Infinite Unknown

- The Truth About How The Fed Has Destroyed The Housing Market (ZeroHedge, Aug 16, 2012):

When observing the trends in the housing market, one has two choices: i) listen to the bulls who keep repeating that “housing has bottomed”, a false mantra which has been repeated every single year for the past four, or ii) look at the facts. We touched briefly on the facts earlier today when we presented the latest housing starts data:construction of single family residences remains 46 percent below the long-term trend; the more volatile multifamily houses is 15 percent below trend and demand for new homes 47 percent below. This is indicative of reluctance by households to make long-term investments due to fear of another downturn in housing prices. Bloomberg summarizes this succinctly: “This historically weak demand for new homes is inhibiting the recovery of demand for construction workers as well, about 2.3 million of whom remain without work.” But the best visual representation of the housing “non-bottom” comes courtesy of the following chart of homes in negative or near-negative equity, which via Bloomberg Brief, is soared in Q4, and is now back to Q1 2010 level at over 13.5 million. What this means is that the foreclosure backlog and the shadow inventory of houses on the market could be as large as 13.5 million in the future, which translates into one simple word: supply.

Here is Bloomberg’s Joseph Brusuelas on this topic:

Approximately 13.5 million households hold negative or near-negative equity positions on their mortgages. Many of them will likely lose  those homes to foreclosures, which are again on the rise. At best, an increase in foreclosures will constrain a recovery in prices; at worst, a flood of inventory to market will put further downward pressure on prices.

In other words it is Bloomberg, not us, coming up with the perfectly logical idea that a number as large as the total number of underwater mortgages may and will end up on the market as foreclosures, which in turn will clog up the market clearance piping for years, if not decades to come.

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Tags: Economy, Fed, Federal Reserve, Foreclosures, Global News, Government, Housing market, Mortgage crisis, Mortgages, Politics, Society, U.S.

- Doesn’t Take Much To Get Homebuilders Confident These Days (ZeroHedge, Aug 15, 2012):

The National Association of Home Builders just released it latest monthly housing market index, which rose from 35 to 37. As headlines proudly blast, this is the highest level of confidence since February 2007. The NAHB chairman was positively giddy: “From the builder’s perspective, current sales conditions, sales prospects for the next six months and traffic of prospective buyers are all better than they have been in more than five years,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “While there is still much room for improvement, we have come a long way from the depths of the recession and the outlook appears to be brightening.” Sadly, as the chart below proves, it doesn’t take much to get the NAHB confident these days. We present the fudge free data on housing completions: not starts, not permits, completions, which is what you get on the other side of the homebuilding process once all i and t‘s have been dotted and crossed, because one can fudge both the start and permit metric more than Bank of Spain’s X-13-ARIMA seasonal “models” can make MS’ IPO track record successful. We leave it up to readers to decide just what homebuilders are so very confident about. Residual record hopium sloshing in the system notwithstanding.The red arrows show the same level of confidence, at least as reported by the NAHB.

Chart source: St Louis Fred

Tags: Economy, Global News, Housing market, U.S.

- David Rosenberg Explains The Housing “Recovery” (ZeroHedge, July 4, 2012)

Tags: David Rosenberg, Economy, Global News, Housing market

Why does the American government consistently fail to foresee the future results of its own actions?

Because it is incompetent.

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My take on that is, that it is impossible to be that much incompetent! This is an ‘intentionally incompetent’ elite puppet government that is looting the taxpayer until there is nothing left.

The government is ‘channeling’ taxpayer money through their friends on Wall Street into the hands of the elite behind the scenes (that control the US government, the Federal Reserve, Wall Street and the media), thereby bankrupting America and destroying the US dollar.

This is a controlled demolition.

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It is managing the financial crisis Wile E Coyote style.

Added: 25. September 2008

Tags: Bailout, Banking, Ben Bernanke, Bubble, Credit Crisis, Credit Crunch, Debt, Economy, Fed, Federal Reserve, Financial Crisis, Funny, Government, Housing, Housing market, Mortgage crisis, Mortgages, Politics, Taxpayers, U.S.

The US Federal Reserve may soon be forced to launch fresh blitz of quantitative easing whatever the consequences for the US dollar, or risk seeing economic recovery snuffed out by the latest surge in long-term borrowing costs.

Market expects Fed will have to double purchases of Treasuries. Photo: Getty Images

Yields on 10-year Treasury bonds have risen relentlessly since March when the Fed first announced its plan to buy $300bn (£188bn) of US government debt directly, a move that briefly forced rates down to nearly 2.5pc, a level thought to be the Fed’s implicit target.

Yields have jumped to 3.69pc – after spiking as high as 3.74pc on Wednesday – pushing up the standard 30-year mortgage loan to 5.08pc and lifting the borrowing cost for corporations.

“The Fed is going to have to consider doubling its purchases of Treasuries,” said Ashraf Laidi, from CMC Capital Markets. “We could be nearing the end-game for the US dollar but the Fed has little choice at this point. We’re in a vicious circle where any policy aimed at supporting the US economy must be at the expense of the dollar.”

Related article:
Marc Faber: U.S. will go into Hyperinflation, Approaching Zimbabwe Levels (Bloomberg)

The US Mortgage Bankers Association yesterday highlighted the fragility of the US housing market, reporting that 12pc of homeowners are either behind on their payments or facing foreclosure, the highest level since records began.

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Tags: Bonds, Debt, Dollar, Economy, Fed, Federal Reserve, Foreclosures, Housing, Housing market, Politics, Quantitative Easing, U.S.

