it all eventually collapses lust like the Old Roman Empire.. taxation, lack of raw materials, debasing currencies, supporting a large military and endless wars, political corruption, declining population are all symbols of transition...not sustainable.. These events have all happened before with bad endings.. That said, these things can drag many years with ups and downs. QE creates more problems than it answers and we are down to gimmicks to re-creating a healthy economy.. Oil is probably the wild card in determining how long the world's economies can continue the game..
Good article and I agree with most of the posts. In South Florida we seem to have bottomed in some price ranges of the home market (say under $500,000) while higher end homes are still trending slowly downward. The condo/townhouse market for the most part has no life. Ditto with multi-family/small hotels (units). We seem to be at a crossroads in this area, now 5+ years past our peak of roughly spring 2005.
The Second-Mortgage Underwriting Failure [View article]
Moon Kil Woong said it correct... having 20-25% equity in homes would greatly stabilize the home market. This whole mess was created with 90% primary loans and 10-20% second mortgages, so no stability and rampant speculation was created.
It's all to late now but hopefully a lesson is learned here. Frankly second mortgages are foolish and should be outlawed.
Another Stimulus: Is the U.S. Still Nothing Like Japan? [View article]
Middle Classes need stability... stability in home prices via higher equity, no second mortgages, no ARMs. Eliminate the speculation via flippers with little equity. Starter homes should pay no property taxes..raise the homestead deduction or better yet eliminate taxes on low end housing, then watch mom and pop investors get back into rehabbing and selling homes.
Middle classes need taxes that are practical.. folks making 50k a year should pay no income tax, let them save or circulate in the economy..
give major tax breaks to small businesses, not large corporations. would you rather have mom and pop, or box stores that re-distribute wealth from the local economy.
of course we won't get started on entitlements, disgusting and endless growth of government at all levels, and endless military programs.
amazing in the course of my lifetime the changes to freedoms, and burdens of taxation and corruption that have taken over this once proud country.
So Many (Non-)Taxpayers with No Skin in the Game [View article]
agree Tom E.. low end workers have no business paying income taxes and what a crime it is to have property taxes on starter low end housing.. government programs and predatory lendors con those blue collar buyers into serfdom via long term debt contracts. How many end bankrupt or foreclosed? Same old story, prey on the weakest of society.
Wasn't it Warren Buffet who pointed out his secretary was in a higher tax bracket.
What Lies Ahead for the Housing Market? [View article]
agree with Jeff via FHA and tax credits, government can prop up low end of housing for a while. High end housing has little support and should hit pre-bubble (1998) levels.
real estate will continue to fall until the short sale/distress sales run the course, probably another 2+ years. Thought I read that Florida has 40-45% of current mortgage holders in negative equity, so much for the American Dream, courtesy of over leveraging and predatory lending.
How about 75% loan to value (ltv) fixed rate, 30 year terms. No seconds or equity lines. I'll trade lower return for stability. How about a 10-1 or less reserve requirement for banks.
The Financial Meltdown: Absolutely Nothing Has Been Fixed [View article]
as usual (author) Charles Hugh Smith is a talented writer with welcome insights on SA.
My ideas are simple: 1. cut large swaths of entitlements. 2. cut government staff's and agencies at all levels. 3. cut military spending and fictionalized . 4. "re" regulate the banking industry starting with reserve requirements. 5. No more bailouts for "to big to fail", break them up. 6. significantly lower taxes for middle class via income and property taxes. 7. address social security 8. allow home prices to fall into affordable levels. 9. have a hard look at tax shelters and tax codes
lots of available reforms, but when special interests control the levers, these glaring reforms will get "dirtied up" and never happen, corruption is the running the country. Or settle for years of slow growth, stagflation, and lots of bubbles and crises.
if one borrows money from the mob and can not pay up, we get the general idea of the abuse the borrower will receive. Allowing banks to hassle and abuse struggling homeowners, isn't quite the same but make no mistake in the banks strong arm tactics and games.
My two suggestions: The home serves as collateral, no other recourse, that will lead to prudent standards of under writing.
