Originally published by Seth Mason of ECOMINOES
Investors are once again throwing cheap, Fed-provided capital into real estate, promoting price increases and inflating a new housing bubble.
If the “recovery” in the housing market were legitimate–i.e. if it were a function of an expanding economy and consumers were driving the market–one would expect the number of mortgage applications to be increasing. An increasing number of mortgage applications would be a natural byproduct of more Americans are getting hired, earning more, and buying houses.
But, of course, this isn’t the case because this isn’t a recovery.In reality, the number of mortgage applications has been shrinking, both in real terms and in terms of year-over-year change:
But the shrinking number of mortgage applications hasn’t stopped investors from partying like it’s 2005:
The new housing bubble will either continue to expand and eventually burst a la 2008, or it will decompress like a whoopee cushion if the Fed “tapers off” the liquidity pumping too quickly.
The market wouldn’t be destined for one of these less-than-ideal outcomes if the “recovery” were based upon consumer demand instead of money created out of thin air and artificially-low interest rates.
It's FINALLY HERE!
Kevin Jackson's hilarious take on Race-Pimping: The Multi-Trillion Dollar Business of Liberalism!
Enjoy this excerpt from the book:
"Meanwhile, you are firmly in control. If (actually, when) you experience problems with poverty, crime, gangs, lack of urban development in cities where you have a black mayor, a black congressman, a black city manager, a black superintendent of schools, a black county treasurer, a black chief of police, a black fire chief, blacks on the county Board of Supervisors, blacks on the school board, etc., find ONE white man, preferably a Republican to blame for all those problems. If one doesn’t exist, don’t be afraid to refurbish one, even if you have to blame Republican Presidents George W. Bush, Ronald Reagan, Herbert Hoover, or T.R. Roosevelt."