home prices
CNBC Tries Calling Out Peter Schiff Over Gold Price
Anyone remember those “Peter Schiff Was Right” YouTube.com videos that went viral right after the U.S. housing bubble popped and the global economic crisis really reared its ugly head in the fall of 2008?
Here’s probably the most popular one out there.
Well, I’m convinced a clip or more of Thursday’s installment of the CNBC show Futures Now, hosted by CNBC Reporter Jackie DeAngelis, will be included in a future “Peter Schiff Was Right About Gold” YouTube video. From an exchange between DeAngelis and the CEO and chief global strategist of Euro Pacific Capital:
SCHIFF: You’re talking about investors’ demand for gold going down. I would disagree. Because I own a gold company too, Euro Pacific Precious Metals. And we’ve never had more demand from our clients in the history of my company than we have now. I would say speculators, speculative demand, is what went down. I think a lot of people who came late to the gold rally were speculating in gold. They were simply buying it because the price was rising. They wanted to hop on that train. They use ETFs. They use futures markets. So I think the speculators have been flushed from the market in this pullback. But the investors- they’re still there. Because all of the reasons they’ve been buying gold for the past 10 or 12 years- those reasons have never been stronger. And so investor demand continues. We’ve flushed away the speculative demand. But I think the speculators will come back in the next rally.
DEANGELIS: Alright. Well, Peter, let’s step back for a second because you kind of jumped in there on the conversation we were having and I definitely appreciate your opinion on that. But I want to talk about the gold price that we’re looking at right now. $1,383.60. That is the price that we’re looking at at this point. We’ve had you on the show multiple times before, you said that gold was going to skyrocket, you say it’s going to be a bumpy ride and you can’t tell us exactly how we’re going to get there. But tell me today, Peter, why have you gotten it wrong?
(Editor’s note: Bold added for emphasis)
SCHIFF: I don’t think I have gotten it wrong. You just said I said it would be a bumpy ride. Look, it’s been bumpy, but I’ve been on this ride since gold was under $300 an ounce. It’s not like gold is down from that point. It’s off its highs. But I think what’s going on right now is you’ve got a false narrative out there that the U.S. economy is improving. It’s not. All the data points have been negative. A deluge of negative data came out today. The only evidence of a rebounding economy, is the stock market going up, or the real estate market going up. But that’s not because the economy is sound. That’s because of all the cheap money created by the Fed. That’s the same reason why stock and real estate prices were going up in 2006 or 2007. It is a bubble. The economy, meanwhile, is actually getting worse. And all this talk about the Fed getting ready to take away the punch bowl is all talk. They’re going to spike it even more. They’re going to up the size of QE. But people who are speculating of an early end are getting it wrong. Gold is going through a correction. All bull markets have a correction. It is a buying opportunity.
“Schiff: Gold a Generational Buy”
CNBC Video
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)
Robert Shiller: 10 Years From Now, ‘Home Prices Will Be About Where They Are Now, In Real Terms’
I can’t believe it’s been 8 months since I last blogged about Yale economist and housing expert Robert Shiller. Back on September 18, I wrote that Dr. Shiller, who was out there in the mid-2000s warning anyone who would listen about the housing bubble and subsequent crash, wasn’t sure residential real estate in the United States had bottomed-out just yet, noting there already had been 4 attempts at a housing recovery since the subprime crisis struck.
On April 30, Robert Shiller appeared on Yahoo! Finance’s business show The Daily Ticker. Speaking to host Henry Blodget, Dr. Shiller had this to say about where he thought home prices were heading:
BLODGET: And so you have studied home prices going back hundreds of years. You’ve watched the bubble form here. You called the top of that. You called the crash. What do you think will happen to house prices over the next 5 to 10 years?
SHILLER: Yeah, well I wrote several New York Times columns about this. I think it’s hard to say. It could go up. It could go down. You know, in the 20th century, typically, in a decade, real inflation-corrected home prices went up 15 percent or down 15 percent. Usually not because of any bubble or anything like that. It’s just supply and demand, right? The existing home stock might be in the wrong location and the economy is moving somewhere else. So it loses value. Or, then it might be some new interest in owning a home. These things are hard to predict.But my guess that is, 10 years from now, home prices will be about where they are now, in real terms.
