Did someone say, ``Housing market recovery?''

[c1ue]

Re: Did someone say, ``Housing market recovery?''

ASH,

Actually you might rethink your view that inflation is a tax on the wealthy.

By any possible measurement technique, the wealthy own the majority of assets in this nation. More importantly, they own the assets with pricing power.

These are the ones which people cannot do without - but these are not the ones like residential property.

Given that there is a severe glut of residential property, the notion of construction cost being a factor in prices is completely wrong for the short term (3 years or so). Even disregarding the 'cramdown' of multiple households into single homes as well as the subdivision of McMansions, delay in kids leaving the nest, etc - the sheer number of excess homes is enough to make new construction irrelevant for quite some time.

But back to inflation: since the wealthy own that part of the economy which has pricing power, then in reality inflation hurts the middle class the most. Because the middle class owns assets but not the pricing power ones. Those who have fixed incomes also get hurt.

As for the Fed just taking on more in its balance sheet - that is purely a coping mechanism. Ultimately those supplying the US - China, GCCs, etc will still insist on some type of concrete payment.

Having a US dollar decline due to US government policy of printing like mad - again why would they send oil and goods? Is the US strong enough to exact outright tribute from these nations?

[WildspitzE]

Re: Did someone say, ``Housing market recovery?''

Really high inflation is a tax on the wealthy, and tends to hurt creditors. It also makes it difficult to earn a living by loaning money.

Playing devil's advocate too: This assumes that private lending will remain dominated by fixed rate lending. Will the US see a more systemic shift to floating rate lending in general? Most emerging markets, after their encounters with mass inflation, are dominated by floating rate lending. It wasn't until these recent "prosperous" times that banks in these countries really began to re-lend in fixed rate lending.

[WildspitzE]

Re: Did someone say, ``Housing market recovery?''

ASH,

Actually you might rethink your view that inflation is a tax on the wealthy.

By any possible measurement technique, the wealthy own the majority of assets in this nation. More importantly, they own the assets with pricing power.

These are the ones which people cannot do without - but these are not the ones like residential property.

Given that there is a severe glut of residential property, the notion of construction cost being a factor in prices is completely wrong for the short term (3 years or so). Even disregarding the 'cramdown' of multiple households into single homes as well as the subdivision of McMansions, delay in kids leaving the nest, etc - the sheer number of excess homes is enough to make new construction irrelevant for quite some time.

But back to inflation: since the wealthy own that part of the economy which has pricing power, then in reality inflation hurts the middle class the most. Because the middle class owns assets but not the pricing power ones. Those who have fixed incomes also get hurt.

As for the Fed just taking on more in its balance sheet - that is purely a coping mechanism. Ultimately those supplying the US - China, GCCs, etc will still insist on some type of concrete payment.

Having a US dollar decline due to US government policy of printing like mad - again why would they send oil and goods? Is the US strong enough to exact outright tribute from these nations?

It depends on the inflation rates, right? There are inflection points.

However, I tend to agree as well. Those that get to use the currency first get the most benefit in terms of purchasing power, and we all know that isn't the middle class on down.

[BiscayneSunrise]

Re: Did someone say, ``Housing market recovery?''

But I've read widely on many things, and that combined with my real world experiences has led me to a conclusion: material wealth never brings happiness,
M

Exactly right. It was Arnold Schwarzenegger who said that he was no more happy when he was worth $50M than when he was worth $40M.

[LargoWinch]

Re: Did someone say, ``Housing market recovery?''

But I've read widely on many things, and that combined with my real world experiences has led me to a conclusion: material wealth never brings happiness, ...

Agreed, but it does bring economic liberty and freedom.

At a certain level, debt is not assimilar to bondage.

[ASH]

Re: Did someone say, ``Housing market recovery?''

ASH,

Actually you might rethink your view that inflation is a tax on the wealthy.

By any possible measurement technique, the wealthy own the majority of assets in this nation. More importantly, they own the assets with pricing power.

These are the ones which people cannot do without - but these are not the ones like residential property.

Given that there is a severe glut of residential property, the notion of construction cost being a factor in prices is completely wrong for the short term (3 years or so). Even disregarding the 'cramdown' of multiple households into single homes as well as the subdivision of McMansions, delay in kids leaving the nest, etc - the sheer number of excess homes is enough to make new construction irrelevant for quite some time.

But back to inflation: since the wealthy own that part of the economy which has pricing power, then in reality inflation hurts the middle class the most. Because the middle class owns assets but not the pricing power ones. Those who have fixed incomes also get hurt.

As for the Fed just taking on more in its balance sheet - that is purely a coping mechanism. Ultimately those supplying the US - China, GCCs, etc will still insist on some type of concrete payment.

