patrick.net

tatupu70 says

Do I really need to post evidence that the world economy isn’t falling apart? Come on.

Sure. What makes you think things are getting better instead of worse? Unemployment is still very high, wages are falling, home inventory is high, home foreclosures are high, etc. Maybe all of this has been going on for so long that you've become desensitized? We're you expecting some sort of singular event that clearly signaled that yes, _now_, the economic system of the world is kaput and the streets would be flooded with hobos and lines going into soup kitchens around the block the very next day?

It doesn't work that way.

This is going to be a process, not an event, and it probably won't be publicly recognized as such until long after it has already occurred, assuming it hasn't happened already. Much the same way it took almost a year for the government to recognize that a recession had started in late 2007.

tatupu70 says

Times are tough–no doubt about it. Weak businesses fail during recessions-nothing new about that.

Uh there is something very new about stores raising prices in a recession. Prices are supposed to go _down_ not up. The weak businesses already failed a year ago, now few remain other than the big box stores.

tatupu70 says

But the point is that there is nothing reactionary or uncontrolled about this. Maybe 2 years ago I might agree, but certainly not now.

You think they want to raise prices which result in lower sales? Like they planned on doing it because its such a good thing with inventory through the roof that they still can't get rid of? Really?

tatupu70 says

Wow-you’ve got a bit of a thin skin. I just said you SOUND like a drama queen–didn’t even really insult you at all…

Hahah, a kinda sorta but not really insult. That has to be one of the most lazy attempts at being passive-aggressive I've ever seen.

clayfire23 says

gameisrigged,
Please read all my previous comments, including the ones that I posted on Oct 12th.
Most of us repeat the same beliefs that we have stated already. So me re-stating what I said already is just consistency.

No, we're not playing the "please read my previous comments" game. I DID read them, and you did not address my points. You simply went off on a very long tangent. I asked you two simple questions; I don't see why it's so difficult to just answer them succinctly.

Again: (1) If, as you seem to think, an economy can be built from the top down, by inflating housing prices, and that jobs and prosperity will follow, then why did it collapse? (2) What do you mean when you say we are “collapsing” or “deflating” housing?

I actually don't have much to do here, because a couple other posters have already made mincemeat of your arguments, but to add just a little bit:

I have also repeatedly stated what I consider a healthy home price appreciation, and why I consider American homes vastly undervalued while compared to the rest of the world. The main difference between you and me is that you have very narrow perspective and consider anything happening outside America irrelevant. I have lived in many countries, and see the global economy for what it is.

That's nonsense. If you think a house in Tokyo, for example, should be the same price as a house in Nebraska, then you understand nothing. To say that those who disagree have a "narrow perspective" is a simple low brow ad hominem argument, and is without merit.

The way America is being self-destructed is that people such as you with narrow perspective have propagated the “perception” that a 5-star home should be available for everyone to purchase at a 1-star price, and if not, it is a “bubble” and “unjustified”.

That's just a silly strawman argument, and you know it.

In my previous post, I asked why a 600-sqft condo was not enough for a family of 4 at the 1-star price that you desire, as that is what most people in the world typically get to live in. There are many trailers and manufactured homes that sell in the 10,000-20,000 dollar range.

That is a silly comparison. Much of the value of real estate is the land itself. People who buy trailers do not necessarily own the land that the trailer sits on.

Let us first define what the median “home” should be. Then we can estimate its median value and then count its multiple against the local median income. The reason for the collapse is NOT that median home values rose a lot (which they DID NOT), but that quite a few folks bought a lot more house than they could ever afford.

Right here, it's hard to take you seriously. I am amazed that you would seriously make the argument that home values did not rise a lot in the bubble. That is so demonstrably false as to be laughable. I don't know where to go from here. You might as well say the sun doesn't emit light.

I have been posting on many blog sites for a long time, but came to patrick.net only recently. I have seen many many posters like you and klarek. Frankly, folks like you are in the majority on every blog. Are you doing this self-destruction intentionally? I hope not, and think it is just your limited perspective. I do not see you guys stopping any time soon, which is why I also believe that America is in a self-destructive death spiral, and that there will be many more jobless bean burrito eaters pretty soon.

