see how it plays out by the end of the year
With California Foreclosure Starts Up 73% Since January, IT'S getting interesting over here already ...
Getting to market and sold is the final confirmation for me, from what I was seeing it took 12 months from NOD filing to finally foreclosure the home.
At the end of the year you can see how long the start to finish process takes. CA was much better than New York ... New York was pushing 1,000 plus days to foreclosure and CA was running in 300's.
Getting to market and sold is the final confirmation for me, from what I was seeing it took 12 months from NOD filing to finally foreclosure the home.
Exactly the case, if they don't get a move on ...they'll be up to their eyeballs with a delinquency dilemma
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