Why Housing Is Dead: First-Time Buyers Collapse To 27-Year Lows

Submitted by Tyler Durden on 11/03/2014

The Millennials (one of the biggest generations in US history) are just not getting with the status quo program. As we detailed previously, with lower credit scores, less disposable income, and a soaring number of people living with their parents; so it should be no surprise that The National Association of Realtors (NAR) today admitted that first-time homebuyers plunged to the lowest level in 27 years. The blame – of course – rather than low/no-growth fiscal policies, student debt servitude, and inequality-driving cheap-funding monetary policy, is price competition from ‘investors’ and too “stringent credit standards,” perfectly mirroring FHFA’s Mel Watt’s Einsteinian insanity desire to dramatically ease lending standards and slash minimum down-payments (as we noted previously). Perhaps NAR accidentally stumbles on the biggest reason no one is buying in their profiling: the typical first-time buyer was 31-years-old, while the typical repeat buyer was 53 – smack in the middle of the Millennial collapse.

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Here is the size of the Millennial generation in context:

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The Rest Of The Story Here

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Most People Cannot Even Imagine That An Economic Collapse Is Coming

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The idea that the United States is on the brink of a horrifying economic crash is absolutely inconceivable to most Americans. After all, the economy has been relatively stable for quite a few years and the stock market continues to surge to new heights. On Friday, the Dow and the S&P 500 both closed at brand new all-time record highs. For the year, the S&P 500 is now up 9 percent and the Nasdaq is now up close to 11 percent. And American consumers are getting ready to spend more than 600 billion dollars this Christmas season. That is an amount of money that is larger than the entire economy of Sweden. So how in the world can anyone be talking about economic collapse? Yes, many will concede, we had a few bumps in the road back in 2008 but things have pretty much gotten back to normal since then. Why be concerned about economic collapse when there is so much stability all around us?

Unfortunately, this brief period of stability that we have been enjoying is just an illusion.

The fundamental problems that caused the financial crisis of 2008 have not been fixed. In fact, most of our long-term economic problems have gotten even worse.

But most Americans have such short attention spans these days. In a world where we are accustomed to getting everything instantly, news cycles only last for 48 hours and 2008 might as well be an eternity ago.

In the United States today, our entire economic system is based on debt.

Without debt, very little economic activity happens. We need mortgages to buy our homes, we need auto loans to buy our vehicles and we need our credit cards to do our shopping during the holiday season.

So where does all of that debt come from?

It comes from the banks.

In particular, the “too big to fail banks” are the heart of this debt-based system.

Do you have a mortgage, an auto loan or a credit card from one of these “too big to fail” institutions? A very large percentage of the people that will read this article do.

And a lot of people might not like to hear this, but without those banks we essentially do not have an economy.

The Rest Of The Story Here

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GAME OVER: TOTAL COLLAPSE IS IMMINENT

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Can you pick yourself out of the photo?

America, while you slept, your country was stolen from you. Your country was absconded by all the political misfits and corporate criminals that the disenfranchised former Republicans and Democrats have been trying to warn you about during the last several years.

How Did We Get Here?

Laws, originating out of New Deal legislation, written in response to the Great Depression, provided some measure of protection for the American financial system from the unsavory forces which led to its initial demise in 1929. In 2008, corporate greed, governmental sheep-think-300x240corruption and a populace who was asleep at the wheel, has succeeded in achieving what historians will someday label the “Greatest Depression of 2013-2014.” History will also show that the destruction of the late, great American economy was entirely self-inflicted.

Why the US Economy Is Irreversibly Damaged

If Americans knew their history, then we would be cognizant of the fact that one of the prime causes of the Great Depression was due to stock investors buying shares on margin (i.e., loans). Glass Steagall Act protected Americans from this shady practice by separating commercial banking from this investment practice of stockbrokers. However, with one stroke of his New World Order pen, Bill Clinton’s repeal of the Glass-Steagall Act opened the flood gates for the domestic AND foreign infusion of bad credit into both our stock market and banking system. Consequently, both industries stand in the midst of a total and complete economic collapse n what is quickly becoming known as the most massive wealth transfer in world history.

On September 30, 1999 , Fannie Mae and Freddie Mac sought governmental permission to “relax” (i.e., break) the prudent governmental regulations on sound lending practices and begin to make loans to individuals who were not credit worthy. This spelled the death of the mortgage industry as we once knew it and the housing market was collapsed.

