The New York Times provides a workmanlike update on the impact of current and probable foreclosures on the housing market. The odd bit is that even though the article is downbeat, it manages to be relatively optimistic compared to industry sources.
For instance, consider this section of the article:
Over all, economists project that it would take about three years for lenders to sell their backlog of foreclosed homes. As a result, home values nationally could fall 5 percent by the end of 2011, according to Moody’s, and rise only modestly over the following year. Regions that were hardest hit by the housing collapse and recession could take even longer to recover — dealing yet another blow to a still-struggling economy.
Contrast this view with the outlook from the industry cheerleader, the Mortgage Bankers Association:
A full housing recovery is three to four years off as the nation grapples with a shadow housing inventory of 4.5 million distressed properties, according to Michael Fratantoni, vice president of research and economics for the Mortgage Bankers Association.
The difference is that the MBA is considering not only foreclosures but people who really want or need to sell and are still holding on in hopes of a better market. This shadow inventory will hit many markets upon any sign of bottoming and recovery, thus leading to halting improvement.
Yes, the article dutifully recites recent statistics: that lenders now own nearly 900,000 homes, double the level at the outset of the crisis. And it describes badly clogged pipelines, with foreclosures in Chicago and Miami running twice the level of sales and eight times in Atlanta (which has one of the fastest foreclosures processes in the US, belying the notion that faster foreclosures lead to more rapid market clearing).
Some of the blame for the overhang is attributed to foreclosure investigations, but that’s spurious. Recall that it was the banks themselves that halted foreclosures when the robosigning scandal broke last fall, and the adverse press, and later investigative pile-on, has led them to try harder to comply with the law (what a concept!). For those who had been paying attention, a pile up in the courts was well underway due to increasing evidence of servicers and securitizers running roughshod over well understood requirements. The robosigning scandal brought it to national attention and led to a change in attitude among quite a few judges, who came to see that the banks were not necessarily to be taken at their word.
Moreover, since as we have pointed out, there have been no real investigations of foreclosure-related dubious behavior to date, mere regulatory theater designed to shield the banks can hardly be a cause of a slowdown in foreclosures.
And the article understates one issue: the failure of servicers to maintain foreclosed properties, which is contributing to an overshoot in housing prices on the downside. We do have one allusion:
Here in this working-class neighborhood of El Mirage, northwest of Phoenix, rows of small stucco homes sprouted up during the boom. Now block after block is pockmarked by properties with overgrown shrubs, weeds and foreclosure notices tacked to the doors.
Overgrown lawns are the least of the problems. It’s not uncommon for vacant homes to be stripped of copper and appliances. That’s why it isn’t nuts to keep homeowners in place even when they are severely delinquent if the local property market is so backed up that a home won’t be sold quickly (the Times says that average time to foreclosure is 400 days and another 176 days to sell it). The homeowner is still liable for property taxes if the home has not been seized by the lender and will maintain the property at a better level than the bank would.
But even this comparatively cheery take shows that the state of play in most local real estate markets is still plenty ugly and not likely to get better soon.
Overgrown lawns are the least of the problems. It’s not uncommon for vacant homes to be stripped of copper and appliances. That’s why it isn’t nuts to keep homeowners in place even when they are severely delinquent if the local property market is so backed up that a home won’t be sold quickly (the Times says that average time to foreclosure is 400 days and another 176 days to sell it). The homeowner is still liable for property taxes if the home has not been seized by the lender and will maintain the property at a better level than the bank would.
This is part of why local and state governments should be waking up to the fact that they need to encourage people to renounce the bank debt completely and stay in the homes, and help them to do so against any foreign (i.e. Wall Street or Washington) pressure.
Naked capitalism has always trashed bailing out bankers, most of the time deservingly. However, I can’t help wondering why no one does the same to home owners who strategically default like that. After all, isn’t it another case of bailing out the irresponsible (despite the beneficial effects on the economy)? Shouldn’t we oppose it on moral grounds for creating another hazard in the future? Btw, predatory lending doesn’t absolve someone of overpaying for something.
In other words, instead of worrying about bankers who are looting like crazy, most people (myself included) feel cheated at people below us getting a free ride.
Another thing is that Yves has called out the system for privatizing profits and socializing losses. Doesn’t a debt jubilee/mortgage forgiveness do the same thing for homeowners? They get to share in the gains on the way up. They should pay for taking leverage on any investment that declines in value, no?
Finally, if we do have this debt renunciation, does that apply to everyone who has a mortgage or just for those underwater?
People “below us”, Richard? Really?
And you’d rather that the thieving bankers, since they are “above you”, continue their free ride, rather than wringing from your obviously dehydrated heart, a miniscule smidge of generosity for those who are “below” you?
I don’t think you need to worry about it, Richard. No one could possibly be below you.
Great! Thanks for a snide remark that contributes absolutely nothing to the discussion.
I wasn’t being trollish; I just wanted to reflect how many people in the middle class currently feel. We’re outraged at irresponsible people at the top and at the bottom getting bailed out while the middle is squeezed.
Leaving the unfortunate classist remark aside, I would point out that this article and Attempter are pointing out the obvious: the bank is going to eat the loss. One way or the other. The asset is deteriorating in the present state of affairs and the provenance of the ownership in many cases is tainted. I am pretty sure this is a contrasting strategy to eviction.
But there are cases where there are no incentives for the owners to stay (no job) so they have to move on to a part of the economy that is doing better or offers them employment. The banks are not often able to rent even…apparently they have internal restrictions to that(liability?). Which seems crazy to me, but there it is.
It’s a stalemate that can only be broken by a rise in the market price (not happening soon), inflation (careful what you ask for), or supply destruction. Taking stuff out of inventory one way or another. Those stripped rancheros they are talking about are probably land value now.
Escariot: You state that “The bank is going to eat the losses, one way or another” A question: Did we the taxpayer not bailout these banks and buy their worthless assets at face value? were not the bailouts, interest free loans and loan gaurantees ment to make up the difference between what the assests held by the bank were worth at the height of the bubble and what these assets were worth after the collapse? Are not the taxpayers the one taking the loss?
One result of the Bailout is that we the people now own the banks. They’re public property.
This means that, even if one believes in land propertarianism in the first place, all mortgages and REO are now public property.
The end goal has to be redemption of all this land for post-oil food production.
While Jubilation in Place doesn’t achieve this goal immediately, it can be a step toward it. It can liquidate the concept of bank ownership and break the banks completely. Putting direct ownership back in the hands of individuals, meanwhile, is a step toward a food stewardship dispensation. REO can be directly repossessed and redeemed.
