patrick.net

bubblesitter says

CDon says

And again, that pullback will be so severe as to put nominal prices below 2014 values, and paying whatever amount of rent in the interim so as to justify waiting - yes?

yes and yes. Why would I block my earnest money and not have any gains on it? Go revisit your rent vs buy math cuz I have and concluded that for my financial situation buying never makes sense, it is a money pit, home is a place to live and enjoy - nothing more.

And there it is. There is your true motivation (my boldface of your comment) - you are not a bubble-sitter... you are a perma-sitter. There is nothing wrong with that BTW for some people given their risk tolerance & location, it will never make sense to buy. Again no problem there.

The problem is we are not all like you. For every person in your situation - there is another for which buying does make sense. Yet, given that they continue to hear a great CRASH is just around the corner, they continue to wait - and why wouldn't they? Sure they could easily afford 500K now. But why risk it when others here are certain that same place will be 420K soon?

So again, if that is your personal situation and it will never make sense for you then that is fine. If I may, may I suggest that you recongnize that you recognize that fact. You should simply say "I cant afford it" shrug your shoulders and go out and live your life...OR if you really like being here - espouse the virtues of lifetime renting for some. That said, it is incredibly irresponsible to come here and continue to spout of your opinion (presented as some sort of axiomatic fact BTW) that if they wait juuuuuust a little longer, a magnificent CRASH will come such that the long time sitters will be richly rewarded.

CDon says

That said, it is incredibly irresponsible to come here and continue to spout of your opinion

Hahaha. Now you are the police on this site?

I remember the mantra "Don't fight the Fed" as far as stock markets are concerned, i.e. if interest rates are low, stocks would do well. This has been true in the last few years.

QE may slow down but the Fed may not touch interest rates for quite some time.

Some interest rates are out of the Fed's control, this is confusing sometimes.

Let us see how soon they actually stop QE.

People buy houses for themselves where 1. they want to live 2. near where they work

People buy houses to rent out where 1. they can afford to buy it 2. (hopefully) where people exist to pay rent, i.e. people have jobs there.

Often the cheap properties are located in welfare zones, unemployed zones, dead zones so although inexpensive, they're worthless as investments.

I know a guy here who bought a place in some hellhole and he flies back east there once in awhile to try to keep it up and deal with his renters, what a colossal PAIN in the ASS. But, he's a slumlord type so he may like it.

hydrocabron is swilling Koolaid I think.

There were numerous things Obama and Congress could have done in 2009 to try to stimulate the economy, Obama did the opposite.

The economy and jobs were the #1 problem, and what did Obama and Pelosi focus on? Changing our healthcare system.

This is the sign of a person who is an idealogue and not a good executive. The executive functions are 2: 1. choose which problem to solve in priority of importance 2. choose people who are qualified to help you.

Obama chose the wrong priority, health care, and ignored the economy. It's either his stupidity or it was intentional to keep the economy sucking long enough to get re-elected, I believe it's both.

New taxes, regulations were obviously bad for job creation.

Obamacare is going to further slow down the economy, it's 1. new regulations 2. new taxes 3. new bureaucracy imposed on us. Obamacare MUST slow down our economy, by what degree is a guess.

Since Obama took office, USA GDP has grown an amemic 2%. This will likely continue.

Many people who dislike Obama also are not too enamored of Bush, because BOTH wanted to grow government.

On balance however, Bush at least didn't raise taxes, rather cut them for inheritance, capital gains, dividends, etc.

I'll answer.
Some people like to perpetuate the myth that the Federal reserve can stimulate the economy because this doesn't require any political discussion.

If lowering tax rates is politically unpopular or impossible, these types can always say "the Fed stimulus", which of course now has been since 2008 or was it 2007? It's been a long time now and GDP still is anemic, 2% since Obama took office.

What the Federal Reserve can do is throw cold water on the economy in an effort to slow down inflation, but the converse is not true, the Federal Reserve can obviously not stimulate the real economy.

Why not? Because most increases of production and innovation have the ability to find capital and grow on their own or with private investment.

