Gruntz wrote:
Don’t say I didn’t warn you.
Ghost of Igloi wrote:
https://www.pinterest.com/pin/513128951265345069/
Bump.
Gruntz wrote:
Don’t say I didn’t warn you.
Ghost of Igloi wrote:
https://www.pinterest.com/pin/513128951265345069/
Bump.
Dump ?
Ghost of Igloi wrote:
Dump ?
Exactly.
Certainly. ?
Bellycheck and Brady out!
No suck-up comments from the Go Pats Guy! (aka Detector Dude, Stanley Morgan, Gruntz, Irony Mann, Portia, etc., etc.).
Regarding “housing affordability”, not only do more income-earners now have to contribute to buying the same house, but the various methodologies are subject to revision, and if not laughable, are lamentably self-serving.
From the NAR: “The Housing Affordability Index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.
Note: Starting in May 2019, FHFA discontinued the release of several mortgage rates and only published an adjustable rate mortgage called PMMS+ based on Freddie Mac Primary Mortgage Market Survey. With these changes, NAR will no longer release the HAI Composite Index (based on 30-year fixed rate and ARM) and will only release the HAI based on a 30-year mortgage. NAR calculates the 30-year effective fixed rate based on Freddie Mac's 30-year fixed mortgage contract rate, 30-year fixed mortgage points and fees, and a median loan value based on the NAR median price and a 20 percent down payment.”
Their methodology is here:
Read it and have a good laugh.
Or if you prefer, read NAHB’s and WFC’s Housing Opportunity Index methodology:
https://www.nahb.org/research/housing-economics/housing-indexes/housing-opportunity-index.aspx
Compare the two and laugh yet harder. Examine the assumptions and become incredulous. Consider the survey methodologies and data, and what they actually say they are trying to calculate, and become ambivalent. Look at historic changes, and become irritated. Consider the number in the context of other great social numbers, and become dismissive.
And no, the “public” one from HUD is no better.
If you are interested, here is a starting-point, and only a starting-point:
The only value of these numbers is to help understand what rube traders and analysts will be made to believe...and even scheming, self-serving policy-makers, and dullard regulators who now often don’t even know any better, who are equal-opportunity-hire “true believers” who couldn’t find their way out of a wet paper bag.
And no, it’s not just me. Example:
https://ritholtz.com/2008/08/nar-housing-affordability-index-is-worthless/
This is the reality. Did nobody learn anything from ‘08?!? “Everybody” believed the numbers then, too, had some deeper intrinsic meaning. There is a great deal of analysis of these numbers, just go and find it, and readbit intelligently.
When you do the work, when you understand these things, you will be able to put all the reporting, propaganda, and manipulation into better perspective, and profit from it if you have the smarts, courage, capital, and luck.
I don’t advocate that everybody peer behind the curtain—on the contrary, aggregate behavior of the unaware is the bedrock upon which the system is based, and I have done very well by that system. But, I get the sense that a few of you might care.
“Recently an annual ritual took place. Wall Street analysts setting year end price targets for the S&P 500 for the new year. Don’t act surprised but these latest price targets are higher for 2020. Why is it not a surprise? Because Wall Street always projects higher price targets. No matter what. And Wall Street will keep doing that until investors get led off the proverbial cliff.
See Wall Street will not tell you to sell. Ever. Why? Because the entire business model is based on attracting ever more investment flows, more assets under management, more ETF allocations. The entire industry is based on fund inflows. Look closely when you see people always bullish on TV, invariably their compensation is based on assets under management or they manage ETFs or their firms are in the business of selling supply to the public, think IPOs and the like.”
—Sven Heinrich, Northman Trader
Ghost of Igloi wrote:
Bellycheck and Brady out!
No suck-up comments from the Go Pats Guy! (aka Detector Dude, Stanley Morgan, Gruntz, Irony Mann, Portia, etc., etc.).
Not me. I’m a KC fan.
“Wall Street will keep doing that until investors get led off the proverbial cliff.
Because the entire business model is based on attracting ever more investment flows, more assets under management, more ETF allocations. The entire industry is based on fund inflows.”
—Sven Heinrich, Northman Trader
And how exactly does leading them off a cliff increase fund inflows? It doesn’t. Lots of people left in both 2000 and 2008 and have never come back.
The author should stop foaming at the mouth, and stop to think if what he is saying makes any sense.
Ghost of Igloi wrote:
“Recently an annual ritual took place. Wall Street analysts setting year end price targets for the S&P 500 for the new year. Don’t act surprised but these latest price targets are higher for 2020. Why is it not a surprise? Because Wall Street always projects higher price targets. No matter what. And Wall Street will keep doing that until investors get led off the proverbial cliff.
