Sure we say the same thing over and over − housing down − housing will continue down. Remember, we’ve got a Huge Job to do here in this regard. Giving folks information which becomes knowledge which changes their minds. Takes away the veil, the denial. Things are bad, they are getting worse due to domestic and global financial policies.
Think of this ridiculous circus in Washington D.C. over the debt crisis − gimme a break − they’ll pass it. But, they’re running their 2012 campaign posture preview, and the Young President basically said in one press conference: “You Average Americans don’t get this economics stuff, we do, leave it to us, move on, nothing to see here.” This reeks of infantilizing the very voters he hopes to sway.
How have his policies worked out for you so far over the last three years? He’s under the same control Bush Junior was under. Financial Elites whose Business Model is Profitable War, while destroying the middle class (off-shoring jobs) and the American and Global Economies for their personal gain. Well they’ve gained a lot, and thanks go to the rest of us for bailing them out and putting them back on the bonus track.
Forgive our rant, but, in fact we voted for this guy. We should have figured out what it really meant that Goldman Sachs put $986,200 into his 2008 campaign. But, to be honest we thought he’d get us out of wars that are killing so many of our finest and sincere young people. But, no. We have more wars. We don’t want to go all politically, but, some things need to be said.
We read an article this morning pointing out that folks on the right and left basically want the same thing with regard to taking away the power of the Banksters. On that we can all agree (maybe). Heck, this similar interest thing is why we obtained the domain name: “NewLiberaltarianParty.com,” which we’ll breath some life into next Spring when the lying games (called election primaries) are really rolling. We stop.
Here’s a great article from Bloomberg, by Robert Farzad, called “The housing slump is far worse than you think.” You can read it below and/or click on the live link.
To the article.
“Key housing market statistics point to years of stagnation ”
“You might be tempted to believe that after four years of brutal declines in home prices, the worst of the crisis is over. The Standard & Poor’s/Case-Shiller 20-city index of prices has fallen back to where it was in 2003. Housing prices in Phoenix are at 2000 levels, and Las Vegas is revisiting 1999. Lower prices have made homes more affordable than they’ve been in a generation, and sales have gone up in six of the past nine months. “It’s very unlikely that we will see a significant further decline” in prices, Housing and Urban Development Secretary Shaun Donovan said in a July 3 appearance on CNN. “The real question is, when will we start to see sustainable increases? Some think it will be as early as the end of this summer or this fall.”
Ken here. This Shaun guy is either in a dream world, or, knowingly continuing deceit to pump up “confidence” for potential home buyers. Don’t be one of those − a home buyer − until we see the bottom, way out to 2014 at least. This magazine style blog can’t print everything − so we choose articles by reputable authors that are for the most part based on hard data, and what we truly believe is “expert” interpretation. We try to educate you to give up on the American Dream of ownership for a period of time. It’s a “huge job” trying to show folks that they must educate themselves to facts in order to beat down their ego’s; their neighbor’s fantasies; and their “dreams” for a better life. This can come to fruition, a better life, but, only after the debt has been expunged, defaulted on, and the Too Big To Fail Banks − fail − are put into temporary National Receivership. And, we return to creating National Wealth through domestic manufacturing − re-industrialization. It’s the only process that has ever worked − over Centuries. There is too much risk for your family to own property − a home − as this all unfolds. Getting worse daily. Stay tuned. Back to the article:
“Doug Ramsey of Minneapolis investment firm Leuthold Group is a student of asset bubbles, from tech stocks in the late ’90s to commodities in the late ’70s and railroads in the 19th century. His outlook is very different from the HUD Secretary’s. Ramsey calculates that single-family housing starts would have to soar an unprecedented 60 percent to 70 percent from their current half-century low of a 419,000 annual rate just to hit the average low of the past six housing busts since 1960 (650,000 to 700,000). ”
“Ramsey says every housing statistic he tracks, including new and existing home prices and the performance of homebuilding stocks, has so far matched the pattern of prices after the bursting of other bubbles, including the Dow Jones industrial average following the crash of 1929 and Japan’s Nikkei after its 1989 peak. It starts with a steep decline lasting three or four years, followed by a brief rally that ends in years of stagnation. The Dow took 35 years to return to pre-crash levels. The Nikkei trades at less than a third of where it peaked 22 years ago. “The housing decline,” he says, “will be a long, multiyear process, and the multiplier effect across the economy will be enormous.” [Emphasis Added.]
“Others are equally gloomy. “It’s still a vicious cycle of foreclosures, prices falling and buyers remaining on the sidelines,” says Jonathan Smoke, head of research for Hanley Wood, a housing data company. With the homeownership rate possibly headed to its pre-bubble level of 64 percent from 69 percent at the peak, Smoke calculates that the nation needs 1.6 million fewer homes that it now has. “We’ve gone through a period when we should have been tearing down houses,” he says. “The supply of total housing stock is beyond what is necessary.”
“No end in sight
Scott Simon, a portfolio manager who heads real estate analysis for bond giant Pimco, says because this housing bust is so much worse than previous ones, it’s hard to tell when it will end. “There are all these things going on that we have never seen before,” he says. “No one knows how or what to model.”
“Simon has been traveling the country with a 28-page PowerPoint presentation for clients that illustrates the dire state of today’s housing market. Three of 10 homes, he notes, are now sold for a loss. American homeowners have equity (market value minus mortgage debt) equal to 38 percent of their homes’ worth, down a third since 2005 and half what it was in 1950. A lot of the decline is attributable to people who have negative equity — they owe more on their mortgages than their homes are worth.”
“Simon also points to the affordability index, which measures the ability of a family with the median national income to buy a median-price home at current mortgage rates. The index is near an all-time high and double its level in 2006 at the peak of the bubble — meaning buyers should find many more homes within their budgets. “I would never have believed this index could get so high,” he says. A rise in affordability should have spurred purchases, boosting prices and keeping a lid on the index. “What this instead means to me is that the credit is not available to most people,” he says. “Houses aren’t cheap if you can’t get the loan.” Simon worries that the problem will get worse in October, when Fannie Mae, Freddie Mac and the Federal Housing Administration drop the maximum mortgage they will buy to $625,000 from $729,750 as a temporary increase expires. ”
“The crux of Simon’s analysis is that the loose lending practices seen during the housing bubble allowed 5 million renters to become homeowners, and that the market is in the protracted process of evicting this group. He believes housing prices will decline 6 percent to 8 percent nationally, with 6 million to 7 million more foreclosures yet to come. ”
“Big ripple effect
If these predictions are right, the economy will be missing a key driving force for years — and the nation will keep paying the price for what Ramsey calls the “illusory prosperity” of the housing boom. “Think about local tax revenues — what the housing bubble contributed to coffers across the country,” he says. “The ripple effect for the economy was enormous: washers, dryers, carpeting, construction jobs.” The housing wealth that has now evaporated gave Americans false expectations about economic growth and rising standards of living. Asks Ramsey: “What was real and what was never meant to be?”
“The bottom line: Despite intermittent signs of recovery, the housing market may be in the midst of a slump that could last a generation. ”
Ken here. Clearly. Finally, don’t let Killer Debt, destroy your families immediate and long term future. Don’t step up for another round of Predatory (Illegal) Lending. We are talking about property crime.Print This Post