Having a US dollar decline due to US government policy of printing like mad - again why would they send oil and goods? Is the US strong enough to exact outright tribute from these nations?

The wealthy also own a lot of securities, collect a lot of "economic rent" (to use Dr. Hudson's parlance), and, being creditors, are owed a lot of money. Almost by definition, the wealthy own a good deal of everything of value; just because there are categories of wealth which preserve purchasing power in high inflation doesn't mean that they won't be hurt when inflation eats into the other categories of their wealth. Anyway, that's a broader point than the one I was making above; you cannot seriously contend that banks will prefer very high inflation.

With regard to the strength of the dollar for foreign exchange, and what will result if the Fed continues to monetize... I'm right there with you. My conjecture is not "here's what the Fed will do, and it's going to work" but rather "here is what the Fed might try to do." Among multiple potential points of failure, I'd say that destroying the dollar is pretty high on the list.

[*T*]

Re: Did someone say, ``Housing market recovery?''

I am simply saying all anti abortionists are not Christians.

I think you are saying not all anti-abortionists are Christians.

Logically almost opposite statements.

[dummass]

Re: Did someone say, ``Housing market recovery?''

I think he is saying that not all non-antiabortionists are not anti-Christians?:confused:

[FRED]

Re: Did someone say, ``Housing market recovery?''

I think he is saying that not all non-antiabortionists are not anti-Christians?:confused:

Gentle reminder. This is a thread about housing, not about abortion.

[metalman]

Re: Did someone say, ``Housing market recovery?''

Gentle reminder. This is a thread about housing, not about abortion.

the usa housing market is an abortion... but point taken. resisting the temptation to jump in.

[johngaltfla]

Re: Did someone say, ``Housing market recovery?''

Without going through all the posts there is this myth permeated by the Bubblemedia that the infallibility of government will cure our problems in the real estate market, I wish to offer my two cents on this subject, or better 9 cents on the dollar if you're a GM bondholder. From my on the ground perspective and involvement with the construction industry let me remind the clowns in the various financial media that until the condominium mess is cleaned up along with the housing backlog in inventory we are no where close to a recovery and hence any "economic" exit from the recession is a myth at best. Pinellas County, FL (St. Pete/Clearwater) has a 3 year supply of houses, not condos, just houses alone. Citrus County, FL about one hour north of the Tampa area has a 40 year supply of prepared residential lots. These numbers assume normalized average population growth for our state, something we are not experiencing now as the exodus is accelerating, even with the illegals.


The nightmare that these clowns refuse to inform you about except with vague references to "securities" being held by the banksters is the large amount of homes buried in the shadow inventory; homes that are neither foreclosed on but delinquent yet the paper is still held on the books. By refusing to foreclose on these homes there is this hope that the occupants will suddenly win the lottery and begin paying off their debts or that the Federal Government will bail them out. There is another shadow inventory which I like to call 'hurricane homes' where the banksters pray for a bum to set it on fire with a crack pipe party or a hurricane hits wiping it out. They do not offer it on the market because the selling price would be anywhere from 40-60% below the value they issued the paper for and the losses would be horrific from any perspective.

Thus if you analyze what is happening the facts have not changed:

1. There are many more banks technically insolvent based on their RMBS and CMBS holdings than advertised. My guess is 1/3 of the commercial banks in the U.S. fit this category.

2. The MBS insurers AND municipal insurers are technically insolvent. As I wrote in a piece a while back titled "Municide" the U.S. Government has to bail out the states and cities or we will see a wave of Chapter 9's that will rival the crisis of the 1930's.

3. The markets will not recover before 2011 at the earliest; the exact time when the Option ARMs resets will create havoc and a final downward plunge in our economy before a major restructuring must occur.

4. You can put all the lipstick on a pig along with a wig but when you kiss it, it still looks like Jim Cramer.

Play your own hand accordingly. If the Fed does not hyperinflate and buy all of the paper at issue price we will lose a good 30-40% of our banks in the next four years. If the allow this crash to occur we will see 40%+ unemployment when all is said and done and our nation's political system will change as a result; and not for the better, I might add.

[don]

Re: Did someone say, ``Housing market recovery?''

Without going through all the posts there is this myth permeated by the Bubblemedia that the infallibility of government will cure our problems in the real estate market, I wish to offer my two cents on this subject, or better 9 cents on the dollar if you're a GM bondholder. From my on the ground perspective and involvement with the construction industry let me remind the clowns in the various financial media that until the condominium mess is cleaned up along with the housing backlog in inventory we are no where close to a recovery and hence any "economic" exit from the recession is a myth at best. Pinellas County, FL (St. Pete/Clearwater) has a 3 year supply of houses, not condos, just houses alone. Citrus County, FL about one hour north of the Tampa area has a 40 year supply of prepared residential lots. These numbers assume normalized average population growth for our state, something we are not experiencing now as the exodus is accelerating, even with the illegals.


