Jan202016
New York bankers preserved their own home values while crushing others
New York bankers refused to foreclose on properties in New York city to preserve the housing values in their own neighborhoods.
As Bernie Sanders recently pointed out, a cadre of major banks in the United States issue more than 35% of all home mortgages, and when you consider how many they service, the numbers go much higher, providing the too-big-to-fail banks significant influence over the housing market.
When housing went bust back in 2007 and 2008, lenders foreclosed on the subprime mortgages that defaulted first, partly because this was their established loss mitigation procedure, and partly because no bankers were subprime borrowers, so they didn’t give a shit about what happened to them. As a result, areas dominated by subprime mortgages endured price drops back to 1990’s levels.
When prime mortgage holders began defaulting two years after subprime borrowers quit paying, prices were already low in subprime areas, so lenders knew exactly what would happen if they foreclosed on alt-a and prime borrowers — lenders knew they would blow out the last remaining neighborhoods where prices held up. Instead, they opted to offer these borrowers loan modifications, and if the borrower didn’t repay, lenders simply allowed them to squat and live for nothing.
Allowing squatting to sustain home prices came with a cost. Once the word got out that it was possible to quit making payments and stay in their house for nothing, any borrower feeling financial distress from the Great Recession decided it was better to quit paying. Those who took greatest advantage of this were the ones who owed the most.
So we ended up with a bifurcated market. Bankers foreclosed in the poor areas dominated by subprime and pounded home prices back to the stone ages. Bankers didn’t foreclose in nicer areas, so prices remained high.
An example of this bifurcation is shown in the chart below that tracks the ratio of home prices in Orange County versus Las Vegas. The ratio was reasonably stable even through the housing bubble, but the bust was much more severe in subprime-dominated Las Vegas, so the ratio became greatly extended.
Perhaps lenders didn’t foreclose in prime areas because they felt they had no choice. If they wiped out house prices there, they would never recover on their bad loans, and they would go bankrupt. But maybe, just maybe, their motivation was more personal.
Would you like to guess where the ratio of foreclosures to delinquencies was the lowest? New York city — by a wide margin. Lenders foreclosed nearly everywhere else at much, much higher rates than they did in New York city — and not because it was a judicial foreclosure state where foreclosure is more difficult. In New York city, they didn’t even try. Lenders didn’t bother filing foreclosure paperwork for most delinquent mortgages and simply allowed everyone who quit making payments in New York city to squat. 
Why would they allow so much squatting in New York city?
Because that’s where the bankers live.
They didn’t want to push down the value of properties in their own neighborhoods, so they let all their neighbors live in houses they weren’t paying for. Given the atrocious behavior of New York bankers, this shouldn’t come as much of a surprise, but it makes it no less outrageous.
Not just did these guys take out financial system to the brink of ruin with their toxic loans that ripped off millions of hapless homeowners, not just did these guys reap huge bonuses and windfalls from the bailouts paid by these same hapless homeowners, they even conspired to preserve their own home values and wealth by allowing any of the financial elite who fell on hard times a free place to live while they figured out the next way to rip everyone off. Assholes.
Manhattan real estate prices shatter records
Robert Frank, Tuesday, 5 Jan 2016
The average apartment price in Manhattan hit a record $1.95 million in the fourth quarter. …
Real estate sales grew 9 percent in the quarter compared to the same quarter last year, according to real estate firm Douglas Elliman. But prices are soaring even higher: The average sales price jumped 12 percent, while the median sales price hit a record $1.15 million and the price per square foot hit a record $1,645.
“The (Manhattan) market continues to be a safe haven,” said Jonathan Miller, president of Miller Samuel, an appraisal firm. “The volatility and government intervention in China will just incentivize more outflows.”
As I noted in Bold California housing market predictions for 2016, “Another wildcard for 2016 is the activity of Chinese Nationals. Over 2015, higher house prices turned off this buyer group, and capital controls made it more difficult for them to get their money out of the country. These trends should worsen next year, eliminating a vital component of local demand. That being said, it could easily turn out the exact opposite if Chinese leaders loosen capital controls.”
Realistically, nobody knows what will happen with Chinese capital flows. If their financial markets continue to be downwardly volatile, there may be a last-minute push to get money out of the country before the illusory wealth evaporates, or this flow may simply be prohibited. In either case, it’s not a stable, long-term source of real estate investment funds.