Dr. Shiller also had this nugget for real estate investors:
So it looks like there’s a tilt toward rentals. What that suggests to me that if you want to invest in housing, you want to look toward housing that is suitable for conversion to rental.
You can watch the entire interview on the Yahoo! Finance site here.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
Redfin CEO Identifies Most- And Least-Vulnerable Metro Housing Markets To Experience Another Bubble
Last week in my Sunday paper, I spotted yet another great article by Chicago Tribune real estate reporter Mary Umberger. It was an interview with Glenn Kelman, chief executive officer of Redfin, a real estate brokerage doing business in 20 U.S. housing markets.
Apparently, Redfin recently ranked 15 major metropolitan areas it perceived as most- and least-vulnerable to experiencing another housing bubble. Kelman told Umberger:
We’ve looked at several factors: income to home-price ratios, ratios of sale price to listing price, the frequency of flips (resales within 18 months of purchase), incidences of bidding wars, and rates of going under contract within two weeks of listing.
From looking at those things, we think there are four markets that are in mini-bubble territory, at risk of price correction: Washington, Los Angeles, San Diego and San Francisco.
At the other end of the list, the least likely to see a correction is Atlanta, followed closely by Chicago, Las Vegas and Dallas.
A new housing bubble. Something I’m starting to hear more of these days.
Anyone remember “crash prophet” Peter Schiff’s warning from last September? I blogged on September 18, 2012:
In his September 14 entry on the The Schiff Report YouTube video blog, Schiff, who correctly-predicted the bursting of the U.S. housing bubble and 2008 global economic crisis, explained to viewers what QE3 was really about:
This is the plan that Ben Bernanke has. Ben Bernanke’s plan to revive the U.S. economy, and create jobs, is to inflate another housing bubble. That’s it. That’s what the Fed’s got. That’s what it came up with. As if the last housing bubble worked out so well for the economy, that the Fed wants an encore.
You can read Umberger’s entire exchange with Redfin’s Kelman on the Tribune website here. Interesting stuff.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
S&P/Case-Shiller: Chicago-Area Home Prices Fall For Sixth Straight Month
Good news on the housing front this morning. At least outside of the Chicago metropolitan area. Leah Schnurr reported on the Reuters website:
Single-family home prices rose more than expected in February, posting their best annual rise since May 2006 in a fresh sign the housing recovery remains on track, a closely watched survey showed on Tuesday.
The S&P/Case Shiller composite index of 20 metropolitan areas gained 1.2 percent on a seasonally adjusted basis compared to January, topping forecasts for 0.9 percent.
Chicago-area home prices are still stuck in a recent downward trend however. From Crain’s Chicago Business ChicagoRealEstateDaily.com this morning:
Chicago-area home prices dipped again in February, the sixth straight monthly fall for a closely watched index.
Single-family home prices fell 0.8 percent locally in February compared with January, according to the S&P/Case-Shiller indices released today.
At the same time, Chicago-area home prices are still up 5.1 percent compared with February 2012.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
Sources:
“Chicago home prices fall for 6th straight month.” ChicagoRealEstateDaily.com. 30 Apr. 2013. (http://www.chicagorealestatedaily.com/article/20130430/CRED0701/130439996/chicago-home-prices-fall-for-6th-straight-month). 30 Apr. 2013.
Schnurr, Leah. “February home prices see best yearly rise in almost seven years: S&P.” Reuters. 30 Apr. 2013. (http://www.reuters.com/article/2013/04/30/us-usa-economy-homes-index-idUSBRE93T0LZ20130430). 30 Apr. 2013.
Jim Rogers: ‘This Is Artificial Floating Of Assets And It’s Going To End Badly’
Lots of Americans these days probably think higher stock and home prices reflect the economic reality of the times.
A strong economic recovery in America?
Try fiat currency printing presses around the world working overtime.
The famous investor Jim Rogers sat down with CNN International’s Nina Dos Santos, host of World Business Today, last Friday. From their exchange:
ROGERS: It’s the first time in world history, recorded history, when all major central banks at the same time are printing a lot of money. The Japanese in December said “we will print unlimited amounts of money.” So the Americans said “we can do that!”
