The Ownership Society

[Milton Kuo]

Re: Nice Catch

If you’ve bought in the last two years you will be underwater sleeping with the fishes like Luca Brasi in the not too distant future.

I'm not so certain this is true anymore. As the last housing bubble cycle has shown, the Federal Reserve and the U.S. government will stop at nothing to reflate housing prices. I strongly suspect that, for decent neighborhoods, it will be possible to buy at the top of the bubble and ultimately come out break-even or better if one is willing to hold on for 10 years or so.

I bitterly regret not speculating idiotically in 2011.

[don]

Re: Nice Catch

Playing the upside of the bubble is often suicidal.

[lektrode]

Re: Nice Catch

.... buy at the top of the bubble and ultimately come out break-even or better if one is willing to hold on for 10 years or so.

I bitterly regret not speculating idiotically in 2011.

+1

for that matter?
i've been 'too careful' most of the past 30...

the flip side?
have a little bit o money in the bank, NO debt - and..
i own outright everything in my 'domain' - as in: see, touch, taste, sleep on (i'd say with, but thats a toss-up) and get stuck mowin...
(and THEN there's timing belts..)

so... guess it could be worse

but that - and the present sitch in The USA today - dont make it feel any better...

[Milton Kuo]

Re: Nice Catch

Playing the upside of the bubble is often suicidal.

I'm not talking about trying to speculate on a bubble. I'm saying that the way the system works, a speculator (or non-speculator) could be stupid enough or unlucky enough to buy at the absolute top and still manage to break even or make a profit due to central bank and federal government policies to reflate asset prices. The only "rule" of "investment" that seems to matter is: "The three most important things in real estate are: location, location, and location."

Meanwhile, the Federal Reserve casino is unlike normal casinos. While you can choose to not play the games at the casinos in Las Vegas and keep your money; if you choose not to play the games at the Federal Reserve casino, you will be penalized with loss of purchasing power and/or money as you scramble to find a safe place to put your money.

[don]

Re: Nice Catch

I'm not talking about trying to speculate on a bubble. I'm saying that the way the system works, a speculator (or non-speculator) could be stupid enough or unlucky enough to buy at the absolute top and still manage to break even or make a profit due to central bank and federal government policies to reflate asset prices. The only "rule" of "investment" that seems to matter is: "The three most important things in real estate are: location, location, and location."

Meanwhile, the Federal Reserve casino is unlike normal casinos. While you can choose to not play the games at the casinos in Las Vegas and keep your money; if you choose not to play the games at the Federal Reserve casino, you will be penalized with loss of purchasing power and/or money as you scramble to find a safe place to put your money.

Milton - I know this isn't the plan of action you're referring to but as we all know, bubble-mania is a powerful tool for getting people in over their heads. One of the best sheeple shearers ever devised and a big favorite of the debt economy. For people more cognizant of their finances, the fed has an incentive plan for those folks as well, the one you outlined. Tread wisely. The bounce back can take quite a while and not every post bubble is a replica of the last one - critical where one is literally "counting" on it being just that.

[GRG55]

Re: Nice Catch

Milton - I know this isn't the plan of action you're referring to but as we all know, bubble-mania is a powerful tool for getting people in over their heads. One of the best sheeple shearers ever devised and a big favorite of the debt economy. For people more cognizant of their finances, the fed has an incentive plan for those folks as well, the one you outlined. Tread wisely. The bounce back can take quite a while and not every post bubble is a replica of the last one - critical where one is literally "counting" on it being just that.

Commodity bubble in the 70s, Japanese asset bubble in the 80s, tech/telecom bubble in the 90s, global property bubble in the 2000s - which was prematurely aborted by the onset of the financial crisis. As that latter bubble inflated I recall lots of discussion, by EJ and others such as Bill Fleckenstein, that not only would it end badly but it would be extraordinarily difficult to find an asset class to reflate large enough to recover the losses from a burst property bubble. Some speculated there was no obvious, sufficiently large asset class and the Fed would therefore be unsuccessful in the next reflation. EJ constructed and published a reasoned argument that alternative energy and infrastructure might be the chosen (preferred?) candidates.

Instead, here we are. In the midst of what might be the greatest global credit mania in history. With tightly sequenced, overlapping reflation of every asset class under the sun.

I suppose we should have seen that coming...

[don]

Re: Nice Catch

I suppose we should have seen that coming...

When I was a kid we used to play on the RR tracks.

We saw the trains coming.

Our parents didn't think it was that good an idea.

What did they know . . . .

[GRG55]

Re: Nice Catch

When I was a kid we used to play on the RR tracks.

We saw the trains coming.

Our parents didn't think it was that good an idea.

What did they know . . . .

Interesting how much smarter our parents become the older we get...

[GRG55]

Re: Nice Catch

Commodity bubble in the 70s, Japanese asset bubble in the 80s, tech/telecom bubble in the 90s, global property bubble in the 2000s - which was prematurely aborted by the onset of the financial crisis. As that latter bubble inflated I recall lots of discussion, by EJ and others such as Bill Fleckenstein, that not only would it end badly but it would be extraordinarily difficult to find an asset class to reflate large enough to recover the losses from a burst property bubble. Some speculated there was no obvious, sufficiently large asset class and the Fed would therefore be unsuccessful in the next reflation. EJ constructed and published a reasoned argument that alternative energy and infrastructure might be the chosen (preferred?) candidates.