And neither are the Russians (See: Wealthy Russians dump high-end US real estate)
Still, Manhattan real estate remains a tale of two markets. The condo market, driven in part by new construction favored by overseas buyers, is on a tear, with average sales prices jumping 25 percent over the past year to $2.66 million, and the price per square foot up 26 percent to $1,959. For just new construction, average sales prices hit $3.29 million or $2,210 a square foot.
Yet the co-op market, which is almost exclusively U.S. buyers and largely in older buildings, is selling for an average of $1.28 million or $936 per square foot.
That has bubble written all over it.
Which Housing Markets Have the Most to Worry About
By Nick Timiraos, December 23, 2015
Home prices are closing in on their records of the last decade, reigniting fears of bubbles. Time to panic? …
There are concerns from housing analysts that low mortgage rates have allowed buyers to pay more for homes that would look unaffordable relative to incomes if mortgage rates rose to 5% or 6%. “It’s not a bubble, but some markets are overpriced,” said John Burns, who runs a homebuilder consulting firm in Irvine, Calif.
So which markets look most overvalued? …New York: In New York City, prices of condominiums have set nominal records and are very close to their 2006 real records.
None of this is reason to panic, and nobody outside of ZeroHedge is claiming it is. However, it is prudent to be aware of the fact that house prices are high by price-to-income standards due to the very low mortgage rates prevalent today. When mortgage rates finally do rise, housing will be more costly to finance, so future buyers will require much higher incomes to sustain current prices or even push prices higher.
Orange County housing will never be cheap again. I doubt we will see large future price declines, but future appreciation will likely be less than previous generations enjoyed.
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Tic tic toc; ie., “subprime is contained”
Bernanke downplays China impact on world economy
JOYCE HO, Nikkei staff writer
HONG KONG — The former chairman of the U.S. Federal Reserve Ben Bernanke said on Tuesday that the world faced bigger problems than China’s economic slowdown.
“I don’t think China’s economic slowdown is that severe to threaten the global economy,” said Bernanke at the Asian Financial Forum held in Hong Kong.
http://asia.nikkei.com/Politics-Economy/Economy/Bernanke-downplays-China-impact-on-world-economy
Dow sinks more than 300 points as oil, Asia sell off
The Dow industrials plunged more than 300 points Wednesday as a renewed rout in oil prices and global equities triggered a selloff on Wall Street.
The S&P 500 SPX, -2.28% was down 41 points, or 2.2%, at 1,840 falling below its Aug. 25 closing low of 1867.61—a level viewed as key technical support point for the S&P, suggesting further moves lower may be ahead.
The energy sector was the worst performer on the S&P 500, down 4%, led by Chesapeake Energy’s CHK, -8.93% 9.5% tumble.
The Dow Jones Industrial Average DJIA, -2.18% dropped 332 points, or 2%, to 15,690 and the Nasdaq Composite COMP, -2.45% was off 97 points, or 2.2%, at 4,381.
International Business Machines Corp. shares IBM, -4.39% retreated 4.2% after the computer maker late Tuesday reported a drop in fourth-quarter earnings. The move in Big Blue was contributing nearly 40 points to the blue-chips benchmark’s decline.
The stock-market rout came as stocks racked up sharp losses world-wide, fueled by oil falling below $28 a barrel and worries over an economic slowdown in China and other developing markets.
“The fledgling hope from yesterday that markets were on the turn has been quashed by sharp overnight falls in Japan and Asia,” said Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor, in a note.
-452 Dow Now
It’s staring to look a lot like 2007. But this time, the FED is at .25 bps on the FF rate, and 4.5 trillion on the books.
Ponzi Schemes do NOT work, and YES, Orange County housing is gonna get killed …
Tic, Tic, Tic
Yawn. 😮
The volatility this year will cause a few ulcers. Raising interest rates also raises discount rates on anything with a future cashflow. The crappy assets that were previously supported by zero percent rates will fall precipitously. The good stuff should rise to the top. Of course, it’s really hard to know what’s good and what’s crap, and the indices will take a beating while investors sort it all out.
I have to agree with el O. Cash is a good asset right now. I’ve never had an ulcer from having too much cash on hand.
Maybe because nobody ever goes back and calculates how much holding cash cost them, relative to a broad index fund over many years?
