The Economist: U.S. Facing 'Perfect Storm' for 2008-Like Housing Crisis

[Into the Night]

They will create some new FHA proposals. They will start a federal program to help build low-income housing where it is needed.

Republicans want to end the FHA and stop all new low-income housing!

They can't. The government is broke. They can't print their way out of this.

 

[Into the Night]

LOL! What do they say in Texas? Bless your heart?

Ok, I'll play. When are they going to pass this legislation to building thousands? hundreds of thousands? millions? of units?

Where are they going to build it? (In San Francisco we passed a $1 billion bill to help the homeless and build housing for them and we literally can't build the housing because of NIMBYs and the City not giving approval.)

Housing is a state and local thing. The hardest places to build are liberal dominated areas along the coast. Why do you think so many people are moving to places like Texas? Texas, a red state, actually lets you build housing. What a novel idea.

But yeah, somehow the Federal gov't is going to magically step in at some unannounced time in the future? and start building all kinds of housing like they did the projects and urban renewal back in the mid 20th century? That worked wonderfully didn't it.

Exactly.

Here in Washington, it is mostly Seattle (a liberal stronghold) that is causing the problem. Apartments are appearing to house the refugees all around the city and just OUTSIDE the city limits.
Inside Seattle, apartments are disappearing fast. Those people are being evicted. A lot of this happened during the so-called restrictions on evictions due to Covid.

 

[Into the Night]

I am not sure where any of us older American Baby Boomers would be right now, had the government not took charge and created THE FHA and helped build Post-War affordable homes and communities.

I know I was raised in such low income FIRST HOME housing and I bet you lived in low-income FIRST HOME housing when you grew up as well! Our first home when I was a kid was a modest 3 bedroom brick home with only one bath and a one car garage.

You want people to be able to afford housing don't you?

Did the FHA disband or something? You are locked in paradox. You are being irrational.

 

[Into the Night]

When I was a kid, we lived in Palm Springs. I still have relatives there.

But we did move to Texas before I started school. California is always a nice place for me to visit- BUT I KNOW DAMN WELL THAT I CAN'T AFFORD TO LIVE THERE.

Here is the deal, when States and their local communities fail to build Low-Income housing- the federal government has to step in to do whatever they can do.

I avoid traveling through the SDTC whenever possible. The devastation there is depressing. Farms and ranches just abandoned. Everywhere. Cities with homeless shitting openly in the streets and open looting everywhere. There are no police to stop it. Businesses driven out of the area. They are not returning. Roads and highways so poorly maintained they are turning into gravel. Arsonists starting huge wildfires every year. The highest fuel prices anywhere.

No. I avoid the SDTC. It's just too depressing to see what has happened there.

 

[Into the Night]

Palm Springs is great (except for the summers). A big part of the reason California is so unaffordable is we don't build housing. And we've had a housing shortage for well over three decades and the federal gov't is not stepping in to fix it so they are not the answer. The answer is to elect politicians in California who support new development. Of course a politician might say I can't get elected holding that position due to all the NIMBYs in the state. NIMBYism is the ultimate Fvck You I've Got Mine attitude and it's like a religion in California.

The answer is to restore a republic as a form of government and to start honoring the Constitution of the State of California again.
THEN you can have elections that mean something. Elections are largely a sham there now.

 

[Into the Night]

Larry Summers is saying that inflation, in the current economy, means that too many people are working and spending money and since supply cannot keep up with demand, prices are rising. So to slow demand, by reducing their purchasing power, they lose their jobs. The unemployment benefits they receive are a fraction of what their salary was; so without savings, you will consume less and as such demand will slow.

I can't help thinking that a modern equivalent to Paul Volcker is needed to drive inflation out of the system.
“Paul Volcker was an inspiration to me and to everyone in the Federal Reserve,” said Janet Yellen, Fed chair under Presidents Barack Obama and Donald Trump. “He embodied the values we hold most dear: devotion to public service, the courage to do the right thing, even when it’s immensely unpopular, a commitment to strong and effective regulation of the banking system and the highest ethical standards. We have Paul Volcker to thank for taming inflation and ushering in a long period of macroeconomic stability.”

https://www.cnbc.com/2019/12/09/pau...d-chairman-who-beat-inflation-dies-at-92.html

The fact that we have a Federal Reserve and fiat money is why we have inflation. The government WANTS inflation. Deflation is horribly destructive to it. Inflation means they can pay off their bonds with worthless money.
Inflation was never beat.