The Uptick Rule once prevented companies from crashing due to large scale shorting of company stock. A company’s stock could not be sold short as long as it was in continuous decline. Short sellers had to wait for an uptick in the stock before engaging in shorting. The Uptick Rule was retired in 2007 and the rest, as they say, is history. The elimination of the Uptick Rule is like going to a basketball game and not being able to see the scoreboard. Who’s ahead, who’s behind? Nobody knows but “Ladies and Gentlemen, place your bets!” What is your stock portfolio worth? Who knows? Who cares? Somebody wealthy is getting wealthier at your expense and you and your middle class investors are none the wiser.

The Rest Of The Story Here

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Is The Fed QE Really Ending?

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The Coming Revolution: Evolutionary Leap or Descent Into Chaos and Violence?

Under present economic and government policy, more and more people will fall deeper into debt and extreme poverty.

AlterNet / By David DeGraw

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A new paradigm is organically evolving: new economic systems, sustainable communities, solar energy, organic farming, liquid democracy, worker co-ops and new media. For all the problems we are confronted by, there are existing viable solutions. There is much to feel positive about. A decentralized global uprising is undermining systems of centralized and consolidated power. A new world is being born.

However, as exciting as the evolution presently occurring is, after extensive research I am forced to confront the fact that I do not see how emerging solutions will reach a critical mass and create the needed change before the effects of inequality, poverty and the overall deterioration of society will lead to widespread chaos and violence. As much as I wish this wasn’t the case, as much as I want to just disengage from the status quo and focus on the implementation of local solutions, we cannot ignore the urgent need for significant systemic change on a mass scale now.

The longer mainstream society stays on the present course, the worse things will get and the harder it will be to overcome the growing crisis. No matter how much we are inclined to ignore it, we will not be able to escape this reality: under present economic and government policy, more and more people will fall deeper into debt and extreme poverty. The present economy only works for 30% of the population, tens of millions of people have been mathematically eliminated.

The Rest Of The Story Here

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FROM THIS DAY FORWARD, WE WILL WATCH HOW THE STOCK MARKET PERFORMS WITHOUT THE FED’S MONETARY HEROIN

Mark this day on your calendars

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by MICHAEL SNYDER | ECONOMIC COLLAPSE | OCTOBER 30, 2014

Mark this day on your calendars. The Dow is at 16974, the S&P 500 is at 1982 and the NASDAQ is at 4549. From this day forward, we will be looking to see how the stock market performs without the monetary heroin that the Federal Reserve has been providing to it. Since November 2008, the Fed has created about 3.5 trillion dollars and pumped it into the financial system. An excellent chart illustrating this in graphic format can be found right here. Pretty much everyone agrees that this has been a tremendous boon for the financial markets. As you will see below, even former Fed chairman Alan Greenspan says that quantitative easing was “a terrific success” as far as boosting stock prices. But he also says that QE has not been very helpful to the real economy at all. In essence, the entire quantitative easing program was a massive 3.5 trillion dollar gift to Wall Street. If that sounds unfair to you, that is because it is unfair.

So why is the Federal Reserve finally ending quantitative easing?

Well, officially the Fed says that it is because there has been so much improvement in the labor market…
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The Fed’s language, however, did suggest that they were getting more comfortable with the economy’s improvement. It cited “solid job gains,” citing a “substantial improvement in the outlook for the labor market,” as well as pointing out that “underutilization” of labor resources is “gradually diminishing.”
But that is not true at all.

The percentage of Americans that are working right now is about the same as it was during the depths of the last recession. Just check out this chart…

The Rest Of The Story Here

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DOES THIS LOOK LIKE A HOUSING RECOVERY TO YOU?

by MICHAEL SNYDER | ECONOMIC COLLAPSE | OCTOBER 29, 2014

We just learned that the homeownership rate in the United States has fallen to the lowest level in 19 years
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We just learned that the homeownership rate in the United States has fallen to the lowest level in 19 years. But of course this is not a new trend. As you will see in this article, the homeownership rate in the United States has been in a continual decline for more than 7 years. Obviously this is not a sign of a healthy economy. Traditionally, homeownership has been one of the key indicators that you belong to the middle class. When people define “the American Dream”, it is usually one of the first things mentioned. So if the percentage of Americans that own a home has been steadily going down for 7 years in a row, what does that tell us about the health of the middle class in this country?