I actually do calculate how my investments perform against a 75/25 portfolio of stocks and bonds as a benchmark. Once in a while there’s a feeling of disappointment, but never an ulcer like you might get from holding during a market crash.
2016 will be a great year to buy stocks.
The drop in stock prices is almost entirely driven by the drop in oil prices. The drop in oil prices is driven by the rise of supply. The rise in oil supply is driven by the rise of oil production outpacing the rise of demand.
Below $30bbl, oil production becomes uneconomical. People can only lose money at a fast pace for a limited time. Soon, oil producers will realize that pumping one more barrel of oil will cost them more than they can afford. Oh, and there’s no where to put it since global storage capacity is topping out.
The global oil market is a game of musical chairs where a rising number of oil producers are competing for a falling number of chairs. Rich oil producing countries will recess as profits fall. Oil exploration bonds will default as the expected profits are not realized. Luxury consumer retail will see drops in sales and profits.
Meanwhile, the real economy chugs along fueled by cheap oil. Consumer staples will do well as 100% of the population benefits from low energy prices. Durable goods do well as low rates and low gasoline prices encourages the purchase of larger, more expensive automobiles. Airline profits rise based on low fuel costs and higher ridership from rise discretionary income. Housing prices rise as a result of low rates (in reaction to economic head fake), low supply, and rising wages.
Oil prices will soon bottom, and remain there for a substantial time. Low oil prices will have a sustained benefit for the next few years on consumer spending. This is how we finally get out of The Great Recession, and people are selling instead of buying.
I don’t know that I believe 2016 is a great year to buy stocks, but I do believe lower oil prices will be a huge boon to the economy, and it will finally lift us out of the Great Recession.
Where’s the article, “DOW Soars 100+ Points Into Close”? I mean, if we’re gonna extrapolate the future from daily movements, why not hourly? Makes about as much sense.
This market collapse with give Trump an excellent excuse to blame Obama when he takes the oath 1 year from today. Providing more moral authority to implement his agenda of jobs & borders.
Or even, “Dow Catapults 326 Points from Intraday Low – Bears Selling at Low Lose Fortune.”
That’s not sexy, man! (said in Steve Carell’s 40-Year-Old Virgin voice)
This bear market may not be over yet. As long as a few people think the worst is behind us, there are a few people who haven’t sold yet. When everyone believes the Dow is going to zero, then we are at the bottom.
Homebuilder confidence remains at 6-month low
This doesn’t match the happy-talk in the financial media
Builder confidence in the market for newly-built single-family homes remained unchanged at 60 in January from a downwardly revised December reading of 60, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
While the number remained the same, it still sits at a six-month low, according to Stifel Fixed Income Chief Economist Lindsey Piegza.
“After eight months hovering in the low 60s, builder sentiment is reflecting that many markets continue to show a gradual improvement, which should bode well for future home sales in the year ahead,” said NAHB Chairman Tom Woods, a homebuilder from Blue Springs, Missouri.
NAHB Chief Economist David Crowe also commented on the report saying, “January’s HMI reading is right in line with our forecast of modest growth for housing. The economic outlook remains promising, as consumers regain confidence and home values increase, which will help the housing market move forward.”
The spin offered by the NAHB is not very credible. In fact, it’s so silly it’s rather laughable.
Purchase applications down 2%
Mortgage applications managed to post another increase as more people choose to refinance their homes.
Mortgage applications grew 9% from one week earlier, according the Mortgage Bankers Association most recent weekly mortgage applications survey for the week ending Jan. 15, 2016.
The refinance index surged 19% from the previous week, while the seasonally adjusted purchase index dipped 2% from one week earlier.
The refinance share of mortgage activity drove a lot of the growth, increasing to 59.1% of total applications, up from 55.8% the previous week.
Furthermore, the adjustable-rate mortgage share of activity increased to 6% of total applications.
The Federal Housing Administration share of total applications dipped to 13.7% from 14.4% the week prior, while the Veteran Affair’s share of total applications declined to 10.8% from 12.2% the week prior.
The United States Department of Agriculture share of total applications marginally decreased, falling to 0.7% from 0.8% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.06%, from 4.12%.
Also decreasing, the average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) dipped to 3.93%, from 4.02%.
The flight to safety in the bond market has caused mortgage rates to drop about a 1/4 point over the past few weeks. That’s why refinances are surging once again.
