WSJ: Home Ownership at 15 Year Low

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Editor’s Comment:

If you read what the realtors are putting out these days you would have the impression that the housing Market is at bottom, that this is the time to buy (all realtors say that all the time) and that the Market has nowhere to go but up. Reality Check: that is exactly what they said in 2011, 2010, 2009, etc. Meanwhile the Market keeps going down because the median income (the ability to pay for housing) of the average person is going down each month. Case/Schiller have proven in an analysis and chart that goes back to the 1880’s that home prices and median income are inextricably linked.

The banks also want you to think the Market has hit bottom and they are journalists and other shills to say so. The faster they get rid of the real estate the less likely they think it will be that the old homeowner will come back and reclaim the property.

But the Wall Street Journal reports that home ownership is at a 15 year low while assets and income at the banks are at an all-time high. 1998 was the last year we saw so few people owning their own home. Take a look at the purported balance sheets of banks then and now. You will understand the figures — the degree to which the banks siphoned money out of the economy. Remember the only reason we let Wall Street exist is that it is supposedly the capitalist engine providing liquidity to consumers and small business owners alike who buy the things that are made.

Before we developed amnesia about why Wall Street exists and it’s job, the financial sector contributed 16% of this nation’s Gross Domestic Product. Now it is up near 50% which means we are reporting revenues and profits based upon derivatives whose value is derived from other derivatives and after a while you finally get to a real transaction where somebody made something and somebody bought something.

This is unsustainable and more reminiscent of the total lack of understanding that French aristocracy demonstrated when starving people from the streets chopped their heads off with the collusion of the merging merchant class. The control of our society by the banks will stop because it is impossible to sustain. What is surprising is that the lopsided figures in our economy don’t produce more outcries and predictions of disaster which undoubtedly will come to pass unless the bankers are put back in their place at 16% of GDP. That means someone in power needs to trim back the TBTF banks by 2/3. It’s a tall order, but somebody needs to do it.

 It is not as hard as it seems. Most of the assets reported on the balance sheets of the TBTF banks are fake anyway.

15 Responses

  1. I hadn’t read this old thing but it rings true. On the other hand, since all that massive wealth has been accumulated on our backs, we, taxpayers, shouldn’t have much to fear: there was no redistribution when those guys were obscenely rich and there won’t be once they lose it all.

    Is it going to impact us? Probably to the extent that that will lead to massive lay-offs but small entrepreneurs will survive by focusing on their community. I’m not particularly worried…

    Tags: Faber | massive | wealth | destruction Faber: ‘Massive Wealth Destruction’ Coming, Well-to-Do ‘May Lose 50%’
    Tuesday, 27 Mar 2012 01:12 PM

    By Newsmax Wires

    The critical question over the next decade isn’t “where will my returns be highest?” but “where will I lose the least money?”

    That, according to economist and investor Marc Faber, is the scenario facing investors today.

    As the author of the Gloom, Boom, and Doom Report, Marc Faber is a well-known contrarian, earning celebrity status because of his ominous predictions.

    So his pessimism during a recent appearance on CNBC wasn’t surprising for a man whose nickname is “Doctor Doom.” What was surprising was the level of “wealth destruction” he sees in the not-too-distant future.

    Faber stated, “I think somewhere down the line we will have a massive wealth destruction. That usually happens either through very high inflation or through social unrest or through war or credit-market collapse.”

    “I would say that well-to-do people may lose up to 50 percent of their total wealth.”

    Faber points out that this bleak outlook for the United States has been caused by Federal Reserve Chairman Ben Bernanke and the Federal Reserve’s continuous printing of new money.

    He says that the bailout and money printing will not create any long-lasting wealth or create healthy growth, and that the collapse will come on Bernanke’s watch.

    While Faber’s prognostications are worrisome (especially for those who fall into the “well-to-do” category), they are hardly as alarming as the scenario laid out by another economist.

    Without appearing on CNBC, earning celebrity status, or being known by a scary nickname, Robert Wiedemer did what Marc Faber couldn’t: He accurately predicted the economic collapse that almost sunk the United States.

    In 2006, Wiedemer and a team of economists foresaw the coming collapse of the U.S. housing market, equity markets, private debt, and consumer spending, and published their findings in the book America’s Bubble Economy.

