Anyone who watches the market carefully knows that lenders are withholding supply to cause prices to bottom. This is in the best interest of the members of the banking cartel. It’s surprising to me they managed to pull it off. Cartels are inherently unstable, most often because each member has a strong incentive to cheat by increase supply to take advantage of the improved pricing. In my opinion, that is what will likely cause the engineered spring rally of 2012 [Read More...]
One of the cartoons I post when appropriate is called the National Squatters Entitlement. It speaks to a truth about people’s attitudes toward home ownership. People convince themselves they own property even if they have no equity claim. Their names may be on title, but all they really own is their loan. I discussed this at length in Money rentership: housing and the new American dream: The mortgage encumbrance gets to the core of the unnoticed change in people’s concept [Read More...]
There is a consensus that something needs to be done to fix the US Housing market. Of course, this consensus opinion is wrong, but everyone seems to have their pet idea on what form of market manipulation will produce a desired outcome — ostensibly to reflate the housing bubble. I argue the pundits are trying to solve a problem that doesn’t exist. Sure banks, loan owners and true owners of real estate want to see prices stablize and go up [Read More...]
What is a Mello Roos tax? The Community Facilities District Act (more commonly known as Mello-Roos) was a law enacted by the California State Legislature in 1982. The name Mello-Roos comes from its co-authors, Senator Henry J. Mello (D-Watsonville) and Assemblyman Mike Roos (D-Los Angeles). The Act enabled “Community Facilities Districts” (CFDs) to be established by local government agencies as a means of obtaining community funding. When California Proposition 13 passed in 1978, it restricted the ability of local governments [Read More...]
Astute Observations