The chart that you are about to view is clear evidence that we are in the midst of a long-term economic decline. It shows what has happened to the homeownership rate in the U.S. since the year 2000, and as you can see it has been collapsing since the peak of the housing market back in 2007. Does this look like a housing recovery to you?…

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So many people get caught up in what is happening on Wall Street, but this is the “real economy” that affects people on a day to day basis.

Most Americans just want to be able to buy a home and provide a solid middle class living for their families.

The fact that the percentage of people that are able to achieve this “American Dream” is falling rapidly is very troubling.

There are some that blame this stunning decline in the homeownership rate on the Millennials.

And without a doubt, they are a significant part of the story. They are moving back home with their parents at record rates, and many that are striking out on their own are renting apartments in the big cities.

This is one area where the decline of marriage in America is really hitting the economy. Back in 1968, well over 50 percent of Americans in the 18 to 31-year-old age bracket were already married and living on their own. Today, that number is below 25 percent.

But that is not all there is to this story.

In fact, the homeownership rate for Americans in the 35 to 44-year-old age bracket has been falling even faster than it has for Millennials…

In the first quarter of 2008, nearly 67% of people aged 35-44 owned homes. Now the number is barely above 59%. The percentage of people under 35 owning homes only fell five percentage points, to 36% from 41%.
So why is this happening?

Well, it is fairly simple actually.

In order to buy homes, people need to have good jobs. And at this point, the percentage of Americans that are employed is still about where it was during the depths of the last recession.

In addition, wages in the United States have stagnated and the quality of our jobs continues to go down. As I wrote about the other day, half of all American workers make less than $28,031 a year. Needless to say, if you make less than $28,031 a year, you are going to have a really hard time getting approved for a home loan or making mortgage payments.

Things have been changing for a long time in this country, and not for the better. Our economic problems have taken decades to develop, and the underlying causes of these problems is still not being addressed.

Meanwhile, middle class families continue to suffer. One very surprising new survey discovered that more than half of all Americans now consider themselves to be “lower-middle class or working class with low economic security”. While Wall Street has been celebrating in recent years, economic pessimism has become deeply ingrained on Main Street…

Optimism may be harder to come by these days. More than half of Americans surveyed in a Harris poll released Tuesday identified themselves as being lower-middle class or working class with low economic security. And 75 percent said they’re being held back financially by roadblocks like the cost of housing (24 percent), health care (21 percent) and credit-card debt (20 percent).

And that’s not the kicker.

“The most disappointing aspect is that 45 percent think they’ll never get their finances back to where they were before the financial crisis,” said Ken Rees, CEO of the Elevate credit service company, which commissioned the survey. “And a third are losing sleep over it.”
The only “recovery” that we have experienced since the last recession has been a temporary recovery on Wall Street.

For the rest of the country, our long-term economic decline has continued.

When I was growing up, my father was serving in the U.S. Navy and we lived in a fairly typical middle class neighborhood. Everyone that I went to school with lived in a nice home and I never heard of any parent struggling to find work. Of course life was not perfect, but it seemed to me like living a middle class lifestyle was “normal” for most people.

How times have changed since then.

Today, it seems like we are all part of a giant reality show where people are constantly being removed from the middle class and everyone is wondering who will be next.

So what do you think?

Is there hope for the middle class, or are the economic problems that we are facing just beginning?

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Global Economy Has Collapsed-Andy Hoffman

By Greg Hunter
USAWatchdog.com
October 27, 2014

Financial analyst Andy Hoffman says the real global economy is in deep trouble, which is much to the chagrin of the Fed. Hoffman explains, “Recall last April, they started smashing gold and started with the ‘taper’ talk. The Fed figured by about this time, they’d be ready to start hiking rates. The fact is the global economy has collapsed. Our real economy has collapsed. Forget the fake PMI numbers or their ridiculous employment numbers. The economy of the world is getting worse and worse and worse. No matter how hard they try to say yes, there is a recovery and we are tapering. Interest rates keep falling and falling. There are plunging rates despite all their talk of recovery and tapering.” Hoffman, who also has deep Wall Street experience, points to the recent sell-off in the stock market and the Fed’s reaction. Hoffman contends, “The Dow Jones propaganda average fell a whopping 9% from its all-time highs. The Fed absolutely freaked out. Within minutes, they had the Plunge Protection Team (PPT) running it back up, and no less than six Fed Governors in the space of three days came out and called for extension of QE and extension of zero-percent-interest-rates (ZERP). That’s how terrified they are, and remember, next week is when QE is supposed to end.”

