The data for California does not seem to support the FDIC's conclusion.
Data? Support conclusions? What's that? Don't you BELIEVE!!!!!
I'd almost say it looks like a conspiracy - like they all together are plotting to keep a lid on the thing... like it is driven by some central committee of propaganda...
The question is when does Karl Rove have time to sleep... making so many calls to agency press secretaries & media outlet spokesmen...
Seriously I don't think there is a conspiracy of directly & intentionally telling falsehoods spewing forth from some central propaganda ministry... they aren't that talented to pull it off... though they would try if they could.
Rather I think there is a collective mass fantasy... in both the public in general, our private institutions and the media... and it is widely & strongly held... and as such is worse than propaganda... even when 'we' are told 'the truth', we ignore it because it doesn't match our 'fantasy'...
Dropping GSEs and increasing mortgage holdings by sizeable amounts? Sounds like the guys at Fannie and Freddie learned some Special Purpose Entity tricks from the guys at Enron. Probably selling them to Bernanke ABS LLC.
you have the number dry fly. we live in fantasyland usa. even when everyone knows what is happening the propaganda keeps spewing. like we invaded iraq to fight terrorists. what happened to good ol bad boy saddam? yeah we are a bunch of dumb asses who dont have a clue so we need to be told different stories for the same thing and lap it up.
Oops! What is this ugly grey thing sticking out at the bottom of the job graph? I'd wager the "uptick" (did I hear "acceleration"?) in the SF bay area is largely pent-up demand from too much cutting earlier that cannot be held back anymore.
And income is not the only thing. There is still some good amount of money in the area. But probably not in the "median" segment.
There are always conspiracy aspects to it, both actively (top-down and connections-style meddling) and passively (who wants to be the bearer of bad news unless the case is waterproof and the timing known).
Rationalization and analysis are quite different things. The positive feedback aspects of speculative behavior are too obvious. What starts it? We've seen money moved from the stock markets do it. This time, interest rates played a big role. No doubt demand could trigger it. Could be a combination. But, when houses are selling for 3-4 times their rental value, demand is not the driving force. Currently, here in northern CA, housing is being seen as an investment with high returns provided by speculative buying based on high returns, thus constituting a positive feedback loop.
I think they've admitted that job growth in California is an exception. They tend not to stresx how big and important exception it is given it's size in the economy and the fact that in various ways (people selling houses and moving elesewhere, speculators priced out locally and looking at other states) that is also driving up prices elsewhere.
But this "housing is propped by jobs" is like the various explanations for stock prices. Why didn't we see the massive real estate value increases in the late nineties?
And I think you've pointed out that in a number of regions the job growth is heavily tied to the real estate expansion. Lots of jobs are created by it and lots of money is losed on the economy.
Just as one expects foreclosures to be down in a place where housing is surging (why lose everything including your credit record when you can make a bit of money by getting rid of the place at more than you paid?) one expects jobs to be up in a region with big sums of money coming into play. Sums of money that are in many cases big enough to make feel they are rich or soon will be rich, that encourage the most reckless sort of spending.
Home price appreciation routinely exceeds per capita personal income in constrained areas such as California. The only time it doesn't is after recessions such as the 90-91 when the aerospace and defense industries contracted severely. I am not sure there is any industry of significance that could impact California as much since not even the tech industry contraction did much more than reduce incomes. Rising rates could quash the housing industry and with it the economy, but the Fed will try to avoid this. Once an owner, appreciation greater than income growth is largely just inflation in a commodity but one that provides a good investment and a lot of wealth. Unless a lot more jobs are destroyed or a lot of people start leaving, it is difficult to see any end to it.
"Unless a lot more jobs are destroyed or a lot of people start leaving, it is difficult to see any end to it."
If you look at historical data California does have a greater curve than other states. However, every run-up has been accompanied by an adjustment. It just means that it's more volatile. You cannot suggest that a DOWN movement is related to the job market, but completely discount that the upward movement really had nothing to do with it. It simply does not work that way. And the fact of the matter is, the upward movement had nothing to do with it. Does that deduce that if not for layoffs, CA would be going straight up? I think that would be naive thinking.
For areas where housing prices are going up but job stats show little to no improvement, are the Feds making the same claims! If so then does some estimate of "under the table" work for the housing industry exist and are they using that to justify their claims?
bbh - Yes, California is more volatile although I suspect that it is diminishing over time as more concentrated industries are giving way to a more diversified environment.