Instead, here we are. In the midst of what might be the greatest global credit mania in history. With tightly sequenced, overlapping reflation of every asset class under the sun.

I suppose we should have seen that coming...

Out of Thin Air

By: Doug Noland | Fri, May 29, 2015

...The current global Credit Bubble is unlike anything in history (and the analysis incredibly challenging). I've tried to explain its origin was the Federal Reserve's response to the early-nineties banking crisis...

...The creation of "money" and Credit ("Out of Thin Air") throughout the market-based Credit apparatus evolved into history's most powerful Credit mechanism. It also proved fatefully contagious. Unprecedented access to cheap mortgage (along with auto, Credit card, student loan, etc.) borrowings was granted to millions of individuals with deficient Credit histories. Similar dynamics created unimaginably easy Credit Availability for business borrowers. For sovereigns, the boom in market-based finance doomed the likes of Argentina, Iceland and Greece (to name only a few). Predictably, the resulting busts have been progressively more spectacular...

...There are a few critical aspects to the backdrop worth keeping in mind. For all intents and purposes, it's become one enormous global Bubble - the U.S., China, EM, Europe and Japan. Unfettered fungible "money" and Credit - "Out of Thin Air" - have provided both the fuel and the glue. Especially after BOJ and ECB QE/currency devaluations - and the resulting flow of speculative finance to "king dollar" securities markets - tightly interrelated global Bubbles essentially converged into one. With China's renminbi tied to the U.S. dollar, the two super financial and economic Bubbles have for awhile now been closely interlinked. As cracks have surfaced in China - surely exacerbated by global competitive currency devaluations - Chinese and American Bubbles have become only further melded...

...At this point, global central bankers remain united in their cause. Military leaders are not. On the one hand, central banks around the world face similar pressures and remain motivated to work in concert to sustain both domestic Bubbles and the greater global Credit Bubble. Government and military officials, though, are increasingly focused on a spectrum of pressing security issues - military, cyber, economic and financial. With the global pie no longer expanding, policies have turned inward looking and insecure. Integration and cooperation are giving way to antagonism and aggression...

[don]

the Ownership Society Chronicles

Maxim Petrichuk/Shutterstock

From Business Insider
You may have heard that real estate is expensive in the Bay Area.

This is how expensive:

A 9′ by 7′ tent someone has pitched in their garden is currently going for $899 per month in the Silicon Valley town of Mountain View.

the visionary, hisself . . .

[Polish_Silver]

Re: the Ownership Society Chronicles

Bay Area real estate was pricey long before Bush. It has more to do with building restrictions than anything else. Interest rates and bank policy are nationwide,
but only SV and a few other places have nose bleed house prices.

[don]

Re: the Ownership Society Chronicles

Bay Area real estate was pricey long before Bush. It has more to do with building restrictions than anything else. Interest rates and bank policy are nationwide,
but only SV and a few other places have nose bleed house prices.

Bush was the Chief Executive cheerleader for the Mother-of-all Housing Bubbles.

That's all I'm sayin'.

George W. Bush

[vt]

Re: the Ownership Society Chronicles

Bush was the Chief Executive cheerleader for the Mother-of-all Housing Bubbles.

That's all I'm sayin'.

George W. Bush

Damn Right! It was Bush AND the Democrats; every one of the corrupt bunch!

Unfortunately the major media, and apologists everywhere for the liberal side of the crooks, only parrots Bush's fault.

http://www.bloomberg.com/apps/news?p...d=aSKSoiNbnQY0

The Main Street Media loves to point out 30 to 1 leverage on Wall Street, but conveniently hides 60 to 1 leverage at Fannie and Freddie.

http://us.macmillan.com/recklessenda...tchenmorgenson

http://www.amazon.com/Reckless-Endan.../dp/1250008794


http://www.forbes.com/sites/peterfer...ancial-crisis/

[Polish_Silver]

Clinton's Role in Housing

Bush was the Chief Executive cheerleader for the Mother-of-all Housing Bubbles.

. . .

Clinton played quite a role as well, including these actions:

1) Promote a big ass stock bubble, which popped under Bush, motivating Bush to launch an even bigger housing bubble.

2) Watering down Glass-Steagal, deliberately choosing not to regulate derivatives, and general deregulation of financial markets.

3) Keeping Greenspan on, allowing the Long Term Capital bail out, etc.

[don]

Re: Clinton's Role in Housing

Clinton played quite a role as well, including these actions:

1) Promote a big ass stock bubble, which popped under Bush, motivating Bush to launch an even bigger housing bubble.

2) Watering down Glass-Steagal, deliberately choosing not to regulate derivatives, and general deregulation of financial markets.

3) Keeping Greenspan on, allowing the Long Term Capital bail out, etc.

All so true, though to assign blame to these entertainers is misplaced.

a thumbnail description of the last 3 presidentes:

Clinton - used car salesman makes it (really) big

George W - idiot son of powerful father

Obama - 21st century step-and-fetch-it


(in the future if I mention George W, assume the other two are included in the remarks, a pre-requisite here on the 'tulip . . . .)