Housing Bubble 2.0: U.S. Homeowners Made $2 Trillion On Their Houses In 2017

Americans who are lucky enough to own their own little slice of the ‘American Dream’ are about $2 trillion wealthier this year courtesy of Janet Yellen’s efforts to recreate all the same asset bubbles that Alan Greenspan first blew in the early 2000’s. After surging 6.5% in 2017, the highest pace in 4 years according to Zillow data, the total market value of homes in the United States reached a staggering all-time high of $31.8 trillion at the end of 2017…or roughly 1.5x the total GDP of the United States.
If you add the value of all the homes in the United States together, you get a sum that’s a lot to get your mind around: $31.8 trillion.
How big is that? It’s more than 1.5 times the Gross Domestic Product of the United States and approaching three times that of China.
Altogether, homes in the Los Angeles metro area are worth $2.7 trillion, more than the United Kingdom’s GDP. That’s before this luxury home on steroids hits the market.

This post was published at Zero Hedge on Fri, 12/29/2017 –.

The EU Bad Loan Crisis to Get Much Worse – The Solution = Financial Pandemic

The bad loan (‘non-performing loan’ (NPL)) crisis in Europe is well known and many have been calling for this issue to be addressed. In Italy, the bad loan crisis has reached 21% of GDP. While NPLs dropped to 4.8% of all loans in the EU as a whole during the first quarter of 2017, they remained well above 40% in Greece and Cyprus, at 18.5% in Portugal, and 14.8% in Italy according to the European Banking Authority.
Now comes the bureaucrats with zero experience to save the day – or is that to create a financial pandemic in the EU? The EU Commission (EUC) along with the European Central Bank (ECB), want to ensure that banks promptly sell real estate, stocks, bonds and other assets that serve to collateralize loans according to their Mid-term Review of the Capital Markets Union Action Plan. Member States are required to adopt laws that facilitate the central directive. At this time, any bank cannot just sell a property that secures a loan. The problem is, all loans, whether secured or not, are valued the same.

This post was published at Armstrong Economics on Dec 29, 2017.

The Wall Street Journal Does a Hit Piece on Trump’s Vacations

The Wall Street Journal is trying to match The Washington Post for anti-Trump investigative journalism.
Consider this article: President Trump Spent Nearly One-Third of First Year in Office at Trump-Owned Properties. It is a screed on Trump’s time spent vacationing.
It has a subhead: “Unlike his predecessors, president traveled frequently to places he owns but where others pay to stay.” That is because his predecessors did not own several billion dollars’ worth of prime vacation real estate.
Would you rather stay at a Motel 6 or Mir-a-Lago if someone else was picking up the tab? To ask the question is to answer it.
I, for one, applaud the time that he spends vacationing. Any time that a politician spends doing anything other than legislating is time well spent. When they are busy “making things better” by expanding the government, citizens are losers. They lose a little more of their liberty.
Earlier this year, The Washington Examiner reported this.

This post was published at Gary North on December 28, 2017.

NY Gov Rips Trump Tax Bill: “Let’s Pillage The Blue To Give To The Red”

It seems that Trump’s tax plan has officially turned New York Governor Andrew Cuomo into a “trickle down” economics guy.
Apparently unhappy that the new tax legislation will result in higher taxes for the “millionaire, billionaire, private jet owners” of his state who have mortgages over $750,000 and annual property taxes of over $10,000, Cuomo said that the White House’s efforts to “spread the wealth around” are nothing more than an effort to “pillage the blue to give to the red.”
“Look, there’s always politics in crafting of legislation. But, this was an egregious, obnoxious…what the Senate was saying is because we have no Senators from the ‘Blue States’ we don’t care. So let’s pillage the blue to give to the red.”
“That’s never been done in this nation before. That’s partisan politicking over any semblance of good government.”

This post was published at Zero Hedge on Thu, 12/28/2017 –.

How To Go Bankrupt: Slowly Then Suddenly

In Hemingway’s, ‘The Sun Also Rises,’ one of the characters, Bill, asks his friend, ‘Mike,’ how he went bankrupt. Mike replied, ‘I had a lot of friends. False friends. Then I had creditors…’ This passage from the novel comes to mind when I hear ads during the local sports radio programming from mortgage brokers urging listeners to use a cash-out refi or home equity loan to take care of credit card debt that piled up during the holidays. Beneath the surface is the message, ‘c’mon in, the water is fine, go ahead and take on even more debt.’
If in fact the retail sales turn out to be as strong as projected, it’s because the average household has tapped into its savings and used an unusually large amount of credit card debt to fund holiday spending this year:

This post was published at Investment Research Dynamics on December 28, 2017.