patrick.net

Create middle class jobs by sweeping away stupid property-value protection schemes. Let people sell gum and bread out of their garage. Even in this high end neighborhood in South America, I can walk to about 5 different informal "7-11s" within 5 blocks of my house. Not to mention hair stylists and barbers. If you want to sell liquor, you just sell it. There aren't drunks walking around at all hours because they can buy whiskey in somebody's garage, which is what liquor license advocates claim.

In the US, the PVNF (Property Value Nazi Front) sics LEOs on kids selling Lemonnade or having a Bake Sale on Saturday on their driveway. Or growing tomatoes in their front yard instead of useless grass. Or having a couple of hens. Or having lawn jockeys.

The hilarious thing about PVNF is they are usually private property absolutists - until somebody does something with their property that they think 'devalues' theirs.

I deliberately look for walkable stuff near an apartment or house. I don't want to have to drive for 20 minutes just to grab eggs or bread. You have to drive, otherwise in most places you have to cross 2-3 danerous high traffic streets with 4 lanes to get somewhere. And if I can support a family-owned business instead of a corporate chain, so much the better.

Call it Crazy says

Have you found someone yet to help carry that HUGE, ego driven head of yours around??

Most likely an Indonesian prostitute.

sbh says

You're smarter than this.

You must not read many of her posts.

rooemoore says

I think Republicans would argue that before they pay the bill they want the
wife to cut up the credit card.

I agree it is stupid, but it is just politics. Been going on like this (and
worse) long before you or I were born.

Call it Crazy says

Wereas, the Democrats would just call the credit card company to get the
credit line raised so she could keep spending, even though they both have
minimum wage jobs at McDonalds....

While that is the conventional wisdom on the difference in parties, it is not accurate IMO. Reps spend on defense. Dems on social programs. If you look at facts, Dem Presidents increase spending at a much slower rate than Reps Presidents do.

Reps have better propaganda machines though--I'll grant that...

Heraclitusstudent says

There are solutions: you could let inflation rise by massively taxing the
rich and spending the proceed (the Krugman solution), or you could deflate the
debt. Or a combination of the 2.

How would the money be spent and who would spend it under the proposed increased taxation?

Say hey! This was in the Wall Street Journal on March 30, 1999:

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, September 13, 2013 __ Level is 98.2

WOW! It is hideous that this is hidden! Is there any such "Homes, Inflation Adjusted"? Yes indeed, go here:
http://patrick.net/?p=1219038&c=999083#comment-999083

Indeed you are right, this IS like the wife spending the money then having the husband not pay it.

But what has happened is that 44% people believe that locking in the debt ceiling is the same as reducing the limit on the credit card, which is what fiscally responsible adults might do to prevent out of control spending.

So how do the American people limit the size of the shit pickle that their government is feeding them?

WellsFargo is expecting this because they havent heard there is a big recovery in housing in full swing

freak80 says

Call it Crazy says

Yep, let's raise the debt ceiling so the government can spend MORE money and write more bad checks for funds it doesn't have...

Federal Budget... we don't need no stinkin' budget!!

Or how about this: tax dividends and captical gains more so that the uber-wealthy can actually pay their fair share? Warren Buffett pays a lower tax % than you do!

But then they will all move to Belgium or Cuba and take all their precious job creation with them. . . .

Sorry, I was being sardonic.

Moderate Infidel says

Foreclosures are going up because houses in the US are TOO CHEAP®.

People refuse to pay a mortgage on something that is TOO CHEAP®.

or if the mortgage rate is too low

Make sure when using it to spray explicit epithets from your mouth like a machine gun (technically this also is legal).

Yes it's Because of extraordinary government meddling, intervention, protectionism, fraud, lies, and more underhanded double dealing than can be mentioned that the housing market recovered before reaching market equilibrium. Who could have predicted that? Certainly I didn't see it. It wasn't until this year that I saw the system behind the system that made the second housing bubble not only likely but inevitable. There was never any doubt that the banks would not lose. That the government housing debt would not fail. That prices would have to return to bubble levels (at least in some places) so that the financial industry would get the final bail out it needed. Everything has been done. It's over.
The American people lose.
The wealthy consolidate their power, enhance their empire, and insulate themselves from future risk of any kind while creating a system of permanent impoverishment for anyone who wasn't quick enough to hop on the billionaire bus.

