RE: Cash Update (or at least a slice)

[EJ]

Re: Cash Update (or at least a slice)

me thinks the term "overleveraged investors" refers to common people rather than chief banksters. The former shall suffer when things unwind while the latter shall be, as always, spared any damage.

Indeed the law and economic law will continue to be differentially, and deferentially, enforced.

[vinoveri]

Re: Cash Update (or at least a slice)

me thinks the term "overleveraged investors" refers to common people rather than chief banksters. The former shall suffer when things unwind while the latter shall be, as always, spared any damage.

you're obviously correct; my misapprehension.
Keep in mind that the breadth of gov favoritism was/is not so limited - this is a (not short) list of direct recipients of TARP (one of many fed programs); how many more creditors, investors and large depositers indirectly benefitted from these infusions - comes back to accountability, who is the perp, "unwitting" victim, enabler etc - http://projects.propublica.org/bailout/list

They can and will continue to pull off bubble-collapse-reflation-bubble-collapse, increasing wealth (for few) and inequality (for many). As long as economic growth which is the key to nirvana continues via increasing aggregate demand and speculation via fiat-credit leverage, fairness, equity and rule of law be damned if they interfere; we need bubbles and we need controlled fraud to get them really going. And the folks that perpetrate the fraud and/or are dependent on its success will not fail en masse b/c the fix is in.

[Mega]

Re: Cash Update (or at least a slice)

I think this is what is so upsetting (to me anyway)........@ the end of the 80's we had a MEGA crash, it was lovely.....but it was sharp & short lived. This time around the BASTARDS have done EVERYTHING possable to keep the party going!

I suspect that if (when) the UK has a REAL fall in house prices then i will (at last) have the collaspe i talked about, i dreamed of. When?............not before 2015, i guess 2016/17..........i can't wait!

Mike

[EJ]

Re: Cash Update (or at least a slice)

I think this is what is so upsetting (to me anyway)........@ the end of the 80's we had a MEGA crash, it was lovely.....but it was sharp & short lived. This time around the BASTARDS have done EVERYTHING possable to keep the party going!

I suspect that if (when) the UK has a REAL fall in house prices then i will (at last) have the collaspe i talked about, i dreamed of. When?............not before 2015, i guess 2016/17..........i can't wait!

Mike

The housing bubble and reflation have been a disaster for the American middle class. The next cycle will produce an even greater gap.

There is no more sure-fire predictor of political instability for a nation than a decline in per-capital GDP.

China's will be sudden and create major difficulties whereas in the U.S. the polity through the asset price inflations, busts, and reflations simmers like a frog in a pot.

[Mega]

Re: Cash Update (or at least a slice)

Bloody Hell !
http://www.zerohedge.com/news/2013-1...-pray%E2%80%9D

More than a million US people are about to lose benafits ! ??????

When people lose everything & have nothing left to lose, they lose it!!!!

Mike

[Mega]

Re: Cash Update (or at least a slice)

"We must speak truth to the power strutor"

The People need to find the strenth & will......................
Mike

[Southernguy]

Re: Cash Update (or at least a slice)

The article you refer to says:


"One of the more recent works (Farber and Valletta from the San Francisco Fed) indicates that about a fifth of long-term unemployment is due to extended benefits. With just over 4 million long-term unemployed recently, this would imply that the absence of extended UI benefits could lower the unemployment rate by 0.5%-pt.

This will directly impact the Fed's credibility to manage the economt in a "data-dependent" manner:"

Interesting.

[Mega]

Re: Cash Update (or at least a slice)

Oh i bet the FED would LOVE a food riot or two.........but i wonder if they get it.......for the life of me i can't understand WHY there is no revoultion?

Mike

[santafe2]

Re: Cash Update (or at least a slice)

We hold the rental in a self-directed IRA, so all the rental income is entirely tax deferred. We do pay the property taxes.
I like owning things free and clear.

We had opportunities to participate with trusted friends in a highly levered 100 unit deal, but I could not overcome the worry that a rash of vacancies would bleed us dry on that giant mortgage payment. For the record, those folks are doing just fine in that deal, making twice my return.
But I sleep well!

We did the same thing here in late 2011 & 2012 as the housing market bottomed. It takes patience and a good understanding of neighborhoods to buy correctly but in this market it's safer to net 4% with housing rentals than it is to net 4% in the stock market or bond market. Leverage is a double edged sword and these appear to be good years to protect your capital at the expense of larger gains. Outside the US there appears to be more investment opportunity than there is here but that sort of investment is best left to an experienced hedge fund manager and not one the average investor is either equipped to investigate or invest.