You made the claim that inflating housing prices leads to jobs and a stable economy, and I disagreed. You have provided absolutely nothing to back up your argument. Your argument doesn't even make sense. So which one of us do you you really think is being destructive?

tts says

Sure. What makes you think things are getting better instead of worse?

Most--not all--but the majority of economic trackers are improving.

tts says

Uh there is something very new about stores raising prices in a recession. Prices are supposed to go _down_ not up. The weak businesses already failed a year ago, now few remain other than the big box stores.

What makes you think they aren't? Inflation is basically zero. Stores aren't raising prices. Walmart tried a promotion to increase sales. It didn't work so they ended the promotion. It doesn't say anything about the rest of the economy.

tts says

Like they planned on doing it because its such a good thing with inventory through the roof that they still can’t get rid of? Really?

Inventory is not through the roof. Last I checked it was up slightly from the low it reached a few months ago. But still much, much, much lower than 2007/2008.

gameisrigged,

I answered your questions many times already. The answer to both your questions is the same. Home values collapsed because YOU succeeded in spreading the perception that the home price appreciation that we had just in some parts of the country was totally unjustified, and so the whole country should suffer a massive correction in prices. You will continue to spread that perception, until all American homes are totally worthless. I already stated that perception is reality. If the perception changes that home values will rise 10% in the following year, how many current homeowners will foreclose intentionally?

Your whole argument that the home price rise was unjustified has to be either based on Shiller's inflation adjusted charts, or based on median price to median income multiples that indicate affordability. Both of those do a poor job in defining what a "home" is, so how can you use those blindly? I am not saying using those metrics is wrong, but define them well first, and use them the same way across the world. How can anyone justify a typical dirty 1000-sqft apartment in India or China's metros being 50 times the local typical household income while considering it unjustified for a nice typical single family home in say L.A or Boston to be even 5 times the local typical household income?

The demand/supply argument is not strong. There is always demand if the perception is that prices will go up. Supply exceeds demand if prices are expected to go down. This is true in every part of the world. A lot of people are waiting on the sidelines or have exited homeownership because the current perception is that prices will go down.

You want a palace of gold for just a few dollars, and if I call that as unreasonable and suggest a small condo for that price, you just call my argument "silly".

You consider it "fake" money if housing goes up even 2% per year. In other words, you will be happy if housing goes down in value every year like a used car does. Should that not apply to the stock market, 401k investing, gold, silver et al? Is all "investing" fake and "greedy"? Are you so distraught with your own life that everyone losing their wealth in every possible way is all that you wish your every living minute?

Our citizens have lost 14 trillion in wealth in the last few years, as per this article out today titled :
AP : Painfully slow economic gains

http://news.yahoo.com/s/ap/us_ap_economy_survey;_ylt=AsAio.rf2XeDRENxvvJn8HOs0NUE;_ylu=X3oDMTNsa2J1cWJuBGFzc2V0A2FwLzIwMTAxMDI4L3VzX2FwX2Vjb25vbXlfc3VydmV5BGNjb2RlA21vc3Rwb3B1bGFyBGNwb3MDMwRwb3MDMTAEcHQDaG9tZV9jb2tlBHNlYwN5bl90b3Bfc3RvcnkEc2xrA2Fwc3VydmV5cGFpbg--

clayfire23 says

Your questions have already been answered many times. Tatupu explicitly specified Detroit as vastly below inflation.

Actually it was ME who used Detroit vs DC as an example of how local housing markets follow local fundamentals, from which you entirely missed the point and went off on a baseless tangent about me being inconsistent. Now, Detroit aside (which, by the way, has NOT tracked below inflation for all of the past 30 years like you said), where are we talking about where housing hasn't tracked with inflation? You insinuated that this is a widespread problem and has been going on for three decades. I think you are full of it. Just admit you made that up.

clayfire23 says

I have stated time and time again that much of the MidWest has underperformed inflation, has never had a boom, but definitely a bust.