    But Wiedemer’s outlook for the U.S. economy today makes “Doctor Doom” sound like Mr. Rogers.

    Where Faber sees a 50 percent loss of wealth for some, Wiedemer sees much more widespread economic destruction.

    In a recent interview for his newest book Aftershock, Wiedemer says, “The data is clear, 50% unemployment, a 90% stock market drop, and 100% annual inflation . . . starting in 2012.”

    Editor’s Note: See the disturbing interview with Wiedemer.

    When the host questioned such wild claims, Wiedemer unapologetically displayed shocking charts backing up his allegations, and then ended his argument with, “You see, the medicine will become the poison.”

    The interview has become a wake-up call for those unprepared (or unwilling) to acknowledge an ugly truth: The country’s financial “rescue” devised in Washington has failed miserably.

    The blame lies squarely on those whose job it was to avoid the exact situation we find ourselves in, including Bernanke and former Federal Reserve Chairman Alan Greenspan, tasked with preventing financial meltdowns and keeping the nation’s economy strong through monetary and credit policies.

    At one point, Wiedemer even calls out Bernanke, saying that his “money from heaven will be the path to hell.”

    Shocking Footage: See the eerie chart that exposes the ‘unthinkable.’
    But it’s not just the grim predictions that are causing the sensation; rather, it’s the comprehensive blueprint for economic survival that’s really commanding global attention.

    The interview offers realistic, step-by-step solutions that the average hard-working American can easily follow.

    The overwhelming amount of feedback to publicize the interview, initially screened for a private audience, came with consequences as various online networks repeatedly shut it down and affiliates refused to house the content.

    Bernanke and Greenspan were not about to support Wiedemer publicly, nor were the mainstream media.

    “People were sitting up and taking notice, and they begged us to make the interview public so they could easily share it,” said Newsmax Financial Publisher Aaron DeHoog, “but unfortunately, it kept getting pulled.”

    “Our real concern,” DeHoog added, “is what if only half of Faber and Wiedemer’s predictions come true?

    That’s a scary thought for sure. But we want the average American to be prepared, and that is why we will continue to push this video to as many outlets as we can. We want the word to spread.”

    Read more: Faber: ‘Massive Wealth Destruction’ Coming, Well-to-Do ‘May Lose 50%’

  2. I find the majority of people like to duck their head into the sand, when they see conflict and politics. I have never understood that mind set. However I see it every day here with my clients. This is why it is so easy for the banksters and government to get away with the crimes and lead them like sheep to the slaughter. To many dont want the hassle or to make a stand, some dont believe a stand will succeed and to give up the keys is the easiest route out. It is actually the hardest way out. They are on the streets and without jobs and incomes. Being lead down a very dangerous difficult path and dont even know it. Like some drunks they are going to have to hit bottom and I mean bottom dragging the rest of the few people trying to fight for our rights with them, until they say enough is enough and they have any choice but to make a stand. When it could have been easier on the rest of us if they had opened their eyes sooner. The main stream media could have helped open their eyes and has chosen not to. This all makes for happy bought politicians and banksters, cause this mind set enables the crimes to victimize us as much if not giving more power to the crooks to cause more harm than the judicial system and the bought politicians and banksters. The people are bigger than the banks. Remember the Ant cartoon. This is so real to life. The ants allowed the bullies to bully them and to enslave them for all their labor and pile their crops up in heaps for the bullies to eat. When the ants learned they had power in numbers the bullies were forced out of town and the ants lived happy lives ever after. People are like those ants in the “Ants” story or what ever it was. The government puts out the propaganda, however I know a lot of people waking up, and telling me they dont believe this propaganda that the economy is improving and the bottom of the housing crisis has been reached. People are telling me they dont believe it at all. That it is much worse than most people think. This is coming from a lot of my spa customers. The government propaganda is only working on a few now and not the majority. To many people are hurting and feeling the pain from the crimes now.

  3. Great case in the 4th District! It’s amazing how the decisions are all over the map



  5. […] Filed under: foreclosure Tagged: attorney workbook, Case/Schiller, derivatives, foreclosure, foreclosure defense, foreclosure offense, foreclosures, French aristocracy, Gross Domestic Product, home ownership, homeownership low, housing market, housing prices, Mortgage, TBTF, the reason Wall Street exists, Treatise & Practice Manuel Livinglies’s Weblog […]

  6. Completely off topic,

    Neil Garfield, stop harassing me!

