[jepsd]

For a Goldilocks economy, the weather needs to be just right…

Sorry if it is a bit confusing, but I’m not sure whether it was too hot or too cold in February and March. Seems to be a conflict. Hmmmm.

Jan. 30 (Bloomberg) — U.S. retailers’ sales rose 4.9 percent last week compared with the same period a year earlier as colder weather helped lift sales of gloves and scarves, the International Council of Shopping Centers said.

March 8 (Bloomberg) — The coldest February since 1979 caused U.S. retailers’ sales to grow at the slowest pace in three months as consumers delayed purchases of spring merchandise.

March 23 (Bloomberg) — Sales of previously owned homes in the U.S. unexpectedly surged last month by the most in three years, a sign that the housing market is probably past the worst of its slump.
Warm Weather
Last month’s jump in sales partially reflects the closing of contracts signed in December, when unseasonably warm weather brought out more house hunters, David Lereah, the Realtors’ chief economist, said at a briefing in Washington.

April 16 (Bloomberg) — Retail sales in the U.S. rose in March by the most in three months as rising incomes and better weather ensured consumers would continue to drive economic growth.

April 24 (Bloomberg) — Sales of previously owned homes in the U.S. declined more than forecast in March to the lowest level in almost four years, delaying housing’s recovery from a slump that’s shown some signs of reaching bottom.
The decline in sales, while partly weather related, may renew concern that the housing recession will linger and put at risk the Federal Reserve’s forecast for moderate economic growth.

May 8 (Bloomberg) — U.S. retailers’ sales probably fell for the first time in four years last month as an earlier Easter and the coldest April in a decade discouraged purchases of lightweight clothing, gifts and garden equipment.

[jepsd]

For a Goldilocks economy, the weather needs to be just right…

Sorry if it is a bit confusing, but I’m not sure whether it was too hot or too cold in February and March. Seems to be a conflict. Hmmmm.

Jan. 30 (Bloomberg) — U.S. retailers’ sales rose 4.9 percent last week compared with the same period a year earlier as colder weather helped lift sales of gloves and scarves, the International Council of Shopping Centers said.

March 8 (Bloomberg) — The coldest February since 1979 caused U.S. retailers’ sales to grow at the slowest pace in three months as consumers delayed purchases of spring merchandise.

March 23 (Bloomberg) — Sales of previously owned homes in the U.S. unexpectedly surged last month by the most in three years, a sign that the housing market is probably past the worst of its slump.
Warm Weather
Last month’s jump in sales partially reflects the closing of contracts signed in December, when unseasonably warm weather brought out more house hunters, David Lereah, the Realtors’ chief economist, said at a briefing in Washington.

April 16 (Bloomberg) — Retail sales in the U.S. rose in March by the most in three months as rising incomes and better weather ensured consumers would continue to drive economic growth.

April 24 (Bloomberg) — Sales of previously owned homes in the U.S. declined more than forecast in March to the lowest level in almost four years, delaying housing’s recovery from a slump that’s shown some signs of reaching bottom.
The decline in sales, while partly weather related, may renew concern that the housing recession will linger and put at risk the Federal Reserve’s forecast for moderate economic growth.

May 8 (Bloomberg) — U.S. retailers’ sales probably fell for the first time in four years last month as an earlier Easter and the coldest April in a decade discouraged purchases of lightweight clothing, gifts and garden equipment.

[jepsd]

Huh? Should I have clarified it as ex-renters that tell the landlord they are leaving town that have no obligation to pay the ex-landlord? You should know what I meant when I said they have no obligation to pay. Or is it because you think homedebtors can also just walk away. Sure, they could, but not as easily as a renter.

Or because I said people will live in their cars? Maybe you don’t know that people already live in cars because they can’t afford housing.

So, please explain my “dumb ass” comment.

[jepsd]

It would now appear that the real estate market as a whole (not just San Diego) is experiencing a correction/decline.

So, you expect Rich to report on Florida, or the whole US, or how about Europe and China? I believe Rich’s claim was that there is a housing bubble in Southern California (not San Diego). For someone who has read the site for two years, you should have known that.

It’s easy to predict something like housing prices or the stock market will decline.