 

[Into the Night]

I am beginning to wonder if Primavera's first language is English. He made some very basic mistakes here.

LIF. You are describing yourself again.

I am pretty good about reading The Economist, and it has never said anything like that. It is very careful in its predictions, and would not make wild predictions like that.

The Economist is a magazine. It has many contributors, some of which make rash predictions.

Why not link economist.com?
So Newsweek has no reference to The Economist, but merely an economist. The Economist is a magazine, an economist is someone who says they study economics.

Meh.

Never heard of him, but looked him up. He does not have a PHD, does have a Masters degree in 2017 from Western Texas, and now has 5 years experience. I can see why Primavera decided to reattribute this to The Economist.

Meh.

The Economist has pointed out that recent mortgages have been to people with very good credit ratings. The loan industry has been very conservative lately. Beyond that, huge numbers of mortgages are locked into 30 year 4% mortgages, with interest rates well above 4%. That means the value of their payments is going down. I wish I had not paid off my mortgage.

Which is why it's not a bubble.

The real problem here is the difficulty selling new houses. That is a problem for the construction industry, but hardly a "perfect storm."

It is. The problem is not a bubble, but a systemic failure. It will spread throughout the building industry and all of it's suppliers. Many suppliers are already hurting because they cannot get supplies to produce their product.

 

[Into the Night]

Eliminating single family housing zoning would be the best thing that could ever happen to landlords. It would open up a huge part of the market for them. It is as far from hammering them as possible.

America has hammered landlords for 70 years, because of a belief that owning a house was a social good. There is a real question about that.

No. DEMOCRATS have hammered landlords for years, because DEMOCRATS feel ownership of anything is bad.

 

[Into the Night]

Oh my, Night actually made a good point. That might be the first time I ever saw that.

There was a bit of speculation, but only a little, and there was not much wild loans given. Prices briefly went up wildly, and now are returning to trend. It is hardly a perfect storm.

You are denying history. You are forgetting the insane speculation before the 2008 crash.

 

[Into the Night]

Immigration is about 1 million a year, and they are more educated than the average native born American, so are less "prolific breeders" than you would think.

Right. I've met a lot of these immigrants. Many have NO basic education at all. They are illiterate.

 

[Into the Night]

Wow, Primavera is getting better. He actually admitted his mistake. Then he went on to make bizarre personal attacks, but baby steps.

LIF.

 

[Into the Night]

The total size of the mortgages in the UK is a bit under $2 trillion, which sounds huge until you hear that $2.72 trillion originated in the USA in 2021 alone.

You just locked yourself in another paradox. You are being irrational. Which is it, dude?

 

[Into the Night]

As a result of being a tRump ass kissing sucker, consider the following details, if you will, as a result of the rot his lawlessly hacked in influence had on the global economy:

The economy slowed under Trump; his inept pandemic response ensured its collapse

In pre-pandemic times, President Trump

Trump’s first three years in office. Worse, following months of dire warnings, Trump’s failure to prepare the United States for a particularly deadly pandemic ushered in economic catastrophe.

Americans could be forgiven for buying into Trump’s bragging about the economy. After all, he consistently puffed up his chest – one hubristic Tweet at a time – portraying himself as an economic super-messiah. But the facts run counter to the mindless reality TV president’s incessant boasting: By virtually all objective measures, the economy performed worse during Trump’s first three years in office compared to Obama’s last three.

Let’s start with job growth. Before the pandemic decimated tens of millions of American jobs, Trump crowed ceaselessly about monthly job reports. But the numbers did not merit Trump’s flamboyant hullabaloo. Over one million more jobs were created during Obama’s last three years in office than in Trump’s first three. To top it off, job growth in every one of Obama’s last three years beats Trump’s best year by a significant margin. So much for Trump’s ostentatious bragging.

Similarly, a pre-pandemic Trump boasted nonstop about record-low unemployment.