As mentioned above, Apple doesn't give a shit what interest rates are but TAX rates sure interest them.

clambo says

There were numerous things Obama and Congress could have done in 2009 to try to stimulate the economy, Obama did the opposite.
...

On balance however, Bush at least didn't raise taxes, rather cut them for inheritance, capital gains, dividends, etc.

Are you suggesting that Obama should have done the same things which Bush already tried? Because those did not stimulate the economy at all.

Eventually they'll run out of foreign buyers or cash buyers.

92 million people out of the workforce cannot qualify for a mortgage today.

86 million people actually working have houses or are tapped out.

People who don't get around much don't know that owning a house is optional but funny thing you can rent about anyplace you would like to live.

It's sometimes expensive to rent, but the freedom can be appealing.

My businesswoman grandmother rented houses since I can remember. She always had money. I found out later she lent my MD father some dough for our summer place. She had cash, he didn't. She of course could visit any time she liked forever. He had to deal with the problems and upkeep, taxes, etc.

U.S. real estate is safe. The value can never go to zero no matter what happens. You can lose it all in the stock market, but you'll always at least have the house.

The world just figured this out, so we're not even at the beginning of them buying it up.

If you didn't buy before 2012, and you're an American, then sorry, this Bud is not for you.

The Fed is between a rock and a hard place (and they're the ones who built the hard place and dragged the rock next to it).

Last year, QE amounted to over a trillion dollars, a trillion which is counted in GDP. Remove the QE, and we had economic contraction in the productive, non-financial sectors of the economy.

What the Fed is doing is propping up an insolvent banking system whose insolvency is due to massive leverage of assets which devalued during the housing bubble popping last time. The lip service they pay to use peons may be about their dual mandate of limited inflation and high employment, but that's all secondary to keeping their Wall Street minders happy.

If the Fed tapers, assets (mainly housing and stocks) should lose at least the amount they've gained from sustained QE, but probably more because of deep leverage. This would, once again, bring banks to insolvency, even without mark-to-market rules, so the Fed can't allow this to happen.

I'm guessing the QE program may end, but no matter what the fed calls it, it will continue to grow its balance sheet until we have some significant inflation. That's the only way to benefit debtors, and the US government and the banks are now the biggest debtors, by far.

There are several houses here that I saw "go to zero"; some in the winder of 83 were crushed by mudslides, a few over on the coast washed away, others were flooded next to a river, etc.

Years later I saw some explode in the 89 quake, the gas mains broke, filled the house up and POOF! there she goes.

exfatguy says

If you didn't buy before 2012, and you're an American, then sorry, this Bud is not for you.

What are you talking about? There are tons of cash rich Americans, it is just that the high prices are chasing them away.

clambo says

With my profits from my shares of Apple I can buy one outright, you must be drinking some powerful Koolaid.

Zing! It is amazing that some people think that bears are poor. :)

I want to see a go to chart that highlights all of the Democrat's wins and accomplishments.

...but just the short list, we don't need the 7000 page book.

Too many words! The Democrats will never read all of that. They would pass it though.

myob says

Last year, QE amounted to over a trillion dollars, a trillion which is counted in GDP. Remove the QE, and we had economic contraction in the productive, non-financial sectors of the economy.

This is incorrect. QE is not counted in GDP.

Removing QE is just removing part of the funding for the government. We saw the effect: interest rates go slightly higher and some other people buy the gov bonds.

clambo says

If lowering tax rates is politically unpopular or impossible, these types can always say "the Fed stimulus"

Yes, if the government spending more is politically unfeasible, and you have a deadlock in Washington then the fed stimulus is the only game in town and people cling to that.

clambo says

As mentioned above, Apple doesn't give a shit what interest rates are but TAX rates sure interest them.

Right wing types think lower tax rates is the cure to everything, but they can't reconcile this with the obvious fact that, whether it's $100 billions or $150 billions, there is simply nothing Apple can/want to do with this money.

Why 2017? I keep seeing this number on zerohedge as well. But then again zerohedge is the epitome of perma-bear.