When a borrower is in default, no waiting 12-18 months to foreclose or "decide" on a 5th or 6th short sale offer. Liquidate the property and reset the markets asap.
Of course we know accounting and bailouts have complicated doing the proper strategy, so we can expect the real estate meltdown to last 2-3 more years just to find a true bottom and reset point.
Nice article and fraud seems to be encouraged in modern business and government. Stop in and visit us in South Florida where these events are a daily news item.
No Money Down Mortgages Continue (Unfortunately) [View article]
the point of the author is that high leverage will eventually haunt the debtor... unable to withstand a blow to income or a price correction.. What the author is saying is that government is encouraging people to take on massive debt that makes no sense and places the borrower in jeopardy of losing the home, losing his credit, and possible IRS and judgments. Leverage is a cancer.
our economic system is collapsing.. the signals are everywhere. The middle class is about to vanish into poverty and the taxation we are looking at will break all but the highest earners down.
Entitlements, global military presence, large government. These things eventually break the back of any country, go read the history books. Cost of living from food to oil is a guaranteed way to kill a society.
Read some books about the collapse of the Roman Empire or other advanced societies. History repeats itself with slightly different twists. Read about the laws of diminishing returns.
Seven Reasons the Market Has Already Bottomed [View article]
mlonz you have a bit of a point. Real Estate is staircase stepping down, and for the moment at least in South Florida, there is some support.
OK, so we are in peak season for say another 3-4 weeks, then what? Very few of the sales are sellers with equity, they are mostly short sale or foreclosed. Lots of sellers just got cleaned out for hundreds of thousands of dollars in equity and improvements and taxes paid. I doubt many are in the mood to put hard earned money at risk, and they have damaged credit ratings.
Most people make less money or have no job at all, lending standards are tighter, the dollar for now is stronger. The bulls are way early, the economic model for this country has major issues.
No Rebound in 2011 as Housing Market Continues to Rot [View article]
The job market hurts it and the second/third home is not seen as
a necessary purchase in the current economic times.
Looks like five or more years to absorb and loosen credit...though certain pocket areas will do better like oceanfront via smaller supply.
Gold: Is It a Bubble or a Refuge? [View article]
taxation, lack of raw materials, debasing currencies, supporting a large military and endless wars, political corruption, declining population are all symbols of transition...not sustainable..
These events have all happened before with bad endings..
That said, these things can drag many years with ups and downs. QE creates more problems than it answers and
we are down to gimmicks to re-creating a healthy economy..
Oil is probably the wild card in determining how long the
world's economies can continue the game..
No Surprise in Housing's Dive [View article]
we seem to have bottomed in some price ranges of the home market
(say under $500,000) while higher end homes are still trending slowly
downward. The condo/townhouse market for the most part has
no life. Ditto with multi-family/small hotels (units). We seem to be at a crossroads in this area, now 5+ years past our peak of roughly spring 2005.
The Second-Mortgage Underwriting Failure [View article]
having 20-25% equity in homes would greatly stabilize the home market. This whole mess was created with 90% primary loans and
10-20% second mortgages, so no stability and rampant speculation was created.
It's all to late now but hopefully a lesson is learned here. Frankly second mortgages are foolish and should be outlawed.
Giant Banks Are Trying to Make Bailouts Permanent [View article]
keep lenders out of the title business, real estate, and
speculation.
The minute the banks spread into the real estate and title business,
the fraud quickly followed accumulating in the bubble.
To easy to scam appraisals and bogus ltv ratios to unqualified buyers. Separation of powers is the best way to police the industry.
Another Stimulus: Is the U.S. Still Nothing Like Japan? [View article]
stability in home prices via higher equity, no second mortgages,
no ARMs. Eliminate the speculation via flippers with little equity.
Starter homes should pay no property taxes..raise the homestead
deduction or better yet eliminate taxes on low end housing, then
watch mom and pop investors get back into rehabbing and selling
homes.
Middle classes need taxes that are practical..
folks making 50k a year should pay no income tax, let them save
or circulate in the economy..
give major tax breaks to small businesses, not large corporations.
would you rather have mom and pop, or box stores that re-distribute wealth from the local economy.
of course we won't get started on entitlements, disgusting and
endless growth of government at all levels, and endless military programs.
amazing in the course of my lifetime the changes to freedoms,
and burdens of taxation and corruption that have taken over
this once proud country.