WHERE??? I've looked at bubble graphs for every single metro region and you're complaints aren't backed by any of them.

clayfire23 says

I also told you to dig up the data yourself (taste of your own medicine) than ask me for data.

http://www.housingbubblebust.com/CaseShiller/Midwest.html

I told you to dig up readily-available data on something that should by this point be intuitively known. You are asking me to dig up data on your bullshit claim. When the burden of proof lies on your side, you look really freaking stupid by challenging someone else to disprove it.

clayfire23 says

One of my early posts on this thread asked for Shiller to point out the markets where home prices were lagging inflation. Shiller sticks just to comparison against inflation in his charts, but once you realized that there are indeed many places in the USA where homes were lagging inflation, you changed your story for it now be about local GDP and local conditions. You cannot have it many different ways.

I didn't. You are just to freaking stupid to grasp that markets are different and that a boom in local GDP will spur the housing sector of that region. That was my only point, and you are the only person that was confused by it. A child could understand this faster than you ever will. It comes as no surprise that a person incapable of grasping simple anecdotes such as that would have the absurdly wild imagination (and lack of knowledge of recent history) to believe that artificially pumping up home prices has a real and long term positive impact on the economy. Hey, why don't we just print a bunch of money until we're all rich? It's that simple!

tatupu70 says

Most–not all–but the majority of economic trackers are improving.

If by improving you mean not as bad as the worst of 2009 you'd be correct. Just because things are a little less bad, mostly due to gov. support, doesn't mean that things are actually better or that a recovery had started. If anything it looks like we're headed for a double dip.

tatupu70 says

What makes you think they aren’t?

Only the larger chains can afford to stay in business by virtue of being big in the first place. The mom n' pops were already squeezed out of most markets by them years ago and the few that still remain have a hard to impossible time competing with them. This is old news....

tatupu70 says

Inflation is basically zero.

Sure, if you don't count the cost of health care, food, gas, or commodities and use a contorted version of rents as your benchmark for home prices. You're seeing plenty of +debt deflation+ (home debt) right now, but there is actual +monetary inflation+ (ZIRP, QE, xxLF, payment on interest for banks from FED, etc.) going on too, which is why commodity prices are rising which is driving up the cost of goods. That is the effect the currency wars (competitive devaluation) are having right now. And its not getting better, but worse. QE2 is coming, weather its a blow out or incrimental is unknown but it is coming.

tatupu70 says

Stores aren’t raising prices. Walmart tried a promotion to increase sales. It didn’t work so they ended the promotion. It doesn’t say anything about the rest of the economy.

Uh, sure a "promotion" to buy more expensive goods, right that'll encourage sales in a recession.... They never dropped prices back down and other retailers are starting to raise prices as well.

tatupu70 says

Inventory is not through the roof. Last I checked it was up slightly from the low it reached a few months ago. But still much, much, much lower than 2007/2008.

Its lower than 2009 but still high compared to how they normally do business. They still haven't sold most of the goods they bought in _spring 2010_ and now its fall. They also took large inventory of goods in anticipation of a recovery by Christmas, but now forecasts are for a worse Christmas than last year.

clayfire23 says

I answered your questions many times already. The answer to both your questions is the same. Home values collapsed because YOU succeeded in spreading the perception that the home price appreciation that we had just in some parts of the country was totally unjustified, and so the whole country should suffer a massive correction in prices. You will continue to spread that perception, until all American homes are totally worthless

LOL you can't possibly believe that. NOBODY is that dumb.

clayfire23 says

Your whole argument that the home price rise was unjustified has to be either based on Shiller’s inflation adjusted charts, or based on median price to median income multiples that indicate affordability. Both of those do a poor job in defining what a “home” is, so how can you use those blindly?

If you ever bothered to read the Case-Shiller methodology, you'd see it's pretty sound and far more sophisticated than anything you could ever come up with. In fact, I doubt you possess the capacity to even read an abstract of the methodology, let alone have an opinion about it.

tts says

tatupu70 says
Uh there is something very new about stores raising prices in a recession. Prices are supposed to go _down_ not up. The weak businesses already failed a year ago, now few remain other than the big box stores.
What makes you think they aren’t?
Only the larger chains can afford to stay in business by virtue of being big in the first place. The mom n’ pops were already squeezed out of most markets by them years ago and the few that still remain have a hard to impossible time competing with them. This is old news….