Anyway I too am confused how everything seems to be going up, despite the fact that real unemployment is still high. Inflation sure as hell isn't "2%" as the Fed claims. Is it all due to QE money printing? If so, what's stopping the Fed from just printing forever until burning money is cheaper than burning fuel?

Next big crash will be October 18, 2016.
You heard it here first.

Disclaimer: This is not meant to be legal, financial or other advice and is for entertainment purposes only. Patrick.net, its employees, friends, associates neither support nor refute the above statements. Permabears, permabulls, and all in between are free to make their own decision as to how to spend their money, when and on what.

Back to the OP - I'll disagree with 3 and 4.

Appraisers need to appraise out at a number that will meet the loan, or else they won't get work from the banks. There were stories of this from before the bubble deflated the 1st time - not sure if it still goes on.

To a credit worthy applicant, banks will lend as much as they think they can get away with. More money = more interest in their pockets. If I bought a house based on what I was preapproved for, I'd be in a McMansion without enough money to heat it. Even with regulation, it amazes me how much one is expected to spend on housing. Since most buy what they can finance, not what they can afford, its no wonder that prices have recovered as well as they have.

@E-man. I wasn't waiting by design - I just kept getting outbid because once I put a value on something, I tend to stick to it. That and my wife is very selective (in a good way).

I try and see the world as it is, not as I want it to be.

Not being able to beat the competition, I got aggressive on a bank owned property and kept the competition at bay. The process was a min-soap opera, as my many posts from that time attest to, but it all worked out well in the end.

CaffeineAddict says

Why 2017? I keep seeing this number on zerohedge as well. But then again zerohedge is the epitome of perma-bear.

If you studied history, the market crashed in 1929 (Great Depression). We made a recovery and entered the next recession in 1937.

2009 (Great Recession)...... 2017??? I'd be conservative and say the market will top out in 2006. Better safe than sorry.

Zerohedge is a bunch of perma-bears. Tyler Durden is an idiot.

When everybody is so sure 2017 is the date, the more likely that it is wrong. The real date could be in 2014, 2015 .... 2019, 2020 .... Definitely not 2017.

exfatguy says

You can lose it all in the stock market, but you'll always at least have the house.

Go for index fund.

Obama is a Wuss.
He could have declared all his Rep/Con/Tea opponents in Congress,SCOTUS & media, "Enemy Combatants" & rendered them to unknown locations. I bet they would STFU & beg to pay for their unfunded wars out of their pocket & search for WMD until they found them.

Bush didn't cause or even like the sub-prime mortgages that led to the economic troubles which peaked in fall 2008 when Lehman imploded.

Sub-prime mortgage is a euphemism for a mortgage that should have not been lent in the first place.

There are 86 million people working and 92 million out of the workforce.

The recovery summer came and went a couple years ago, you don't hear this nonsense any more.

GDP grew only 2% since Obama took office, that's anemic.

clambo says

Bush didn't cause or even like the sub-prime mortgages that led to the economic troubles which peaked in fall 2008 when Lehman imploded.

That didn't stop him from promoting the American Dream Downpayment Act-which had the government giving assistance
to make the downpayments to buy homes
https://www.youtube.com/watch?v=kNqQx7sjoS8

Had the fed done nothing at all, you feel we would still be pretty much right where we're at. Now?

he would have been branded a welfare cheat and Obama would have been called a racist for not enforcing the laws. This is just dumb. If I buy 100 acres of agricultural land and lease it to a farmer for say 10-20 years -does it mean that at some point in time, he gets to own the land???? This is actually very common in communist/far left leaning countries. I am really surprised to see the conservatives supporting this guy. he is a deadbeat who hasn't paid the rent in years and the owner is booting him out.

it could be because of solar projects or the BLM giving the lease to cronies, but that is what a lease it. I would think when your lease is up-you gotta go. That should be standard in a capitalistic country?? Again I see this in socialist countries a lot, where long term renters get to own the building/land etc-because of the evil rich owners taking advantage blah, blah, blah. But that is usually a far left position-not a right position. But maybe in this country politics is not right or left-but on who is making policy. Why else would dems support Heritage Foundation's Romey/Obamacare?

