[Sidebar: Americans have been robbed by the Robed Gavel Tyrants, too, hired to be "KEEPERS' OF THE FLAME"
Keepers of the Flame were/are those such as Keynes and the JURISPRUDENCE.
CAPITALISM'S FRAUDULENT FINANCIAL VIRTUAL 'MONEY' EQUALS THE PROBLEM.
Trading and exchanging of REAL VALUE has been contaminated.
Federal Reserve System (FRS) is a CRIMINAL RICO GLOBAL and the JUDICIAL USA is wrapped up AS INVESTORS!
IT was intended to POP and the EXPLOSION?
BIG CATCH INVESTORS' BUBBLE: COURTS & ALL THE 'JESTERS' FOR THE FRS.
The Bubbles were carefully planned. Intended to POP POP POP POPIN POP.
Except the IMPLOSION has happened. Average Americans, and certainly not the line up of lawyers in the streets like in India, fought the CRIMINALLY INSANE and that has been an important reality.
Get the COSMIC WAKE-UP, the FRS has robbed Americans almost to death. When there is only the dust of the fraud left, then what is in the TREASURY to actually count as value?
to be continued ...]
“Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.” -John Maynard Keynes, The General Theory of Employment, Interest and Money
It’s too bad Keynes isn’t around today to see how the
toxic combo of financial engineering, central bank liquidity and fraud
have transformed the world’s biggest economy into a hobbled,
crisis-prone invalid that’s unable to grow without giant doses of
zero-rate heroin and mega-leverage crack-cocaine. This is exactly what
the British economist warned about more than half a century ago in his
magnum opus, “The General Theory…”, that you can’t build a vital,
prosperous economy on the ripoff, Ponzi scams of Wall Street charlatans,
mountebanks and swindlers. It can’t be done. And, yet– here we are
again– in the middle of another historic asset-price bubble conceived
and engineered by the bubbleheaded crackpots at the Federal Reserve. Go
figure?
Just take a look at housing, which is at the end of an astonishing 18-month run that was entirely precipitated by what?
Higher wages?
Nope.
Lower unemployment?
Wrong again.
Consumer confidence, bigger incomes, credit expansion, growing revenues, pent-up demand?
No, no, no, no and no. Economic fundamentals played no
part in the so called housing rebound. In fact–as everyone knows–the
economy stinks as bad today as it did 4 years ago when the government
number-crunchers announced the end of the recession. The reason prices
have been rising is because of the Fed’s loosy-goosey monetary policy
(fake rates and QE), inventory suppression, bogus gov mortgage
modification programs, and unprecedented speculation. (mainly Private
Equity and investors groups) Those are the four legs of the stool
propping up housing. Only now it looks like a couple of those legs are
in the process of being sawed off which is going to put downward
pressure on sales and prices. Take a look at this from DS News:
“A majority of experts surveyed by Zillow and Pulsenomics expect large-scale investors will pull out of the housing market in the next few years…Out of 110 economists, real estate experts, and investment strategists surveyed in Zillow’s latest Home Value Index, 57 percent said they think institutional investors will work to sell the majority of homes in their portfolios “in the next three to five years.” These investors are largely credited with propping up housing during its recession, helping to keep sales volumes from plummeting too far.While their withdrawal will most certainly affect today’s still-fragile market—79 percent of those surveyed said the impact would be “significant or somewhat significant” should investor activity curtail this year.”
Experts Predict Level Playing Field as Investors Withdraw, DS News
This is what we were afraid of from the very beginning,
that the big PE firms would pack-it-in and move on once they’d made a
killing, which they have, since prices soared 12 percent in one year.
Now they want to get out while they getting is good, which means that–in
some of the hotter markets where investors represented upwards of 50
percent of all purchases–there will have to be a new source of demand.
Unfortunately, the demand for housing has never been weaker.
Sales are down, purchase applications are down, and the
country’s homeownership rate has slipped to levels not seen since 1995,
18 years ago. The Fed’s $1 trillion purchase of mortgage backed
securities (MBS) and zero rates have done nothing to stimulate “organic”
consumer demand. Zilch. No “trickle down” at all. All the policy has
done is generate a temporary surge of speculation that’s distorted
prices and created conditions for another big bust. Get a load of this
article from Housing Perspectives:
“Although household growth is the major driver of
housing demand, getting an accurate picture of recent trends in this
measure is difficult…In its recent release, the HVS reported annual
household growth of just 448,800 in 2013. This represents a 48 percent
drop in household growth relative to that from 2012 and marked the
lowest annual household growth measure since 2008, in the depths of the
Great Recession (Figure 1).
Source: US Census Bureau, Housing Vacancy Survey
Repeat: “…a 48 percent drop in household growth relative
to that from 2012 and marked the lowest annual household growth measure
since 2008, in the depths of the Great Recession.”
Do you really think there are enough first-time homebuyers in out there in Mortgageland to fill that gap?
In your dreams! Keep in mind, that a lot of first time
homebuyers are collage grads who want to start a family and put down
roots. Regrettably, nearly half of those potential buyers have been
scrubbed from the list due to their burgeoning student loans which now
exceed $1 trillion. These kids will probably never own a home, let-alone
have a positive impact on sales in 2014. Ain’t gonna happen.