DOS SANTOS: You don’t agree with that strategy?
ROGERS: No, of course not. Debasing your currency sometimes works in the short-term. It has never worked in the long-term. And it doesn’t ever usually work in the medium-term. Debasing your currency- lots of politicians like to do it because it’s an easy way. But then the Americans said “we’ll print money.” And then the English said “well, we’ll print money.” And the Europeans of course. This is artificial floating of assets and it’s going to end badly.
“Rogers: Printing money is unsustainable”
CNN International Video
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)
Peter Schiff: Fed Creating Another Housing Bubble, ‘Day Of Reckoning’ Early In Obama’s Second Term
First it was “crash prophet” Jeremy Grantham warning:
Courtesy of the above Fed policy, all global assets are once again becoming overpriced.
Now, Peter Schiff is saying the same about housing.
And that America’s “day of reckoning” is right around the bend.
From a March 1 entry posted on The Schiff Report YouTube video blog:
The Fed influenced the housing market during the bubble predominantly by influencing the short end, making it easier for people to take out ARMs. Today, the Fed is influencing the housing market not predominantly by influencing adjustable rate mortgages, but by outright buying 30-year fixed-rate mortgages to drive mortgage interest rates down to record lows. But in both cases, it was the Fed’s interference that inflated the prices, inflated the bubbles, and there’s going to be a disastrous consequence when this bubble bursts. Although this bubble, is not going to be, I think, as large as the previous bubble. I think the consequences will be much bigger, as the Fed is not going to succeed in elevating home prices. But what they are succeeding at doing is transferring significant percentages of bad mortgages from the private sector to the Federal Reserve. In fact, the federal government has never been more involved in the housing market than it is today. Not only does the government insure over 90 percent of the mortgages, through the FHA, through Fannie, and Freddie. But now the government owns the mortgages. The Federal Reserve is financing them. The Federal Reserve is buying $45 billion worth of mortgages every month. So the government is the housing market…
Now President Obama, we’s got a bigger bubble going during his presidency, and he ain’t getting out of Dodge either. Only this time, I think, the bubble is going to burst not late in his second term, but early. And the difference is going to be- there are no more bailouts. This is the last bubble. This is the biggest bubble. In my book, The Real Crash: America’s Coming Bankruptcy: How to Save Yourself and Your Country
, I call it the “government bubble.” That’s what we have. This is the final bubble, and there is no bailout. We’re finally going to have to deal with the consequences of our profligacy. And the problem is, because we’ve kicked the can down the road for so long, right? We’ve papered it over with so much inflation, that the problems have gotten that much worse, which means when we finally are forced to confront them. And again, we’re going to be forced to do it. We’re not going to do it on our own. We’re not going to voluntarily check into rehab. We’re going to have to be forced to do it, because we’ve hit rock bottom, and the world has done an intervention. This “day of reckoning” is coming. And it’s not because of the sequester. Everybody is making a big deal about how painful this sequester is supposed to be. Well this is nothing compared to what’s really going to happen when we really have to swallow the bitter tasting medicine to restore health to an economy that is virtually going to be on its deathbed as a result of all the bad medicine that has been forced-fed it over the years by the Federal Reserve, by Congress, to mask the symptoms while the underlying disease gets that much worse.
“Bernanke Almost Comes Clean On ‘Exit’ Strategy”
YouTube Video
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)
Peter Schiff: ‘Gold Bears Are Making Much Ado About Nothing’
There’s been quite a bit of talk these past couple of years about the Federal Reserve tightening monetary policy due to an economic recovery finally arriving that I’m going to have to agree with “crash prophet” and Euro Pacific Capital CEO/Chief Global Strategist Peter Schiff on this.
The Fed is bluffing.
Unless Fed officials are now starting to worry that growing their balance sheet is not in their best interest anymore.