—Sven Heinrich, Northman Trader
That guy must live in a cave. There are numerous pessimistic outlooks for 2020 out there.
https://www.zerohedge.com/s3/files/inline-images/2020%20%281%29.png?itok=rsXq9JEUHaters gonna hate wrote:
Ghost of Igloi wrote:
“Recently an annual ritual took place. Wall Street analysts setting year end price targets for the S&P 500 for the new year. Don’t act surprised but these latest price targets are higher for 2020. Why is it not a surprise? Because Wall Street always projects higher price targets. No matter what. And Wall Street will keep doing that until investors get led off the proverbial cliff.
—Sven Heinrich, Northman Trader
That guy must live in a cave. There are numerous pessimistic outlooks for 2020 out there.
Maserati wrote:
“Wall Street will keep doing that until investors get led off the proverbial cliff.
Because the entire business model is based on attracting ever more investment flows, more assets under management, more ETF allocations. The entire industry is based on fund inflows.”
—Sven Heinrich, Northman Trader
And how exactly does leading them off a cliff increase fund inflows? It doesn’t. Lots of people left in both 2000 and 2008 and have never come back.
The author should stop foaming at the mouth, and stop to think if what he is saying makes any sense.
Via Robert Shiller the inventor of the CAPE ratio:
“C.A.P.E. reached 33 in January 2018 and is almost as high now, at 31. That number might seem meaningless in itself, but it is significant when you consider that it has been as high or higher on only two occasions: 1929, just before the 85 percent stock market crash ending in 1932, and in 1999, just before the 50 percent drop at the beginning of the new millennium.”
Igy, 1929 is totally irrelevant. The markets are completely different.
They are also substantially different from 2000, and the overall financial and monetary system is substantially different than it was in 2008.
Yes a crash is always possible, but the CAPE in neither 1929 nor 2000 informs if, when, or how.
The ouija board says next week.....
Maserati wrote:
Where did you buy, and what did you get?
Yaletown area, roughly 1500 sf 2BR lower floor apartment in a fairly low, new-ish (post leaky condo era anyway) condo building. I am not a wealthy idiot, this is what was within our grasp. Knock on wood the tenants will be good to the place... :-)
https://www.theguardian.com/business/2019/jan/05/global-economic-crash-2020-understand-whyGhost of Igloi wrote:
https://www.zerohedge.com/s3/files/inline-images/2020%20%281%29.png?itok=rsXq9JEUHaters gonna hate wrote:
That guy must live in a cave. There are numerous pessimistic outlooks for 2020 out there.
Yaletown, I remember when it was old industrial crap. I used to go in the dock entrance of a euro food wholesaler to buy stuff on the cheap, that was near or at expiry.
Is the bldg concrete? Yes, I remember driving around when there were lots of those stick condos completely wrapped in scaffolding and plastic. Even the concrete ones from the 80’s have issues—I know someone who just had to pay CAD120,000 to have a leaking 2BR concrete condo near Deep Cove rehabilitated.
Seriously, good luck with the renters, I hope everything works out for you. Canada is a money laundering haven in part due to lawyers not having to account for the source of client’s money, it is known worldwide as the Vancouver model. As long as that remains in place, prices will stay high.
How long are you planning to hold on to it?
Toucan, yes I am experiencing duality. Sold a bunch of stuff Friday and will be selling more today to lock in the big 1.5%, while meantime leaving the small b&h as is. Holding and selling the same thing at the same time...?
Maserati wrote:Yaletown, I remember when it was old industrial crap. I used to go in the dock entrance of a euro food wholesaler to buy stuff on the cheap, that was near or at expiry.
Is the bldg concrete? Yes, I remember driving around when there were lots of those stick condos completely wrapped in scaffolding and plastic. Even the concrete ones from the 80’s have issues—I know someone who just had to pay CAD120,000 to have a leaking 2BR concrete condo near Deep Cove rehabilitated.
Seriously, good luck with the renters, I hope everything works out for you. Canada is a money laundering haven in part due to lawyers not having to account for the source of client’s money, it is known worldwide as the Vancouver model. As long as that remains in place, prices will stay high.
How long are you planning to hold on to it?
The market dipped over the last couple of years in response to a couple of initiatives aimed at money laundering. You can no longer buy a house for a bag of cash, and to avoid non-resident tax you have to provide the city strong evidence you pay Canadian taxes. We will hold onto the place for a few years anyway. Time will tell. Partner is within a couple/few years of (first) retirement and I have a few to a dozen or more until I'm ready to pack it in. Decisions on disposal of this place will be influenced in time by what the market is doing and our current financial status. If I could predict future housing prices I would have a more solid plan. I can't, do I don't. Time will tell, and I'm not much of a planner, anyway. I am an idiot after all... :-)
the forever problem for the 'housing is unaffordable' people is that well houses are sold every day at market clearing prices. Someone is buying houses, and it can't all be supre rich people buying homes.
So people like our good Maser are insisting that housing is not affordable but people buy it anyway and the prices stay up. What sense does that make?
and he is arguing that bond investors are perfectly happy, year after year, to lose around 6% per year on treasury biils and they never get wiser.
His view of markets is so perverse it's hard to put into words.
