Posts Tagged ‘home values’

The Case Against Homeownership

The Case Against Homeownership

By Barbara Kiviat, courtesy of TIME 

A home is shown for sale in the Haight Ashbury neighborhood in San Francisco, California, August 24, 2010. Sales of previously owned U.S. homes took a record plunge in July to their slowest pace in 15 years as the wind went out of the housing sector's sails and underlined a struggling economy. REUTERS/Robert Galbraith (UNITED STATES - Tags: BUSINESS)

Homeownership has let us down. For generations, Americans believed that owning a home was an axiomatic good. Our political leaders hammered home the point. Franklin Roosevelt held that a country of homeowners was "unconquerable." Homeownership could even, in the words of George H.W. Bush’s Secretary of Housing and Urban Development (HUD), Jack Kemp, "save babies, save children, save families and save America." A house with a front lawn and a picket fence wasn’t just a nice place to live or a risk-free investment; it was a way to transform a nation. No wonder leaders of all political stripes wanted to spend more than $100 billion a year on subsidies and tax breaks to encourage people to buy.

But the dark side of homeownership is now all too apparent: foreclosures and walkaways, neighborhoods plagued by abandoned properties and plummeting home values, a nation in which families have $6 trillion less in housing wealth than they did just three years ago. Indeed, easy lending stimulated by the cult of homeownership may have triggered the financial crisis and led directly to its biggest bailout, that of Fannie Mae and Freddie Mac. Housing remains a drag on the economy. Existing-home sales in July dropped 27% from the prior month, exacerbating fears of a double-dip. And all that is just the obvious tale of a housing bubble and what happened when it popped. The real story is deeper and darker still. 

For the better part of a century, politics, industry and culture aligned to create a fetish of the idea of buying a house. Homeownership has done plenty of good over the decades; it has provided stability to tens of millions of families and anchored a labor-intensive sector of the economy. Yet by idealizing the act of buying a home, we have ignored the downsides. In the bubble years, lending standards slipped dramatically, allowing many Americans to put far too much of their income into paying for their housing. And we ignored longer-term phenomena too. Homeownership contributed to the hollowing out of cities and kept renters out of the best neighborhoods. It fed America’s overuse of energy and oil. It made it more difficult for those who had lost a job to find another. Perhaps worst of all, it helped us become casually self-deceiving: by telling ourselves that homeownership was…
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In The Year 3000: Predicting The Liability Side Of The Fed’s Balance Sheet

In The Year 3000: Predicting The Liability Side Of The Fed’s Balance Sheet

Courtesy of Tyler Durden

When it comes to the asset side of the Federal Reserve’s balance sheet, there are no secrets: with the winddown of the bulk of the Fed’s emergency liquidity programs by February 1, the majority of the Fed’s current $2.2 trillion in assets will continue being outright-held securities. And even as the emergency programs sunset, the quasi-permanent, QE remnants will be here to stay. What we know for certain is that the current $1.8 trillion in Treasuries and MBS will rise to at least $2.2 trillion, as the balance of QE round 1 is exhausted. Will this purchasing of outright securities end there? Hardly. As the Fed is the only market for MBS, and as the MBS market can not allow a dramatic rise in 30 year mortgage rates, which is precisely what will happen if the buyer of first resort disappears, we fully expect some form of QE to show up and grab the baton where QE 1.0 ends. In fact just today, Fed economist Wayne Passmore, under the aegis of Atlanta Fed president Dennis Lockhart, stated during the annual American Economic Association meeting that GSE ABS should have an outright explicit guarantee by the Federal Reserve. Forget about QE then – this would be an onboarding of over $6 trillion in various assets of dubious worth, which currently exist in the limbo of semi-Fed guaranteed securities, yet which have an implicit guarantee. Of course, should the broader Fed listen to young master Passmore, look for John Williams’ expectation of hyperinflation as soon as 2010 to be very promptly met. The danger of the Fed’s next unpredictable step is so great that it is even causing insomnia for none other than BlackRock big man Larry Fink, who asks rhetorically "Are they going to kill the housing market?" Well Larry, unless the Wall Street lobby hustles, and the Fed isn’t forced to print another cool trillion under the guise of Mutual Assured Destruction, they very well might.

So now that we (don’t) know about the assets, what about that much less discussed topic: the Fed’s liabilities?