I'd appreciate if you wouldn't purposely misquote me.

tts says

Uh, sure a “promotion” to buy more expensive goods, right that’ll encourage sales in a recession…. They never dropped prices back down and other retailers are starting to raise prices as well.

OK--this is tiring. Walmart's promotion was to LOWER prices--I think it was ~6 months ago. They thought it would spur more sales. It did, but just not as much as they had hoped/expected. So they moved prices back to the pre-promotion levels. Prices went up--but only to the levels they were at 6 months ago.

I think a lot of what you say might be OK if you wouldn't make everything so dramatic and full of hyperbole. "through the roof", "collapsing", "falling apart", etc.

thunder .... you're really hitting on something. I've noticed the exact same thing and it's pretty much across the board on products. Packages that used to weigh 16 oz. are now 13 or 14, etc.

thunderlips11 says

Inflation is may have started to creep up on us, and it’s hiding in reduced sizes and quality rather than price increases.

Well hopefully this'll trick us fat Americans into eating smaller portions. Having less people get quadruple heart bypass surgeries after decades of eating cheap 1/2 gallons of ice cream will shave off the cost of our total national healthcare bill :)

Packages that used to weigh 16 oz. are now 13 or 14, etc.
The Great Repackaging happened during the oil bubble of 2008.

tatupu70 says

Walmart’s promotion was to LOWER prices–I think it was ~6 months ago.

Prices are higher than they were 6 months ago, and a year ago too. It isn't just Walmart raising prices, its the clothes and electronics manufacturers too. Every body is right now. Walmart was just one of the bigger and more visible ones.

tatupu70 says

I think a lot of what you say might be OK if you wouldn’t make everything so dramatic and full of hyperbole. “through the roof”, “collapsing”, “falling apart”, etc.

You might think of it as "dramatics" but from a historical perspective they're correct. Even the talking heads on TV call it the worse recession since WWII, which is just a round about way of saying the Great Depression.

tts says

Prices are higher than they were 6 months ago, and a year ago too. It isn’t just Walmart raising prices, its the clothes and electronics manufacturers too. Every body is right now. Walmart was just one of the bigger and more visible ones.

No they're not. Have you checked out LCD TVs lately?

tts says

You might think of it as “dramatics” but from a historical perspective they’re correct. Even the talking heads on TV call it the worse recession since WWII, which is just a round about way of saying the Great Depression.

Oh, well--if the talking heads on TV say it then it must be true. Never mind that it's nothing like the Great Depression..

tatupu70 says

No they’re not. Have you checked out LCD TVs lately?

You're conflating technology improvements with monetary inflation? That is an apples to oranges comparison. You can read the BLS commodity price list (http://www.bls.gov/ppi/ppitable06.pdf) if you want a more correct view. Great article on that here (http://gonzalolira.blogspot.com/2010/10/signs-hyperinflation-is-arriving.html) but, "Grains as a class have risen over 33% year-over-year. Refined oil products have risen just shy of 13%, with home heating oil rising 18% year-over-year. "
tatupu70 says

Oh, well–if the talking heads on TV say it then it must be true. Never mind that it’s nothing like the Great Depression..

Most people still put some store in what the talking head on the TV box says. These days food stamps and unemployment benefits have reduced the soup kitchen lines and hobos, but that just hides the problem, that doesn't mean that there isn't one.

clayfire23 says

gameisrigged,
I answered your questions many times already. The answer to both your questions is the same. Home values collapsed because YOU succeeded in spreading the perception that the home price appreciation that we had just in some parts of the country was totally unjustified, and so the whole country should suffer a massive correction in prices. You will continue to spread that perception, until all American homes are totally worthless.

Ha, ha - I didn't know I had that kind of power.

Hey everyone - I command you not to buy a house until they cost $1 each. LOL.

So THAT'S what you meant by "we are deflating housing"? You mean it is your belief that the housing crash was caused by some dudes on a message board? Sorry, but I have to disagree with your theory.

I already stated that perception is reality. If the perception changes that home values will rise 10% in the following year, how many current homeowners will foreclose intentionally?