Apply the same logic to all corporate-owned land, especially industrial farming acreage. Through public subsidies of corporate agriculture, biofuels, etc. we long ago became public owners of all that land as well.
Back in April at the Minsky Conference Steve Waldman became my new hero for loudly describing Diamond and Blankfein as stupendously overpaid public employees!
After the talk I asked Joe Nocera, also on the panel, why the Times did not write stuff like that. He said they did, that this is what TBTF means. I do wish the Times would drop its euphemenglish and start writing articles that actually have leads in the first paragraph and are about news.
Workman like is the most we can hope from Gray Lady, with luck print media will vanish soon and people will be forced to follow reporters like Yves.
Charlie, not only did we pay then, but it is gift that keeps on giving.
Over 60 percent of U.S. mortgages are now parked with Freddy and Fannie last I looked.
Beyond the disgusting language, this comment is identical to the notion of election fraud that the Republicans have raised the last 2 million years.
The number of strategic defaults and election fraud cases is negligible; it’s a smoke screen for being for the rich and against Joe Blow.
yep…and The Emperor Has No Clothes: This is a Bank Insolvency Issue. The diversionary tactics and distractions are all part of the extend and pretend. They Have No More Money (equity). It is gone. It evaporated in 2007-2008. It is not coming back. Their Books are bloated with delusion. The market is putting in the correction.
No buyer is philanthropic in this market. They aren’t taking on anyone’s problem.
And even better, they passed through all of the bailout funds to employee bonuses, protecting themselves from their own worthless equity.
“Another thing is that Yves has called out the system for privatizing profits and socializing losses. Doesn’t a debt jubilee/mortgage forgiveness do the same thing for homeowners?” Richard
OK, let’s forget debt forgiveness. Instead, let the US Treasury create some debt-free, full legal tender fiat (United States Notes) and send every American citizen, including savers, a large and equal bailout check.
1) Savers would be compensated for years of suppressed interest rates.
2) Borrowers would be able to pay off or down their underwater mortgages.
Of course we need fundamental reform in money creation too including separate government and private money supplies.
I wouldn’t have a problem with that idea (aside from the fact that I’m not a citizen) because it’s fair to all. Savers aren’t punished for holding out on buying a house because of elevated prices (see Monevator as an example of this) or paying off a mortgage early. We would also offer relief to homeowners who would otherwise default and cause community cohesion issues and bank balance sheet losses. Hey, it’s certainly a lot better than the Fed printing out money and giving it to the banks to lend.
The only reservation would be the idea of creating more money. But hey, the Fed is in bed with the banksters (just goes to show you all that I don’t spout the corporate party line) and all that spigot would be better off going to the many than the few.
The only reservation would be the idea of creating more money. Richard
Yes, that could easily cause price inflation with our current banking system. The solution is to put banks out of the counterfeiting business at the same time with a 100% reserve requirement and to meter the bailout checks so as to just make up for the money supply shrinkage as existing debt is repaid.
We would end up with vastly reduced debt and 100% reserve banking. But since 100% reserves may not be optimal for economic growth we should allow fundamental liberty in private money creation too soon after the bailout.
Unlawful mass evictions, including those due to
speculation, are a serious violation of the human
right to housing. Debt forgiveness is one potential
route to the compensation due the victims. Absent a
state that can act independently of criminal banks,
we can invite the UN Special Rapporteur on Housing
to sort this out as fairly as possible.
Below you? Good grief. That is gross.
In response to..
“Doesn’t a debt jubilee/mortgage forgiveness do the same thing for homeowners? They get to share in the gains on the way up. They should pay for taking leverage on any investment that declines in value, no?”
That is the problem. MOST people do not buy homes as “investments”, they buy a place to raise their kids with good schools and safe streets. The investment piece comes as an after thought. That is the difference between the way bankers and the business class see a homes and the way the average Joe on Main Street see one.
Wall Street and Main Street should never mix. They do not see the world the same way. Main Street generally loses but Wall Street seems to always forget that it exists within the bounds of a democracy despite its best efforts to undermine said democracy and they are out numbered.
Wall Street always seems to forget that we are NATION of people that support a STATE and an ECONOMY but the best interests of the NATION will almost always come before the needs of the other two.
“That is the problem. MOST people do not buy homes as “investments”, they buy a place to raise their kids with good schools and safe streets. The investment piece comes as an afterthought. That is the difference between the way bankers and the business class see a homes and the way the average Joe on Main Street see one.”
Daniel – no matter why people buy homes they do not have a free ride on insuring it value.
Furthermore, the reason why you do something does not change the essential nature/ flaws or risks embedded in something. For instance, if someone makes the argument that people bought crack because they wanted vitamins I would find it hard to agree that they don’t have a responsibility for the consequence.
Mind you I am not suggesting they lied as to their reason – just saying that it seems to basically make the argument that people are stupid and everyone else needs to pay for this and in turn stupidity needs to be glorified.
This is akin to paying bonus to the fearless business leaders who presided over their institution flying off the cliff.
Both actions are in essence despicable
“After all, isn’t it another case of bailing out the irresponsible?”
No. Next question.
“Shouldn’t we oppose it on moral grounds for creating another hazard in the future?”
No. We should support it on moral grounds for addressing the ongoing hazard that bankers’ criminal greed has created.
“Btw, predatory lending doesn’t absolve someone of overpaying for something.”
Yeah, actually it does. Predatory lending is a form of fraud, and fraud is a basis in the law for setting aside a contract.
“In other words, instead of worrying about bankers who are looting like crazy, most people (myself included) feel cheated at people below us getting a free ride.”
Clearly, most people are stupid. What we’ve witnessed over the last several years is nothing less than Wall Street mugging Main Street. Apparently, most people have no problem with the mugger because they are too pissed off that somebody wants to help the victim get up off the ground. I mean, screw that guy! I picked myself up off the ground, and so should that loser! Grrrrr, it makes me so mad!!!
“Another thing is that Yves has called out the system for privatizing profits and socializing losses. Doesn’t a debt jubilee/mortgage forgiveness do the same thing for homeowners?”
No. First, wiping away debt that cannot and will not be paid will not increase the value of a home. Second, what we’re really talking about here is a remedy to address systemic fraud, not a handout. But I suppose you’d be against giving the victim of a mugging his wallet back. I mean, the guy was stupid enough to go down that dark alley, right? What did he think was going to happen? Finders, keepers.
“They get to share in the gains on the way up.”
The gains were illusory, just as they are in any Ponzi scheme, which I assume you’d not only legalize but lionize.
“They should pay for taking leverage on any investment that declines in value, no?”
