[NeoPeasant]

A Fed wealth survey indicates American net worth grew slightly.

$this->bbcode_second_pass_quote('', 'T')he big reason: while household assets increased, debts – particularly mortgage debt -- rose considerably more.

[Leanan]

Hey, it's not just Americans.

Japan in surprise trade deficit (the high cost of oil imports is blamed)

Caller deluge hits debt helplines (UK)

[Aqua]

Looks like my country is going to get away just fine according to this economic masterpiece( laughs satirically).

http://breakingnews.iol.ie/news/story.a ... =y73zz6984

How do you know theres a massive speculative property bubble waiting to burst? When your fellow countrymen are speculating so much abroad to earn the term Robopaddy, this handle is starting to catch

http://www.davidmcwilliams.ie/Articles/ ... icleID=243

Quote
Since 1990, and particularly since the late 1990s, the speculative wealth of the new Ireland largely built on property (here, then in Britain, and latterly on the continent) has given nice, funny, witty, decent, empathetic Paddy real commercial balls. Let's call the new wedged-up global Irish investor Robopaddy.

Robopaddy is today moving around the globe, chasing yield, mainly in property. e has an unparalleled risk-taking appetite fuelled by 20 per cent plus leveraged returns on properties notched up in Ireland and various parts of Britain since 1996.

His exit strategy is simple - he buys, develops, builds and sells on to fledgling Robopaddies who are feeding further down the food chain.
The more ambitious Irish banks are financing Robopaddy, safe in the knowledge that he will sell on to younger, smaller Robopaddies whose mortgages will be secured against their smallish property portfolio in Dublin, Cork or Galway.
Therefore, global Robopaddy is aggressively entering far-flung markets on leverage secured on decent property here.

Robopaddy has one crucial characteristic distinguishing him from other, mainly English-speaking, white investors: he has empathy. He has the memory and the vocabulary of the Ireland of the struggles, the historic Ireland of the 1960s,1970s and 1980s.

In South Africa for example, he is the only big investor who will chat away to the black taxi driver. He feels uncomfortable when a black man addresses him as `boss', and is probably more keenly aware of and sensitive to, the story of a downtrodden nation disenfranchised in its own land.

As such, Robopaddy is a formidable adversary, a valued adviser and a guaranteed player. This is his trump card.

Robopaddy has the gut feeling of the downtrodden, combined with the bank balance of the overlord. He is unique in the white financial world, and other investors should underestimate him at their peril.
This apparent contradiction explains his disproportionate success in South Africa. To the leftist ANC he is the acceptable postcolonial face of successful capitalism. End Quote


Good read and gives a good guide to how insane the property game has got here.

[Ludi]

*waving arms and screaming*

You don't own it if you're still making payments on it! The bank owns it and you are buying it from them! You only own part of it (the principal of the mortgage which you have paid off)!

What the hell?

So if I have a $300,000 mortgage which I have not paid off, my net worth is more than that of someone with a $70,000 house they have paid the mortgage on???

I'm so confused!

[rogerhb]

$this->bbcode_second_pass_quote('Ludi', 'S')o if I have a $300,000 mortgage which I have not paid off, my net worth is more than that of someone with a $70,000 house they have paid the mortgage on?

[Novus]

America's entire economy for the last 25 years has been based almost entirely on hallucinated wealth. Look at the way homes have been used as re-fi cash ATMs. Say joe 6 pac bought a house ten years ago for $150k. So far he has payed off $50k of his loan. Logically his house is still a net liability to the tune of $100k. Due to the hallucinagenic effect of our economy he believes his particalboard house in the burbs is really worth $300k. Instead of a net liability of $100k he thinks he has a $200k net asset which he can then get other loans to buy more consumables with.

No rational person would charge a $4000 Plazma TV on their credit card and call it a net asset after they made the first payment but that is exactly what we are doing with housing. Housing is not investment as the real estate agent may want you to think. Housing has no intrinsic value that mulitpies over time like a farm or a factory or business because it has no production or value added over time. A house built in 1996 does not house people %200 better today then it did when it was new. In fact it probably has less value as an actual house then it did when it was new. It's increased value in the marketplace is purely hallucinated.

[rogerhb]

How about this as an interesting point of view:

Western countries are fearful of population drops because it removes pressure on house prices. One way that house prices can go up is when you have more and more people chasing the same houses.

If more people are chasing houses, prices will still creep up, and most importantly loans will still be made.

The last thing any banker would want is for everyone to be free-hold.

[HonestPessimist]

$this->bbcode_second_pass_quote('Novus', '
')No rational person would charge a $4000 Plazma TV on their credit card and call it a net asset after they made the first payment but that is exactly what we are doing with housing. Housing is not investment as the real estate agent may want you to think. Housing has no intrinsic value that mulitpies over time like a farm or a factory or business because it has no production or value added over time. A house built in 1996 does not house people %200 better today then it did when it was new. In fact it probably has less value as an actual house then it did when it was new. It's increased value in the marketplace is purely hallucinated.

[rogerhb]

$this->bbcode_second_pass_quote('HonestPessimist', 'I')f we goes by your suggestion totally, then this industry goes out of business and these peoples involved lose their living-hoods. Imagine the rippling effects on the retail, home warehouse and lumberyard businesses (Home Despot, Lowe, Hechinger's, the Great Indoors, etc.).

[FoxV]

btw, just wanted to throw in

$this->bbcode_second_pass_quote('', 'M')edian net worth rose 1.5 percent...