Yes, this upward movement was not a product of job creation but was in part a recovery from the decline of the early 90s. This upward movement persists despite slower growth in incomes, in part because prices are set by sales which are less than 20% of the market. Most could not afford to purchase the home they are already in. In part it is adjusting to comparably inflated prices worldwide. Affordability has declined. Growth in income inequality, population, and wealth drawn to the area continues to increase price appreciation over income.
Will this boom come to an end? Undoubtably. Do booms end because psychology changes or does psychology change because booms end? Does psychology effect its own changes on its own timing or does it need external triggers? What magnitude of triggers might it take and what magnitude of adjustment will take place? What short of interest rates high enough to cause a recession could? Difficult questions all.
another interesting data set: USATODAY.com
take the city of san francisco, with a 4.2% population loss in the last 4 years, new housing (condos downtown) being added at a furious pace and dismal job growth, and somehow san francisco has lots of froth still with skyrocketing prices, coming in at 10 times median income for median home prices...makes you wonder who is buying all these homes and condos at these prices, and why
Here's an article from todays San Jose Mercury News which talks about San Jose becoming the 10th largest city in the U.S, taking that position away from Detroit.
However, most of that is due to Detriots decrease in population. San Joses population increased a little since 2000 as one can see from the accompanying graph in the paper edition which appears almost flat compared to the gains over the previous decades. Moreover those gains are due only to the housing industry! The job situation still remains poor. Another case of feedback from the housing bubble effecting job numbers and population growth.
Regionally this isn't the case. According to this
, in Silicon Valley housing is up but job growth is going nowhere.
The data for California does not seem to support the FDIC's conclusion.
Data? Support conclusions? What's that? Don't you BELIEVE!!!!!
I'd almost say it looks like a conspiracy - like they all together are plotting to keep a lid on the thing... like it is driven by some central committee of propaganda...
The question is when does Karl Rove have time to sleep... making so many calls to agency press secretaries & media outlet spokesmen...
Seriously I don't think there is a conspiracy of directly & intentionally telling falsehoods spewing forth from some central propaganda ministry... they aren't that talented to pull it off... though they would try if they could.
Rather I think there is a collective mass fantasy... in both the public in general, our private institutions and the media... and it is widely & strongly held... and as such is worse than propaganda... even when 'we' are told 'the truth', we ignore it because it doesn't match our 'fantasy'...
As far as I'm concerned it is a conspiracy. Could somebody explain table F.127 (Issurers of ABS), item 6 (mortgages) in the Z1 to me?
http://www.federalreserve.gov/releases/z1/Current/z1.pdf
Dropping GSEs and increasing mortgage holdings by sizeable amounts? Sounds like the guys at Fannie and Freddie learned some Special Purpose Entity tricks from the guys at Enron. Probably selling them to Bernanke ABS LLC.
you have the number dry fly. we live in fantasyland usa. even when everyone knows what is happening the propaganda keeps spewing. like we invaded iraq to fight terrorists. what happened to good ol bad boy saddam? yeah we are a bunch of dumb asses who dont have a clue so we need to be told different stories for the same thing and lap it up.
Oops! What is this ugly grey thing sticking out at the bottom of the job graph? I'd wager the "uptick" (did I hear "acceleration"?) in the SF bay area is largely pent-up demand from too much cutting earlier that cannot be held back anymore.
And income is not the only thing. There is still some good amount of money in the area. But probably not in the "median" segment.
There are always conspiracy aspects to it, both actively (top-down and connections-style meddling) and passively (who wants to be the bearer of bad news unless the case is waterproof and the timing known).
Are midterm elections that close for the propaganda to start now? What gives?
What they call "job growth" is mainly driven by the construction and financial services jobs.
Rationalization and analysis are quite different things. The positive feedback aspects of speculative behavior are too obvious. What starts it? We've seen money moved from the stock markets do it. This time, interest rates played a big role. No doubt demand could trigger it. Could be a combination. But, when houses are selling for 3-4 times their rental value, demand is not the driving force. Currently, here in northern CA, housing is being seen as an investment with high returns provided by speculative buying based on high returns, thus constituting a positive feedback loop.
Massachusetts housing prices have boomed but the state continues to lose residents.