As others have said, most people don’t buy a home as an investment but as shelter.
“The gains were illusory, just as they are in any Ponzi scheme”
Nope – The number of seconds, thirds,HELOCs etc as well as debt consolidation from credit cards etc into mortgages show that there was active non-illusory monitization of the gains.
Now you are asking everyone to pay for the mess….and worst are hanging a moralistic stance around what is essentially a wealth transfer mechanizim.
By this logic why not bail out all the folks who spent money based on illusory gains in dot com portfolios that went up and were ridden down?
Money was pulled out of the manure heap that is residential RE either through sale and/or refinancing. There is just no way to put lipstick on this pig.
By this logic why not bail out all the folks who spent money based on illusory gains in dot com portfolios that went up and were ridden down? illusionist
Why not? The government backed counterfeiting cartel, the banking system, has distorted the entire economy and cheated the entire population, borrowers and savers alike.
We need a bailout of the entire population plus fundamental reform.
“No. Next question.”
Sounds like you’re dismissing the point rather than making an attempt to justify your views.
“No. We should support it on moral grounds for addressing the ongoing hazard that bankers’ criminal greed has created.”
So the bankers’ crimes absolve you of any criminality in pursuing vigilante justice? We should deal with legal issues through the appropriate legal channels. I’m not denying that banks are innocent; they’re probably guilty on many counts of many things (most cited here at NC).
“Yeah, actually it does. Predatory lending is a form of fraud, and fraud is a basis in the law for setting aside a contract.”
Maybe we’re confusing the definition here. To me, predatory lending is like dumping. It’s giving someone an interest rate lower than what that person should be receiving given the actual default risk. Now, the reality may not be apparent until later, when deteriorating economic conditions or reduce in exuberance in the lender causes cooler heads to rethink things. It doesn’t absolve the borrower from responsibly considering whether he/she will be able to repay things. Heck, if the person could/did, he/she will have gotten a sweet deal at an interest rate far lower than market price. By that reasoning, a person accepting predatory lending is making a bet that he/she will be able to service it and knowing the consequences if he/she defaults. Fraud would be if the terms of the contract were changed midstream.
“Clearly, most people are stupid. What we’ve witnessed over the last several years is nothing less than Wall Street mugging Main Street. Apparently, most people have no problem with the mugger because they are too pissed off that somebody wants to help the victim get up off the ground. I mean, screw that guy! I picked myself up off the ground, and so should that loser! Grrrrr, it makes me so mad!!!”
I admit I used poor language in this part. It’s not the “classist” remark (which I stand beside as appropriate language for making sociological distinctions). Rather, my mistake was the remark that we in the middle class are solely watching those below us and worried about government policy giving them a benefit that doesn’t apply to all.
What I meant to say is that many people in the country feel this way justifiably, and it’s distracting them from the other issue; bankers on top looting the system.
“No. First, wiping away debt that cannot and will not be paid will not increase the value of a home. Second, what we’re really talking about here is a remedy to address systemic fraud, not a handout. But I suppose you’d be against giving the victim of a mugging his wallet back. I mean, the guy was stupid enough to go down that dark alley, right? What did he think was going to happen? Finders, keepers.”
Hey, I’m all for an orderly bankruptcy process, which is a more careful implementation of the foreclosure agreement in the mortgage contract. It’s an out clause for people who truly can’t pay their debts. I also support a PIIGS debt restructuring on those grounds. What I can’t support is a jubilee, which means letting underwater individuals keep their homes for free by wiping all their debt away? What about someone who isn’t underwater and has a mortgage? Does his/her debt get wiped away as well? Are those debts even comparable in monetary value? What about individuals who own their homes outright?
“As others have said, most people don’t buy a home as an investment but as shelter.”
I disagree here. It’s true that homes serve a double purpose as a shelter as well as an investment. However, that doesn’t absolve someone of risks inherent in the asset. Perhaps you all believe that homes deserve special treatment because of their importance as shelter, but if so, that needs to be written into the contract and made known to all parties and signees beforehand. As things are written right now, you leverage your gains on the way up, which was dandy for 2 decades when everything went nowhere but up, but now you suddenly cry foul when prices go down?
Furthermore, there are many responsible people (some I know, Monevator for those of you looking for an example online) who viewed house prices as irrationally high versus average income in 04-07. We/they held off on buying until a pullback, which we/they couldn’t anticipate would happen so quickly. We/they were prepared to rent until prices became reasonable and cost-effective, which could have been 10-20 years for all we/they knew. We/they made a calculated gamble based on economic conditions, and according to the rules of capitalism, we/they should be free to take advantage of low prices now (which are still being artificially propped up by government support).
Please don’t make ad-hominem attacks against me. If you have read my posts before, you’ll know that I view most of NC’s comments positively and am just as outraged against banks. I can’t, on principal, however, support any policy that differentiates based on class (or race, etc).
While the “below us” comment is troubling it is even more troubling that it is distracting all the attention the the writer’s lack of empathy or perception thereof.
The key issue I believe is that one cannot protect against stupidity and the mass orgy that was sub prime was stupidity on a gigantic scale.
As such both forms (banks & the borrowers) of bailout are wrong and in the end doomed.
Why is everyone getting at that one comment? It’s nothing other than an innocuous reference to class divisions. Now the remark would be crude if I had called them “the unwashed masses” or “the peons”, which I did not.
My issue here is that we’re “supposed” to feel more empathy to people who made wrong bets on an asset class because they’re underwater (let’s face it, most underwater people are poor)? Note that that statement (making wrong bets) can apply equally to bankers who sold subprime as well as individuals who didn’t think before plopping down on an overvalued home.
The only fair solution would be for all parties to share in the suffering. Right now, it seems that bankers are getting bailed out. Irresponsible homeowners are getting bailed out. The taxpayers are on the hook for the bill. Wonder why the tea party gets so much support in some parts of the country? They use the idea of fairness, a fundamental virtue for many Americans, to invalidate bailing out anyone.
Keep it classy, guys.
Richard, please explain how “Irresponsible homeowners are getting bailed out.” Do they keep their homes? I honestly don’t understand the equivalency you are attempting to make between someone living in a house rent-free for a limited period of time with the trillion$ in direct-line Wall Street welfare, bonus-protection, and zero-interest loans to speculate on commodities.
“Why is everyone getting at that one comment?”
Agreed. I am stating something to the effect that the comment is in fact distracting from the real deal.
Both the Borrowers and the Lenders are to blame for this putrid manure heap.
That the freebie to the borrowers is akin to paying bonus to the fearless business leaders who presided over their institution flying off the cliff.