Schiff, who correctly-called the 2008 global economic crisis, wrote in the March issue of his Gold Letter that was published Friday:
Testifying before the US Senate this past Tuesday, Fed Chairman Ben Bernanke made an extraordinary claim about its bloated balance sheet: “We could exit without ever selling by letting it run off.” What Bernanke means here is that the Fed could simply hold its Treasuries and agency bonds until they mature, at which point the government would then be forced to pay the Fed back the principal amount. Through this process, the Fed’s unprecedented and inflationary position will be gradually and placidly unwound.
Growing rumors last month of a potential “tightening” of monetary policy – seemingly confirmed by the Fed minutes released on Feb. 20th – have spooked the precious metals markets, leading to a 5.8% correction in gold and 10.2% in silver.
However, these fears are preposterous on two counts…
You can read the entire article (“The Fed’s Tightening Pipe Dream”) on the Euro Pacific Precious Metals website here.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)
S&P/Case-Shiller Home Price Indices Show Annual Gains For Composites, Chicago Metro Area
Data through December 2012, released Tuesday by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, reveals not only did all three headline composites end the year with gains, but the Chicago metro area did as well. From a related press release:
Home Prices Closed Out a Strong 2012 According to the S&P/Case-Shiller Home Price Indices
New York, February 26, 2013- Data through December 2012, released today by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed that all three headline composites ended the year with strong gains. The national composite posted an increase of 7.3% for 2012. The 10- and 20-City Composites reported annual returns of 5.9% and 6.8% in 2012. Month-over-month, both the 10- and 20-City Composites moved into positive territory with gains of 0.2%; more than reversing last month’s losses.
In addition to the three composites, nineteen of the 20 MSAs posted positive year-over-year growth- only New York fell.
The press release went into more detail about the recent performance of Metropolitan Statistical Areas:
In December 2012, nine MSAs and both Composites posted positive monthly gains, led by Las Vegas with an increase of 1.8%.
Eleven cities declined with Chicago posting the largest negative monthly return of 0.7%.
(Editor’s note: Italics added for emphasis)
This decline follows another one from October to November, in which the Chicago MSA lost 1.3 percent.
According to the S&P/Case-Shiller data, home prices in the Chicago metropolitan area did gain 2.2 percent from 12 months earlier.
You can read the entire press release/obtain data from the S&P Dow Jones Indices site here.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
Chicago 4th On Latest Forbes ‘America’s Most Miserable Cities’ List
I really hate this time of year in Chicago. Yeah, the cold, wintry days here in the concrete jungle have a lot to do with it. But it’s also that part of the year when Forbes releases their “America’s Most Miserable Cities” list. And the recent trend has seen Chicago moving higher- i.e., more miserable- up that list. Forbes just released their latest installment.
And the trend remains intact.
Chicago climbs to number 4 on the 2013 list of “America’s Most Miserable Cities,” up from 6th last year and 7th in 2011.
From the Forbes website:
Chicago has passionate supporters, but residents must endure the misery of long commutes, plummeting home prices, brutal winters and high foreclosure rates. The migration rate out of Chicago is the sixth worst among the 200 largest metros.
Kurt Badenhausen added in the accompanying article:
Two cities on our list, Chicago (No. 4) and New York (No. 10) may surprise readers, though they’ve been here before. Both offer a myriad of opportunities and positives as the homes of financial centers, world-class culture, leading universities, sports teams galore and high-end restaurants. But it isn’t easy living in either city, particularly if you don’t earn a lot of money (even if you do it can be tough).
Chicago residents must endure long commutes (31 minutes on average), plummeting home prices (37% the past five years), brutal winters and high foreclosure rates (3.3% of homes in 2012 says RealtyTrac). Many residents are giving up on the Windy City with a net migration out of the city of 107,000 people the past five years, according to Moody’s Analytics.
Regrettably, another Illinois city- Rockford- accompanies Chicago in the “top 5,” which includes:
5. Modesto, CA
4. Chicago, IL
3. Rockford, IL
2. Flint, MI
1. Detroit, MI
To make matters worse, the county north of Cook- Lake County- was named to the number 9 spot this year.
Illinois residents couldn’t be more proud, I’m sure.
