Now that Housing Bubble #2 Is Bursting…How Low Will It Go?

Posted on February 26, 2019 by Charles Hugh Smith

There are two generalities that can be applied to all asset bubbles:

1. Bubbles inflate for longer and reach higher levels than most pre-bubble analysts expected
2. All bubbles burst, despite mantra-like claims that “this time it’s different”

The bubble burst tends to follow a symmetrical reversal of very similar time durations and magnitudes as the initial rise. If the bubble took four years to inflate and rose by X, the retrace tends to take about the same length of time and tends to retrace much or all of X.

If we look at the chart of the Case-Shiller Housing Index below, this symmetry is visible in Housing Bubble #1 which skyrocketed from 2003-2007 and burst from 2008-2012.

Housing Bubble #1 wasn’t allowed to fully retrace the bubble, as the Federal Reserve lowered interest rates to near-zero in 2009 and bought $1+ trillion in sketchy mortgage-backed securities (MBS), essentially turning America’s mortgage market into a branch of the central bank and federal agency guarantors of mortgages (Fannie and Freddie, VA, FHA).

These unprecedented measures stopped the bubble decline by instantly making millions of people who previously could not qualify for a privately originated mortgage qualified buyers. This vast expansion of the pool of buyers (expanded by a flood of buyers from China and other hot-money locales) drove sales and prices higher for six years (2012-2018).

As noted on the chart below, this suggests the bubble burst will likely run from 2019-2025, give or take a few quarters.

The question is: what’s the likely magnitude of the decline? Scenario 1 (blue line) is a symmetrical repeat of Housing Bubble #2: a retrace of the majority of the bubble’s rise but not 100%, which reverses off this somewhat higher base to start Housing Bubble #3.

Since the mainstream consensus denies the possibility that Housing Bubble #2 even exists (perish the thought that real estate prices could ever–gasp–drop), they most certainly deny the possibility that prices could retrace much of the gains since 2012.

More realistic analysts would probably agree that if the current slowdown (never say recession, it might cost you your job) gathers momentum, some decline in housing prices is possible. They would likely agree with Scenario 1 that any such decline would be modest and would simply set the stage for an even grander housing bubble #3.

But there is a good case for Scenario 2, in which price plummets below the 2012 lows and keeps on going, ultimately retracing the entire housing bubble gains from 2003.

Why is Scenario 2 not just possible but likely? There are no more “saves” in the Fed’s locker. Dropping interest rates to zero and buying another trillion in MBS won’t have the same positive effects they had in 2009-2018. Those policies have run their course.

The Rest of The Story Below:

Now that Housing Bubble #2 Is Bursting…How Low Will It Go?

Economic Collapse Confirmed! $244 Trillion Dollar Dark Debt As Half The World Lives On $5.50 A Day

Blocks Removed, The [DS] Is In A Panic, They Are About To Be Brought Down:Dave Janda

YouTube: Operation Freedom
https://www.youtube.com/channel/UCJ-q…

6,250 YEAR OLD BULL STILL GOING STRONG

February 22, 2019

by Egon von Greyerz

Is a total collapse of the financial system next or will we see the globalists taking control of the world? Either way, the world is now at one of the most critical crossroads ever in history. Shakespeare expressed it eloquently in Julius Caesar:

There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.

THE NOT SO BRIGHT FUTURE FOR THE WORLD

One of the brightest minds in finance, R.E. McMaster, has summarised the global situation as follows:
“The globalist New World Order could fall apart. First of all, all of the world’s governments today are socialist, a guarantee of failure.

Moreover, debt globally has reached a tipping point (by 2022 at the latest). (A root meaning of the word “debt” is “death”.)

Social Credit Red China could implode from all its excessive reckless debt and imperialistic over-extension.
The un-elected elitist EU is already coming part with Italy, France, the UK, Poland and Hungary in revolt.
The US Empire is self-destructing from military overstretch, bloated debt at all levels, and spoiled, childlike, take-offense-at-everything selfishness by identity groups and welfare recipients squabbling over the loot taken from productive citizens by the government, while billionaire oligarchic-run corporations pick them apart.
Plus, nearly all governments are equally destructive cultural Marxist.

Then there is the instability of the earth’s magnetic poles, its fast weakening magnetic field, the increasing numbers and intensity of volcanic eruptions and earthquakes, plus solar instability, not to mention expensive and increasingly scarce energy.

The risk of an internet shutdown.

The risk of a population-exterminating epidemic (likely a virus, man-made), and the risk of a destructive global nuclear war.

Mankind today, at least the mad narcissistic sociopathic and psychopathic Luciferian rulers, seem to have a comprehensive death wish. …”

It is hard to argue against many of these projections. R.E. McMaster is a moderate person with an immaculate 50 year track record.