Unfortunately your comment distracts from this in as much that the folks here are all focusing on that – so in effect you tacitly are enabling this evasion of responsibility.
Illusionist are you seriously suggesting “that the freebie to the borrowers is akin to paying bonus to the fearless business leaders who presided over their institution flying off the cliff.”
Really? That was my counterpoint—skirting Richard’s rather telling slip about his lessers—that the equivalency is a demonstrably false illusion. Defaulters do not keep their homes, they are not in breach of contract (mortgages prescribe the default process), and taxpayers pay them nothing. Banksters on the other hand, have reaped trillions from taxpayers from taxpayers directly and through F Beard’s Criminal Reserve “cartel”. Your illusion is too transparent.
To suggest that my not-so-savvy aunt in any way shares responsibility with the banksters for serious fraud and the engineered GFC is offensive nonsense. I guess you didn’t catch the obvious hyperbole.
“To suggest that my not-so-savvy aunt in any way shares responsibility with the banksters for serious fraud and the engineered GFC is offensive nonsense.”
Pray why was she borrowing in the first place when she clearly should have known better. I am not holding only her responsible but she also shares some responsibility. At least the same responsibility as someone who wanders into a Vegas casino and then wonders why they need to pay all this money just for spinning a wheel.
Everyone is upset over $30 K commodes – how much did the loan junkies spend collectively on commodes and larges houses then they should have bought?
Everyone alas Aunt Lu included contributed to this putrid pile from where this aroma emanates.
Sorry for all the flack. You’re right of course: the banks were really helpless victims of the onslaught of predatory subprime borrowers. Even my Aunt Lu forced them to issue her a variable HELOC against her meager Social Security check. And now that she can’t pay because her house in Pella wouldn’t sell as promised (“RE never goes down”), the govermnin should simply garnish her SS check until she checks out.
And really, why should taxpayers presume to limit the multi-million-dollar bonuses of pillars of society like John Thain, sitting on his $30,000 commode, when feckless slum-dwellers voluntarily choose to buy groceries and gas instead of dutifully mailing in payments on their deflated shacks. I’m not quite sure how we can spin that into a bailout equivalent to the trillions doled out to Wall Street, but I’m sure we can think of something.
Anyway, deadbeats like my aunt can just go to the Criminal Reserve’s discount window like everyone else and get her own damn 0.25% loan, can’t she?
The one point you have indeed made is that both the Bankers and Aunt Lu are irresponsible deadbeats.
That is why I say both the borrowers and lenders are to blame for this manure factory.
That is why I say both the borrowers and lenders are to blame for this manure factory. illusionist
Wrong. And stop calling them “lenders.” They are instead members of a government enforced and backed counterfeiting cartel – the banking system. The entire population was pressured by negative real interest rates on their savings to borrow from the cartel or be forever priced out of the housing market by those who did.
There is no moral equivalence between borrowers and so-called “lenders”. The borrowers are victims and the “lenders” are villains.
Incorrect. I am not defending the banks. I have acknowledged numerous times that they are guilty in looting, drinking from a spigot of credit from the Fed, and bribing politicians.
This does not however allow you to take up street vigilante justice in publishing bankers names for attack (as happened right after the initial crisis) or keeping your home for free (while losing your mortgage) as was proposed by another poster earlier.
We have laws. One party breaking some does not allow another to do so as well. The one exception would be contract law in which breaking the contract has repercussions clearly stated for both parties at time of signing.
“… keeping your home for free (while losing your mortgage) as was proposed by another poster earlier.”
Once again, what a poster proposed is not what happened; it should. Only banksters were actually bailed out. Can you document anyone getting free title to homes they aren’t paying for? Some may “enjoy” months in free rent because banksters can’t foreclose or don’t dare to expose the pretend value, but that’s not a free house and not much of a bailout. HAMP and HAMP 2 have been documented absurdities, token political PR only.
You and Illusionist are attempting to equate the unfortunatge gullibility of homeowners (or my aunt who thought she sould finish her basement before selling her home in retirement) with the predatory fraud of banksters. Here the difference in degree is an exponential difference in kind. To suggest that “squatters” rise to the level of bankster criminality is a transparent, kiss-up/kick-down way to distract and avoid blaming the real perps. “Everyone was doing it; we’re all at fault; mistakes were made; who could’ve known?; let’s look forward, not back.”
“We have laws. One party breaking some does not allow another to do so as well.”
The well-rested Eric Holder doesn’t seem to agree. He’s merely picking the low-hanging fruit: nannies and gardeners that have egregiously flouted our sacred immigration laws. I’m not sure why we even have an AG, come to think of it. This is why people are understandably consider vigilantism as the only recourse. America’s elite are completely above the law.
“The one exception would be contract law in which breaking the contract has repercussions clearly stated for both parties at time of signing.”
Eureka! It’s called strategic default. Thank you.
We have laws.
No, we don’t.
One party breaking some does not allow another to do so as well.
Where as a group corporate and government criminals unilaterally and completely overthrow all law in their assaults on the citizens (the case of kleptocracy), the citizens have a right and an obligation to respond in kind and where necessary reject all constraints of law in their dealings with these foreign, alien criminals.
I am interested in all the aspects of this.
But a simple was to see it is that nobody would be foreclosed if the market weren’t crashed. They would simply sell the house.
No homeowner crashed the market.
Therefore to act as if homeowners have some sort of equivalent responsibility for the crisis as the banks, seems outlandish.
“No homeowner crashed the market.
Therefore to act as if homeowners have some sort of equivalent responsibility for the crisis as the banks, seems outlandish.”
Why do you think the prices went so high that they had to crash? Who was bidding up prices? who was taking our HELOCs they could not afford on turd heaps? Santa Clause?
I’ve discussed at length that ex second homes, strategic default is an urban legend.
Hey, who’s to say the real housing bubble didn’t start in ’45, and the recent, decade long spike and dip was, in actuality, a minor and short-lived, mid-bubble perturbance?
If that’s the case, the economy busting housing crash is still in its infancy.
Also, how does the collapse of the commercial real estate market fit in to all this? I know the CRE market and the housing market aren’t joined at the hip, but it seems to me they must communicating somehow, perhaps telepathically, because they sure do act the same.
Or is it possible, with the most toxic elements of both markets now sitting side by side on the Fed’s balance sheet, the poor bastards have been left with no choice but to slide toward oblivion, together?