[don]

Re: Cash Update (or at least a slice)

Big money is not reselling $1 trillion in real estate

RealtyTrac put out an interesting report that essentially confirmed what I was seeing in various individual cases and various case studies. Big investors are not selling with an endgame of rental securitization or with larger profits as the big prize. Over $1 trillion in real estate purchases were made by investors since 2011:




One of the interesting finds also ties in with the drop in inventory. Big money investors are not exactly putting the homes back on the market to resell:

“(RealtyTrac) Among all investor purchases during the time period, 57 percent have subsequently been re-sold, but only 25 percent of properties have been re-sold by entities purchasing at least 100 properties, and only 1 percent of properties have been re-sold by entities purchasing at least 1,000 properties.”

We are talking about a massive amount of real estate that was yanked off the market.

In a typical housing market each sale would likely generate another sale. For over a generation the US has been locked in a property ladder mentality. You buy your starter home, build some equity, and sell for a bigger place. So each sale also brought on another sale, two transactions. With this massive foreclosure crisis you have big money essentially conducting one and done deals. Buy a home and keep it off the market.

Not moving out

Banks pressured law makers to circumvent accounting rules that apply to you and any other mortal. These “measures” to help the average folks essentially transferred over giant chunks of real estate to large money investors holding onto properties like a pit-bull. One of the measures of course is the selective foreclosure process:

“(CNN Money) RealtyTrac estimates that 47% of the nation’s foreclosed homes are currently occupied. The percentage actually tops 60% in some hot housing markets, like Miami and Los Angeles.

Those still living in repossessed homes include both former owners and renters. Either way, their time in the homes is mortgage and rent free.”

This is a big deal.

[lektrode]

Re: Cash Update (or at least a slice)

Big money is not reselling $1 trillion in real estate

RealtyTrac put out an interesting report that essentially confirmed what I was seeing in various individual cases and various case studies. Big investors are not selling with an endgame of rental securitization or with larger profits as the big prize.
........
..
...................This is a big deal.

i'll bet it is - what was the name they gave all these 'free fed money to buy em up' scams a few years back?
would imagine they're already sitting on 1000% markup, so why sell....

[Forrest]

Re: Cash Update (or at least a slice)

Bloody Hell !

http://www.zerohedge.com/news/2013-1...-pray%E2%80%9D

More than a million US people are about to lose benafits ! ??????

When people lose everything & have nothing left to lose, they lose it!!!!

Mike

Yes...it is why America is so well prepared for a militia type crack down wherever trouble shows up. Fema has been preparing for ages. It is also why none of this information ends up on the news...no one at FEMA wants anyone to find out just how dicey things are, lest those people get a little upset, or something. FEMA actually does not want to have any trouble. We only foment Arab Springs on other people's shores.

I was expecting something to come out of Washington about this by January 15th, but it looks like they are going to see how people react first. I imagine there is going to be a lot of rent not paid in January. Or mortgages.

[Polish_Silver]

killing the middle class?

The housing bubble and reflation have been a disaster for the American middle class. The next cycle will produce an even greater gap.

Is that because the asset owned by the middle class was houses, which took a big loss, but the fed has been great at pumping up bonds and stocks, overwhelmingly owned by the top 5% of wealth/income people?

[Polish_Silver]

Re: Cash Update (or at least a slice)

Wishful thnking? Madoff is the exception. No one else is in prison, nor been held personally responsible civilly, only corporations have been fined. The abrogation of social contract in failure to enforce the laws against the widespread frauds (as Bill Black describes) that were perpetrated leading up the AFC is a continuing travesty. Why do you think next time will be any different?

My thinking exactly. And more people will learn how to game the system.

[jr429]

Re: Cash Update (or at least a slice)

Despite PE guys like Blackstone, Colony, Carlyle (I have friends pretty senior at each) buying up a lot of RE lets keep in mind that the "cash buyers" from China are not necessarily cash buyers. Many is the result of shadow banking where 2% USD loans are mis-appropriated (it's technically illegal to borrow USD at 2% in China then buy overseas realestate but it happens) to drive realestate in the US. Here in Orange County California there's an obscene number of purchases happening. In the Peninsula in the bay I recently hard of several "cash purchases" all of a sudden "unable to obtain the funds".