Sorry, Donald. Time for another truth bomb: The unemployment rate declined at a steady clip after 2010, when Obama’s aggressive recovery measures saved the American economy from total collapse. Trump just happened to be the guy in charge when Obama’s decade-long trend reached its nadir. Indeed, a look at the unemployment rate over the last decade shows no notable change in the three years after Trump took ofBiden's Economic Performance Has Proved Unbeatable
No first-year president going back to Carter comes close to matching the current White House occupant’s No. 1 or No. 2 ranking in each of 10 key measures.

fice.

Ultimately, Trump had zero claim to the unemployment numbers he took credit for. An orangutan could have been elected in his stead and the unemployment rate would have hit the lows that it did before COVID-19 changed the world."

https://thehill.com/opinion/white-h...rump-his-inept-pandemic-response-ensured-its/

Additionally, never ever forget at dealing with the fallout of the lawlessly hacked in tRump mob and its disastrous effect on
the global economy:

Biden's Economic Performance Has Proved Unbeatable
No first-year president going back to Carter comes close to matching the current White House occupant’s No. 1 or No. 2 ranking in each of 10 key measures.

U.S. financial markets are outperforming the world by the biggest margin in the 21st century, and with good reason: America’s economy improved more in Joe Biden's first 12 months than any president during the past 50 years notwithstanding the contrary media narrative contributing to dour public opinion.

Exceptional returns from dollar-denominated assets, especially the S&P 500 Index in both absolute terms and relative to its global counterparts, can be attributed to record-low debt ratios enabling companies to reap the biggest profit margins since 1950. Corporate America is booming because the Biden administration's Covid-19 vaccination programs and $1.9 trillion American Rescue Plan reduced the jobless rate to 4.2% in November from 6.2% in February, continuing an unprecedented rate of decline during the Covid-19 pandemic."

https://www.bloomberg.com/opinion/a...-s-economic-performance-has-proved-unbeatable

Fiction is not going to help you.

 

[Celticguy]

I think is pretty obvious folks don't believe Biden's lies (other than the faithful).

no but I really dont think his owners care. they will skim and skim till it all blows up.

 

[Walt]

You are denying history. You are forgetting the insane speculation before the 2008 crash.

Yes, there was insane speculation before the 2008 crash. No one had to prove income, and they were willing to give 107% loans. The bad mortgages from the early 2000's are mostly out of the system by now, so not much of a current issue.

There were a few months of insane house purchases lately, but nothing long term, and not a lot of volume. More importantly, the credit standards stayed high, and mortgages were sane.

Actually, inflation works in our favor here. Even if houses lose value, inflation means they will not go down in price. Mortgages will not go underwater.

Housing value will not crash, they will decrease a bit, go to trend, and then start rising again, hopefully slowly.

 

[Walt]

You are denying history. You are forgetting the insane speculation before the 2008 crash.

Yes, there was insane speculation before the 2008 crash. No one had to prove income, and they were willing to give 107% loans. The bad mortgages from the early 2000's are mostly out of the system by now, so not much of a current issue.

There were a few months of insane house purchases lately, but nothing long term, and not a lot of volume. More importantly, the credit standards stayed high, and mortgages were sane.

Actually, inflation works in our favor here. Even if houses lose value, inflation means they will not go down in price. Mortgages will not go underwater.

Housing value will not crash, they will decrease a bit, go to trend, and then start rising again, hopefully slowly.

 

[Walt]

Right. I've met a lot of these immigrants. Many have NO basic education at all. They are illiterate.

I have met a lot of these immigrants, that have PHDs. We are both telling the truth. You surround yourself with the illiterate, and I surround myself with the well-educated.

 

[Walt]

The Economist is a magazine. It has many contributors, some of which make rash predictions.

They have editors who are careful with their reputation. I know it sounds bizarre to you that anyone cares about their reputation, but it actually happens. Not all of us believe 20 something "economists" with wild predictions based on wishful thinking.

 

[Celticguy]

They have editors who are careful with their reputation. I know it sounds bizarre to you that anyone cares about their reputation, but it actually happens. Not all of us believe 20 something "economists" with wild predictions based on wishful thinking.

too bad Biden does. cant imagine how many he had to look at to think we're not in a recession now.

 

[Into the Night]

no but I really dont think his owners care. they will skim and skim till it all blows up.

It ain't gonna be pretty when it does.