Monday, May 17, 2010


Greetings good citizen,

Is this merely evidence of persistence in the face of certain doom or is this something more insidious? If you examine the evidence, you’ll find that die-hard capitalists really believe in ‘perseverance’

Because for them the game has never been about ‘satisfying need’, it has always been about ‘sheering the sheep’ the endless battle to keep ‘em stupid and broke!

Which is to say the capitalist considers themselves the ‘top of the food chain’ (which means he honestly believes he’s the best of the best, it doesn’t matter how much you shrink the pond, he’ll always be the biggest fish.

This goes hand in hand with ‘never enough’ syndrome.

That’s how dangerous this ‘social abomination’ known as capitalism is…civilization can collapse completely and capitalists will still do everything in their power to screw you! Not because they need to but because it’s what they do!

So we arrive at tonight’s offering where we catch some oblivious capitalists still up to their old tricks…

Building Is Booming in a City of Empty Houses
Published: May 15, 2010


“For the first time in three or four years, we have pent-up demand,” said an executive at the builder of Coronado Ranch. [Or so ‘shit for brains’ would have you think…Las Vegas is another one of those locations where if you don’t bring your job with you, you sure as shit aren’t going to find one when you get there!]

The chance to make money on the next housing boom “is like it’s never been,” Mr. Lee, a real estate promoter, assured a crowd of agents, investors and bankers. “We’re going to come back like you’ve never seen us before.” [Naturally, this redefines the term ‘irrational exuberance’…the buyers aren’t there…as evidenced by 10,000 vacant units!]

Home prices in Las Vegas are down by 60 percent from 2006 in one of the steepest descents in modern times. There are 9,517 spanking new houses sitting empty. An additional 5,600 homes were repossessed by lenders in the first three months of this year and could soon be for sale. [So, with a backlog of 10,000 unsold units, these fucking geniuses decided it was time to build more! Who are the bankers that are underwriting these crazy people? Because you know it only a matter of time before they show up in Washington, looking to be ‘bailed-out’…]

Yet builders here are putting up 1,100 homes, and they are frantically buying lots for even more. [I’m just ‘shooting from the hip’ here good citizen but something like this may be enough to bring back public executions! Hangings to be specific…not that I’d object to the return of the guillotine…]

Las Vegas is trying to recover by building what it does not need. It is an unlikely pattern being repeated in many of the areas where the housing crash was most severe. [Could this have something to do with most capitalists being ‘one trick ponies’? Since they don’t know how to make money some other way, they persist in doing what they know how to do, even after buyers for their scams have dried up and banks are under investigation for fraud…]

“There’s a surprising rebound in the hardest-hit markets,” said Brad Hunter, chief economist with the consultant Metrostudy. “People are buying again.” From the recession’s lows, construction has nearly doubled in Las Vegas, Phoenix and Tucson. It is up 74 percent in inland Southern California and soaring in Florida. [This definitely wouldn’t be the first time that speculators have ‘gotten ahead of themselves’ in trying to ‘time’ the recovery. The bad news is they do this with ‘other people’s money’…and when they blow that money, they walk away!]

Some of the demand is coming from families that are getting shut out of the bidding for foreclosures by syndicates that pay in cash, and some is from investors who are back on the prowl. [The ‘joke’ is on the legitimate buyer because the economy isn’t ‘recovering’, the economic books are being cooked by the ‘rah, rah, feel good, don’t vote us out of office’ crowd.]

Land and labor costs have fallen significantly, so the newest homes are competitively priced. Some of the boom-era homes, meanwhile, are in developments that feel like ghost towns. And many Americans will always believe the latest model of something is their only option, an attitude builders are doing their utmost to reinforce.

In Phoenix, a billboard for Fulton Homes summed up the builders’ marketing approach. “Does your foreclosure have tenants?” it asks, next to a picture of a mammoth cockroach.

Brent Anderson, a marketing executive with another Southwest builder, Meritage Homes, said it bought 713 lots in stricken Arizona last year, and was on the verge of starting construction in a new Phoenix community called Lyon’s Gate.

