Housing Market-It’s all Manipulation-Fabian Calvo

jc davis 03/04/2013  •

Greg I know this hosing bubble will be bad for the country , but I will be glad if I can sell my home in the city to move onto my land outside the city. Great interview. Great information. I continue to learn more from your interviews then any other sites. Certainly a step above the rest.

AndyB 03/04/2013  •

Greg: given the declining levels of income among the middle class and the educational debt enslavement of the presumed next generation of home buyers, it is not unreasonable to assume, after all the manipulation is exhausted, that the final holders (purposeful or not)of the majority of US distressed homes will be the owners or cronies of the FED. After all, what segment of the population can still qualify even at reduced prices and low rates? Very few actually. The first time organic buyer is dead, never to return until well after the great reset. The headwinds of increased property taxes and home insurance, higher utility bills, and far less available discretionary income combined with ever declining median income certainly ensures this fact.

hjb 03/04/2013  •

i live in an affluent neighborhood in florida out.. of 45 homes eight are empty obviously owned by banks slowly deteriorating in the sometimes merciless sw florida weather… 29 are being rented by people unused to living in relatively luxurious surroundings chewing up the lawns with their vehicles ..3-4 families sharing the exorbitant rents beating the houses to death inside …hot tubs ripped out of lanais filled with torn cushions,beer cans torn screens etc and before their last rent payment one night they will leave taking all they can carry like $500 front doors copper from walls a/c units rugs etc owned by some investor it will sit as the rain /bugs /roaches invade until the owner or the property manager comes by and sees it like a crime scene for another month until it is visited by police,insurance company adjusters etc then boarded up it will sit forlorn with a for sale sign on it until thieves break in and steal all the windows doors,tile etc …its happening folks in places where the prices are very low “great buys” of course the electric ..water .code enforcement fines…taxes etc keep accumulating even if th water electric occupancy has been turned off WELCOME TO FLORIDA now go home broke or just come for the winter

Chris R. 03/04/2013  •

As always, great material. Thanks. Sounds like a “pump and dump” scenario. This starts to make more sense as I’ve been confused lately trying to reconcile data from multiple sources. For example, some say buy real estate at depressed prices before the dollar drops and you end up with a dollar that buys less, or buy real estate with a mortgage and pay the mortgage back with cheaper dollars, while others (e.g. Aftershock book – that I’m reading) warn to stay completly as far away from real estate as possible pending a a great inflation period and an upcoming further bursting of the real estate and other bubbles. Again, what you and Calvo speak of now sounds to me like a “pump and dump” scenario. Thinking of it that way sort of helps bridge the gap in my mind to explain facts like housing prices in my neighboorhood (southern california) seem to be creeping upward, yet I’m still underwater, meanwhile, I hear that multiple offers are helping to bid up prices (i.e. the investors you spoke of). So, as to reconciling what looks like conflicting guidance, one take away from this interview is the notion that with proper guidance, someone can possibly get in AND OUT of this market with some hope for profit.

In the know 03/05/2013  •

Dave,
As usual great reporting and interview ! I would like to add to the thought that the banks and the FED are waiting to offload these properties once prices rebound. Well I am here to tell you that, It’s not going to happen and here’s why. There are 10,000 baby boomers per day retiring in the USA, that’s 70,000 a week. So you ask yourself how are they funding these retirements? They are trying to sell their oversized, underwater house’s that they raised their kids in and trying to extract any equity they may have left in them, to possibly downsize and have less maintenance to tend to. Who, with the unemployment and wage deterioration even qualifies for a mortgage, has the down payment savings or a job to even buy what they are selling to support prices ?………………………………no one; and that’s why it will never recover.

Also apply the same scenario above to the stock market/bond markets/annuity markets/any equity markets/any market.
You know from that question and answer, that the market is being printed higher and actually printing money itself due to naked short selling/naked long buying through the non-regulation, non-position limit and non-reporting of borrowed and electronic creation of shares. Certs are created electronically, if only long enough to extract the vig for milliseconds through HFT. They’re then put back on the shelf readied for their next electronic manipulative deployment with no tracable electronic signature.

Thanks again !

Thomas Blankenhorn 03/11/2013  •

The Fed is going way beyond their mandate of price stabilization and maximum employment. They really had little control over employment in the past as it hinges on so many factors including the legal workweek.

With the forces of increased productivity, outsourcing and insourcing to illegal immigrants, American citizens are getting squeezed. With the added assault of the Federal Reserve creating a new record wealth divide each day, it is raising the cost of living on the majority of people.

Why is the fed so concerned about keeping inflated house prices up? There are either clueless or it’s purposeful to cause a civil war. Look at my site above where I put together an essay and house price calculator. I’ve kept abreast of the RATIO of the median house price per median income since I was a kid. Per 1990 levels, house prices are 30+% too high. I tell you, Bernanke needs a lesson on economics. You cannot have prosperity when such a ratio is high and going higher. It breaks down the economy, not helps it. Helping the wealthy by coddling the housing market and the stock market with the OBVIOUS OUTRIGHT manipulation is CRIMINAL. The DOJ gives Bernanke a free pass to commit treason!

With taking away bank interest while the real inflation rate is around 7-8 percent, and hurting those who were compelled to invest by being FAR on the correct side of fair value in the pig stock market being bank interest was taken away, which by the way means short-selling, simply ruins the economy and society more. What reporters do not tell the public is the the PE ratio for the S&P500 tends to 6 to 8 in bad times, not 100% higher than this range, and the average PE ratio is closer to 13, not 15, as any mathematician worthy of being called such would know since 1990 the outliers are so numerous, the data must be discounted. And furthermore, what does an average PE ratio have to do with today that is NOT average?

The Fed or Congress should set up a fund to compensate all those who lost in the stock market due to the Federal Reserve UNLAWFUL MANIPULATION. To my surprise, some members of Congress want to further prop up house prices by coddling all the underwater homeowners who refused to abide by historical ratios of house price per income. We need lower house prices, not higher. Go see more of the overall plan on http://proposedsolutions.blogspot.com