I remember IR giving his 2016 predictions based on where mortgage rates would be at, but I can’t remember if he had a prediction for housing based on rates below 4%. That didn’t seem like a strong possibility one month ago.
Any chance 30 year fixed will hit 3.5%?
30 year jumbo at wells fargo is at 3.5% right now…
And that’s the advertised rate. The real rate available without points can be an eighth to a quarter lower without points, or with very low points, depending on your qualifications.
So why is the jumbo loan half a percent higher than a conforming loan?
I mean lower
If mortgage rates remain below 4% this year, housing will do really well. Sales will be up significantly, and so will prices.
Get Over It: There Is No More Federal Deficit
You almost have to ask where the deficit has gone. Consider the following.
The Treasury projected last week in its monthly report on federal finances that the deficit next year (fiscal 2017) will be more than $25 billion less than it was this year. This will be the seventh consecutive year the deficit will be lower than the year before.
If the Treasury’s forecast for 2017 is correct, the deficit will be about 2.2 percent of GDP, the lowest since 2007.
With the deficit falling, federal debt growing more slowly and the debt as a percentage of GDP getting smaller, economists have mostly turned to other issues.
So has the financial and business media, which is so focused on the price of oil and China that, even in the midst of a presidential campaign with political control of the Senate in question, the deficit and other Washington-related stories are of little concern.
For that matter, the political media has largely ignored the deficit as well.
President Obama only mentioned the deficit once last week in his State of the Union Address, and that was just to make sure everyone knew it had fallen by close to $1 trillion since 2009.
The fact that the State of the Union Address didn’t include more about the deficit either wasn’t noticed or was completely ignored by almost all commentators and pundits, the congressional Republican leadership, rank and file Republican members and all of the GOP presidential candidates.
The federal deficit that in previous years made legislating in Washington more difficult had little-to-no impact last year. All of the big policy changes, which were enacted by the Republican-controlled Congress with substantial Democratic support, that is, on a bipartisan basis, raised rather than decreased the deficit compared to what it otherwise would have been. This included the doc fix, the two-year increase in the budget caps and the tax extender bill.
Reconciliation, the process that is supposed to be used to reduce the deficit, was instead used on the legislative fool’s errand of repealing Obamacare even though it was obvious from the start the bill would be vetoed. Using reconciliation to do this eliminated any possibility of it being used for deficit reduction.
Even though the limit on military spending was raised substantially last year, the Pentagon and its supporters in Congress are — the deficit be damned — already pushing for more.
Earmarks – where individual representatives and senators get money for a pet project or special tax break in return for their vote but were abandoned several years ago at the insistence of the tea party — returned last year and made deficit increases much more likely. This is likely continue this year with the leadership needing to buy support for individual appropriations to avoid even the threat of a government shutdown.
Even though the voters the GOP presidential candidates need to reach in the Republican primaries supposedly fiscally ultraconservative and the deficit should be a main concern, it so far hasn’t been an issue on the campaign trail.
All of this leads to an almost inevitable conclusion: the federal deficit that dominated U.S. politics for the past decade has disappeared as an issue . Almost no one talking about it, few are seemingly worried about it and it isn’t the deterrent to policy changes it used to be.
Equally as important, those in Congress, in interest groups and outside the beltway for whom the federal deficit was a prime reason for living now have to look elsewhere for political inspiration.
But, but, but, Obama is still a socialist muslim non-US-citizen. There’s still that!
This article appeared in Forbes, which is surprising. It also shows how stupid Democrats are that they have an issue where they can make the case that they are better for deficit reduction than Republicans, and they refuse to exploit it. Clinton balanced the budget and left behind a surplus. Bush squandered it. Obama inherited Bush’s mess, cleaned it up, and got us back to fiscal sanity, yet Democrats aren’t effectively making the case they made the difference. And why did the Tea Party remain silent as their colleagues in the Republican Party started buying votes again?
As the
mainstream mediahopium penguin brigade gloats, I suspect the Dems aren’t making the case they made a difference due to the following…U.S. Tax Revenue by Year
FY 2015 – $3.176 trillion est
FY 2014 – $3.021 trillion
FY 2013 – $2.775 trillion
FY 2012 – $2.45 trillion
FY 2011 – $2.3 trillion
FY 2010 – $2.16 trillion
FY 2009 – $2.1 trillion
That’s a $1 trillion increase in 6 yrs.