... after adjusting for inflation

[Vexed]

Hallucinated wealth increases, but real-world income declines

Average American Family Income Declines

[Novus]

$this->bbcode_second_pass_quote('HonestPessimist', '')$this->bbcode_second_pass_quote('Novus', '
')No rational person would charge a $4000 Plazma TV on their credit card and call it a net asset after they made the first payment but that is exactly what we are doing with housing. Housing is not investment as the real estate agent may want you to think. Housing has no intrinsic value that mulitpies over time like a farm or a factory or business because it has no production or value added over time. A house built in 1996 does not house people %200 better today then it did when it was new. In fact it probably has less value as an actual house then it did when it was new. It's increased value in the marketplace is purely hallucinated.

[dooberheim]

$this->bbcode_second_pass_quote('Novus', 'F')ixing up an old house does not add intrinsic value to a home unless it is the form of turning a single family home into a two family home. Most renovating comes in the form of adding gargantuan additions to modest homes restyling them as McMansions. In a world of energy depleation this is very counter productive.

[shortonoil]

$this->bbcode_second_pass_quote('', 'I')f we goes by your suggestion totally, then this industry goes out of business and these peoples involved lose their living-hoods. Imagine the rippling effects on the retail, home warehouse and lumberyard businesses (Home Despot, Lowe, Hechinger's, the Great Indoors, etc.).

[holmes]

you tend to forget the credit card is part of the "American Dream". I saw a commercial last night watching the Olympics and it actually implied this. Visa commercial. Some sick shit. The American nightmare soon to follow. and european nightmare, and asian nightmare, etc.....

It will take 6$ a gallon nationwide to knock the turret off. This figure comes from folk I will not even question or argue with. u can believe what u want.

[erb]

my wife and I are at the moment scraping together enought for a deposit on a small house (nonMcmansion) 2/3 bedroom ($135,000) with a fireplace outside of any major metro area.

is this a bad idea
i still have a small school loan im paying but no major debts

just want some opinions/ideas

[holmes]

what do u and your wife do? Job wise.
I think its a good investment. I can not advocate building a new house and consuming more resources. but buying what is already there is great. if u want to tear it down and build a thermal mass structure is the zonign compatible? is thermal mass improvements allowed on the current structure? does it have a good south facing for maximum solar gain? How much area for a garden? can u build inground greenhouse? find out about zoning. These fucks have locked us into their death profit lunatic industries and markets. find out what improvements u can do. U dont want ot be stuck living in a shitbox when energy prices hit the fan.

[Leanan]

Is it on a commuter train line?

I'm not sure fleeing the city is a good idea. Can you get to work or to the store without driving, if necessary?

The financial experts who believe in peak oil all seem to think it will mean the suburban real estate market will crash, while city real estate will boom.

I think if I were looking to buy a house, it would be in an "eco-hood":

http://www.emagazine.com/view/?3066

The best places for living without cheap fossil fuels are often the older parts of the city. That's where people settled first. Where there's water, shelter from the wind, good topsoil. Those areas are often quite cheap now, since the homes are small.

[lawnchair]

Well, compared to continued renting costs in T-Dot (more expensive per month to build zero equity), then I'd take it as a good idea. At least, if you can find something to do whereever you're going. Are either of you, by chance, teachers or nurses? Welders, plumbers, carpenters? If so, then yes.

The thing about the current 'bubble' is how uneven it is. If you can find something to do in a place like in my hometown, you can live on a pretty small income. May never be rich, but... lots of reasonable houses under $50k. http://kelleragency.com/greatbend.html (disclaimer: a friend's real-estate site... as comparison, not advertising, since I'm not suggesting anyone to move to Kansas)

Rural Ontario is a somewhat nicer place to live, with some better opportunities. $135k may well be in line with your needs and wants. But, the fireplace is pointless. (You want a woodstove to heat the house, not a fireplace which mostly heats the air above your house)

Again, this is if you can find something to do. No public transportation, but when the town is only 4 miles across you can surely live close enough to work to walk any day, and shop (Wal-Mart, dollar store, or nothing) by foot/bicycle 80% of the time. Just because most small town people drive everywhere doesn't make it necessary.

If it were to come down to Mad Max, I don't take it as a given that the grocery stores in Toronto will be supplied and the stores in, say, Hanover Ontario, will be empty. But, if there were shortages both places, I think I'd rather be in the smaller town.

I am amazed at the people who simply must live in the city or burbs. Yes, there are all sorts of marvelous cultural activities. But, the majority of 'burbanites just watch the same TV and shop the same Wal-Mart that small towners do. Except that we can buy a house for the cost of three years' city rent (or a fully-equipped SUV!).

[Leanan]

I think the reason to live in the city or the burbs is that's where the jobs are. It won't do you any good to "build equity" if the bottom drops out of the market. You may end up owing more money than the house is worth. Home ownership is great, if you're sure you can make the payments. If you can't, you end up worse off than you would be if you'd just rented.

And I do I think it is more likely that supermarkets in cities will be supplied. Already, the U.S. has many "food deserts" - places where there are no grocery stores. The suppliers would rather serve big customers like Wal-Mart than small, rural mom-and-pop stores. There are just as many people living in rural areas as there was 50 or 100 years ago. But the population in the suburbs has boomed, and the suppliers aren't interested in making a little money in the country when they can make a lot of money in the cities or suburbs. I suspect this will be even more true as fuel prices rise. Why send a truck all the way to a one-horse-town in, say, Maine, when you can use less fuel and find more customers in Boston?

Now, if are planning to be completely self-sufficient, you may not have to worry about food or fuel deliveries. But it's hard to be completely self-sufficient.