I disagree. Lots of people tried to wait out the crash, and ended up chasing the market down. Silly homeowners thought it would be over in a few months and we'd be right back to bubble-land. That's why the majority of houses for sale in 2008 were foreclosures - because nobody would put their house up for sale unless forced to. Did that "perception" that prices would immediately come back help anything? No. Many people's homes are worth even less now, so waiting actually made things even worse for them.

Your whole argument that the home price rise was unjustified has to be either based on Shiller’s inflation adjusted charts, or based on median price to median income multiples that indicate affordability. Both of those do a poor job in defining what a “home” is, so how can you use those blindly? I am not saying using those metrics is wrong, but define them well first, and use them the same way across the world. How can anyone justify a typical dirty 1000-sqft apartment in India or China’s metros being 50 times the local typical household income while considering it unjustified for a nice typical single family home in say L.A or Boston to be even 5 times the local typical household income?

We're just going in circles now. You keep insisting that comparing our prices to other countries is relevant, when several of us have explained to you why it's not a good comparison, and you haven't addressed any of those points. Just the fact that you consider a communist country with a population density over 4 times greater than the U.S. to be valid as an unqualified comparison of housing cost, shows you haven't the slightest clue what you're talking about. And again, the fact that you're trying to compare trailers where the buyer doesn't even own the land it sits on, is just embarassing for you.

The demand/supply argument is not strong. There is always demand if the perception is that prices will go up. Supply exceeds demand if prices are expected to go down. This is true in every part of the world. A lot of people are waiting on the sidelines or have exited homeownership because the current perception is that prices will go down.

O.K., I'll let every economist in the world know that you do not believe supply vs. demand has any effect on markets. I'm sure they'll rewrite all the textbooks in light of your revelation.

You want a palace of gold for just a few dollars, and if I call that as unreasonable and suggest a small condo for that price, you just call my argument “silly”.

No, claiming that I said I "want a palace of gold for just a few dollars" isn't silly at all, is it? And when did I say that, again?

You consider it “fake” money if housing goes up even 2% per year.

Strawman.

In other words, you will be happy if housing goes down in value every year like a used car does. Should that not apply to the stock market, 401k investing, gold, silver et al?

Only if it's overvalued.

Is all “investing” fake and “greedy”? Are you so distraught with your own life that everyone losing their wealth in every possible way is all that you wish your every living minute?

Strawman.

Our citizens have lost 14 trillion in wealth in the last few years, as per this article out today titled :

False. That "wealth" was fake, overinflated bubble assets. A more accurate way to put it would be to say that housing was overvalued by 14 trillion dollars, and now it is returning to normal. What good is fake wealth if it can't be sustained, and screws up the economy when it crashes?

tts says

You’re conflating technology improvements with monetary inflation? That is an apples to oranges comparison.

I'm not conflating anything. You specifically mentioned electronics as somewhere that prices were rising. Now you want to change and say you were actually talking about commodities?

robertoaribas says

There was a rather in depth article about this today in fact, on the news, profits are dropping at LCD manufactures which rather proves this is not deflation, and rather a market disequilibrium. Funny Tapa-bootie thought this meant something else!

Not really funny ha-ha, but whatever makes you laugh is a good thing. What I thought was that it meant prices of LCD TVs were falling. Which is pretty much the definition of deflation.

robertoaribas says

If you really feel that this entire crisis is caused because some people see it, and actually write about it, well as they say in the south, God bless you! [I think that translates from Southern to English as ” you are too much of an idiot to bother explaining it to” but I don’t speak fluent Southern]

LOL

klarek, you have now self-destructed yourself....LOL....thanks for confessing that your entire philosophy is based on Case Shiller data. That is all you got? Case Shiller data is just ONE measure, and is by no means without major flaws

1. It uses data from just 20 metros, and ignores MANY metros including the MidWest that have multi-million populations

2. It compares same home re-sales, but totally ignores improvements/remodelling/teardown and reconstruction of the home that causes it to go up in value. In the last 20 years, so much has gone into home renovation/room additions/finished basements etc and government sponsored re-development of several neighborhoods and homes, all of which raises the value of a given home, but that does not matter to Case Shiller.