I can’t help thinking this post and both the cited reports all miss the point. Expecting any recovery in real estate prices while wages remain stagnant (depressed?) is just loopy. House prices haven’t fallen enough to make the properties affordable to workers. Speculators are entirely under water and won’t be rushing back in any time soon. All the new mortgages are guaranteed by Fannie and Freddie, and one can expect them to end up at the Fed after the bubble in stocks and commodities finally pops. All the “prosperity” of the past 20 years was based on housing speculation. It was probably responsible for 10-15% of domestic employment. Today we have employment based on war, homeland security, private security. We have a generation of food service workers crushed by education loans nondischargable in bankruptcy, and another generation of retirees crushed by ZIP. If there is any reason for optimism I haven’t heard it yet.
Definitely. A realistic appraisal of the employment picture tied to responsible loan practices, say 20% down and a house at 2-3 times income would further ravish the housing market but would be mark to market in a sustainable manner. To relieve the foreclosure blight banks need to do huge loan modifications to reflect the current value of the home not these damaging and fraudulent servicer induced foreclosures. This can only be accomplished by someone like HUD being given the power to force the banks to do it probably under some sort of receivership process.
You make some great points. But consider this: by failing to help victims of the worst of the bubble (those who bought from 04-07) the banks and pols together created a downward spiral that is now sucking the lifeblood out of the country. How does this help raise income? It doesn’t. Quite the opposite in fact.
The story in the NYTimes demonstrates that banks have NO EXIT PLAN. That’s the scary part. None. They are completely incompetent and bereft of ideas, except for maximizing their bonus before the final flush wipes them out.
Their “plan,” such as it is, is to keep as many people in their underwater homes paying as much as possible until someone makes them stop. And Geithner, et al allow this. The reckoning is coming.
And the sad thing is, it could have been avoided if people like Richard had been ignored two years ago and Paulson’s original plan for TARP been implemented.
Now all we can do is wait for the giant sucking sound as the last of the water drains from the tub.
” by failing to help victims of the worst of the bubble (those who bought from 04-07) the banks and pols together created a downward spiral that is now sucking the lifeblood out of the country.”
wow, hey, I’m no fan of the banks, but, please, “victims”, and then basically characterizing bankers as vampires? I’m sorry, but, if you were dumb enough to buy at the peak of the bubble, you may have been a “victim” to your own greed and stupidity. And, personally, I’m damn tired of all this talk about “help” for these “victims”, which only prolongs the inevitable return to sane prices with loan modifications that you and I will pay for eventually when the banks fail again and cheap money from the FHA which you and I are paying for and will pay for for decades.
Liquidate the Housing Stock!
signed, a renter.
Guess what? I did. And you wanna know something else? Ten months after liquidating the family housing stock we qualify for a new mortgage. So now we can pick the carcass of another sucker who thought they were buying a family home but actually put it all on red (and the wheel landed on black, too bad!). Is that a little galling, Mike? I hope so. I didn’t enjoy the ride down and I’m not over the moon about the prospect of getting a bargain at someone else’s expense. Was there a more rational, humane, better way to unwind this whole mess? Yes, Mike, there was. But in the absence of that, it’s every man for himself. I hope you like it here in the land of I got mine you get yours. I think it sucks.
The core ideological blinder it seems to me is financialization: if your in the financial markets, that ninety five percent of humanity that is not looks like pure cost and their motives are completely incomprehensible because while they may be motivated by money, money does not dictate their every move.
If most people thought financially there would no longer be underwater homeowners, they would all have walked long ago. Most of the worlds population has no access to finance and yet create wealth. What passes for finance now in the US sees those people not as wealth creators to empower through financial service, but as an extractive resource to be mined as efficiently as possible.
Mike and Richard speak clearly for this mind set.
” Ten months after liquidating the family housing stock we qualify for a new mortgage.”
Listen to yourself. First, does that even bother you? That someone is giving you a very large loan just a few months after you screwed up the old one? Stunning. Are you embarrassed at all? Even more amazing is that you are so addicted to taking out such a large loan to live in a home that you are doing it again after your first failure in such an awful market! Do I have to come over to your house and beat you on the head with a stick to stop your own little personal madness from infecting the rest of us?
That someone is giving you a very large loan just a few months after you screwed up the old one? Stunning. Mike M
What is stunning is that you don’t understand the perverse incentives of a government enforced and backed counterfeiting cartel, our banking system. To not borrow from the counterfeiting cartel is to be priced out of the market by those who do.
Now, that’s just plain neurotic. Good luck with that.
I’m curious: do you think we’re close enough to the bottom to merit a house purchase, at this stage? (I have been on the sidelines for years, waiting for the right time. I still think there’s at least another 12 months of decline, but feel very uncertain about it and would welcome another carefully reasoned point of view.)
First, to Mike M.,
Somehow I knew you would ask if I was embarrassed to have defaulted. No. When your income gets cuts in half through no fault of your own, when you put 20% down on your dream house and paid your mortgage and taxes on time for 6 years, only to watch the value fall by half–for what should I be embarrassed?
It is so easy for people to lump all defaulters into one box, Mike: you borrowed too much and you must pay the bill. Open your eyes dude. Not everyone took out a massive line of credit. Not everyone had a liar’s loan. When the ship goes down it doesn’t ask whether you paid full freight or what class cabin you were in.
I think people like you don’t want people like me to be able to recover from fraud or bad decisions or bad luck. At least not until you have risen on our bones. That’s the sad truth, Mike. Others did better than you, and they must suffer. I think you speak for millions. I think you really do want to beat me on the head with a stick, to teach me a lesson. That’s so pathetic.
It’ll have to be the right house at the right price. We’re in no hurry! But rentals in good suburbs are still notoriously bad (houses that can’t sell) and when I run the numbers I can buy a house better than my current rental, get a 15 yr mortgage with a down payment equal to one year’s rent and payments half what I am currently making. If I can’t sell in a couple years I could easily break even (or better) renting it out. That to me is a buy sign. I hesitate to buy a “move-up house” or better in this market, but an entry-level house in a good school district looks to be a low risk. I’ll wait until the fall or winter for the best price.
See Mike, I have learned something? Now you should really ask yourself why you want to beat me up so much.
Dude, you have a very serious disease that millions and millions and millions of Americans have, and, after they amputated your arm, you’re still going at it with the other, like that creature in Python’s Holy Grail. Ten years from now you’ll still be trying to figure out how to buy some trash trailer in Florida for whatever cash and credit is still available to you, while surrounded by a whole world of very nice rentals for a very reasonable price. Good luck. My goal until my last breath is to minimize my tax obligations so that I don’t have to pay for this idiocy as much as I have to.
