Tom Ferguson on America for Sale. Tom Ferguson is my favorite curmudgeon and if you listen to this podcast from Radio Free Dylan [Ratigan], you are likely to join his fan club. Ferguson is a political scientist who is both a serious archivist (which means he has found how the official accounts have been doctored to flatter the victors) and is an astute observer of national and state politics. An excerpt from the transcript of the podcast: Tom: They stuck posted prices on their committee assignments and the slots on those committees, like committee chairs and party leaderships posts.
You want the job, you write the cash and buy it at the price. You know, my memory on this is that in 2008, the Democrats wanted for major committee chairs, they wanted $400,000 in contributions and another $200,000 in promises to fundraise. That’s a lot. Tom: Well, look, that’s hard to tell from the outside, usually. Dylan: And what do you suggest is the greatest distortion in our government that results from this. Why Home Prices Have Much Further To Fall.
Why Home Prices Have Much Further To Fall By Lance Roberts of Streettalk Live January 25, 2012 There has been a deluge of articles recently about the upticks in the housing data. The consensus is that these data points are surely indicating, finally, a bottom in the depressing decline of real estate. (Note: I suggest a review of recent posts on Housing Is Not Affordable and The Margin Effect for more background on why housing is going to be in the trenches much longer than expected) The point I specifically want to address today is home prices. People Buy Payments - Not Houses When the average American family sits down to discuss buying a home they do not discuss buying a $125,000 house. Here is a statement I have not heard discussed by the media. Over the last 30 years, a big driver of home prices has been the unabated decline of interest rates. In 1968 the average American family maintained a mortgage payment, as a percent of real disposable personal income (DPI), of about 7%.
Glaeser: Don’t Count on Housing Market to Lead Recovery. What will the New Year bring for housing markets? Prediction is a perilous business, but history and basic housing economics suggest that price changes will stay modest, and that construction will increase only slowly. The best that can be said about the current market is that it offers abundant affordability and that the broader economic recovery doesn’t depend on a big housing rebound.
The most recent S&P/Case-Shiller housing-price data show a second month of seasonally adjusted price declines. The overall 20-city index dropped about 3.4 percent from October 2010 to October 2011, after falling less than one percentage point during the previous year. When it comes to housing prices, it hasn’t just been a lost decade: Many metropolitan areas have had two lost decades. The disparate nature of those four cities reminds us that it is possible to lose big on housing in rapidly growing cities, such as Atlanta and Las Vegas, and in declining cities, such as Cleveland and Detroit. Price Gains. Why Home Prices Have Much Further To Fall. Housing Is Not Affordable. The media has been replete with commentary lately about the bottom in housing and the coming recovery in 2012.
Of course, this is the same siren's song that we heard in 2010 and 2011 and many a soul were dashed against the rocks of further declines. In this past weekend's missive we talked about the 5 reasons why the bottom in housing is not in and why further declines are likely coming from the massive overhang, and ultimate liquidation, of foreclosures. One the points that has really gnawed at me as of late is the National Association of Realtor's (NAR) Housing Affordability Index. This index has been pointed to many times by the mainstream media as evidence that a recovery was at hand as "affordability" has never been higher. Nothing could be further from the truth. According to the NAR the index: "Measures the degree to which a typical family can afford the monthly mortgage payments on a typical home.
This is what the Housing Affordability Index misses entirely. Real Estate 4 Ransom documentary trailer. Bank Delays May Push 1 Million U.S. Foreclosure Filings to 2012. Lender delays in processing home- loan defaults will push as many as 1 million U.S. foreclosure filings from this year to 2012 or beyond, casting an “ominous shadow” on the housing market, according to RealtyTrac Inc.
The number of properties receiving a notice of default, auction or repossession plunged 29 percent in the first half of 2011 from the same period last year, the Irvine, California- based data seller said today in a report. About 1.17 million homes got a filing, or one out of every 111 households. Procedural delays caused by a probe into bank documentation errors, combined with weak consumer sentiment and a jobless rate above 9 percent, are weighing on a property recovery by adding to a backlog of distressed homes, RealtyTrac said.
A clogged foreclosure pipeline may prevent real estate prices from finding a bottom as the housing slump enters its sixth year. 3.2 Million Forecast RealtyTrac in January forecast as many as 3.2 million foreclosure filings for 2011. Three-Year Low. Quelle Surprise! The Banks Lied and Robosigning Lives! We’ve heard numerous bank executives swear piously before Congressional hearings that those “paperwork problems” that led major servicers to halt or slow foreclosures on a widespread basis last year were “mistakes”. That was already a really big lies, since “mistake” means the practice was not deliberate and was presumably isolated, when in fact robosigning was a widespread, institutionalized practice. 14 major servicers then swore in consent orders earlier this year that they’d stop doing all that bad stuff.
But with compliance weak (the banks get to hire the overseers!) , they appear to have decided they don’t need to change their ways all that much. Indeed, the record of consent orders is underwhelming; for instance, both Nevada and Arizona are suing Countrywide for violations of past agreements. Two stories were published yesterday, one a long form Reuters investigation (hat tip April Charney), the other a shorter report by AP (hat tip Lisa Epstein and Daniel Pennell).
20 Startling Facts About the US Housing Market. Priced In Gold, Is Housing A Buy? | zero hedge. Submitted by Charles Hugh Smith from Of Two Minds Priced in Gold, Is Housing a Buy? What is the relative value of housing if we price it in ounces of gold? My basic point of view is that nominal prices and broad terms such as deflation, inflation and growth should be viewed with extreme skepticism. The more useful approach is to examine the purchasing power of various assets and the the purchasing power of the income streams generated by those assets. Put another way: to value housing, let's compare the price of a house priced in loaves of bread, or ounces of gold, or barrels of oil to historical norms. Corrospondent Bart D. has charted some relative values for essentials in Australia, and I will share his fascinating charts next week.
Today let's look at a chart of the Case-Shiller Housing Index priced in gold, courtesy of longtime correspondent Harun I. Click on the chart to open a larger image in a new browser window. Harun's comments are worth studying. How low can the ratio go?