3. It only considers homes that have been sold twice in a specific short time period, and so that skews the sample quite a bit, and includes more of the short term "flip" sales especially with foreclosed homes

To be honest, the Case Shiller index actually does not help your case or mine. It can easily overstate both home price appreciation AND home price declines because of its methodology. Other methodologies are also not perfect, which is why I keep bringing you guys back to first defining what a median home is before analyzing its price or affordability. You can be like gameisrigged and refuse to acknowledge the greediness of wanting to buy a palace of gold for a dollar, or do some fair analysis. The choice is yours.

Case Shiller's big research basically just says that home prices have stayed the same as inflation over the past 100 years. They do not jump around and include GDP, local economy etc. They are consistent in what they say, unlike you. You like to use inflation where it works for you, and then jump to GDP where it does not. And by the way, GDP can easily be bloated up with fake housing/infrastructure building, and so GDP cannot be justified to do more building or price rises. The Chinese government does this on a massive scale with government sponsored home and city building, and there are many ghost cities with no citizens. GDP is another factor that actually does NOT help your argument.

But ignoring all that, and even just looking at the Case Shiller data for what it is worth, I see many places even its 20 cities where prices are now below inflation. As per the inflation calculator provided by the Bureau of Labor Stats at
http://data.bls.gov/cgi-bin/cpicalc.pl, the cumulative inflation from 2000 to 2010 is 27%. From 1990 to 2010 is 67%. So prices should be 27% higher than 2000, and yet it is not in ALL the following cities, considering that the Case Shiller index started at 100 in Jan 2000. It is actually not up 67% from 1990 in quite a few cities just in the 20 that Case Shiller follows. There are many cities in the MidWest like Indianapolis, St.Louis, Kansas City etc where prices have lagged inflation quite a bit.

2010/2000/1990 index values
Atlanta 109/106/69
Charlotte 115/102/74
Dallas 119/106/na
Phoenix 111/105/66
Las Vegas 102/105/82
Chicago 125/107/71
Cleveland 106/103/69
Detroit 70/105/58

There are more cities in the Case Shiller list that are pretty close to being on par with inflation now and if home prices drop even more, will start lagging inflation.

Now who trusts the official inflation numbers put out by the BLS? that is a whole different story and not worth getting into here...enough to say that the official inflation numbers are considered to be far less than what they actually are....

tatupu70 says

I’m not conflating anything. You specifically mentioned electronics as somewhere that prices were rising.

And they are rising. The new tech causes temporary price drops but then the price starts to go up again because the matierials they're made from keep costing more. Did you not read the BLS report?

tatupu70 says

Not really funny ha-ha, but whatever makes you laugh is a good thing. What I thought was that it meant prices of LCD TVs were falling. Which is pretty much the definition of deflation.

"Deflation" as its used by the FED is a monetary term when talking about the money supply as a whole shrinking effecting the value of the dollar. You're talking about the price of a single class of goods, or even just a single item falling which can also be described as deflation in terms of price but not as economists use it. The BLS report shows the price pretty much _all_ commodities rising though, and that will effect everything. You still haven't addressed that.

tts says

“Deflation” as its used by the FED is a monetary term when talking about the money supply as a whole shrinking effecting the value of the dollar. You’re talking about the price of a single class of goods, or even just a single item falling which can also be described as deflation in terms of price but not as economists use it. The BLS report shows the price pretty much _all_ commodities rising though, and that will effect everything. You still haven’t addressed that.

I haven't addressed it because you weren't talking about it until just last post. Previously you were arguing that prices were rising and using WalMart as an example. If that were true, it would be shown in the CPI. Which it's not. Inflation has been and continues to be very tame.

Now if you want to argue that we will see inflation in the future because of rising commodities--that's a different discussion. I would say that's a big maybe. Of course commodities have risen over the last year as the world economy has improved. Not sure that's big news.

tts says

“Deflation” as its used by the FED is a monetary term when talking about the money supply as a whole shrinking effecting the value of the dollar.

Wrong. Here is the generally accepted definition of deflation:

In economics, deflation is a decrease in the general price level of goods and services.

It can be caused by monetary factors, but that is not the definition.