My goal until my last breath is to minimize my tax obligations so that I don’t have to pay for this idiocy as much as I have to. Mike M
Somehow, I don’t think a nationwide depression is going to spare you either. There will be increased crime for one thing, maybe World War III to spur aggregate demand, the risk of a fascist dictatorship, etc.
We could spare ourselves a lot of misery if we:
1) Recognised that our money system is fundamentally crooked.
2) Bailed out the entire population.
3) Implemented fundamental reform based on ethical money creation.
Or not. The End has to come one of these days.
Leviathan, thanks for your reply. Have you considered the total cost of the purchase along with the issue of how the repayments compare to your current rental costs? E.g., if your prospective purchase drops another $15K in price, it seems like it’s going to take a lot of rent savings to make that up, especially compared to the risk of carrying a huge debt in a very weak economy which, if you believe the reports here, stands a very good chance of getting weaker. (None of the systemic risk factors have been addressed; many highly unstable financial situations around the world such as in the Eurozone, which will probably reverberate here if they implode; etc.)
This is in reply to Alex’s 2nd comment. I think all we can do is stick our finger in the air and guess, based upon largely personal and local factors. Here are the questions I am asking: 1) what is the median income of my community?; 2) what is our time horizon?; 3) what is our minimal acceptable housing standard, as a family?
I think number one is critical because a community’s median income is unlikely to change dramatically (whereas your family income may fluctuate). There are tons of houses priced at 6-10x median income in our town, sitting empty. I don’t know what developers are smoking, but they need to stop. I won’t buy anything more than 3-4x median income, because you are likely to get stuck. This is the most important lesson I personally took away from the collapse.
Second, regarding time horizon, I probably don’t want to live in this town more than 6 years, which is when my youngest leaves for college. In two years I can move within the high school catchment zone. But I hate our rental and can’t find a better replacement. So I’m inclined to buy a house sooner rather than later. I’d rather buy an entry-level house that can be rented or sold at a small loss (still cheaper than renting for two years) than take a real chance on a “move-up” house that might drop 10% or more in that time.
Third, what can you stand to live in given your income, age, needs, etc? I don’t like living in rentals. It feels like a huge step back. My kids don’t like it. They want a home, with rooms they can decorate. Life isn’t just about finances and spreadsheets. We bought ourselves some breathing room, now it’s time to breathe.
Let me know if you find a flaw in my rationale. I’m always open to reasonable critiques (so long as no one threatens to beat me over the head with a stick).
Thanks, Leviathan. Seems like our situations are different. I have no kids, and am reasonably happy renting, for now, partly because my life is still pretty itinerant (doing a postdoc.) The economy of the town I’m in centers around a major research university, so I’m also anticipating a fairly significant further drop in median income if there’s a big drop in funding from the NIH, NSF, etc.
signed, a renter. Mike M
You are also a victim of the bankers’ traditional divide and conquer strategy.
The banks? That’s rich. Go back and read Das Kapital again. It’s the owners of capitol who divide and conquer. The banks are just the carnival hucksters and casino owners who churn that capitol for their own profit. if you choose to walk in to the door of that casino, as always, expect o lose a set amount.
How in the world someone can call a renter, or, a person who didn’t buy a house in the last decade a “victim”, is a real stretch. I am so happy I don’t “owe” a home.
How in the world someone can call a renter, or, a person who didn’t buy a house in the last decade a “victim”, is a real stretch. Mike M
You are a victim of the banks. As a saver, the banks have cheated you of honest interest rates for as long as you have saved.
Now you wait like a vulture for a cheap house to fall into your hands as your “compensation”?
An equal bailout of the entire population including savers would fix everyone.
“An equal bailout of the entire population including savers would fix everyone.”
And who in god’s name is going to pay for such an el grande “bail out”. You’re really flinging feces on the wall trying to make your argument.
And, really, you insult me by thinking that I put my hard earned savings into a bank for nearly zero return. Do you think, just because I didn’t go into severe debt servitude by “buying” a home, I’m therefore inferior and do something so stupid as buy a 1.5% CD?
And who in god’s name is going to pay for such an el grande “bail out”. You’re really flinging feces on the wall trying to make your argument. Mike M
Since over 95% of the money supply is debt then replacing that debt with real legal tender should not increase price inflation IF a 100% reserve requirement was placed on the banks at the same time.
As for the source of the funds, the US Treasury could easily create some debt-free, full legal tender fiat for that purpose.
And, really, you insult me by thinking that I put my hard earned savings into a bank for nearly zero return. Do you think, just because I didn’t go into severe debt servitude by “buying” a home, I’m therefore inferior and do something so stupid as buy a 1.5% CD? Mike M
No. You were probably forced into some kind of speculation instead or perhaps you bought bank stock and joined the looting class yourself?
Are you writing this from a nice apartment in Greece?
You should speak to Mike in language he understands. He has read Das Kapital. Tell him he has false consciousness ;-)
“I’m sorry, but, if you were dumb enough to buy at the peak of the bubble, you may have been a “victim” to your own greed and stupidity. And, personally, I’m damn tired of all this talk about “help” for these “victims”, which only prolongs the inevitable return to sane prices with loan modifications that you and I will pay for eventually when the banks fail again and cheap money from the FHA which you and I are paying for and will pay for for decades. ”
Blunt and Harsh but true. Very true.
You seem like a reasonable person with a defensible line of thought. So I ask you this in all seriousness: can Mike M. really be right?
I mean, the way he lays it out, borrowers should in every case suffer the consequences for (in many, not all ways) being duped. Now, I can see your differences with the fans of jubilee. Much as I would love to see a debt jubilee, I don’t see it happening and I actually sympathize with those who find it unfair.
But if there is no jubilee, there has to be an exit strategy that will work for regular folk (that is, those of us beneath Richard in the social hierarchy). We see that people like Mike don’t actually want THAT either. Do you?
If you don’t agree with those who say wipe clean the slates of everyone, as the slates of the Wall Streeters have been wiped clean, then what is the path forward? I walked and have advocated that path for others. But many don’t like THAT path either. So…debt servitude for life? What???
” So I ask you this in all seriousness: can Mike M. really be right? ”
I am not certain what really right means in this question? Some can be largely right without being a 100% right. Or parts of what someone says I could agree with (if that makes it right or not I don’t know).
“I mean, the way he lays it out, borrowers should in every case suffer the consequences for (in many, not all ways) being duped. Now, I can see your differences with the fans of jubilee.”
I believe for the most part there appears to have been a general suspension of thought and a willful participation in the orgy. In essence the borrowers also rolled the dice – not withstanding all the effort at putting lipstick on that one it is just plain cool aide.