It is possible that the elite is working hard on their globalist agenda to assume control of the world. If they achieve what they have set out, life on earth will be extremely unpleasant to say the least. Also, there will be nowhere to escape.

A DISORDERLY RESET NEXT

But even the best plans can go badly wrong. The most likely spanner in the works for the elite will be a total collapse of the financial system. This would involve first a final round of money printing creating hyperinflation in most Western countries as well as in emerging markets. But this will have no effect as the world discovers that worthless pieces of paper or computer entries cannot create eternal prosperity.

After a brief hyperinflationary phase, we will see an implosion of the financial system when global debt and liabilities of at least $2 quadrillion currently, disappears into a black hole. As the debt implodes, so will all the bubble assets financed by the debt, including stocks, property and bonds.

So the world is not in the position to take the flood that leads to fortune. Sadly whatever current the world takes will lead to miseries. We are now in a LOSE – LOSE situation and it will be a question of the least painful outcome.

Since the world cannot choose which way to go, we must look at the most likely option. Personally I believe that a collapse of the financial system and the world economy is more likely than globalist control of the world. You could argue that the globalists will orchestrate the collapse and take advantage of the anarchy which will arise to take control. But I think that the coming disorderly reset of the world economy will be impossible to control by any individuals, state or military power.

A GLOBAL FIRE IS REQUIRED

So the coming years and decades will be horrific which ever path the world takes. A reset is totally necessary for the world to start the next growth phase. We need a global fire that burns the current system down to the ground. Only from that position can we get strong green shoots that will form the foundation for a healthy growth of the new world economy.

Michael Snyder recently wrote an article about life in Major Wester Cities called:

“Rats, Public Defecation And Open Drug Use:
Our Major Western Cities Are Becoming Uninhabitable Hellholes”
The advantage with the fire is that it will also destroy the decadence as well as the false values and false morals which have become rampant in the last few decades.

The suffering that we, our children and grandchildren will go through during this period of transition will be horrendous but sadly it will be necessary in order to give the world a chance to eventually take the right current.

The Rest of The Story Below:

6,250 YEAR OLD BULL STILL GOING STRONG

We Can Save This Country!

We Can Save This Country!

We are living through one of the most pivotal times in American history

Jon Bowne | Infowars.com – February 18, 2019

Denying that a criminal Deep State ruling class actually controls a majority of the power in our government is the only thing holding back a true reset.

We can save this country, but we must make our voices heard or the ruling class will pivot into a tyrannical maelstrom from which it cannot pull itself out of.

Image Credits: Kim Davies | Flickr.

Denying that a criminal Deep State ruling class actually controls a majority of the power in our government is the only thing holding back a true reset.
We can save this country, but we must make our voices heard or the ruling class will pivot into a tyrannical maelstrom from which it cannot pull itself out of.

The Deep State operatives have made themselves vulnerable to justice, but how long before their handlers close the gap to protect themselves?

The Plan Run The [CB] Economy Into The Ground, Then Reset

Get economic collapse news throughout the day visit http://x22report.com
Report date: 02.14.2019

Two thirds of the American people declare bankruptcy because of medical bills. Obama's ACA was suppose to fix this, it did not.US retail is collapsing, it is a race against time, the [CB] economy is deteriorating at an accelerated rate, this is part of the plan, let the [CB] economy destroy itself. CA is in trouble, no money, the owe the Federal Government, Q tells us to watch CA. Tax receipts coming into the government is at an all time low, the debt is continually climbing and wages and jobs cannot keep up, the only way out of this is to let the [CB] economy implode.

All source links to the report can be found on the x22report.com site.

Denver housing prices drop

February 13, 2019, by Shaul Turner

New Colorado Realty Association statistics show the median sale price for a single family home in Denver is $425,000, that's down more than 1 percent and townhouse/condo prices are down 12 percent. Association spokesperson Kelly Moye tells FOX31 several factors contributed to the shift, “With the elections and the stock market and the subsequent government shutdown, it never picked up.”

Broomfield County is an exception along the front range, with a 4.3 percent increase in the median sales price.
Moye says there are also more homes on the market right now, putting buyers in the driver's seat, “Where there used to be one or two, they might now have ten or twenty to look at…take advantage and jump on it while you can.”
Moye advises those planning to sell a home with average amenities to list the property just under the most recent comparable price (listed no more than four months prior to placing the home on the market).

As of mid-February, properties remain on the market an average of 48 days. Your real estate agent can help tailor the best plan for selling or buying a home to your specific needs.

Central Bankers are Money Swindlers [Knowledge is Power]