Why is the Fed so terrified with even a relatively small market drop from all-time highs? Hoffman thinks, “Their fear is a loss of confidence in the dollar. It’s that simple. . . . Since 2008, all they have left in their arsenal is money printing, market manipulation and propaganda. The propaganda doesn’t work anymore. Nobody believes in recovery, and everyone knows it’s not true.” Hoffman also points out, “Just think about the perception if the Dow fell a thousand points in a day or, let alone, three or four thousand points in a day. They would call it the crash of 1929. Look at Europe. Twenty-five European banks failed the stress test. . . . The banking system, as a whole, is on the precipice right now, and the slightest drop will cause the whole 2008 calamity to start all over again. . . . Once that confidence leaves, everyone races out of currencies, and the stock market and the whole economy mirage collapses.”

Hoffman also contends that “economic Mother Nature” is going to have the last word on all markets despite propaganda and manipulation. Hoffman says, “If you are going to try to push gold and silver prices below the cost of production, if you are going to take interest rates way below what they should be and take stock prices way above where they were in 2008, you are going to have a catastrophic collapse. People say the stock market is up and things must be fine—no. . . . Across the board, you are seeing commodities and currencies crash around the world. Of course, the real way economic Mother Nature is going to get back at us is with gold and silver because manipulators cannot create physical gold and silver, and you are seeing inventories drained with record demand. We are going to see economic Mother Nature showing all of her claws.”

Hoffman closes by saying, “This is decades and decades of a mad experiment in global fiat currency, and it’s going to come to an end. No matter how we get to the other side, it’s going to be ugly. The other side one day will be good, but the other side is going to take a long time to get to, and there is going to be a lot of pain and hardship and, hopefully, not world war.”

Join Greg Hunter as he goes One-on-One with Andy Hoffman of Miles Franklin, one of the biggest precious metals dealers in America.

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New study: the middle class is collapsing in the United States

October 23, 2014
Santiago, Chile

When I was growing up, my father was able to support his family of four on a single income. And when he was growing up, his father could do the same.

This sort of security simply doesn’t exist anymore.

These days, it typically takes two working parents just to be able to afford a comfortable standard of living. And even then, just barely.

Today people have to borrow on their credit cards just to get by. And young people are forced to indebt themselves decades into the future simply to pay for an increasingly worthless university degree.

In 1970, general tuition at the University of Pennsylvania was $2,550 per year, roughly 33% of the median household income at the time ($7,559).

Bear in mind this was at a time when most households were still supported by a single income.

By 2012, however, general tuition at the same school had risen to $42,734—over 86% of the median household income ($49,486) at a time when many households had become dual income.

This means that the price of a piece of paper from university went from 33% of a single income to 86% of two incomes combined.

This is unbelievable cost increase that illustrates a very clear divide that’s forming in the West.

Yes—inflation exists. It’s hidden. It’s long-term. But it exists. And over a period of years… even decades… it changes the very fundamentals of civilization.

There are two primary forms of inflation. On one hand, there’s asset price inflation. This is when the value of stocks, bonds, and real estate goes up.

But if you’re a typical family that has to spend 95% of your household income just to get by, asset price inflation doesn’t really give a huge boost to the measly 5% of your income that you manage to save.

No, instead, the typical family suffers from the other inflation—retail price inflation.

This is when the cost of goods and services outpaces their wages year after year.

People easily lose track of this. But enough time passes and they find that now two parents have to work just to afford a basic lifestyle, quality food, medical care, and education that one parent used to provide.

Asset price inflation is something that primarily benefits the ultra wealthy.

When you only have to spend 5% of your income on living expenses, and 95% on investments, you stand to gain substantially when your investments increase in value.

This phenomenon has created one of the greatest transfers of wealth in history: one class of citizens getting richer at the expense of everyone else.

A new report just released by two academics at the London School of Economics and UC Berkeley shows just how rapidly the middle class is collapsing in the Land of the Free.

The top 0.1% (160,00 families with total net assets of more than $20 million in 2012) owned 7% of all wealth in late 1970s. That jumped to 22% in 2012.

The bottom 90%, on the other hand, went from a 36% share to a 23% share in the same period.