    No, i do not want to suscribe and get an automatic e-mail anytime someone answers my off-the-wall posts. I want to keep checking the site whenever i feel like it. i want to be surprised to discover that 50 people blogged when I’m good and ready. I do not want you to bombard me day and night with alerts about new posts.

    I erased three of those “suscribe” things in the past hour. i will throw a major issy fit if you keep it up.

    I already know what happens to people when they suscribe: they become mean, nasty and they flip on one of us. Last time i checked, “NO” was a full sentence.

  7. @Toile,

    A little pain has never deterred any banker. See our pain? See how well they’re doing? Nah. Don’t make it pain free…

  8. I don’t advocate violence either. I believe a properly honed guillotine permanently mounted in place of the bronze Wall Street bull would prove the perfect solution to what ails the world, and would be 100% pain free. If a single victim complains I promise to halt immediately.

    Bets GDP would double in a month, housing would bottom out on day one, and E. Tolle would have a gurney faced grin from ear to ear and live happily ever after.

  9. Enraged- I am here and waiting to go where ever to do the paddling.
    Count me in. Problem is I believe some of the Banksters would actually like it.

  10. There is going to be a real problem with the Abeel v B of A lawsuit. To note:

    1. The firm was originally known as Mitchell Stein and Associates. This firm was one of the firms involved in the Mass Joinder lawsuit. Mass Joinder law suits have been found to be “questionable”.

    2. Stein’s license in CA is “not eligible to practice law”. He failed to respond to BAR complaints and the license action was taken by the BAR.

    3. I attended a meeting with a major law firm about doing a Mass Tort case regarding foreclosures. Over 600 different homeowners would have been in on the action. The attorneys familiar with Tort Law explained that there would be major problems with trying that action.

    Homeowners would need to be divided up and grouped into counties, and actions filed in the individual counties were the properties were located.

    “Steering Groups” would need to be established. The groups would determine how the proceeds would be divided among each homeowner.

    Division of the proceeds would be problematic due to the fact that different homeowners would suffer different damages, and would want different remedies if the lawsuit was won.

    4.The allegations will be difficult to prove.

    5. Stein cannot practice in CA, but claims he can practice in Federal Court. I do not know for sure, but I find that this may be “pushing the envelope”.

    It shall be interesting to see if individual homeowners who are a part of the action are putting money up front like was done in the Mass Joinder. If they are, you can almost bet that the BAR and AG’s will step in again.

  11. I don’t advocate violence but clearly, you’re right about where this is headed. I’m sure the banksters are shipping families overseas.

  12. Black & LoBello on AM720 KDWN | Black & LoBello
    discuss Abel v. BAC Home Loans Servicing LP et al, a current case in New York alleging that banks are laundering money overseas (2:15), problems with the stress tests for the major banks (12:40), tips for investment including real estate and offshore accounts (16:40), how to check house foreclosures…

  13. “What is surprising is that the lopsided figures in our economy don’t produce more outcries and predictions of disaster which undoubtedly will come to pass unless the bankers are put back in their place at 16% of GDP. That means someone in power needs to trim back the TBTF banks by 2/3. It’s a tall order, but somebody needs to do it.”

    Someone in power? Who might that be? Got someone in mind? Please pray tell!

    Toile and i can’t think of anyone. That’s why we’re working on the new, high tech guillotine: the blade comes down several times and stops short of the guy’s head to be lifted back up again and again, just to make it a memorable experience to remember. Scares the shit out of everyone who watches and gets tongues loose in no time! and I will soon be launching my high tech pillory. Guy’s head and hands still in the wooden plank holes but in the new one I’m working on, there is paddle that wacks his butt every 30 seconds, 24 hours a day. i hear it will be much more productive than waterboarding to track down where all that money went… And it is made of recycled wood from all those foreclosed house left abandoned by the banks. Radical, environmentally-concious clean up.

  14. Great commentary, Neil. This says it all:
    “But the Wall Street Journal reports that home ownership is at a 15 year low while assets and income at the banks are at an all-time high.” That’s the plan, Stan…

  15. See Abeel vs Bank of America. Spire law group is going after the TBTF Banks.

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