It appears that James at bubblemeter already beat me to what I said in my last post. He posted this in 2009.
http://bubblemeter.blogspot.com/2009/05/cities-below-2000-inflation-adjusted.html

clayfire23 says

klarek, you have now self-destructed yourself….LOL….thanks for confessing that your entire philosophy is based on Case Shiller data. That is all you got? Case Shiller data is just ONE measure, and is by no means without major flaws

I look at them all. CS has pretty sound methodology though.
clayfire23 says

It compares same home re-sales, but totally ignores improvements/remodelling/teardown and reconstruction of the home that causes it to go up in value.

Actually, if you bothered to look up the methodology used by the group that collects the data, they do exactly that. Try again.

clayfire23 says

It only considers homes that have been sold twice in a specific short time period, and so that skews the sample quite a bit, and includes more of the short term “flip” sales especially with foreclosed homes

There isn't any kind of covenant on time which you're alluding to.

tatupu70 says

I haven’t addressed it because you weren’t talking about it until just last post.

Uh yes I was, I've said commodities multiple times now.

tatupu70 says

Previously you were arguing that prices were rising and using WalMart as an example. If that were true, it would be shown in the CPI. Which it’s not. Inflation has been and continues to be very tame.

CPI is juked and I already said why (doesn't track home prices, gas, food, etc. properly), BLS report has the numbers, you're still ignoring that. Quite changing the subject and look at the BLS report.

tatupu70 says

Wrong. Here is the generally accepted definition of deflation:
In economics, deflation is a decrease in the general price level of goods and services.
It can be caused by monetary factors, but that is not the definition.

Yes you cited one of the definitions, good on you, there are multiple ones. Use the proper one in its proper place. Also use the one you intend to use properly. "General price level" is not one product or even class of goods, its all of them. Address the BLS report and stop changing the subject.

tts says

CPI is juked and I already said why (doesn’t track home prices, gas, food, etc. properly), BLS report has the numbers, you’re still ignoring that. Quite changing the subject and look at the BLS report

you realize that BLS is responsible for CPI too, right? So, the PPI that you quote is correct, but the CPI isn't? OK--whatever you say.

I did address the BLS report. It was the PPI which tracks producer price index. Do you not understand what it means?

tts says

Yes you cited one of the definitions, good on you, there are multiple ones

I'm sure there are any number of incorrect ones...

If foreclosures are "spreading," what effect does that have on prices?

http://www.npr.org/templates/story/story.php?source=patrick.net&storyId=130881128#recommendationCntHref

robertoaribas says

tapa bootie: owners equivalent rent is something like 30% of the CPI index. In a world with dropping and/or stagnant rents this offets a rather fair amount of inflation in other categories.
I’m not saying we are seeing serious inflation today, deflationary pressures from rent and housing price drops and credit contraction are outweighing them; just saying the CPI is probably not capturing true inflation very well given nearly 1/3 of it is housing related.

Aren't housing costs about 30% of an average families budget? So that's what they should represent in the CPI too.

Isn't capitalism grand.

robertoaribas says

don’t charge more because they want to

You don't like more money? What's wrong with you?

"The market" is orthogonal to morality and as such facilitates amorality and the eventually the de-facto enslavement of people given the physical economics of land tenure and the fact that landlords reap what they do not sow.

"As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce." -- some communist

> Not the kind of place I would ever buy.

Thanks for your comments.
Why not, though? By your own estimates ("I wouldn’t be surprised if you could get $2200-2400"), it appears to offer higher ROI % that some of your properties reported here.

Yey. Apocalypse is back. Actually I'll plant sweet potatoes.

bubblesitter says

Fed should seriously start planning on getting some ink and paper from China for QE4.

It may just be the whisky doing the thinking for me tonight, but I think I have a brilliant idea. Let us outsource the fucking Fed to China and get _them_ to print the damn money themselves. Saves a lot of time and trouble since they are going to get the money anyway... Bernanke can go fuck himself for 99 weeks on unemployment.

native94027 says

bubblesitter says

Fed should seriously start planning on getting some ink and paper from China for QE4.

It may just be the whisky doing the thinking for me tonight, but I think I have a brilliant idea. Let us outsource the fucking Fed to China and get _them_ to print the damn money themselves. Saves a lot of time and trouble since they are going to get the money anyway… Bernanke can go fuck himself for 99 weeks on unemployment.

you go to the front of the class

Bap33 says

native94027 says

bubblesitter says

Fed should seriously start planning on getting some ink and paper from China for QE4.

