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Housing 2006 Redux——-Mortgage Fraud And Speculation Come Roaring Back

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http://davidstockmanscontracorner.com/8-2-hansonfull-blown-recovery-fraud-back-to-2006-highs/

Introduction:

To preface this report, I consider the subject matter and my findings, herein, to be as important to contemporary housing and residential credit forecasting, as my early work in 2005/2006 on Bubble 1.0.

These data go a long way in identifying the “missing energy / link” driving what I have coined a “demand-less house-price surge” and explaining what the recurring annual rate plunges to historical lows; institutional speculators tripping all over themselves for sub 3% cap-rates on single-family rental houses; boomerang buyers; boomers longing for “vacation” condos on beaches; and a deluge of foreign demand with H1B and EB5 visas can’t.

Bottom line: “Second / Vacation” home demand has surged more than any other housing segment over the past three years.The overwhelming market opinion is that aging, equity-market affluent baby-boomers are all rushing in at the same time to buy their dream “vacation” home. But, this is misguided, as the data, herein, reveal the truth; there is no indication true “2nd/vacation” home demand is surging at all.

In fact, the data fully supports my thesis that this housing market is spun out of control from rampant speculation, process incompetence, relationship-driven dissonance, and outright fraud, or an exact repeat of 2005 to 2007.

Fraud in lending – occurs late-mid to late cycle when demand is stalling and can’t get a boost organically or fundamentally – is simply another form of stimulus and “transitory” by nature. It’s not durable. In fact, just like stimulus, pervasive fraud leads to a slingshot effect when the drivers suddenly turn counter-cyclical on some sort of catalyst.

Excessive speculation and fraud are driving house demand and certainly prices. “Vacation”, “second”, and “investment” properties are all part of the same speculative “trade”, but by different parties. And just like in 2006, the distinction between the property types has become de minimis. As prices continue to increase past the ability for the incremental buyer to afford, either leverage-in-finance or fraud, must fill in the buyer qualification/house price divergence.

.............

More at the link.

One for Eric.

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They talk about learning from history, but it seems our world leaders can't remember what happened last week or a few short years ago, let alone the crashes of the 30s or 80s. Always thought it was weird that Gordon Brown seemed to have forgotten about the late 80s/early 90s crash come the early 00's - fecking gold fish brains!

Edited by mikthe20

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They talk about learning from history, but it seems our world leaders can't remember what happened last week or a few short years ago, let alone the crashes of the 30s or 80s. Always thought it was weird that Gordon Brown seemed to have forgotten about the late 80s/early 90s crash come the early 00's - fecking gold fish brains!

given their education and number of advisors I find that hard to believe.

the alternative would be that they do these things deliberately.

take your pick.

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:rolleyes::rolleyes::(:wacko:

I've been coming to hpc since 2004 - in fact even earlier than that --- and I just cannot believe that NOTHING has changed, NO LESSONS have been learned...... I am beyond despair now. I have absolutely NO respect for ANY of the F*CKERS who are meant to be running and supervising this country. The Banksters have taken over. We have been completely screwed. I am completely exhausted and resigned to it all now.

More than anything -- I despair of younger generations who don't do something REALLY radical --- lie down in the streets of London - bring it all to a stop.... Don't damage ANYTHING. Just lie there in your hundreds of thousands and REFUSE to move UNLESS and UNTIL the Banksters and their cohorts are jailed. DO NOT BACK DOWN. Just INSIST that things change NOW. End of. Use your Facebook and all the other stuff to bring this change NOW. DEMAND IT NOW.

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