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Economy
by
Chris Martenson
Executive Summary
- The data shows first-time home buyers already beginning to throw in the towel
- But house "flipping" by amateur investors is coming back into vogue
- Why we're back in a housing bubble
- Big funds are beginning to exit retail housing due to too much "stupid money"
- The risks every home buyer (and homeowner) needs to be aware of right now
If you have not yet read Part I: Housing Prices are Being Dangerously Distorted by Big Institutional Money available free to all readers, please click here to read it first.
The Impacts
As noted in the Salt Lake City anecdote above, one obvious impact of all this institutional money is that it is preventing ordinary people from buying a home because they cannot compete with the big money firms:
Blackstone, other investors snap up thousands of Tampa Bay rental homes
Ken and Susan Beran embodied that old idea of the American dream. They married. Built a house. Raised a daughter within its walls. But after 30 years, as Ken eyed retirement, the Berans envisioned a different dream.
In December, they moved to a new home — this time, to rent. Ken said he can't imagine ever buying a home again. Susan, a first-grade teacher, hasn't felt so calm in years. "I'm leaving a building I had to maintain, had to stress over," Susan said. "I'm taking all of my memories with me."
Bad credit, ravaged savings and evolving attitudes are driving more Americans to rent houses, and big-money investors are waging war to win their business. Few are mightier than the Blackstone Group, which dropped $150 million to buy 1,000 Tampa Bay homes — in just the last six months.
The New York-based private equity giant has already bet $3.5 billion across the country that the housing crisis has fundamentally changed the way many families live. Once-proud homeowners like the Berans, they believe, are beginning to reject home ownership altogether.
It seems entirely wrong to me that the Fed bailed out big banks and made money excessively cheap for institutions, and that this is being used to price ordinary people out of the housing market. Said another way, the Fed prints fake money out of thin air and some companies use that same money to buy real things like houses and then rent them out to real people trying to live real lives.
Recently it was shown that the number of first-time homebuyers has fallen by 25% as these typically low-end buyers have retreated in the face of higher prices.
Not exactly the sort of 'spin' you usually read on that story, but it's more honest than trying to claim that the recent price hikes are due to improving consumer confidence and an economic recovery…
And the Smart Money Is Already Withdrawing
PREVIEW by Chris MartensonExecutive Summary
- The data shows first-time home buyers already beginning to throw in the towel
- But house "flipping" by amateur investors is coming back into vogue
- Why we're back in a housing bubble
- Big funds are beginning to exit retail housing due to too much "stupid money"
- The risks every home buyer (and homeowner) needs to be aware of right now
If you have not yet read Part I: Housing Prices are Being Dangerously Distorted by Big Institutional Money available free to all readers, please click here to read it first.
The Impacts
As noted in the Salt Lake City anecdote above, one obvious impact of all this institutional money is that it is preventing ordinary people from buying a home because they cannot compete with the big money firms:
Blackstone, other investors snap up thousands of Tampa Bay rental homes
Ken and Susan Beran embodied that old idea of the American dream. They married. Built a house. Raised a daughter within its walls. But after 30 years, as Ken eyed retirement, the Berans envisioned a different dream.
In December, they moved to a new home — this time, to rent. Ken said he can't imagine ever buying a home again. Susan, a first-grade teacher, hasn't felt so calm in years. "I'm leaving a building I had to maintain, had to stress over," Susan said. "I'm taking all of my memories with me."
Bad credit, ravaged savings and evolving attitudes are driving more Americans to rent houses, and big-money investors are waging war to win their business. Few are mightier than the Blackstone Group, which dropped $150 million to buy 1,000 Tampa Bay homes — in just the last six months.
The New York-based private equity giant has already bet $3.5 billion across the country that the housing crisis has fundamentally changed the way many families live. Once-proud homeowners like the Berans, they believe, are beginning to reject home ownership altogether.
It seems entirely wrong to me that the Fed bailed out big banks and made money excessively cheap for institutions, and that this is being used to price ordinary people out of the housing market. Said another way, the Fed prints fake money out of thin air and some companies use that same money to buy real things like houses and then rent them out to real people trying to live real lives.
Recently it was shown that the number of first-time homebuyers has fallen by 25% as these typically low-end buyers have retreated in the face of higher prices.