Just in time for back to school!

Quigley says

Certainly I didn't see it. It wasn't until this year that I saw the system
behind the system that made the second housing bubble not only likely but
inevitable.

Thank you Quigley. A reply was swimming around my head, but you put it together more eloquently.

patrick could indeed retire today if he bought a 4 bedroom home in palo alto when he was writing his book telling people what a sham buying a house is. (09? 10?)sooooooo ironic!!!!!!

http://www.amazon.com/The-Housing-Trap-ebook/dp/B009DRL91K/ref=sr_1_1?ie=UTF8&qid=1379113383&sr=8-1&keywords=patrick+killelea

Got it, so the spending continues unchecked, what happens when the ability to pay ends?

Heraclitusstudent says

For most people there is never a link between what they want (services, wars, retirements) and the resulting debt or taxes.

There should be an official website tracking each dollar and linking each law they passed to a price tag, updated-in real time. There we would see the price of attacking Iraq. The price of social security, Obama care etc...

Its because there isn't they "buy"everything and raise the debt ceiling later

Dan8267 says

FortWayne says

Walmart business plan is simple. Come into an area and dump products at break even or less until everyone around goes out of business.

Selling for less than cost to run competition out of business is called price dumping and I believe it's illegal in most states.

Legal or illegal, they do practice dumping cheap Chinese garbage all over the place until they run everyone out of town.

sbh says

Honest Abe says

what happens when the ability to pay ends?

It doesn't, in theory. If we default on our debt we will just have to inflate even more. It's not a solution, it's macho bluster. Spending has to be reformed, but that's done outside of default.

That doesn't work anymore when the rest of the world stops buying your debt.

egads101 says

U.S. FORECLOSURE STARTS DECREASE 8 PERCENT IN AUGUST TO LOWEST LEVEL SINCE DECEMBER 2005

Yes foreclosures must at some point start to decrease-but just as a decrease in initial jobless claims doesn't mean any one got a job, a decrease in foreclosures doesn't mean more home sales or higher prices
http://smaulgld.com/initial-jobless-claims/

Bitter because I make enough money to buy a multimillion dollar home? Okay. Entitled because I want to get a good deal on my purchase? Okay.

some more background
http://money.cnn.com/2013/09/12/news/economy/debt-ceiling/index.html?iid=HP_LN

mell says

Honest Abe says

what happens when the ability to pay ends?

It doesn't, in theory. If we default on our debt we will just have to inflate even more. It's not a solution, it's macho bluster. Spending has to be reformed, but that's done outside of default.

That doesn't work anymore when the rest of the world stops buying your debt.

Or the Fed stops buying our debt! http://smaulgld.com/why-the-end-of-quantitative-easing-may-be-bad-for-the-dollar/

RentingForHalfTheCost says

Inventories up, mortgage applications down, price reductions outnumbering price increases.

I didn't predict it either.

And there is evidence of continued "recovery" in housing?

It's over.

I was being sarcastic- I clearly predicted it back in June
Google real estate supply and demand or click here
http://smaulgld.com/the-coming-supplydemand-real-estate-inventory-reversal/

Call it Crazy says

Which guy would that be, he seems to have multiple personalities??

That split personality issue is really getting out of hand ;)

It's sad to see old guys gloating about how they made like bandits by screwing the next generation, and convinced that the current outcome is a valid solution in the long term.

Imagine what shostakovich could have done with advanced technology and a drum machine

sbh says

You want to be able to buy a home at a lower price.....I get it.......and you're willing to scalp the value of others' homes in order to achieve that.

The house is worth what someone will pay for it. I'm trying to "scalp" the value that is perceived by the seller.

sbh says

JH says

If the price point was set at the market value (i.e., what someone will pay for it immediately), it would have sold before it hit the market.

Real estate is an illiquid highly localized commodity: it doesn't trade 24/7 on a global market like the fractional ownership of companies. There is no constant market "price" for unique custom homes like there is for an S&P contract.

But any house about to hit the market passes through the realtors' agency and his personal and business contacts. If it is set at a good investment or a good purchase price, it sells or has offers before it's even listed.