Really? That is a ridiculous statement. No one can predict when a mania will end, but yes we know it will end. It isn’t just because a broken clock is right twice a day, either. It is because we have identified a current mania (or bubble). Apparently you don’t see it for what it is yet.

…you missed a huge run up in the value of what would now be your home.

Exactly why you don’t get it. You are worrying over 2 years of what you think are lost opportunity. Do you understand why home loans are traditionally 30 years long? It is because a house purchase isn’t a 2 year commitment (er, I mean flip).

Rents will rise as owners have to make higher payments and more people will rent because they can’t afford to buy or choose not to until prices correct. This will aide in the softening of any potential landings.

Good luck with that theory. Yes, owners will need to make higher payments, but renters aren’t going to be footing the bill. Renters can pick up and move overnight. People will live in cars before they pay some other idiot’s mortgage. You forget that renters have no obligation to pay anything to anyone.

[jepsd]

It’d probably be funnier, though, if…

Gawd, what a tough crowd. Tawlk amongst yahselves…I’m vehclempt.

[jepsd]

“Talk to any atheist for a while, and you may find that they are obsessed with God (believing in the non-existence, that is).”

None of the atheists I know are like that. Also, I don’t think most of my friends even know I’m an atheist. It’s not worth advertising in today’s american culture. If what you said were true, what would be the relevance of it?

For example, Salman Rushdie admits he is obesessed with God, but he is a staunch athiest. It is the irony of the situation that in order to deny the existence of God, you must discuss God. It is meant as a joke.

[jepsd]

With respect to the belief in God (or anything for that matter), the burden of proof is on the believer. Without the proof that God exists (after many centuries of study), it’s an entirely rational conclusion to state that God does *not* exist.

carlislematthew, burden of proof or respecting beliefs has nothing to do with it.

Please conduct a scientific test to prove or disprove that those things that float above your deck do or do not exist. You cannot conduct such an experiment. Therefore, the rational conclusion is that we do not know whether they exist or not. Most of us would believe they do not exist, but this is not a rational conclusion, it is again a belief.

I’m belaboring this because this whole board exists because some (myself included) believe there is a housing bubble. Believing something does not make it true or untrue. We collect evidence and try to draw rational conclusions based on the evidence, not lack thereof.

[jepsd]

The vast majority of the world’s greatest scientists are atheists.

If they were great scientists, they would be agnostic.

Atheists also have a belief that is not rational. Athiests believe God does NOT exist.

One cannot prove nor disprove the existence of God. Therefore, to be rational, you have to say you do not know if God exists or not.

Talk to any atheist for a while, and you may find that they are obsessed with God (believing in the non-existence, that is).

Atheism is a belief, not a rational conclusion.

[jepsd]

No, I wouldn’t know how to calculate such a number.

However, if the national savings rate is negative and people are buying homes with 100%+ financing as well as funding a 401(k) or Roth, or other IRA, etc, a certain amount of money to fund these retirement accounts is effectively coming from borrowing and not from earnings/savings.

When housing payments ratchet up (due to ARMs, which not everyone has), people will do everything to save their houses since I believe that the consensus on the street is that the house is the best retirement investment, not equities. People are emotionally attached to their houses. They “bought” houses mainly based on emotions, so they will try to save their houses. Some will be successful at holding on and others will not.

That is why both stocks and housing will go down. People will try to save their house at all costs.

[jepsd]

I disagree. Stocks will not benefit and here is why: The stock market has already directly benefited from the lending bubble. The excessive borrowing has not only allowed excessive consumption, but also equity investments that lifted the stock market over the past 3 years.

And in the end, the majority of SD buyers are still regular people that will hold until the bitter end and they can get out for what they paid for it.

People are attached to their homes, not their stocks. When the ARM adjusts, the only place there is money to grab is from the 401(k), the Roth, etc. Lots of equity investments will be liquidated to save the house. The house will be the last thing a family wants to part with.

I personally know a family who recently liquitated Roth IRA’s to buy land for building a house.

[jepsd]

I’ve always assumed that particular section of the paper was paid for by Realtors. There are only articles about Realtors in there along with their ads. I’m sure they can print whatever they want because it is likely advertising space and not considered journalism.