I mean take the example (hypothetical or real) of Aunt Lu – what why did she take the loan & why did the banks lend to her? I understand the perverse incentive structure in the banks caused them to behave the way they did but lest we forget there was in effect a similar motive behind Aunt Lu taking the loan.
What exit route do you suggest for someone who made likely the biggest financial decision of their life by abiding to the prudent wisdom of ” place it all in on the red”?
Can we really keep suspending reality? Either for Aunt Lu or for Uncle Thaine?
I don’t think it’s desirable or possible to suspend reality. The market is resetting. People can either get out of the way and begin to slowly rebuild, or they can hope the collapse doesn’t reach them. Already millions who thought they would be safe ignoring the problem are finding that it HAS reached them.
Our government has, to date, lied to these people, assuring them that with public assistance they would be able to keep their homes. What I am saying is that we’d be better off with a lot more honesty and assistance in helping them move on. Some should be helped to stay, others should be helped to leave, and those who made their own grave with excessive borrowing or fraud should be left to fend for themselves. But no one should be told that it was all their own fault and they get what they deserve. At least not until a price is paid by the architects of the system, which as Yves keeps pointing out, continues to not happen.
See, this is what I was talking about above, typos and all:
Now, Mr M suggests: “I’m sorry, but, if you were dumb enough to buy at the peak of the bubble, you may have been a “victim” to your own greed and stupidity.”
But, but, sputter, why, why is a homebuyer, who had no influence on the market, so stupid, so moronic, as not to anticipate a market crash? So idiotic as not to be able to time a complex market? And so must pay the price. But the people who actually _did_ crash the market, and who truly were in a position to anticipate a crash, must receive endless bailouts? I can’t swear to the math, but do believe we could have made all the loans good by writing down to market, with some further adjustment to more prudent renters and homeowner, at a much lower cost; and that if we had done so, by now the economy would be absolutely roaring back…..
The word “recovery” is a suprising propoganda victory. Recovery used in this context means back to profit taking as before. An unrestrained, out of control system of clear cutting, blood letting, consumption and burning, with the losers predetermined at the starting gate. This is bullshit – people need housing, the need is universal, can you please make money some other way?
How about housing them in prisons, working them as slaves 16 hours a day for 2 cents an hour?
“Apple, the computer company behind the iPod and iPad, offically admitted today that 137 workers ‘suffered adverse health effects’ from exposure to a toxic chemical in cleaning agents used at one of its factories in China. The Apple report also reveals that only 32 percent of audited facilities comply with the company’s maximum 60-hour, 6-day work week; in 2009, compliance was at 46 percent. In the U.S., 60-hour work weeks were deemed excessive in the 1880s, when factory workers pushed for 8-hour work days.”
Last summer, I visited the house I grew up in the 60’s. Next to the foreclosure notice was a note that the property had been condemned. My father said that the electricity had been shut off and without the submersible pump the basement had flooded. It sat for months and mold now permeates the house. It would probably have to be demolished.
Most of the houses in the midwest where I grew up have basements protected by electric pumps. I wonder how many of the foreclosed homes lack electricity and will end up like the place I grew up – a total loss with negative value, probably kept on bank books at near the 2007 valuation.
I grew up in a midwest home which was one of the few built in 1944. I believe the cellar sump pump served only to elevate the laundry water to above the sewer line. There was no flood which would have required the pump in the 30 years my folks lived there.
The basement flooding problem might be more localized than I thought. Northwest Ohio, where I grew up, was drained swampland – flat as a pancake. Basement flooding during heavy rains was a common problem.
My house is 4 years old. My sump seems to run all the time in the spring and fall.
About 3 weeks ago the check valve on the sump pump blew out. Sprayed water all over the walls in the finished part of the basement and started to flood the basement. I got a spare boat pump out and got that going and then replaced the check valve.
My house has an area way that drains into the sump. If I had not been there then the basement would have had at least a foot of water in it.
NOW…were this house a foreclosure that nobody was checking on daily I assure you that water would have sat and likely have grown as we had 7 days of rain.
At that point you are pulling out the wallboard and subflooring for the basement and first floor. There goes the hardwoods and the cabinets as well. Kiss the furncace, AC and the water heater goodbye too.
This goes on long enough and you will lose the second floor to mold too.
In Sacramento most of the homes are valued below the loan amount. My neighbor would have stayed, but the loan came up for a rewrite and the property was valued at 50% or less of the original loan. The downward spiral has many causes.
On the House: Housing counseling was sacrificed to keep federal government open. From Philadelphia Inquirer
“The budget deal crafted in April to keep the federal government in operation cut money from the Department of Housing and Urban Development that had been designated for housing-counseling programs across the country.
That $88 million had been allocated to help guide homeowners facing foreclosure, older Americans (62 and over) considering reverse mortgages, and first-time home buyers, a large number of them minorities. Of those three areas, foreclosure counseling remains at the forefront, with millions of homeowners in trouble and many nonprofit agencies already struggling to cope.
Without the money, nonprofit groups can expect their budget crunch to hit Oct. 1, when fiscal 2010 dollars will have been spent, advocates say.
HUD-funded counseling is not limited to helping distressed borrowers. But another federally funded effort, the National Foreclosure Mitigation Counseling Program overseen nationally by NeighborWorks, does deal exclusively with people facing the loss of their homes.”
The utility of the Consumer Financial Protection Bureau in light of the scorched earth republican tactics of extorting concessions or face financial default is more evident than ever. Liz Warren is most likely to be recess appointed to head up the bureau in the coming months. Of course, even liberals think of this as an ideological betrayal. See the The Atlantic whine of middle class propriety on this point.
The foreclosure mess is so complex, there are battles and small skirmishes being fought at every level in the courts, and offices of county deed recordings, as well as by state AG on issues from scam mortgage mod services to robo signing affidavits for mortgage liens, deeds, unsecured debt, you name it. Because real estate law can be slightly varied from state to state, not much national news is being gathered to gain a synoptic view to reveal a pattern. I do see many people are not asleep at the switch, including this one attorney down South who does boot camps for attorneys to fight foreclosure and protect homeowners. His comments seem to provide some insight into what is being done on a broad basis by attorneys serious about due process for the public.
The dogs of depression doom continue to howl. The home tax credit, trillions of deficit spending, money printing, and a complete backstop of the financial system with subsidized interest rates are unable to stop the housing correction.
One can only imagine the future history books covering this era.
Future history books will probably take a global view of this period. Perhaps the name the glorious leader in Rome (Silvio) coined will stick and like the Dark ages, Renaissance, Industrial Age etc this period will be known as the Sub-prime Bunga Bunga Age.