"Spraying bullets" LOL Sweet!! More Libtarb Propaganda!! Slidefire stocks have been around for years and they are lame, they look cool but that is about it..............nothing new here that is unless you are completed clueless regarding firearms...........but never the less...

I agree with Apocalype...........every ASSHOLE should have at least 12 of these "Redneck Machinegun" Stocks!

It's a correction within a correction. Probably .. within a correction.

sbh says

Why would the act of government repression of home values reflect or engender a growing middle class? Special taxation is simply crony consumerism.

Because it is the exact opposite of what has happened since 2008. Low interest rates and withheld inventory have propped up home values. Special deduction from taxation or significant decrease in taxation for specific groups is also crony consumerism. This behavior is engendering a shrinking of the middle class.

Therefore, as a middle class individual with children who will also be middle class, I would appreciate a reversal of this behavior.

egads101 says

Quigley says

Yes it's Because of extraordinary government meddling, intervention, protectionism, fraud, lies, and more underhanded double dealing than can be mentioned that the housing market recovered before reaching market equilibrium. Who could have predicted that?

When the US beat Mexico in world cup qualifiers, did the mexicans whine scream and cry like babies? it was because the ball bounced funny? the grass on the pitch was not to our liking? the refs were bad?

wrong is wrong. get over it!

In a democratic country I hope for better.

egads101 says

yeah, maybe. But much more likely they just keep making money, and you keep being yoU!

Is this because investment bulls always make money, and investments always increase in value?

Looking around my area, plenty to be had, condo's are still cheap too. Not sure why inventory seems to be building, still a few foreclosures around yet.

egads101 says

veruca says

I'm confused. Why are they laying off so many employees if posters here are saying the housing market is strong and prices are going to keep going up due to strong demand. Serious question to those guys

Well, maybe posters here are more knowledgeable than you? for the past years 65% of all loans have been REFINANCE LOANS.

as rates rise, refinance loans tank; Purchase loans have been relatively stable when compared to last year.

Serious answer to you. the oracle is never wrong; housing is going to lull into the spring, but prices will be higher next year.

I know others are more knowledgeable. That's why I asked the question. Why are you so nasty?? I see why you have such a low rating as a teacher at your college. Unbelievable, how you treat people. Thank you to everyone who answered politely and unbarbaric.

Beep, beep, beep...........................this is a public service announcement to the fellow board members (aka nitwits): There are outlets and professional services available to deal with anger management issues. I can assure you Patrick.net will not be your source of healing. Let me know if you need any assistance locating such services in your local area.

sbh says

JH says

Low interest rates and withheld inventory have propped up home values.

Yes, I agree. Now, substitute "middle class wealth" for the words "home value". Now, how might you rectify your statement;

sbh says

If you view home values as a measure of wealth you won't assail home values. But if you view home cost as a consumer cost you'll assail home values as a detriment to middle-class capital formation.

Yes, I see homes as a cost to the middle class for 30 years (from, say, age 35-65). Then after 30 years (at, say, age 65), the home becomes a measure of wealth. As long as it is on my monthly balance sheet, it is a cost to me. That is, if I am middle class, my wages are stagnant, I make the median for my neighborhood which is $70k where I live. If that is my income and I drop $400k for a median home in my neighborhood, where am I going to get any money to make other investments? OK, sure I could move, get a better paying job, etc, etc. But we are talking about middle class, so we are staying at the medians.

Now this projection for age 65 makes three huge assumptions:
1. the borrower did not take out a single HELOC (that he didn't pay off)
2. the borrower did not refinance in a way that makes the house like an ATM; ie, didn't extend the 30 year loan
3. the borrower was able to use his savings or natural increases in income to make upgrades to the home in order for it to maintain value.
4. we agree that, historically, middle class homes gain value with inflation IF and only IF the home is maintained using #3 above.

sbh says

if you view home cost as a consumer cost you'll assail home values as a detriment to middle-class capital formation

If we are talking about "median" (ie, middle class), I think they (we) have a very difficult time with capital formation. And once an investment (say, a home) increases in value, the middle class starts using that value to pay for things...thus eroding at its value over time. That is the difficulty with areas that make the middle class house poor and why I am on the side of "homes are an expense" rather than an asset. It will be interesting to see boomers retire, and then eventually Gen X and Y, and see how many retire with house payment bills still coming to their mailboxes...