As it stands now, and as we have often pointed out, the liabilities of the Federal Reserve are rather straightforward: the major items are currency in circulation (about a $800 billion, and excess…
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Home Values: Confusion Reigns

Zillow reports on the actual changes in home values, as well as the perception/misperception of changes, in different regions over the last year.  (My yellow highlighting) – Ilene

Confusion Reigns as Home Values Fluctuate Regionally; Northeastern Homeowners Overly Cynical About Home Values, But Western Homeowners Are Too Confident

ZillowHomeowners Across the Country Predict a Full Recovery in Next Six Months, According to Zillow(R) Q3 Homeowner Confidence Survey

SEATTLE, Nov. 18 /PRNewswire/ — Homeowner confidence was all over the map in the third quarter, as home values in some parts of the country stabilized while other areas saw continuing declines. Homeowners in the Northeast were the most cynical about their own homes’ values over the past 12 months, although the region posted the highest percentage of homes increasing in value during that same time period, according to the Zillow Q3 Homeowner Confidence Survey(1) and the Zillow Q3 Real Estate Market Reports.

One in five (20 percent) Northeastern homeowners believes their own home gained value in the past 12 months, according to the survey. But in reality, 31 percent of homes in the region increased in value, according to the Zillow Q3 Real Estate Market Reports.

That translates to a Zillow Home Value Misperception Index(2) of -6, which means Northeastern homeowners believe values performed worse than they did in reality – a first in Homeowner Confidence Survey(3) history. A Misperception Index of 0 would mean homeowners’ perceptions were in line with reality.

Homeowners in the West were the least realistic in the country, with 28 percent believing their own homes’ values increased in the past 12 months. According to Zillow, 17 percent of homes in the region actually increased, resulting in a Misperception Index of 17.

The Midwest had a Misperception Index of 8, while the South had an Index of 15.

Nationally, 25 percent of homeowners believe their own home’s value increased in the last 12 months. In reality, 22 percent of U.S. homes gained value. But fewer than half (49 percent) believe their home’s value decreased over the past 12 months, while 72 percent actually decreased. That discrepancy between perception and reality resulted in a Misperception Index of 10.

U.S. homeowners were also more optimistic about the future of their own homes’ values than at any time in the past six quarters. Two in five (41 percent) say their own home’s value will increase in the next six months.…
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BERNANKE’S REAL REPORT CARD

BERNANKE’S REAL REPORT CARD

report card, ben bernankeCourtesy of The Pragmatic Capitalist , citing David Rosenberg:

Courtesy of David Rosenberg:

BERNANKE’S REAL REPORT CARD

• 4 million lost jobs
• 4.6 percentage point surge in the unemployment rate
• 20% decline in the S&P 500
• 30% plunge in house values
• A 3.5% reduction in real GDP per capita
• 11% decline in the trade-weighed dollar
• 109 failed banks (almost matching the total from the prior 13 years combined)

…At least now, post-reappointment, we’ll see what he does for an encore.

Source: Gluskin Sheff

 


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Phil's Favorites

American influence could take the hit as Putin, Zelenskiy try to make peace in Donbass

 

American influence could take the hit as Putin, Zelenskiy try to make peace in Donbass

Zelenskiy is facing a tough meeting with Russia’s Putin on Dec. 9. Ukrainian Presidential Press Office via AP

Courtesy of Erik C. Nisbet, The Ohio State University and Olga Kamenchuk, The Ohio State University

President Vladimir Putin of Russia and his Ukrainian counterpart, Volodymyr Zelenskiy, are set ...



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Kimble Charting Solutions

Gold Miners Indicator Attempting Multi-Year Breakout, Says Joe Friday

Courtesy of Chris Kimble

Are Gold Mining stocks about to be sent a bullish signal they haven’t received in years? Possible says Joe Friday.

This chart looks at the Senior Miner/Junior miner (GDXJ/GDX) ratio over the past few years. Historically when the ratio is heading up, miners tend to do very well.

The ratio has created a series of lower highs just below the falling line (1), since the summer of 2016. The ratio is currently testing the strong falling resistance line and the June 2019 highs at (2).

Joe Friday Just The Facts Ma’am; If the ratio succeeds in a double breakout at (2), it sends miners a long-awaited bullish message.