You can see the entire 2013 list of America’s “Most Miserable Cities” here.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
More Chicago-Area Homes Underwater Last Quarter
Back when I was running “The Most Hated Blog On Wall Street” I used to talk with increasing regularity about the “underwater people”- Americans who owed more on their mortgages than their homes were worth. According to online home and real estate marketplace Zillow, their ranks are now thinning out. At least in certain parts of the country. Cory Hopkins reported on the Zillow Blog yesterday:
Almost 2 million American homeowners were freed from negative equity in 2012, and the overall percentage of all homeowners with a mortgage in negative equity fell to 27.5 percent at the end of the fourth quarter, according to Zillow’s fourth quarter Negative Equity Report.
The falling negative equity rate is good news for struggling homeowners and is largely attributable to a 5.9 percent bump in home values nationwide last year to a median Zillow Home Value Index of $157,400 (when home values rise, negative equity falls). At the end of 2011, 31.1 percent of homeowners with a mortgage were underwater, or more than 15.7 million people…
Still, despite more than 1.9 million homeowners nationwide finding their way back above water last year, 13.8 million American homeowners are still struggling with negative equity.
Here in the Chicagoland region, there’s still plenty of “underwater people” around. Francine Knowles reported on the Chicago Sun-Times website early this morning:
Nearly 37 percent of homeowners with mortgages in the Chicago area had negative equity in the fourth quarter of 2012, edging up from the third quarter, according to a new report that forecasts conditions will be worse by the end of the year… That was up from 36.6 percent in the third quarter, but down from 39.2 percent in the fourth quarter of 2011.
The Seattle, Washington-based company predicts falling home prices for the “Windy City.” Knowles added:
Zillow expects the percent of homes with negative equity will rise to 37.3 by the end of this year.
“Our forecast shows that Chicago’s negative equity rate is expected to rise because home values are expected to decrease by 0.6 percent” in the metropolitan area in December 2013, Zillow senior economist Svenja Gudell said in an email.
(Editor’s note: Italics added for emphasis)
I’ve been reading/hearing about a Chicago-area housing market recovery in the local media outlets with more frequency these days. Sure, sales are up. But prices have been going down. Plus there’s a whole bunch of foreclosures in the pipeline.
A recovery? I’ll believe it when I see it. And let you know when that happens.
UPDATE: This afternoon the Chicago media is running stories about a February 21 Illinois Association of REALTORS press release which might be interpreted as showing the Chicago-area housing market is experiencing a solid recovery. The problem is, January 2013 home sales and median prices are being compared to just one month (“year-over-year”)- January 2012. Instead, consider what the REALTORS wrote on January 22 about the nine-county Chicago Primary Metropolitan Statistical Area (PMSA) over 12 months (January through December 2012):
Year-end 2012 home sales totaled 90,365, up 26.7 percent from 71,315 homes sold in the region in 2011… The year-end 2012 median price reached $160,000, down -1.5 percent from $162,500 in 2011.
(Editor’s note: Italics added for emphasis)
Like I said before: Sales up. Prices down.
Analyze year-end totals for home sales and median prices, and a clearer picture emerges of how healthy the Chicago-area housing market really is.
Or isn’t.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
Sources:
Hopkins, Cory. “2 Million Homeowners Freed From Negative Equity in 2012; 1 Million More to Come in 2013.” Zillow Blog. 20 Feb. 2013. (http://www.zillowblog.com/2013-02-20/2-million-homeowners-freed-from-negative-equity-in-2012-1-million-more-to-come-in-2013/). 21 Feb 2013.
Knowles, Francine. “More Chicago homes underwater in last 3 months of 2012.” Chicago Sun-Times. 21 Feb. 2013. (http://www.suntimes.com/business/18361768-420/more-chicago-homes-underwater-in-last-3-months-of-2012.html). 21 Feb. 2013.
“Home sales, median prices increase in January; housing gains extend into new year.” Illinois Association of REALTORS. 21 Feb. 2013. (http://www.illinoisrealtor.org/node/3203). 21 Feb. 2013.
“Illinois sees home sales increase in December; 2012 notches 22.9 percent sales gain over 2011.” Illinois Association of REALTORS. 22 Jan. 2013. (http://www.illinoisrealtor.org/node/3182). 21 Feb. 2013.
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