Not exactly the sort of 'spin' you usually read on that story, but it's more honest than trying to claim that the recent price hikes are due to improving consumer confidence and an economic recovery…
by
Adam Taggart
When you buy a piece of clothing, how much thought do you give to how it was made?
Few shoppers do. But they should. In many respects, where our clothes comes from is nearly as important as where our food comes from.
The recent tragedy in Bangladesh, where over 1,000 sweatshop workers died in a building collapse, provides a stark reminder of this.
In this podcast, I talk with retail entrepreneurs Scott Leonard and Matt Reynolds, co-founders of Indigenous Designs, to get a better understanding of the notoriety the textile industry has earned (much of it well-deserved) and learn about new business models that promise to transform it for the better.
Indigenous: Sourcing Our Clothing Sustainably
by Adam TaggartWhen you buy a piece of clothing, how much thought do you give to how it was made?
Few shoppers do. But they should. In many respects, where our clothes comes from is nearly as important as where our food comes from.
The recent tragedy in Bangladesh, where over 1,000 sweatshop workers died in a building collapse, provides a stark reminder of this.
In this podcast, I talk with retail entrepreneurs Scott Leonard and Matt Reynolds, co-founders of Indigenous Designs, to get a better understanding of the notoriety the textile industry has earned (much of it well-deserved) and learn about new business models that promise to transform it for the better.
by
JHK
by
Chris Martenson
[Chris lost his voice this week due to illness, so we were unable to record a new podcast. So while Chris recuperates, enjoy this excellent discussion from the archives will Bill Black, recorded a year ago, on the pervasive control fraud within our current financial system. ~ Adam]
“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it." ~ Frederic Bastiat
Bill Black is a former bank regulator who played a central role in prosecuting the corruption responsible for the S&L crisis of the late 1980s. He is one of America's top experts on financial fraud. And he laments that the U.S. has descended into a type of crony capitalism that makes continued fraud a virtual certainty while increasingly neutering the safeguards intended to prevent and punish such abuse.
In this extensive interview, Bill explains why financial fraud is the most damaging type of fraud and also the hardest to prosecute. He also details how, through crony capitalism, it has become much more prevalent in our markets and political system.
A warning: There's much revealed in this interview that will make your blood boil. For example, the Office of Thrift Supervision. In the aftermath of the S&L crisis, this office brought 3,000 administration enforcement actions (a.k.a. lawsuits) against identified perpetrators. In a number of cases, they clawed back the funds and profits that the convicted parties had fraudulently obtained.
Flash forward to the 2008 credit crisis, in which just the related household sector losses alone were over 70 times greater than those seen during the entire S&L debacle. So how many criminal referrals did the same agency, the Office of Thrift Supervision, make?
Zero.
Bill Black: Our System is So Flawed That Fraud is Mathematically Guaranteed
by Chris Martenson[Chris lost his voice this week due to illness, so we were unable to record a new podcast. So while Chris recuperates, enjoy this excellent discussion from the archives will Bill Black, recorded a year ago, on the pervasive control fraud within our current financial system. ~ Adam]
“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it." ~ Frederic Bastiat
Bill Black is a former bank regulator who played a central role in prosecuting the corruption responsible for the S&L crisis of the late 1980s. He is one of America's top experts on financial fraud. And he laments that the U.S. has descended into a type of crony capitalism that makes continued fraud a virtual certainty while increasingly neutering the safeguards intended to prevent and punish such abuse.
In this extensive interview, Bill explains why financial fraud is the most damaging type of fraud and also the hardest to prosecute. He also details how, through crony capitalism, it has become much more prevalent in our markets and political system.
A warning: There's much revealed in this interview that will make your blood boil. For example, the Office of Thrift Supervision. In the aftermath of the S&L crisis, this office brought 3,000 administration enforcement actions (a.k.a. lawsuits) against identified perpetrators. In a number of cases, they clawed back the funds and profits that the convicted parties had fraudulently obtained.
Flash forward to the 2008 credit crisis, in which just the related household sector losses alone were over 70 times greater than those seen during the entire S&L debacle. So how many criminal referrals did the same agency, the Office of Thrift Supervision, make?
Zero.
by
Adam Taggart
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