Both parties spend like drunk sailors. One party demands we pay for the spending and another actually does something to pay for the spending.
If only we could decrease the military industrial complex spending…
The other party has a solution too, … that nobody talks about: financial repression
It’s politically more palatable to screw people over when they don’t know it’s happening.
That’s the end game with inflation, which is why liberal economists always favor it. You don’t need to raise taxes on the wealthy if you merely undermine the value of their holdings through inflation.
To what? Zero?
Defense spending is 15% of the federal budget. Social Security is 37%, and Medicare and Medicaid are 27%. The net interest on the debt is 7% of federal spending to pay down the national debt($7+T of which was incurred under Obama’s watch).
The budget deficit this year will still be over $400B. Assuming 2% interest, this adds an extra $8B of interest payments for FY2017. Say what you will about the military-industrial complex, but even at $1B each, we would have 8 LRSBs for that $8B of interest paid, instead of nothing.
If you look at the national debt at $18T, 2% debt service is $360B/yr. This would pay well over half the defense budget. The problem isn’t defense spending, or even entitlement spending, the problem is financing these outlays with borrowed money. Plain and simple.
Half, maybe? The military industrial complex is the best example because both parties are complicit in growing spending on this.
Each party has its solution to the deficit and debt. They’re just dramatically different and politically impracticable until one party holds the executive branch and controls both houses in Congress.
We had 6 years of a Republican controlled government under Bush and 2 years of Democrat control under Obama, and those were some of the worst periods of deficit/debt growth for this country, so I think you have the premise all wrong. The best periods of deficit reduction have been under divided governments. The last 6 years of the Clinton presidency were highly contentious but resulted in a budget surplus, and now the last 6 years under Obama that again, have been highly contentious, have led to deficit reduction.
That’s why I think the best government is a divided government. Whenever one or the other party controls everything, you get the absolute worst policies and uncontrolled spending. Division helps put checks and balances on everybody and forces them to scale back their radical agendas. Disagreement leads to less spending.
The deficit is mainly a function of economic activity: as the economy grows, tax receipts grow and vice versa. The Clinton balanced budget was “achieved” via the dot.com bubble; nothing more. The Bush deficit was mostly due to the financial crisis, a significant cause of which was the dot.com bubble (and the poor prosecution of the wars). The Federal budget is not the source of most of the growth of government spending in the past few decades. It is in state and local government. The Federal budget is mostly a wealth-redistribution machine. There is very little that is discretionary, thus the president in power has very little impact on the budget.
New York City real estate finally valued at $1 trillion
The bankers win again
New York City real estate just experienced its largest growth since the last year of the pre-crisis boom, with the total market value of taxable property in the city finally exceeding $1 trillion, according to a report from The Real Deal.
Per The Real Deal’s report, the total market value of taxable property in New York City rose 10.6% in the fiscal year beginning July 1, which represented the largest increase since 2008.
From The Real Deal:
Average condo tax assessments rose the fastest among unit types, increasing by 10.7% to $9,302. Average taxes on co-ops rose by 6.5% to $6,837.
Brooklyn saw by far the largest spike in market values, with a whopping 16% increase year-over-year. Queens values climbed by 9.9% while Manhattan, which foots nearly two-thirds of the city’s property tax bill, saw values increase by 9.3%.
Something Strange Going on in Housing
It’s called reflating the housing bubble
My wife and I recently looked at homes around Washington D.C. We were shocked. Prices in many D.C. suburbs are 30% to 50% higher than they were five years ago. We visited Seattle over Christmas and found the same: Prices are up anywhere from 30% to 70% since 2009.
D.C. and Seattle are big, wealthy, cities. But almost everywhere around the country, homes prices are surging. Nationwide average home prices are up 30% since bottoming in 2012. They’re now just 4.5% off their 2006 bubble highs, according to data from Yale economist Robert Shiller. Even adjusted for inflation, average prices are back to where they were in 2004 — a year most would consider as firmly part of the housing bubble.
San Francisco prices are up 79.2% since 2009. Atlanta is up 53%. Phoenix, up 47.1%. Denver, 42.6%. Los Angeles, 49.7%. The magnitude of these gains rivals what we saw during the nuttiest portions of the 2000s bubble.