“We’re building them because we’re selling them,” Mr. Anderson said. “Our customers wouldn’t care if there were 50 homes in an established neighborhood of 1980 or 1990 vintage, all foreclosed, empty and for sale at $10,000 less. They want new. And what are we going to do, let someone else build it?” [Um, we can only wonder what bank(s) is buying this obvious horseshit…and if the bankers go bus a second time, and turn up in Washington, looking to be rescued, well, I don’t think it’s going to be pretty…]

All of this goes contrary to the conventional wisdom, which suggests an improved market for builders is years away. Nationwide, new home sales at the beginning of this year plunged to a level below any recorded since 1963, when the figures were first officially tabulated. [So are these morons suggesting that we all ‘trade in’ our ‘used’ homes for brand spanking new ones? The Rockefellers might be able to afford this but the average paycheck peasant certainly can’t!]

Simply put, the country already has too many houses, the legacy of wide-scale overbuilding during the boom. [There is currently a 9 YEAR housing ‘overhang’, are we supposed to tear these properties down because they are no longer ‘new’?] The Census Bureau says there are two million vacant homes for sale, about double the historical level. Fewer new households, moreover, are being formed as families double up for economic reasons, putting a further brake on demand.

Even some builders agree with the pessimists when it comes to Las Vegas. Meritage Homes, for example, has largely withdrawn from the city. “We don’t think it will come back for a long time,” Mr. Anderson said.

American West is betting the opposite is true. The developer, which is privately held and is based here, builds nowhere else.

The evening under the tent with Mr. Lee was the official start of American West’s new community, called Reserve at Coronado Ranch. Before it opened, buyers began putting down money for the houses, which sell for under $300,000. “For the first time in three or four years, we have pent-up demand,” said American West’s vice president for sales, Jeff Canarelli. [As many Florida builders found, it is one thing to take a letter of commitment and quite another thing to get the buyer to take delivery of the finished product. That may well be the case here.]

Disregard what you may have heard about how hard times may usher in an era of restraint. “With our buyers, they always want bigger,” Mr. Canarelli said. An American West home introduced during the recession comes equipped with an elevator. [Is the ‘assumption’ here that you’ll be too tired from working three minimum wage jobs to walk your sorry ass upstairs at the end of the day?]

One of the initial buyers at Reserve is Josh Snider, a surgical technologist who decided a year ago he wanted to buy his first home. He sought out a foreclosure, deals that were supposedly plentiful and cheap. “What a nightmare that was,” recalled Mr. Snider, 38. “I put in five or six offers and was always outbid.” [Um, it has been my experience that these ‘anecdotal stories’ are worthless, too much is left out. Was ‘Josh’ submitting bids that were way too low? It sure looks that way…]

He didn’t see any homes that were being sold by buyers in the traditional way. The price declines in Las Vegas have been so brutal that most homeowners with a mortgage owe more than their home is worth. If they must sell, their only option is a so-called short sale done with the approval of the lender, which can be a lengthy and frustrating process for all concerned.

Worried the market was going to turn around before he bought, Mr. Snider started checking out the new developments. He liked the floor plan, size and price of Reserve, which ultimately will have 310 houses.

A final incentive sealed the deal, this one courtesy of the United States government: he got a loan insured by the Federal Housing Administration, which meant his down payment was much smaller than a private lender would require.

The house, to be done in September, cost $273,500. “It’s not a bargain for everyone,” Mr. Snider said, “but it’s a bargain for me.”

He plans to live in the house with his girlfriend, Cindy Rojas, and his 12-year-old daughter.

Another early buyer is Irving Hallman, an investor from Hawaii. “I understand Vegas has its ups and downs, but we did the numbers and this house will hold its value,” Mr. Hallman said. [ How fucking trite! Is Mr. Hallman aware of how many buyers during the run up to the last crisis said THE EXACT SAME THING!]

