The Darkest Storm is About to Descend - You Can't Imagine the Carnage

Quote from Pa(b)st Prime:

Well my point is obvious, eh? You hinted that a loose BOJ had no effect on boosting asset prices in Japan. I responded that real estate prices in Tokyo are STILL sky high-in fact the highest in the world.
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Ok so their prices came from the moon back to the stratosphere, thats not deflationary?they can stay highly priced because japan is still one of the highest income countries in the world

The bottom line is money printing there failed to create inflation(not a housing price index) while at the same time interest rates nose dived. before the 70's the last bull market in commodities was in the... 30's, they went down less then everything else, that did not prevent deflation from happening. bottom line that the 'liquidationist' mentality of letting everybody fail would repeat a great depression.
This financial system is built on the idea that the government will step in when things turn sour, if they dont the entire chain collapses because no one is ready for it
Soros is dead right that 'market fundamentalists' are a great danger as were communists and I dont like to agree with him
 
P, you're 100% right on that...rental prices are steady and climbing. More and more people are forsaking home ownership for the rental prospect.

Quote from Pa(b)st Prime:

I see a few things recently developing. For one I see rental prices appreciating in every major metro that I track. Along with the corresponding drop in resale prices p/e's (rental vs. home value price) have come in quite a bit. I'm going out to L.A. for an extended stay and I'm absolutely blown away by rents.

I agree the employment picture will worsen-consumer spending will suffer ect, YET I'm not at all sure if economic slowness ipso facto means lower housing costs (or lower enegy, food ect.) I'm stuck on a 1970's fractal for my trading decisions and I see just one thing. Higher priced essentials with declining real income. Now if Treasury rates spike higher it's a whole new ball game but the Fed, Congress and the tape all indicate to me a move toward inflation rather than steady prices.
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Income increases reflect debased currencies as much as any other benchmark. Asset prices can't rise in an incomeless vacuum now can they? I'm sure someone is going to talk about productivity but get real. Is a municipal transit bus anymore “productive” today than 40 years ago. I think not, yet Chicago Transit Authority salaries have risen 700% in these past 4 decades.

All one hears about is how housing is on it's ass but I DARE someone to find me house in NYC, the Bay Area, L.A. let alone beleaguered Phoenix, Vegas or Miami that isn't 300% higher in value than a decade and a half ago.

No one with any sense disputes if the Fed's policy will effectively “save” asset prices. Of course it will. And it worked in Japan as well. The debate is only over the COST of cheap money as it effects consumer/essential products. There's a ying yang. Instead of home prices falling 60% they'll only fall 30% but instead of a T-Bone staying steady at x a pound it'll trade 2x an lb. Or make that a Kobe.....
Quote from Daal:

Ok so their prices came from the moon back to the stratosphere, thats not deflationary?they can stay highly priced because japan is still one of the highest income countries in the world

The bottom line is money printing there failed to create inflation(not a housing price index) while at the same time interest rates nose dived. before the 70's the last bull market in commodities was in the... 30's, they went down less then everything else, that did not prevent deflation from happening. bottom line that the 'liquidationist' mentality of letting everybody fail would repeat a great depression.
This financial system is built on the idea that the government will step in when things turn sour, if they dont the entire chain collapses because no one is ready for it
Soros is dead right that 'market fundamentalists' are a great danger as were communists and I dont like to agree with him
More...
 
Quote from Pa(b)st Prime:

Did he indicate how his business is doing?
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He said his business was 'FINE', which in so many terms means it's holding up well, but not blowing doors off...he is very established and has an amazing trio of restaus, so he should be ok...
But he mentioned multiple restaurants in his area and around LA that are suffering and closing down..established ones too...
 
Quote from Pa(b)st Prime:



All one hears about is how housing is on it's ass but I DARE someone to find me house in NYC, the Bay Area, L.A. let alone beleaguered Phoenix, Vegas or Miami that isn't 300% higher in value than a decade and a half ago.
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My cousin bought her house in the Valley in 1992 for 650K
at the peak
The house across the street from her (very comprarable) just sold in foreclosure for 700K
 
Quote from PohPoh:

He said his business was 'FINE', which in so many terms means it's holding up well, but not blowing doors off...he is very established and has an amazing trio of restaus, so he should be ok...
But he mentioned multiple restaurants in his area and around LA that are suffering and closing down..established ones too...
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I believe it. On one hand places are packed but on the other with soaring food costs and ect. one NEEDS to be packed if they're to survive. I still wonder how so many young people are able to pay for "bottle service" and $12 Cosmos......
 
Quote from Pa(b)st Prime:

Income increases reflect debased currencies as much as any other benchmark. Asset prices can't rise in an incomeless vacuum now can they? I'm sure someone is going to talk about productivity but get real. Is a municipal transit bus anymore “productive” today than 40 years ago. I think not, yet Chicago Transit Authority salaries have risen 700% in these past 4 decades.
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Well its better to reflate and dilute everybody then to try to clean up the system and end up with a worst system than you had before.

Hayek was advising that US authorities to let the 30's economy collapse because a bottom was around the corner and the system would be clean, who knows maybe he was right but when everyone and their mothers get unemployed and people are starving congress comes up with brillant ideas like social security and the welfare interventionalist mentality takes over the nation.
All the sudden you are being taxed everywhere need to cough it up 50% of your income no matter where you live. You lose all your liberties and the government is controlling just about every business.
I dont think its worst to reflate people in order to avoid that, its not like in the alternative they would benefit so much, you might help out the saver with higher rates but so what if he gets to keep only 50% after tax in order to do 'justice' to the poor

Nobody wants that again, specially if its just to please a few folks who wanted a hike from 5.25% and major firms to fail while the worst housing bust in 70 years was going on, m1 was 0 and money velocity was going down
 
Our house in the valley (Sherman Oaks) was purchased for 170K in 1990. We put 150K into a remodel in 1994 and sold the place for 970K in 2004. Houses in that very modest 'hood are still getting 850-900K.

Quote from PohPoh:

My cousin bought her house in the Valley in 1992 for 650K
at the peak
The house across the street from her (very comprarable) just sold in foreclosure for 700K
More...
 
Quote from PohPoh:

My cousin bought her house in the Valley in 1992 for 650K
at the peak
The house across the street from her (very comprarable) just sold in foreclosure for 700K
More...

Impossible. It really is. I've poured over a couple of hundred sales histories in Sherman Oaks, Studio City, Encino and Woodland Hills. (only south of the blvd.) I've also checked out the Strip, WeHo, BH, Bel Air, Brentwood and the Palisades as well. Homes bought in the 89-92 break are up 300% right now.

I'll pick one randomly.

http://www.trulia.com/property/1063686507-4223-Costello-Ave-Sherman-Oaks-CA-91423#sold_data

http://www.trulia.com/property/1043060747-4124-Madelia-Ave-Sherman-Oaks-CA-91403#sold_data
 
Quote from Dr. Zhivodka:

Our house in the valley (Sherman Oaks) was purchased for 170K in 1990. We put 150K into a remodel in 1994 and sold the place for 970K in 2004. Houses in that very modest 'hood are still getting 850-900K.
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Sounds about right bro and south of Ventura Blvd the shit keeps right on pumping higher.
 
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