It’s crazy. And it’s underreported, likely because we’re still shellshocked from the housing crash.
Average home prices can’t sustainably rise faster than average incomes, especially if interest rates are rising (which they are). But look where we’re at: well above average and rising:
https://g.fool.com/art/newsletters/1255/images/hpi.png
As a percentage of median income, recent price gains have brought us almost halfway back to the 2006 bubble peak.
Don’t call this a bubble — mortgage borrowing is still low by historic standards — but things are changing. Consider a new type of mortgage San Francisco Federal Credit Union recently promoted. In response to “skyrocketing home prices” hampering affordability, the bank is offering a no-money-down mortgage with an adjustable interest rate and without requiring private mortgage insurance. Even 2005’s mortgage market would blush at those terms.
All real estate is local, so your house might be just fine. Everyone has a different housing story.
But we should ask: Why are home prices rising so quickly?
[Because lenders restricted supply to reflate the housing bubble]
If you called housing a bubble in 2003, you were right. But it took another three or four years for prices to peak. We can look at prices today and say things look crazy, but forecasting what might happen next is nearly impossible. Here’s how I think about housing:
A home is a great place to live. Historically, it’s been a lousy investment. Here’s a look at the long-term data, including an interview I did with Robert Shiller. Keeping your expectations in check is key in any investment, but especially housing, where emotions mix with leverage and social status.
If you’re not going to live in a home for at least five to seven years, you’re exposed to lots of variability. This is just like the stock market.The ability to wait out crazy fluctuations is your best defense in all investments, including housing.This is especially true when you break down how most mortgages amortize: Before 10 to 15 years of ownership, the large majority of your monthly payment is interest. And most people can’t write off interest from their taxes, since they take the standard deduction rather than itemize.
Put these together, and a smart home philosophy is to ask: Is this home a good place to live, raise my family, and live for a decade or more? If it is, great. People get into trouble when they ask, “Is this the right time to buy/sell based on market conditions?” Your odds of timing housing are no better than timing the stock market.
“…the bank is offering a no-money-down mortgage with an adjustable interest rate and without requiring private mortgage insurance.”
The zero down feature helps you buy sooner, but it kills your DTIs. It effectively shrinks the price range of homes you can buy (assuming you’re pushing your DTI limits to buy the most house possible) because your real income must support the full P&I at 100% LTV.
Just because you’re not paying PMI monthly and seeing it itemized on your monthly statement, doesn’t mean you’re not paying for mortgage insurance. The cost is included in your rate. So this is a silly uninformed comment.
The borrower will need to qualify for the maximum fully-amortized P&I possible at payment sixty one (beginning year six). This feature of this product further constricts the borrower’s purchasing power.
Once again, yawn…
Looking at prices alone, yes bubble.
Looking at cost of ownership relative to rent, not bubble.
So what is it?
As for the rent increase, I’d say a lot is demographic. People are getting tired of the sprawling suburbs and want to live closer to places they like to/need to visit. This drives up demand exactly where supply is already restricted, thus prices increase.
We don’t have irrational exuberance or a complete detachment from fundamentals yet, so not a bubble. Not nationally anyway.
“If you called housing a bubble in 2003, you were right. But it took another three or four years for prices to peak. We can look at prices today and say things look crazy, but forecasting what might happen next is nearly impossible.”
Yep
As a wise man once said, “You never know what an idiot will do”.
Ammon Bundy and His Gang Must Go to Jail
If we don’t want to see more gangs of armed men take up arms against the United States every time they disagree with federal government policy, then every single person in the Oregon siege must be arrested and prosecuted to the fullest extent of the law. Period.
But shockingly there are signs that these men may go free. The local sheriff, David Ward, just a few days ago met with their leader, Ammon Bundy, and offered them “safe passage” out of the state. Bundy, who has called for a meeting on Friday between his men and local authorities to discuss this, noted that they will likely take the sheriff’s offer and “we will go out of this state and out of this county as free men.”
Free men?! Well, actually I’m all for these men being free eventually. But first they deserve “safe passage” from the federal building they have illegally commandeered to the back of police car. From there they should be taken to police station where they will be fingerprinted, etc. and charged with a string of federal crimes.