Now, this letter isn’t intended to rail against wealth inequality, or to suggest that we should be more ‘equal’.

Equality is a dangerous and impossible ideal to strive for. Every human being alive is different, and to suggest that we should all be the same or live according to the same standards is absurd.

No matter what, there are always going to be poor people and rich people. There are always going to be folks who choose to work harder, and those who choose to work less.

And there’s nothing wrong with that. Wealth is a noble ideal; it’s nothing to apologize for.

The accumulation of wealth is supposed to mean that you have done something to create value in the world—that you have created a useful product that people desire, or that you have created wealth for others.

But that path to accumulate wealth is now all but dead.

The Land of the Free used to be a place where you could work hard and build wealth for yourself, either by starting a business, taking some investment risk, or working your way up the chain.

Yet today, authorities chase away children who have the audacity to operate a lemonade stand without a permit.

The nanny state legally bars most grown adults from investing their own savings in lucrative private enterprises, forcing the masses into overheated, central bank- manipulated stocks and bonds.

And today you’re lucky to work for the same company for more than a few years. As a colleague told me a few months ago, few people have careers anymore.

Instead, human beings are ‘rented’ by companies to perform tasks. There’s no longer a career track, growth, or significant advancement.

All of the old capitalist ideals have been replaced with compliance, obedience, and subservience to the state. They’ve managed to completely hollow out the middle class.

The ultra rich, meanwhile, continue to get rich.

Central bankers print money, and it pushes up the value of assets that the rich already own, making them even richer.

In other words, if you’re born rich, you stay rich. If you’re not, it’s becoming harder to attain wealth. Talent and hard work matter less and less with each passing year.

This is dreadfully, terribly wrong.

The people in charge of this system have completely broken what capitalism is supposed to be. And they’ve replaced it with a new form of feudalism.

This is something that can’t possibly last.

All the technology and tools already exist for individuals to take the power back and divorce themselves from this reality.

You no longer have to live, work, and play in the same country where you were born.

You no longer have to hold the heavily manipulated, degraded currency that they destroy, or use the banking system that they control.

You no longer have to educate your children in the state-controlled school system, or feed your family the genetically-modified crap that the corn lobby bribes onto the store shelves.

You can break free. It’s a matter of choice.

Until tomorrow,

Simon Black
Senior Editor, SovereignMan.com

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MARKET TURMOIL AHEAD? ‘FEAR INDEX’ SHOWS UNPRECEDENTED ACTIVITY Calm before the storm?

by PAUL JOSEPH WATSON | OCTOBER 22, 2014
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The VIX index, a measure of how volatile the S&P 500 is likely to be over the next 30 days, is showing unprecedented activity, feeding into concerns that the financial markets are about to experience huge turmoil.

The Chicago Board Options Exchange Market Volatility Index (VIX) is commonly known as the ‘fear index’ or the ‘fear gauge’ because it is used to predict short-term market expectations.

As Zero Hedge points out, “The last 3 days have seen VIX drop 12.74%, 15.55%, and 13.4% today… VIX has NEVER dropped more than 10% for 3 days in a row ever.”

Last week, VIX spiked to its highest level in almost three years off the back of concerns about collapsing oil prices, the Ebola virus and weak economic growth.

As Money Morning explains, “When the markets grow, the VIX will generally shrink alongside positive investor sentiment and a growth in the major stock indexes. But in times of uncertainty, such as during a financial collapse or geopolitical turmoil, investors load up on option trading to bet on the market’s downside. The VIX will then spike.”

Could the unprecedented drop in the VIX index over the last three years represent the calm before the storm?

Last week, the Dow Jones suffered a drop of 450 points, its biggest loss in over a year, following weeks of turbulent market action, while the Standard & Poor’s 500 index fell 31 points, or 1.7 percent.

Although stocks have rebounded since, uncertainty about the durability of the economic recovery remains a dominant theme. Last month, the so-called Hindenburg Omen, a technical analysis pattern that is said to forecast a stock market crash, was triggered twice, an event CBS News described as “another dark sign” for the markets.

Traders also remain wary of a “black swan event,” a surprise incident that could send stocks plummeting. Earlier this month, UBS director of floor operations at the New York Stock Exchange Art Cashin told CNBC that a shock geopolitical development could cause turmoil.

“People don’t want to get too deeply involved, I don’t think, fearing that some bit of news or rumor could pull the plug on them,” said Cashin.

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