So Many (Non-)Taxpayers with No Skin in the Game [View article]
low end workers have no business paying income taxes and
what a crime it is to have property taxes on starter low end housing.. government programs and predatory lendors con
those blue collar buyers into serfdom via long term debt contracts.
How many end bankrupt or foreclosed? Same old story, prey
on the weakest of society.
Wasn't it Warren Buffet who pointed out his secretary was in
a higher tax bracket.
What Lies Ahead for the Housing Market? [View article]
prop up low end of housing for a while. High end housing
has little support and should hit pre-bubble (1998) levels.
real estate will continue to fall until the short sale/distress
sales run the course, probably another 2+ years. Thought
I read that Florida has 40-45% of current mortgage holders
in negative equity, so much for the American Dream,
courtesy of over leveraging and predatory lending.
How about 75% loan to value (ltv) fixed rate, 30 year terms.
No seconds or equity lines. I'll trade lower return for stability.
How about a 10-1 or less reserve requirement for banks.
The Financial Meltdown: Absolutely Nothing Has Been Fixed [View article]
welcome insights on SA.
My ideas are simple:
1. cut large swaths of entitlements.
2. cut government staff's and agencies at all levels.
3. cut military spending and fictionalized .
4. "re" regulate the banking industry starting with reserve requirements.
5. No more bailouts for "to big to fail", break them up.
6. significantly lower taxes for middle class via income and property taxes.
7. address social security
8. allow home prices to fall into affordable levels.
9. have a hard look at tax shelters and tax codes
lots of available reforms, but when special interests control
the levers, these glaring reforms will get "dirtied up" and
never happen, corruption is the running the country. Or settle
for years of slow growth, stagflation, and lots of bubbles
and crises.
The World's Largest Guilt Trip [View article]
general idea of the abuse the borrower will receive. Allowing banks
to hassle and abuse struggling homeowners, isn't quite the same but make no mistake in the banks strong arm tactics and games.
My two suggestions:
The home serves as collateral, no other recourse, that will lead to
prudent standards of under writing.
When a borrower is in default, no waiting 12-18 months to foreclose or "decide" on a 5th or 6th short sale offer. Liquidate the
property and reset the markets asap.
Of course we know accounting and bailouts have complicated doing the proper strategy, so we can expect the real estate
meltdown to last 2-3 more years just to find a true bottom and reset point.
The American Dream [View instapost]
No Money Down Mortgages Continue (Unfortunately) [View article]
debtor... unable to withstand a blow to income or a price correction..
What the author is saying is that government is encouraging people
to take on massive debt that makes no sense and places the borrower in jeopardy of losing the home, losing his credit, and
possible IRS and judgments. Leverage is a cancer.
On Bubbles and Depressions [View article]
The middle class is about to vanish into poverty and the taxation
we are looking at will break all but the highest earners down.
Entitlements, global military presence, large government. These
things eventually break the back of any country, go read the history books. Cost of living from food to oil is a guaranteed way to kill a
society.
Read some books about the collapse of the Roman Empire or
other advanced societies. History repeats itself with slightly
different twists. Read about the laws of diminishing returns.
Seven Reasons the Market Has Already Bottomed [View article]
Real Estate is staircase stepping down, and for the moment at least in South Florida, there is some support.
OK, so we are in peak season for say another 3-4 weeks, then what? Very few of the sales are sellers with equity, they are mostly short sale or foreclosed. Lots of sellers just got cleaned out for hundreds of thousands of dollars in equity and improvements and taxes paid. I doubt many are in the mood to put hard earned money at risk, and they have damaged credit ratings.
Most people make less money or have no job at all, lending standards are tighter, the dollar for now is stronger. The bulls
are way early, the economic model for this country has major issues.
Is Gold a Better Hedge than Oil? [View article]
and the stuff is getting costlier to extract.
Gold should do well down the road as well.
Mad Hedge Fund Trader makes nice points and Brad as well.