According to the census estimates, Massachusetts was the only state in the country to lose population from July 2003 to July 2004.
I think they've admitted that job growth in California is an exception. They tend not to stresx how big and important exception it is given it's size in the economy and the fact that in various ways (people selling houses and moving elesewhere, speculators priced out locally and looking at other states) that is also driving up prices elsewhere.
But this "housing is propped by jobs" is like the various explanations for stock prices. Why didn't we see the massive real estate value increases in the late nineties?
And I think you've pointed out that in a number of regions the job growth is heavily tied to the real estate expansion. Lots of jobs are created by it and lots of money is losed on the economy.
Just as one expects foreclosures to be down in a place where housing is surging (why lose everything including your credit record when you can make a bit of money by getting rid of the place at more than you paid?) one expects jobs to be up in a region with big sums of money coming into play. Sums of money that are in many cases big enough to make feel they are rich or soon will be rich, that encourage the most reckless sort of spending.
Home price appreciation routinely exceeds per capita personal income in constrained areas such as California. The only time it doesn't is after recessions such as the 90-91 when the aerospace and defense industries contracted severely. I am not sure there is any industry of significance that could impact California as much since not even the tech industry contraction did much more than reduce incomes. Rising rates could quash the housing industry and with it the economy, but the Fed will try to avoid this. Once an owner, appreciation greater than income growth is largely just inflation in a commodity but one that provides a good investment and a lot of wealth. Unless a lot more jobs are destroyed or a lot of people start leaving, it is difficult to see any end to it.
"Unless a lot more jobs are destroyed or a lot of people start leaving, it is difficult to see any end to it."
If you look at historical data California does have a greater curve than other states. However, every run-up has been accompanied by an adjustment. It just means that it's more volatile. You cannot suggest that a DOWN movement is related to the job market, but completely discount that the upward movement really had nothing to do with it. It simply does not work that way. And the fact of the matter is, the upward movement had nothing to do with it. Does that deduce that if not for layoffs, CA would be going straight up? I think that would be naive thinking.
No one told us here in New Orleans where we have a RE bubble and a crappy local economy. But, hey, why let the facts get in the way of a good story?
For areas where housing prices are going up but job stats show little to no improvement, are the Feds making the same claims! If so then does some estimate of "under the table" work for the housing industry exist and are they using that to justify their claims?
Chris at DeLong's blog:
Crippling 'Wealth'
by Kurt Richebacher
PrudentBear.com
June 29, 2005
http://prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=44331
Excellent, General and Movie Guy!
Alexis,
I posted the article link over at the General late this evening. Thanks for the heads up.
bbh - Yes, California is more volatile although I suspect that it is diminishing over time as more concentrated industries are giving way to a more diversified environment.
Yes, this upward movement was not a product of job creation but was in part a recovery from the decline of the early 90s. This upward movement persists despite slower growth in incomes, in part because prices are set by sales which are less than 20% of the market. Most could not afford to purchase the home they are already in. In part it is adjusting to comparably inflated prices worldwide. Affordability has declined. Growth in income inequality, population, and wealth drawn to the area continues to increase price appreciation over income.
Will this boom come to an end? Undoubtably. Do booms end because psychology changes or does psychology change because booms end? Does psychology effect its own changes on its own timing or does it need external triggers? What magnitude of triggers might it take and what magnitude of adjustment will take place? What short of interest rates high enough to cause a recession could? Difficult questions all.
another interesting data set:
USATODAY.com
take the city of san francisco, with a 4.2% population loss in the last 4 years, new housing (condos downtown) being added at a furious pace and dismal job growth, and somehow san francisco has lots of froth still with skyrocketing prices, coming in at 10 times median income for median home prices...makes you wonder who is buying all these homes and condos at these prices, and why
Here's an article from todays San Jose Mercury News which talks about San Jose becoming the 10th largest city in the U.S, taking that position away from Detroit.
Valley leaders tout leap past Detroit as boon to region
However, most of that is due to Detriots decrease in population. San Joses population increased a little since 2000 as one can see from the accompanying graph in the paper edition which appears almost flat compared to the gains over the previous decades. Moreover those gains are due only to the housing industry! The job situation still remains poor. Another case of feedback from the housing bubble effecting job numbers and population growth.
o deposit code for free money casino no deposit code for free money casino no deposit code for free money casino. casino stockton california casino stockton california casino stockton california.