Saturday, April 23, 2011

Housing markets

Greetings good citizen,

Today’s top headline is The BIG rip off

Builders and analysts say a long-term shift in behavior seems to be under way. Instead of wanting the biggest and the newest, even if it requires a long commute, buyers now demand something smaller, cheaper and, thanks to $4-a-gallon gas, as close to their jobs as possible. That often means buying a home out of foreclosure from a bank.

Four out of 10 sales of existing homes are foreclosures or otherwise distressed properties. Builders like Mr. Meier who specialize in putting up entire neighborhoods on a city’s outskirts — Richmond is some 50 miles northwest of downtown Chicago — cannot compete despite chopping prices.

Shelter is the single largest ‘purchase’ a tad over half of us will ever make, although in the not too distant future, nobody will ‘own’ a home/moneypit.

Because the court system that upholds said ownership will cease to exist.

What an outrageous claim you must be thinking! The whole enchilada is held together by the ‘men with guns’, where does Gegner think they are going?

And the answer to that question is, ‘in business for themselves’. Funny thing about the ‘men with guns’ if you stop paying them they are pretty quick to adopt ‘independent contractor’ status.

That’s the ‘flipside’ to a civilization ruled by money. Once the money proves worthless, things revert to the ‘old order’…the only thing that still trumps ‘gold rules’ is ‘gun rules.’

Before guns it was bows and arrows, and spears and swords before that.

But I’m getting ahead of myself; there’s still one last stage left before the global real estate market ‘implodes’.

It is the last ‘variant’ on what has increasingly proven to be a ‘suckers bet’. In this ‘final stage’ of the ‘own your own home’ game. In the future you will find that the ONLY way you will be able to secure financing is through a ‘full recourse’ loan…an extremely hazardous proposition, as those who took out student loans already know.

So, is a ‘new car’ thrown in with a new house really a winning combination? Could be if you happen to have exceptionally deep pockets (and don’t mind driving a ‘base model’ Chevy/GM product…)

Oh, and make no mistake about it, YOU ARE paying for the car, it is just being ‘financed’ with the house!

This begs the other question…if you can’t secure financing for a car, is throwing a house into the bargain really a wise move?

Bizarrely, this strategy is ‘working’ but you can make a damn good bet that the whole scam relies heavily on ‘creative financing’ (which is another way of saying the customer takes it long and deep!)

But in the end we wouldn't be providing the level of service our readers expect if we failed to point out the REAL problem here is the rapidly diminishing pool of potential buyers.

If you view a home as an ‘investment’, you are making the ‘assumption’ that someone will someday come along and buy the property from you for more than you paid for it.

Maybe not as much as you’d like to get, but more than you paid!

That’s the ‘whole point’ of ‘real estate’, you buy it expecting to turn it around for a profit.

Have you spotted the ‘fly in the oinment’ yet?

What fly is that?

The big hairy one commonly called the ‘payroll distribution chart’.

With the demise of the Autoworkers the number of people pulling down a ‘living wage’ in this country shrunk radically.

This, in turn, diminishes the number of future homebuyers.

Want to throw some gasoline on that fire?

Factor in the 2 billion Indian and Chinese people who used to walk but now want to ‘cruise’.

Which is to say you can stop wondering ‘why’ the price of gasoline is headed for ‘boing’, the machinations of the greedy capitalists are biting the rest of us in the ass!

All racism aside, was exporting our, er, ‘lifestyle’ to the most populous place on Earth really a ‘wise’ move?

Which is to state that it won’t be long before the price of energy alone will make ‘homeownership’ cost prohibitive.

You think operating a motor vehicle is an expensive proposition? Try heating a home! (Especially in the frigid north…)

Not that energy is the only thing rising in price.

As retailers have been warning, their costs are rising as cotton and other materials get more expensive, laborers in China demand higher wages and fuel prices go up. By this fall, many have said, they must charge customers more. Because retailers pay for items about six months in advance, spring merchandise on the shelves for a few months was ordered and paid for in late summer, before costs soared. And when costs first started creeping up, clothing makers used an array of tactics to keep prices flat, whether by moving production to lower-cost countries like Bangladesh, using cheaper fabrics or ordering early to lock in prices.

Um, one is tempted to say ‘I told you so!’ here but that would be counterproductive.

What did I tell you?

A few of you might remember that I have in the past pointed out that once you give up the ability to produce your own (whatever) you instantly place yourself at the mercy of those who still can produce the item (pricewise, cheaper goes right out the window!)

How bizarre is it good citizen that this is precisely the type of ‘economic voodoo’ that crowned Ronnie Reagan as an economic genius and the savior/hero of capitalists everywhere!

But that isn’t the only incident of fiscal irresponsibility on display today.

And may I say that now is an especially peculiar time to think that taxes matter only if they reduce consumption. We have lots of excess capacity in the economy; the government can easily buy more goods and services without requiring that the private sector buy less. The only reason to raise taxes now, or promise future rises, is to address solvency concerns.

Discussions like this really disturb me; they indicate that there are a lot of people with Ph.D.s in economics who can throw around a lot of jargon, but when push comes to shove, have no coherent picture whatsoever of how the pieces fit together.

Not to put too fine a point on it good citizen but if the people with Ph.D’s can’t get it right, what chance do YOU have of making sense out of it?

But then we are falling right into their trap, aren’t we?
The main ‘excuse’ for most of the ‘excesses’ foisted upon us is ‘complexity’.

Which is more closely related to the ‘if we told you the real reason you’d say no!’ excuse…which is why ‘national security’ is so often invoked whenever somebody starts sniffing around a ‘sacred cow’ that is most likely an embarassing boondoggle.

ONLY (no exceptions): thieves and scoundrels require the ‘cloak of secrecy’ to hide behind.

Why politicians keep claiming the need sort of speaks for itself.

In a somewhat related story, More Drivers Running Out Of Gas

We have this observation from today’s Cryptogon:

Wow. Some people are in so much denial about gas prices, and not wanting to think about filling up, that they are simply driving until they run out of gas. This is a fantastic lesson in cognitive dissonance.

If you’re not familiar with the term ‘cognitave dissonance’ it is linked to the wikipedia in the actual article.

And, finally (a bit overlong today, but nowhere near the 9 pages they used to be…) we have this brilliant observation:

“If those in charge of our society - politicians, corporate executives, and owners of press and television - can dominate our ideas, they will be secure in their power. They will not need soldiers patrolling the streets. We will control ourselves.”

Howard Zinn

We are fed such an incredible, steaming heap of toxic bullshit it is a small wonder that a majority of us are indeed ‘psychotic’! (The airwaves are packed with ads for ‘mind/mood altering’ drugs for a reason.)

Ironically, the ‘crazier’ they make you, the easier it will be to exterminate you…

The sad part is they are more than a few fries shy of a Happy Meal too!

Have a nice day!

And thanks for letting me inside your head,


No comments:

Post a Comment