I think there are way more important issues Harry (Fuck 'em in the Ass while Nancy holds 'em down) Reid should be addressing, than a couple horsies and cows on public land.

Precisely, and the claim of ancestral rights would have been laughed off, after the Feds opened up on the crowd.

lostand confused says

If I buy 100 acres of agricultural land and lease it to a farmer for say 10-20 years -does it mean that at some point in time, he gets to own the land????

That's not what he's arguing. He's arguing that the land was owned by the family well before the agency was established. It's an interesting claim. At best, there could be some constitutional merit to it, at worst he is simply trying to create his own prop 13. Not really that crazy. The Feds on the other side have a good argument as well, however bringing in the SWAT team is completely fucked up. People are sympathizing because TBTFs laundering blood money are getting bailed out left and right and at best get a slap on the wrist via a laughable fine while somebody not paying their couple hundred - or make it thousand - bucks is getting swatted. The rule of law has been abandoned and I expect to see more of this until this crony administration starts prosecuting bankstas, the Federal Reserve and the likes of Corzine, Mozillo etc.

sbh says

With so much public land in the west, and the mandate for multiple use, and budget cutbacks pressing the BLM to mothball road systems and access to large swaths of country, should the government start selling off remote territory to ranchers or wealthy Ted Turner types?

Yes.

Even transferring "ownership" to the individual state or county would make things better than the current imperial administration of land from "Rome." The current imperial bureaucracy approach invites cronyism and corruption. The approach was tolerable when most of the land was inaccessible or un-useable. However, now the land has clear market value, it's a grave error to continue manage it through a bureaucratic central government commune approach. The result is not equal access by all but some insiders are always more equal than others. The lack of a transparent market to handle necessary transfers between different usages will always lead to inefficiency and corruption.

The fat old white grouch gun nut has a lot in common with the OJ Simpson trial juror: "He ain't guilty because he's one of us!"

It is a good thing for Americans to finally realize that there is no law in the USA, and to take up arms. I just wish they would take up arms against the banksters.

Get your facts straight.

The guy was continuing a family ranch that existed for a very long time.

Later, the Feds claim his activity was fucking up the land. They started to charge him fines and extra fees to "remediate" his "damage". They claim he hurt the desert tortoise somehow.
Conveniently, the Chinese want to use his land for a bullshit solar/wind farm which will rip off the energy customers and taxpayers.

This piled up and now the story goes he owes "back rent to the Feds." Not quite and it's a bullshit deal.

clambo says

Get your facts straight.

The guy was continuing a family ranch that existed for a very long time.

On land that didn't belong to him.

The end.

Say Good Night, Gracie!

CDon says

I got to say, it is nice seeing some people step up and take some measure of accountability about how wrongheaded this site has been for a while now. Unfortunately, it had a very large effect on my SIL & her family who are now worse off because of it.

Yep. It had influenced my thinking too much...I *almost* missed the boat because of it. I was fortunate to find something that fit the bill and was fairly priced...but if I step back I was about 12-18 months late...almost got bit.

I take comfort in the fact, this guy probably already has enough money power and resources, and probably has been enriched by all of this, somehow.
He should go on a shit talking tour. "Blah blah blah, the crazy Liberals did this, and the Militant fascists tried to do that, I'm telling you they are crazy!"

I'd go!

If his retirement funds don't hold up, he can always eke out a living posting Fox and WorldNutDaily articles here day after day after day.

Put him in touch with Call It Crazy.

Medical science is studying him as a freak of nature. How can a fat guy who doesn't exercise have talking muscles that never get tired, all on a single big mouthful of spit.

They are thinking of making cell cultures of his masseters to treat muscular dystrophy.

The worst thing you could do to him is drive chopsticks into his ears so he can't hear himself talk anymore.

So wall street is just as capable of slumlording as private individuals. This is news?