patrick.net

My impression is that the economy will actually slowly recover in 2012, while expensive housing like the Bay Area Fortress continues to drift downward, because it's still grossly overpriced compared to renting the same thing.

Cheaper housing in poorer neighborhoods is already below rental costs though, and in those areas I think there could actually be a rise in house prices as landlords continue to buy up the good deals.

So the news will be contradictory. It will be reported the prices are rising, and that prices are falling. You'd have to study the details to see what's really going on. You can count on the NAR and Realtors to continue lying, and you can count on lazy or paid-off reporters to continue quoting the NAR and Realtors as if they were objective sources.

Long term interest rates might escape the control of the Federal Reserve and rise quickly, especially if Ron Paul actually gets elected. Not that higher interest rates would necessarily be a bad thing. It would be wonderful for responsible people who have saved. European or Japanese debt repudiation could have the same effect.

If that happens does not realtor flesh move from a delicacy to fodder for common stock?

I'm pretty sure realtor flesh is not kosher, just because they're too close to swine.

What will be the national debt at the end of 2012?

http://www.usdebtclock.org

"You'd have to study the details to see what's really going on. You can count on the NAR and Realtors to continue lying, and you can count on lazy or paid-off reporters to continue quoting the NAR and Realtors as if they were objective sources."

I like to take a walk at lunch. I pass by a condominium / townhome complex where I can see just from the street view 3 empty units. I assume someone would want to sell them.

I searched on Redfin up to 300K, went through all the listings, did not see ONE for sale. Ok, went up to 400K, 90% houses.

In my opinion, no one has any real numbers on short sales, forclosures, and shadow inventory. If they do, it is a closely guarded secret.

David9 says

In my opinion, no one has any real numbers on short sales, forclosures, and shadow inventory. If they do, it is a closely guarded secret.

I think you're right.

The banks blew everyone's deposits on ridiculously bad mortgage lending. The money is gone. So the banks hide their real numbers and rely on loans from the Fed to paper over the giant hole for now. If they were to foreclose on all their delinquent accounts, sell off their shadow inventory, and honestly publish the value of their collateral at current market prices, they'd have to acknowledge that they are bankrupt, that they defrauded the public, and that the executives should all be in jail.

The government knows this, so they don't encourage the sale of shadow inventory or publication of honest numbers either.

Private debt gets transformed into public debt, debtors are given a year or two of free rent, savers are robbed, and the criminal executives not only stay out of jail, they get giant bonuses instead.

I feel that the with economy we are in for sharp and permanete life style change here in the USA, if anyone actualy reads this post, I'll ask that go to YouTube and search out Americatalatst with Kyle Bass from Nov 7 th 2011 I think it was I don't think I can put a link to you tube from my iPhone or I would just post it, but what he has been saying now for a few years and what he sees ahead for likes of the world economy dove tails with you guessed it I'm
Still signing the praises of Harry Dent not that Kyle even says one word I have no idea if Kyle agrees or disagrees or gives rats ars about Harry, please
http://www.5V3kpKzd-Yw&feature=youtube_gdata_player

Hey I tried, if you go and listen you will hear Kyle state something to the topic of just what some of you posted about re: banks and optic backstops and the Hugh casem between reality and what we have been conditioned to think about there always being a fed or money center well guess what there is not any thing but promises and NO Money the end of fiat currency nations and economies is a real and in fact likey outcome, please those of you with an intrest please look it up in YouTube you will be damm glad you did!

cab says

Can someone please explain what "the Fortress" means?

A city/area where it is the prices can't fall (rich areas). They are immune to market conditions. I guess it is subjective. E.g., Cupertino, CA

cab says

Can someone please explain what "the Fortress" means?

fortress

[fawr-tris]   Origin
for·tress

noun

1. A geographic area that appears to shrink over time.
2. Redefined continually.

I agree completely with Kyle Bass, one of the hedge fund managers who foresaw and profited greatly from the inevitable result of the housing bubble using data and reasoning that in retrospect are totally obvious. Using the same deep understanding, mountains of data and simple math combined with his typically flawless reasoning, Kyle believes as do I that the EU situation will end very poorly. Japan is on the brink, after the EU crash especially, of being unable to pay the interest on its huge national debt or borrow more funds for its demographically aging welfare state.

Like Kyle says, after thirty years of the citizens and governments of developed countries borrowing massive amounts of money from developing countries to hide the negative impact of globalization that exported good-paying manufacturing jobs and shifted the west to nearly fully debt-based consumerist societies, the BILL IS NOW DUE and simply CANNOT be paid for with ADDITIONAL DEBT, something that should be, but apparently isn't, obvious to the most casual observer with some degree of common sense.

China will also suffer greatly when the EU problem and it effect on the US and Japan destroys its export market combined with their own rapidly escalating real estate bubble implosion.

At best, if pols did everything _right_ (cut spending and raise taxes), with most of those correct moves resulting in political suicide, we would have a very long and extremely DEEP worldwide recession. If they do mostly incorrect things as they are doing now by attempting to kick the can down the road by accumulating massive amounts of additional debt, the result will be CATASTROPHIC when the CDS and bond markets finally FORCE the issue.

I'd guess 2012 as the likely end of the can kicking for the EU, with Japan to follow in 2013/14.

My guess in 2012 is that unemployment at 8.6 will go way back up over 9.1 once the seasonal jobs end and we all pay off the xmas bill, economy will go on pause ... there still seems like more daily layoffs than hiring going on so it will continue to push the economy downward. Congress just passed 1T+ budget so inflation will increase thus crunching the consumer. The law that states that tax owed by sellers on sold underwater homes by deducting the full mortgage minus the sold short sale price that starts in 2013 will probably be repealed by congress out of fear from we the people. There will be probably a deeper acceleration of house prices in over priced markets like NY... North Korea new leader vs. there military will fight over leadership and if the Mayans are right then who cares anyway!