2008 World Press Photo Foreclosure

NEW YORK, May 28 (Reuters) – One of eight U.S. households with a mortgage ended the first quarter late on loan payments or in the foreclosure process in a crisis that will persist for at least another year until unemployment peaks, the Mortgage Bankers Association said on Thursday.

U.S. unemployment in April reached its highest rate in more than a quarter century and is still rising, helping propel mortgage delinquencies and foreclosures to record highs.

Such economic weakness drove up foreclosures of prime fixed-rate loans, which are made to the most creditworthy borrowers. The foreclosure rate on those loans doubled in the last year and represented the largest share of new foreclosures in the first three months of this year.

“We clearly haven’t hit the top yet in terms of delinquencies or the bottom of the housing market,” Jay Brinkmann, the association’s chief economist, said in an interview.

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Tags: Economy, Foreclosures, Housing, Housing market, Mortgages, U.S., Unemployment

The Numis report says: “The bankruptcy of the UK is a very real probability as the UK Government is trying to stimulate a greater debt burden in a grossly indebted economy. We believe the scale of the macro imbalances in the UK means there is no prospect of a recovery in 2009 and we expect the UK to be mired in a deep recession through all of 2010.”

House prices may fall by a further 55 percent and there is a “very real probability” that Britain will be bankrupted, a leading investment bank has warned in a private note to clients.

People who bought buy-to-let flats are expected to “begin panic selling” and the average home value could drop below £100,000.

The predictions in a 298-page report from Numis Securities, a City investment bank, are the bleakest yet on the deteriorating state of the British property market.

House prices have already fallen by about 20 per cent over the past year.

However, in the note written last month, Numis said: “Despite UK house prices already having fallen 21% from the peak, we do not believe that the correction is anywhere near over.

“Our core headline forecast is that UK property prices remain between 17% and 39% overvalued based on fair valuation. Moreover, history has shown us that when property…which has experienced a price bubble corrects, the price tends to fall below fair value for a period of time, as confidence in that market remains low. Prices could fall a further 40-55% if the over-correction was as bad as the early 1990s in our view.”

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Tags: Debt, Gordon Brown, Government, Housing market, Politics, Real Estate, Recession, U.K.

Britain saw some of the steepest house price falls in the world last year, collapsing by 14.7 per cent, with only Latvia performing worse, research showed yesterday.

More than three-quarters of the 42 countries surveyed recorded falls in the value of property in the final quarter of 2008, compared with just 27 per cent in 2007.

Dubai was the strongest performer, with house prices soaring by nearly 60 per cent in 2008, but much of this gain is expected to be wiped out this year.

Related article: House prices fall, leading to a record annual rate of decline, Halifax reveals (Telegraph)

Latvia saw the steepest slides on an annual and quarterly basis, with prices dropping by 16 per cent in the final quarter of the year and by 33.5 per cent during the whole of 2008.

Iceland also suffered badly, with prices falling by 14 per cent during the year. The US and Ireland were also near the top of the losers’ table with annual price drops of 12.1 per cent and 9.1 per cent respectively.

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Tags: Economy, Housing market, Iceland, Ireland, Latvia, U.K., U.S.

“The penthouse, which first went on the market in October 2007 at $9.25 million, has since been appraised at $6.5 million, and its owner has decided to offer the property in a sealed-bid auction-like process in March, with a starting bid of $4.995 million.” “Mr. Orenstein says the owner decided on this process because he plans to move soon to Italy with his wife and baby.”

There are many millionaires and billionaires fleeing from the U.S. right now. No big city on this planet will be a safe place in the future.

THE real estate market in Manhattan has become so unnerving to buyers that some are forfeiting six-figure deposits rather than close on deals they have made.

FORFEITED A buyer for this Spring Street penthouse, with stunning river views, walked away from the deal, and a $780,000 deposit.

At 304 Spring Street, a sleek condominium building in SoHo with stunning Hudson River views, the buyer for the duplex penthouse recently decided he would not go through with the deal and walked away from a $780,000 deposit.

At 1120 Park Avenue, a classic prewar co-op filled with multimillion-dollar apartments, it appears that a buyer forfeited a deposit of as much as $1.1 million.

Real estate agents representing buyers of at least three other multimillion-dollar properties also report clients who knowingly left deposits of more than $1 million or hundreds of thousands of dollars on the table.

In each case, the buyers had signed their contracts before the financial meltdown last fall, but decided in recent months that because values in the luxury real estate market have dropped 20 to 40 percent, it no longer made sense to go through with their deals.

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Tags: Economy, Housing, Housing market, Real Estate, U.S.

Spanish bank Santander has sought regulatory permission to freeze payouts from its main real-estate fund after investors sought to withdraw 80 per cent of the vehicle’s capital at once.

The bank, the biggest in the eurozone by market value, said in a regulatory filing on Monday that the Santander Banif Inmobiliario FII fund, the country’s biggest, “currently lacks the necessary liquidity” to meet redemption demands worth €2.62bn ($3.35bn), or 80 per cent of the fund’s value at the end of January.

Santander is seeking authorisation to suspend full reimbursements from the fund for two years, while it “starts an orderly programme of disposals”.

The fund, which was 67 per cent invested in residential rental properties at the end of December, lost about 15 per cent of its value between the end of the third and fourth quarters last year as asset values were adjusted to reflect difficult market conditions.

This, coupled with investors’ need for cash, triggered a run on the fund during a two-week redemption window that closed on Friday.

Spain’s residential property bubble burst almost two years ago, leaving at least 1m new houses unsold.

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Tags: Economy, Housing, Housing market, Real Estate, Santander, Spain