Then they should be arraigned before a judge, and if they can make bail, released until they have their day in court. If all goes as it seems it should, they will be convicted of at least one felony, be required under federal law to give up their weapons, and then serve time in prison. And, assuming they don’t cause more problems while in federal prison, they will then be released and finally have earned the right to be “free men.” But only then should they be free men.
These armed men must be called to answer for their crimes just like any other American. The most serious charge they likely face is “sedition.” Under federal law, “seditious conspiracy” is defined as using force “to seize, take, or possess any property of the United States contrary to the authority.” The Bundy gang illegally taking control of federal property because they want to coerce the federal government to change its policies is the very definition of sedition. This crime carries with it a prison term of up to 20 years.
There’s a definite double standard here because when the Indians sieged at Alcatraz or Wounded Knee, they were not sent to jail. Same thing when the Black Panthers armed with rifles stormed the California state capitol. These were considered noble acts of protest meant to highlight the government’s oppression of an overlooked group of people.
I’m guessing the main difference here is that Ammon Bundy is not loved by Hollywood or the elite liberal media, so he has to go.
It may have something to do with the cause he supports as well. He wants to graze his cattle on our land and not pay for the privilege. It’s hard for me to find much noble support for this position.
I’m sure you’re outraged over the loss of income, but I think that’s actually just a symptom of the greater cause which is that Federal land management has been very unfriendly to the ranching business.
Measuring Success Reflating the Housing Bubble
Our latest housing scorecard examines housing recovery data, our programs’ performance, and areas for improvement.
As 2015 came to a close, we saw our housing market reach key milestones on the path to recovery – homeowners’ equity rose again, the number of homeowners in negative equity continues to decline, and purchases of new homes increased. It’s clear that we must continue to support programs that will allow more American families and homeowners to recover from the Great Recession.
Here’s a closer look back at some of our progress:
Homeowners’ Equity rose again in the third quarter of 2015. Homeowners’ equity (total property value less mortgage debt outstanding) was up $361 billion (3.0%) from the second quarter of 2015, for a total of nearly $12.4 trillion–the highest level since the fourth quarter of 2006. Homeowners’ equity peaked in the first quarter of 2006 at nearly $13.3 trillion. The increase in owners’ equity was $260 billion in the second quarter. The change in equity since April 1, 2009, when the Administration initiated its broad set of actions to stabilize the housing market, now stands at more than $6.1 trillion (+98.6%). (Source: Federal Reserve).
The number of homeowners in negative equity continued to decline in the third quarter. As of the third quarter of 2015, CoreLogic estimated that 4.1 million homes, or 8.1 percent of residential properties with a mortgage, were in negative equity. This compares to 4.3 million, or 8.7 percent, that were reported in negative equity in the second quarter and 5.2 million, or 10.4 percent one year ago. From the beginning of 2012 through the third quarter of 2015, the number of underwater borrowers (those who owe more on their mortgage than the value of their home) has declined by 66 percent–from 12.1 million to 4.1 million—or by 8.0 million homeowners. (Source: CoreLogic).
Purchases of new homes rose 4.3 percent in November but remained below the 500,000 mark. New home sales increased to 490,000 (SAAR) in November from a downwardly revised October pace of 470,000 and were 9.1 percent higher than a year earlier. New home sales have been at or above the 500,000 mark for 6 of 11 months this year. Data on new home sales can be volatile and are often revised. (Source: HUD and Census Bureau).
The Administration’s programs continue to help struggling homeowners. In all, more than 10.1 million mortgage modifications and other forms of mortgage assistance arrangements were completed between April 2009 and the end of November 2015. More than 2.5 million homeowner assistance actions have taken place through the Making Home Affordable Program, including nearly 1.6 million permanent modifications through the Home Affordable Modification Program (HAMP), while the Federal Housing Administration (FHA) has offered more than 3.0 million loss mitigation and early delinquency interventions through November.
$630,000: Orange County median home price in December is highest since Great Recession
By the numbers alone, Orange County’s housing market just had an incredible month, with the highest prices since the Great Recession and the busiest December in a decade.
But then again, new housing numbers out Tuesday don’t tell the whole story.
A surge in pricier new home sales helped account for the bump in pricing. And new loan-disclosure rules that delayed the closing of home sales in November resulted in a big jump in December transactions.
Still, local market watchers said, rising employment and continued low mortgage rates also had a hand in boosting the market in December.
