Ron Paul explains the Subprime mortgage crisis and predicts the dollar collapse (VIDEO)

If you REALLY want to understand what happened in 2008 read Meltdown by Tom Woods. It’s not a tome. Quick read and common sense.

Everyday people would be wise to understand the basics of what is called “Austrian Economics.” The Austrians, not the people who run the Fed, or bobble along on CNBC and Bloomberg were the ones who were right about The Crash we saw in 2008 (and the Great Depression for that matter).

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Basic economics San Francisco hipster style

I’m not dissing San Francisco here. I’m not even dissing San Francisco hipsters. (Who are way more fun that the Brooklyn type in my experience.) I actually like the city quite a lot. But I don’t have to pay taxes or deal with the regs (and people like below) there either.

I will also say that San Francisco is the only place I’ve ever been followed into a restaurant by a homeless person who demanded that I buy her a piece of pizza.

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The High Cost of a Home Is Turning American Millennials Into the New Serfs

This is an excellent piece and pings directly on what we have seen firsthand. Millennials are being regulated, by many means, right out of home ownership. The author makes the point that despite the spin, Millennials actually want their own homes. They want families. They don’t necessarily want to spend their lives in tightly packed cities. They just can’t afford homes, families, or to move. Few Millennials will admit this but it’s true. But hey, the mimosas are bottomless at brunch.

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The relative value of $100 in each state (MAP)

This feels about right to me. I was in Alabama a couple of months ago and it is pretty amazing how much less expensive many things were. A good solid high quality and interesting meal was 2/3 the price I’d pay where I live. Houses are probably half the cost. And where I was visiting was a lovely little college town, not out in the middle of nowhere.

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How are millions still underwater as home prices rise? (Thank the Federal Reserve)

During the Crash the Fed should have let things fall. It would have been painful. Very painful for some. But the market would have cleared. Some people would have picked up deals and many people would be in houses now, even many who would have hurt in 2008/2009, with positive equity.

Instead the Fed intervened and tried to put a bottom under house prices. As such we have the situation we have now. Millions of homeowners still underwater and a much less mobile workforce.

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People over 50 carrying much more debt than in the past, this could be dangerous

I certainly see it where I live. Across the street from me are homes which are in the $500k-$1 million range (my neighborhood is nice but more modest) and it is filled with retirees, most of whom built their homes in the period after the 2008 Crash. These were the folks who had money during those particularly lean times. The only people who could get a mortgage. Indeed at least some of these people probably paid cash for their homes.

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Interest-only mortgages: They’re baaack

Oh this is a great sign.

It does sound like the parameters around these new interest only loans are pretty conservative, 20% down, 720 FICO score, etc. But take it as a bellwether. Watch to see if more of this stuff comes on the market, with less stringent guidelines. Caution, always caution when it comes to housing, which is a highly government manipulated market.

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Government should not be in the mortgage business

This article is almost right in our opinion. Yes, the Community Reinvestment Act pushed by both the Clinton and Bush administrations contributed mightily to the housing implosion. But the Act is only part of the equation. Fundamentally the housing Crash was a symptom of the inevitable reversion to the mean after years of easy money from the Fed. The CRA just made the malinvestment easier.

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The “House Rich” movement, and the woe of aftermath

This is what much of northern Virginia looks like. It’s not pretty.

Where I live they are building houses again. The neighborhood beside me should have been built 5 years ago but finally the bulldozers are in motion again. But don’t call it a recovery. There is no vibrance in the market. Just a subset of people escaping places like California with solid state jobs at the University.

But even here there is concern. 2 years ago the builders began again,

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Have the young simply figured out that houses aren’t that good an investment? (Video)

Houses, at least most houses, really aren’t that good  an investment. Don’t get me wrong, I own a house. I’m rooting for a housing recovery. And I know some people are upside down on their houses and are hoping to get back above water sometime this decade. They don’t want to believe that their largest asset really isn’t that great an asset. But alas, in many cases, perhaps most, this is true.

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