It may just be the whisky doing the thinking for me tonight, but I think I have a brilliant idea. Let us outsource the fucking Fed to China and get _them_ to print the damn money themselves. Saves a lot of time and trouble since they are going to get the money anyway… Bernanke can go fuck himself for 99 weeks on unemployment.

you go to the front of the class

Actually this has already been happening. The reason the People's Bank of China has $2.5T of money-good assets under its wing is because it forcibly confiscates all USDs China's exporters receive for their goods, and prints the yuan in exchange.

Or so I've read (IIRC this is one of Peter Schiff's theses). Obviously there is outward loss of USD as China makes import purchases, but that's the general pattern since the mid-90s.

Tenouncetrout says

CNN.COM had the stones to print that “70%” of real estate is afordable.
Afordable for whom, Foreigners?

70% is affordable for dual income households willing to invest every penny they have into a mortgage. Not to mention their hip hop thug children, left alone to raise themselves while momma works at the office.

It's very comforting to know that Patrick (influenced by that Duck Dude I presume) has changed the name from "Housing Crash Forum” to the much more optimistic “Housing Market Forum.” It sounds so much better. Unfortunately, prices are still crashing.

http://www.doctorhousingbubble.com/7-charts-showing-a-10-to-15-percent-decline-in-home-prices-for-u-s-housing-in-2011/?source=patrick.net

Clarence 13X says

Tenouncetrout says

CNN.COM had the stones to print that “70%” of real estate is afordable.
Afordable for whom, Foreigners?

70% is affordable for dual income households willing to invest every penny they have into a mortgage. Not to mention their hip hop thug children, left alone to raise themselves while momma works at the office.

100% agree

Troy ... from the article:

"In a separate report today, the Realtors group said U.S. sales tumbled 25 percent to a 4.16 million seasonally adjusted annual pace in the third quarter from the previous three months. The pace was 21 percent below the 5.28 million rate of the year- earlier period."

A 25% drop in sales from a previous bad sales year doesn't translate into higher prices in the future. Without adequate sales activity needed to burn through the excess (as in huge) inventory, prices will continue to be stagnant at best, with the likelihood of decreasing prices remaining high. With all this "good news," keep in mind the millions of homes in the shadow inventory that the banks are withholding from the market in order to prevent the supply from decreasing values even further. No matter how you look at it, home prices will be pressured via market forces in a downward direction for years to come.

RayAmerica says

A 25% drop in sales from a previous bad sales year doesn’t translate into higher prices in the future.

Was 2009 a bad housing year? I thought prices generally rose in '09.

RayAmerica says

Without adequate sales activity needed to burn through the excess (as in huge) inventory, prices will continue to be stagnant at best, with the likelihood of decreasing prices remaining high

Agreed. I think sales activity is already rising and will continue to slowly rise making your point moot.

RayAmerica says

With all this “good news,” keep in mind the millions of homes in the shadow inventory that the banks are withholding from the market in order to prevent the supply from decreasing values even further.

Ah, yes. The infamous shadow inventory. Banks for some reason didn't put all this inventory on the market in 2009 while prices were rising... It's the boogeyman hiding in the closet waiting to bite unsuspecting buyers.

RayAmerica says

No matter how you look at it, home prices will be pressured via market forces in a downward direction for years to come.

Speak for yourself Ray..

robertoaribas says

Supply and demand are forward looking… and both are against you at this point in time. Year over year SALES is indicative of demand… and forward looking in terms of price.

Year over year numbers are most definitely NOT forward looking. Month to month numbers are better but not great. Look at pending sales or mortgage applications. Those are actual forward looking statistics.

robertoaribas says

Once again, you must be going to lose your A$$ if prices drop. You aren’t stupid enough to believe what you write, so it must be an emotional response.

Wow--it must be nice to live in such an insulated world where you know everything before it happens. You do understand that sales activity has been picking up in the last few months after a sharp drop when the credit ended, right? If anyone is acting emotionally, it's you...