Irvine-based home-data firm CoreLogic reported the median price of an Orange County home – or the price at the midpoint of all sales – was $630,000 in December. That’s up 8.2 percent from December 2014, the highest annual home-price gain in more than a year.
That’s also the highest median price for any month since the housing bubble burst eight years ago, and just 2.3 percent below the all-time high of $645,000 reached in June 2007.
In addition, 3,206 houses, condos and townhomes – new and existing – changed hands last month, up 13.8 percent, CoreLogic figures show. That’s the highest tally for any month since July and the most for a December since 2005.
December sales typically rise from November as builders and others rush to get housing transactions completed before year’s end. But last month’s sales jumped 31 percent from November, twice the average November-December increase.
Industry insiders across the state are blaming new loan-disclosure rules known as “TRID,” saying December stole some of the sales that normally would have closed in November because of delays those rules caused.
“I don’t think (the entire sales jump) would have happened without TRID,” CoreLogic analyst Andrew LePage said. “(Sales) would have increased. It just wouldn’t have been as big an increase.”
Here we go again …
We’re gonna get to the truth here. Either Larry is gonna be right or Lee in Irvine is gonna be right.
I say we’re in another housing bubble and all the reflation of real estate for the last 7 years has been a fraud … and is unsustainable.
This time when the collapse happens the FED will be a Paper Tiger pushing on a string.
Tic, Tic, Tic …
Great summary and helps me put together how there has been a housing dicotomy.
Central planning doesn’t work though, and I see can kicking as putting off the inevitable. I seriously doubt the bankers have things in control. If incomes aren’t there to sustain prices, they will crash eventually.
What I am estimating from this is that the second part of the crash of the housing bubble is coming and will punish areas that rapidly appreciated over the last 15 years. Not bubble 2.0, but the contuation of bubble 1.0.
The path matters.
“Central planning doesn’t work though, and I see can kicking as putting off the inevitable. I seriously doubt the bankers have things in control. If incomes aren’t there to sustain prices, they will crash eventually.”
There’s a difference between walking off a cliff and an imperceptible downhill grade. The change in elevation may be the same, but there are important differences in travel time and the condition of the hiker at destination.
Put another way: no one will notice if rates rise 100% over the next 30 years. If they rise 100% over the next 3 years everyone will feel the impact.
Incomes can sustain prices so long as rates allow. But rates are closely tied to the economy, and a struggling economy results in downward pressure on rates. Contrast this with a strong-growth economy which can sustain increasing rates with rising wages.
I find the quixotic certainty that rates will rise and crash housing somewhat amusing and somewhat pitiable. Seeing someone attack a windmill once is comical, but the tenth time is not.
Prices fall when supply exceeds demand, but supply also falls as demand and prices fall. You can’t have a price crash without excess inventory. Further that excess inventory needs to be perishable. Think manager’s sale at the bakery department. The reason prices crashed so hard during the housing bust was due not only to their distressed nature, but the fact that they were becoming more distressed by the hour.
Prices were falling so hard because: a) demand was also falling as credit contracted and price drops encouraged borrowers to wait, b) banks had to sell to recover capital or risk being insolvent, and c) supply was rising as defaults skyrocketed.
This friction between apathetic buyers and desperate sellers caused a rift to form in the space-time continuum. As we know from Star Trek, this isn’t good. The first sign of this rift is always volume. Look at volumes in 2006, and tell me if a crash was imminent? Do we see the same drop-off today?
The Most Mystifying Lines of Sarah Palin’s Endorsement Speech
Sarah Palin’s meandering, fiery, sarcastic, patriotic and blustery speech endorsing Donald J. Trump for president on Tuesday in Ames, Iowa, does not easily submit to categorization.
It has been described as performance art, a filibuster, even slam poetry.
Mrs. Palin has always been a singular force on the campaign trail. But in her years away from politics, the former Alaska governor and Senator John McCain’s Republican vice-presidential pick in 2008 seems to have spawned a whole new series of idiosyncratic expressions and unusual locutions — to the point where even Mr. Trump seemed occasionally mystified as he tried to follow along.
Below, a list of 10 of the most memorable lines of the speech, and an attempt to translate them:
http://www.nytimes.com/2016/01/21/us/politics/sarah-palin-endorsement-speech-donald-trump.html?_r=0
Our typical political circus has become a freak show.