The facts that are being piled upon facts are that the MBS industry – the major players – used and employed fraud, deceit and other unlawful methods te secure mortgages. Not only that, they defrauded investors in the Securitized pools and the GSE’s that were shoveling tax-backed dollars out the door with more velocity than Super Bowl confetti blowers. Those facts are established.
The game now is an actuarial one where the bets are that the courts are going to hold that their activities were or weren’t illegal. There are literally thousands of cases pending across the nation on both the consumer and investor side with rulings inching ever more toward the conclusion that the unlawful acts were just that – unlawful.
The TBTF’s have set aside BILLIONS for litigation and damages and are trying desperately to keep the lid on those costs, e.g. the AG’s deal and full-tilt-boogie lobbying.
They know most consumers are not going to prevail in court, but yet enough are to keep them worried. They are playing the percentages that most people will just walk away and accept that they were “unlucky”. For those who will fight, it’s an uphill battle, but the facts are on their side. This boils down to taking the TBTF’s to court and calling their bluff, reciting their illegalities and fighting back. The more that happens, the closer we’ll get to an end to the mess.
Newer track homes are not built to stay up for more than 50 to 60 years, the builders use the cheapest materials.
We have to look at what are the cost of materials and labors to build one of these homes and cost to prepare the build-able track, with utilities, sewage, and access roads. And what are the profitable margin for average new homes that sells for about $500K. If the profit is substantial ( more than 50% ), then bank can really let the delinquent owners keep the property at cost, but not allow them to sell back to the market for a quick profit and impose a hold time.
If owners are evicted than property can be tore down for salvage and resell the property as build-able pads, to other builders for a later time.
Just letting the empty property rot will not be an acceptable solution and won’t do good for anyone’s interest in real estate market.
I am interested to know where you got the idea that new homes have a fifty to sixty year life span? I am a builder and nothing could be further from the truth.
Start with the footing and foundation. fifty heck twenty five years ago soil tests were not done determining buildable depth, compaction required, water table etc. Today, a builder knows and complys with all codes applicable to soil. Footings are wider, contain more rebar and require an engineered concrete mix be used. Same thing with foundations. homes built seventy years ago met none of todays requirements and are still around.
Every aspect of framing a home has improved. In most areas of the u.s. exterior walls must be built out of 2 by 6 for r value. That wasnt true ten years ago. Loads are calculated and engineered lumber is used. Pre engineered roof trusses are used. mechanical fasteners are used. none of this was done twenty years ago. In my area, we build to the following standard, the structure of the house must be able to withstand an 80mph wind, an 8 foot snowload, and a magnitude 5 earthquake all happening simultaneously.
The wiring in a new house should last at least 100 years, probably longer than wiring will be needed. Plumbing and the materials they use are vastly superior to stuff used twenty years ago. All windows and exterior coverings are far superior as well. We use stuff on the exterior that is guranteed not to fail for seventy five years.
Every aspect of home building is alot better now than twenty years ago.
I dont understand your reasoning regarding cost. once a house is purchased, the lender who lent money to cover the cost of building it, and the builders profit, is out of the picture. The cost of access roads etc, is paid buy the builder when he buys the lot from the developer. How do any of these costs figure into the owners bank deciding what to do when the owner cant pay them?
I feel as you do, that every effort should be made to keep folks in their homes. But bulldozing new houses? we can do better than that.
Poly core floating slabs (aka roach motels) laid in haste (cores not anchored correctly).
Gang nails, 5-ish MM of depth (see firemen won’t go on roof), weathering of wood etc, additionally see;
Trusses shorten the construction time. With
trusses, most roofs can be installed in one
working day. Delivery and erection can be
coordinated with the completion of the frame. Site
labour requirements are reduced, as is the impact
of wet weather on the construction program.
Because trusses are manufactured specifically for
each project, costly pilfering is virtually eliminated.
Skippy…more on request, BTW lets tell them about how buildings breath and the evolution of ascetic design to cover this up. Depending on the climate some of the stuff made in the last 10-15ish years is already degrading twice / thrice as fast as building practices over 50 years ago. Hell homes are warranted on the premise of short term original ownership, sell in 4 to 6 years aka flippers and not a good premise for the long term…eh.
not sure what they are doing in really humid areas. vapor barriers and housewrap are all included in the inspection here, as are roof vents and correctly designed and installed heating and cooling systems. gang nails? We use 14 guage 2 inch galvanized staples. that gives us about an inch and a half of embeddment. We space these staples six inches apart in the field and two and a half inches apart on the edges and seams. We have nailing schedules on our plans that we must adhere to. All this hapens before snow and ice shield and thirty pound tar paper is installed. One area where a builder can cheap out is on shingles. Specify at least thirty year shingles when building a house. or better yet, install a metal roof guranteed for 100 years.
Roof trusses are engineered to carry a specified load. They do save time, but they are for the most part stronger than any stick framing.
I dont know what a poly core floating slab is.
If you have wood that is exposed to the weather,like a redwood deck, it will have a twenty year life span. That being said, it is still better than a trex type composite in my opinion. Some of the batches of trex were bad and have started to pit after ten years. Any other wood shouldnt be exposed to weather, and shouldnt be weathering due to a house breathing if the correct preparations are done.
You build an economy on consumable[s dreck, amplified by pure speculation, eviscerated and bundled for maximum opaqueness, shipped internationally to insure a dominate industry position and for what[!?]…so a few could become billionaires, shower the rest of the sheeple with their gifts…barf <<< is my addition to the play pen.
Skippy…for those still grumbling about the state of said playpen and their culpability in its mess, try this shoe on…you bought a crappy asset, you helped enable the malfeasance, you gave it validity.
“The banks? That’s rich. Go back and read Das Kapital again. It’s the owners of capitol who divide and conquer. The banks are just the carnival hucksters and casino owners who churn that capitol for their own profit.”
Sometimes, things change. In the era of Marx, a contemporary of Henry George, real estate was the only opportunity for blowing debt-financed speculative bubbles. The banksters have become much more sophisticated since then, and they’ve learned how to bilk the owners of capital (that’s how you spell the word) because all capital these days is illusory.
In Marx’s day, were there so-called “institutional investors” of the scale that the banks enjoy today? No.
You don’t know what you think you know. You can cite Marx and Keynes and George all day and all night, it won’t change the fact that the world they described no longer exists. Of course, the false world described by Mises, Hayek and Friedman never existed, so there’s no solace for you there, either.
If they come for me, I’m dobbing you in first.
Skippy…what size head ye got, I give’um your head bag size…lol.