Maybe this is why the banks are suddenly speeding up
their foreclosure filings, because they want to offload more of their
distressed inventory before prices fall. Is that it? Check out this
article on Housingwire:
“Monthly foreclosure filings — including default notices, scheduled auctions and bank repossessions — reversed course and increased 8% to 124,419 in January from December, according to the latest report from RealtyTrac.This marks the 40th consecutive month where foreclosure activity declined on an annual basis, with filings down 18% from January…As a whole, 57,259 U.S. properties started the foreclosure process for the first time in January, rising 10% from December……this month’s foreclosure starts increased from a year ago in 22 states, including Maryland (up 126%), Connecticut (up 82%), New Jersey (up 79%), California (up 57%), and Pennsylvania (up 39%).Scheduled foreclosure auctions jumped 13% in January compared to the previous month.” RealtyTrac: Monthly foreclosure filings reverse course, rise 8%, Housingwire
Like most articles on housing, you have to sift through
the bullshit to figure out what’s really going on, but it’s worth the
effort. The banks have been dragging their feet for 40 months now,
slowing down the foreclosure process (and adding to the shadow supply of
distressed homes.) in order to push up prices hoping to ignite another
boom. Now–after 3 and a half years of blatant collusion–they’ve done a
180 and started speeding up foreclosures. Why?
It’s because they agree with the above-mentioned “110
economists, real estate experts, and investment strategists” who think
that “institutional investors” are going to call-it-quits and move on to
greener pastures. That’s going to push down prices, which means they’re
going to lose money. So they want to get ahead of the curve and dump
more houses on the market before the stampede. That way, they lose less
money.
Keep in mind, the banks are up-to-their-eyeballs in
distressed inventory. Even conservative estimates of shadow backlog puts
the figure of 90-day delinquent or worse, above 3 million homes. But if
you review the gloomier prognostications, the sum could easily exceed 6
million homes, enough to suck the entire bleeding banking system into a
black hole of insolvency. There was an interesting article on the topic
in Bloomberg last week. It seems that, “bond king” Jeffrey Gundlach has
been warning mortgage-backed security purchasers that they should to
pay more attention to underlying collateral in MBSs (vacant homes, that
is) which have been “rotting away” for “six years” or more. Here’s a
clip from the article:
“The housing market is softer than people think,” Mr. Gundlach said, pointing to a slowdown in mortgage refinancing, shares of homebuilders that have dropped 13% since reaching a high in May, and the time it’s taking to liquidate defaulted loans…About 32% of seriously delinquent borrowers, those at least 90 days late, haven’t made a payment in more than four years, up 7% from the beginning of 2012, according to Fitch analyst Sean Nelson.“These timelines could still increase for another year or so,” Mr. Nelson said, leading to even higher losses because of added legal and tax costs, and a greater potential for properties to deteriorate.”
Gundlach Counting Rotting Homes Makes Subprime Bear, Bloomberg
Let me get this straight: The number of “seriously
delinquent borrowers” has actually gone up in the last year? Not only
that, but many of these people “haven’t made a payment in more than four
years”?
That’s a mighty fine recovery you got there, Mr. Bernanke. Sheesh.
Keep in mind, the backlog of unwanted homes could be a
lot bigger than most people think. Way bigger. I was reading an article
by Keith Jurow the other day, (“The Coming Mortgage Delinquency
Disaster”, Keith Jurow, dshort.com) that paints a pretty grim picture of
what is really going on behind the faux inventory numbers. Jurow–who
has done extensive research on pre-foreclosure notice filings in New
York state– says: “The number of monthly foreclosure filings in Suffolk
County on Long Island …(were) more than 180,000 (while) fewer than 1,000
foreclosure filings had been served each month in (the last 4 years).
By this calculation, Jurow figures that there should have been 1,192,000
foreclosures in New York state while the actual percentage of homes
that have been repossessed remains in the single digits. (Read the whole
article here.)
Chew on that for a minute. So, that’s a total of 180,000
homeowners who would have faced foreclosure under normal conditions,
while less than 48,000 have actually been foreclosed. That’s 132,000
fewer foreclosures than there should have been IN JUST ONE COUNTY IN ONE
STATE ALONE.”
The reason the prodigious shadow stockpile continues to balloon is quite simple, as Jurow points out in his piece:
“Servicers do not foreclose on seriously delinquent borrowers throughout the entire NYC metro area. Completed foreclosures have actually declined rather dramatically throughout the nation in the past two years. The difference is that in the NYC metro, the servicers have not been foreclosing since the spring of 2009.”
So, there you have it; the banks haven’t been
foreclosing because it hasn’t been in their interest to foreclose.
Foreclosure sales push down prices which batters balance sheets and
scares shareholders. Who wants that? So the game goes on. Only now, the
dynamic is changing. Skittish investors are eyeing the exits, QE is
winding down, and housing prices have peaked. The recovery has reached
its zenith, which is why the bankers want get off on the top floor
before the elevator begins its bumpy descent.
People who are thinking about buying a house in the near
future, should watch developments in the market closely and proceed
with extreme caution. No one wants to get burned in another bank
swindle.
Mike Whitney lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at fergiewhitney@msn.com.
Federal Reserve System "FRS" is a CRIME RICO GLOBAL, and the USA was and is nothing BUT, the BUBBLE MACHINE. Lawyers went to the FRS LIEYERS' schools to be the AGENT/s for the FRS. Keynes knew too, because he was an insider obviously!
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