...

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Zero Hedge

4 Dead After Two Robbers Hijack UPS Van, Ending In Epic Gun Battle On Florida Highway 

Courtesy of ZeroHedge View original post here.

Four people have been confirmed dead after a UPS truck was hijacked by two suspects following a robbery attempt of a jewelry store on South Florida's Miracle Mile Thursday, reported CBS Miami.

The suspects led police on a two-county rush-hour chase through Miami and ended in a hail of gunfire on Miramar Parkway and Flamingo Road in Miramar.

The incident began around 4 pm Thursday in Miami-Dade County, where two people attempted to rob a jewelry store on the Miracle Mile.

The suspects exchanged gu...



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Insider Scoop

7 Healthcare Stocks Moving In Friday's Pre-Market Session

Courtesy of Benzinga

Gainers
  • Sierra Oncology, Inc. (NASDAQ: SRRA) shares increased by 43.3% to $0.55 during Friday's pre-market session. The market cap stands at $23.1 million. The most recent rating by Oppenheimer, on December 06, is at Outperform, with a price target of $1.20.
  • Cassava Sciences, Inc. (NASDAQ: SAVA) stock moved upwards by 40.6% to $2.53. The market value of their outstanding shares is at $20.6 million.
  • Puma Biotechnology, Inc. (NASDAQ: PBYI) stock increased by 5.9% to...


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Lee's Free Thinking

Chart Shows the Fed Ramping Up Not QE - Funding Almost All Treasury Issuance

 

Chart Shows the Fed Ramping Up Not QE – Funding Almost All Treasury Issuance

Courtesy of Lee Adler, Wall Street Examiner 

The Fed is ramping up “Not QE” .

The Fed bought $2.2 billion in notes today in its POMO, “not QE,” operations. Actually $2.15 billion because they sold back a whole $50 million. Must have been a little glitch in the force.

This brings the Fed’s total outright purchases of Treasuries to $170 billion since it started Not QE, on September 17.

It also did $107 billion in gross new repo loans to Primary Dealers to buy Tre...



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Chart School

Silver stock taking the sector higher

Courtesy of Read the Ticker

As the US economy begins to show late cycle characteristics like: GDP slowing, higher inflation, higher wage costs, CEO confidence slump. 

Previous Post: Gold Stocks Review

The big players in the market are looking for the next swing off good value lows. This means more money is finding it way into the gold and silver sector, and it is said gold and silver stocks actually lead the metal prices.

The cycle below shows prices are ready to move in the months ahead (older chart re posted).


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Digital Currencies

Chinese Crypto Exchange IDAX Locks Cold Wallet As CEO "Goes Missing"

Courtesy of ZeroHedge

By William Suberg via CoinTelegraph.com

Chinese cryptocurrency exchange IDAX has suspended deposits and withdrawals after its CEO allegedly disappeared.

In a blog post on Nov. 29, IDAX, which earlier this week warned it was seeing a run on withdrawals, said the whereabouts of Lei Guorong were currently unkno...



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Members' Corner

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

 

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

By Matt Wilstein

Excerpt:

Sacha Baron Cohen accepted the International Leadership Award at the Anti-Defamation League’s Never is Now summit on anti-Semitism and hate Thursday. And the comedian and actor used his keynote speech to single out the one Jewish-American who he believes is doing the most to facilitate “hate and violence” in America: Facebook founder and CEO Mark Zuckerberg.

He began with a joke at the Trump administration’s expense. “Thank you, ADL, for this recognition and your work in fighting racism, hate and bigotry,” Baron Cohen said, according to his prepared...



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The Technical Traders

VIX Warns Of Imminent Market Correction

Courtesy of Technical Traders

The VIX is warning that a market peak may be setting up in the global markets and that investors should be cautious of the extremely low price in the VIX. These extremely low prices in the VIX are typically followed by some type of increased volatility in the markets.

The US Federal Reserve continues to push an easy money policy and has recently begun acquiring more dept allowing a deeper move towards a Quantitative Easing stance. This move, along with investor confidence in the US markets, has prompted early warning signs that the market has reached near extreme levels/peaks. 

Vix Value Drops Before Monthly Expiration

When the VIX falls to levels below 12~13, this typically v...



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Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

Reminder: We are available to chat with Members, comments are found below each post.

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

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Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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