The nightmare that these clowns refuse to inform you about except with vague references to "securities" being held by the banksters is the large amount of homes buried in the shadow inventory; homes that are neither foreclosed on but delinquent yet the paper is still held on the books. By refusing to foreclose on these homes there is this hope that the occupants will suddenly win the lottery and begin paying off their debts or that the Federal Government will bail them out. There is another shadow inventory which I like to call 'hurricane homes' where the banksters pray for a bum to set it on fire with a crack pipe party or a hurricane hits wiping it out. They do not offer it on the market because the selling price would be anywhere from 40-60% below the value they issued the paper for and the losses would be horrific from any perspective.

Thus if you analyze what is happening the facts have not changed:

1. There are many more banks technically insolvent based on their RMBS and CMBS holdings than advertised. My guess is 1/3 of the commercial banks in the U.S. fit this category.

2. The MBS insurers AND municipal insurers are technically insolvent. As I wrote in a piece a while back titled "Municide" the U.S. Government has to bail out the states and cities or we will see a wave of Chapter 9's that will rival the crisis of the 1930's.

3. The markets will not recover before 2011 at the earliest; the exact time when the Option ARMs resets will create havoc and a final downward plunge in our economy before a major restructuring must occur.

4. You can put all the lipstick on a pig along with a wig but when you kiss it, it still looks like Jim Cramer.

Play your own hand accordingly. If the Fed does not hyperinflate and buy all of the paper at issue price we will lose a good 30-40% of our banks in the next four years. If the allow this crash to occur we will see 40%+ unemployment when all is said and done and our nation's political system will change as a result; and not for the better, I might add.

Dovetails nicely with the post on the next Katrina homeless being put in vacant foreclosures. The feds are working on it. Sounds like an insurance industry idea ;)

[jiimbergin]

Re: Did someone say, ``Housing market recovery?''

http://www.businessweek.com/bwdaily/...temp_top+story
FHA Loans: Return to 0% Down

A new Federal Housing Administration program will let first-time home buyers use their $8,000 tax credit for down payments or closing costs

Buyers who haven't owned a home for three years or longer are eligible for an $8,000 tax credit, thanks to a provision in this winter's stimulus package. Now, under a little-noticed program announced May 29, the Federal Housing Administration will steer the funds to cover closing costs directly—in some cases even offsetting the 3.5% minimum down payment FHA loans require. That's enough to cover most or all of the down payment and fees for homes up to the U.S. median price, now about $169,000.

The government tries one more time to restart housing. :rolleyes:

jim

PS. yes *T* that is what I meant. Thanks for correcting it.

[don]

Re: Did someone say, ``Housing market recovery?''

http://www.businessweek.com/bwdaily/...temp_top+story
FHA Loans: Return to 0% Down

A new Federal Housing Administration program will let first-time home buyers use their $8,000 tax credit for down payments or closing costs

Buyers who haven't owned a home for three years or longer are eligible for an $8,000 tax credit, thanks to a provision in this winter's stimulus package. Now, under a little-noticed program announced May 29, the Federal Housing Administration will steer the funds to cover closing costs directly—in some cases even offsetting the 3.5% minimum down payment FHA loans require. That's enough to cover most or all of the down payment and fees for homes up to the U.S. median price, now about $169,000.

The government tries one more time to restart housing. :rolleyes:

jim

PS. yes *T* that is what I meant. Thanks for correcting it.

Here in Cali they have a $10,000 tax credit for buying a new house. Keep in mind the state's broke. Must be a new one. (Must have been some fat envelope from the major builders here in the Tarnished State) Think of the impact that has on the tens of thousands of houses on the market that are not brand new. Pretty neat, hey :p:p The "Who Cares Who Gets Screwed" boyz in Sacto strike again

[metalman]

Re: Did someone say, ``Housing market recovery?''

Here in Cali they have a $10,000 tax credit for buying a new house. Keep in mind the state's broke. Must be a new one. (Must have been some fat envelope from the major builders here in the Tarnished State) Think of the impact that has on the tens of thousands of houses on the market that are not brand new. Pretty neat, hey :p:p The "Who Cares Who Gets Screwed" boyz in Sacto strike again

everyone ******* loved the gov't backed housing market... mortgage tax deductions... gov't backed loans... etc.... etc... until the ******* thing blew up, didn't they? now everyone is bitching because the gov't can't save the monster it created.

duuuuuuuuuuuuugh.