There is a benefit to the seeming madness in places like Las Vegas. Building homes is the traditional fuel of a recovery. [So, the fucking BLS will be pointing to ‘insanity’ in Las Vegas and telling us the ‘economy’ as well as the ‘housing market’ are ‘recovering’…beautiful!]

“Housing is construction. It’s tables. It’s paint. It’s couches. It’s toilets,” said Sally Taylor, a specialist in liquor and gambling establishments who attended the American West festivities. “If we build more houses, we’re creating more jobs.” [Seriously good citizen, are people REALLY this stupid or do they grow them like that out there? They’re bulldozing ten thousand house lots from the ‘economic desert’ that is Detroit, why don’t they try building new ones to ‘revitalize’ the economy? I mean WTF!]

Across the street from Reserve’s three model homes is a new strip mall. Only one building is occupied, a gambling parlor. Others will start to be filled when more buyers join Mr. Snider and Mr. Hallman finds a renter. [Oh, that is too rich! Mr. Snider couldn’t buy a foreclosed property because ‘flipper’ kept beating him to the punch…now ‘flipper’ is buying up the contracts on what promises to be the next fucking ‘ghost town’! Which only proves that just because you have money doesn’t mean you’re particularly smart!]

Analysts have calculated that it could take as long as a decade for inventories to return to their precrash levels and for demand to once again exceed supply. That is a grim prospect for any owner who hopes to accrue equity through rising prices. [It is particularly grim for any owner that intended to use that equity as their retirement nest egg…]

A few experts, however, are starting to think the path to a better market will be much shorter. Stephen F. Auth, chief investment officer at the financial services company Federated Investors, is a housing bull. He says he does not believe that many extended families will end up all living in one place, like the Waltons in the 1930s. [It seems as though the term ‘expert’ is suffering from the same ‘definition problem’ that the word ‘bonus’ is suffering from…]

“That’s an unsustainable environment — Grandma coming home, Johnny moving back in with his new wife,” Mr. Auth said. “They’re going to move back out. The great housing depression is nearly over.” [It isn’t and won’t be over until jobs that pay decent wages make a comeback…and that isn’t happening here in the next Banana Republic…]

New-home sales in March rose 27 percent. But most analysts attributed the jump to the pending expiration of yet another government incentive, a tax credit for buyers, and said sales would quickly slump again. [Worse, it appears as though the recent ‘spike’ in sales activity is being driven by speculative buyers and not by the ‘natural expansion’ of home ownership.]

Even in Las Vegas, a community built on the willingness to be lucky, belief in a housing turnaround — and Mr. Lee’s portrait of a resilient city on its way to being a global “meetspace” — is provisional. Agents at the party said they had their hopes but were chastened by the horrors of the last three years. [Does anyone else think Mr. Lee is a ‘wasbeen’ stuck firmly in the past who is totally oblivious to ‘current events’?]

Afterward, packing up his video equipment, Mr. Lee said the party itself heralded a recovery. “We used to do this every two weeks, starting in the 1990s,” he said. “But this is the first time in 18 months. Believe me, it’s been famine around here.”

Apparently the article notes that American West is a ‘privately held’ company that only builds in Vegas…which is a shame because I’d be willing to bet this article would have driven him out of business if his stock were publicly traded…I know I’d short it!

In fact, if this article DOESN’T result in a FDIC investigation into the lending practices of the banks involved with these projects, there’s some serious ‘dereliction of duty’ going on!

The economy, such as it is, is ‘FUBAR’ good citizen…so signs that irrational behavior persists isn’t ‘comforting’ by any stretch of the imagination.

While this article represents a fine example of ‘investigative reporting’ but one can’t help but come away with the impression that its purpose wasn’t to expose corruption in the banking sector so much as to ‘cheerlead’ the economic recovery.

How desperate is that good citizen, we are shown evidence of a crime and told it is the ‘economic recovery’ in action…is there no limit to their depravity?

Thanks for letting me inside your head,


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