I have to say Steve didn’t disappoint me; his article passed my test: He used the phrase “American Dream” when referring to homeownership. That is what I always look for. I usually play a game to amuse myself: I read the opening paragraphs and then guess whether or not the “American dream” phrase is on the other side. I was right today, by the way.

None of these guys will be blamed. Didn’t you see Fannie Mae get away? What else can you expect from a government that has a “American Dream Downpayment Initiative”? I kid you not, this is the actual name of the federal assistance program for first time homebuyers (this initiative has existed since 2003).

I’m guessing that the “liberal media”, the bloggers and the internet, and any other housing bears will be blamed for planting the seeds of the crash. The real perpetrators will likely be unblamed. Anyone who cashed out of his/her home and has a fat savings account will be sued for not participating in the American Dream. Afterall, it is un-American to be without a house and a 100% mortgage. Anyone with cash in the bank will be under scrutiny (you are already because of the new banking laws under the Patriot Act).

[jepsd]

I have to concur that the market is currently defined as a “buyer’s market” because supply outstrips demand, but that is NOT to say that it is a “great buying opportunity” as you have pointed out.

I feel that the NAR uses and will continue to use the phrase “buyer’s market” excessively to encourage buying rather than to state the market conditions of supply versus demand.

Please find me an article by a Realtor claiming there is a surplus of housing in SD, CA, or anywhere in USA. I don’t believe I’ve seen any (although they may exist). It is more likely they will claim “buyer’s market” out of one side of the mouth and “shortage due to lack of buildable land, population, immigration, everyone loves the sun, take your pick…” out of the other side.

[jepsd]

The phrase “buyers market” (as used by NAR) means that sales volume is slowing and sellers are getting desperate. The NAR will repeat as necessary to encourage buying. Get used to hearing it more and more as RE drops 5 to 10% per year. NAR will declare a “great buying opportunity” all the way down.

I heard Ben Jones on the radio with Rich yesterday, and indeed he is right. It is a renter’s market. Unfortunately, mathematics education in the US is so poor that people don’t realize that renting a house for 50% of the cost to own the exact same thing is an awesome deal. They are getting a tax deduction by owning, you know! Ha ha ha. I have a really good deal for anyone who wants to take it: You give me a dollar, and I will give you 30 cents back! Ha ha ha.

[jepsd]

When housing prices drop, the Fed will lower rates. The Fed is the engine of inflation. Why would they NOT do this? You write as if inflation is something controlling the Fed. They are creating the money and credit expansion (that is the definition of inflation).

Rising prices are a RESULT of inflation. Some prices go down when there is inflation (e.g. Chinese goods have lowered prices of retail items). Rising prices are a general effect of inflation. They are not the same thing. It’s like saying that your rash is poison ivy (like many people say “I have poison ivy” and point to their rash). In reality, poison ivy (inflation) gave you a rash (rising PPI and CPI). Similarly, it takes time for the rash to form just like it takes time for the inflation to cause price movements.

If the dollar weakens, yes we could theoretically export more, but it takes time to get a factory going that can compete in the world market.

I don’t know what is going on in China, but I’ve heard that the Chinese govt is making loans to Chinese businesses that probably can’t be paid back. They will get away with it until it doesn’t work anymore. Anyone’s guess.

Consumers can’t buy things when they don’t have jobs. You can’t “make” consumers if you don’t pay them enough to buy the stuff. And, no, they probably don’t see the recession looming. They got themselves into a corner because nothing bad has happened yet. It doesn’t matter until it matters. It’s like asking me why people don’t see the housing bubble? They don’t see it because they have been successful in the face of all the evidence against them.

China can’t just turn the US loose and become consumers themselves. The dollars they hold are not entirely worthless. They can buy real estate when it crashes or equities. Now, you may understand why the Fed will try to prop up prices in the US.

[jepsd]

Foreigners buy US treasuries to keep their currency in a position to keep their exports flowing to the US. If the consumer falters in the US, I assume China would stop purchases of US treasuries, but they have another reason to do it: they already own so many that if they stopped purchasing more, what they already own would decline greatly in value. Their position is too large for them to exit. Both the US and China are backed into a corner together. This won’t end with China continuing prosperity if the US consumer backs down. Both countries will suffer consequences when the game is finally up.

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