“Worst of them all is Kings County, New York, where a Brooklyner making a median income would need to…”

December 04 Comments Off on “Worst of them all is Kings County, New York, where a Brooklyner making a median income would need to…” Category: Feed, Tumblr

“Worst of them all is Kings County, New York, where a Brooklyner making a median income would need to set aside 98 percent of their salary to pay for a median-priced home of $615,000. But you can make do on 2% right? Food is too fattening anyway.”

– Brooklyn is now the most unaffordable place to buy a home in America. 

Subprime loans are making a comeback, and it’s a disaster

September 27 Comments Off on Subprime loans are making a comeback, and it’s a disaster Category: Feed, Tumblr

Subprime loans are making a comeback, and it’s a disaster:

“But if houses don’t become cheaper and wages don’t rise, what is actually achieved by making it easier for people to go into debt to buy them?”

A: Inflation! Making bankers richer! The totally foreseeable detonation of the worldwide economy!

Oh wait…. is this one of those rhetorical questions?

“Isn’t home ownership a crucial cog to any healthy economy? Well, as Germany shows—and Gershwin…”

September 19 Comments Off on “Isn’t home ownership a crucial cog to any healthy economy? Well, as Germany shows—and Gershwin…” Category: Feed, Tumblr

“Isn’t home ownership a crucial cog to any healthy economy? Well, as Germany shows—and Gershwin wrote—it ain’t necessarily so.”

– Most Germans don’t buy their homes, they rent. Here’s why.

1000%

September 12 Comments Off on 1000% Category: Feed, Tumblr

On the NASDAQ, the peak of the real estate bubble in late 2007 was about $2,800. When the bubble popped, the index lost 50% of it’s value.

At the current rate of market rise, we are on track to double the total value of the pre-bubble peak market midway into the next year, exceeding $5,000 on the index.

The only time the index, in the entirety of history, broke $5,000 was the late 90s/early 00s tech bubble, after which the index lost 80% of its value.

What’s the difference between the tech bubble then and the bubble now? The tech crash hurt a narrow piece of the market, its effect was proportionate on the industry causing it (visible in the DJ Industrial Index). The same was not true of the real estate crash which, because it was caused by heavy leverage in the banking systems, caused crunch across the board.

The DJI lost a little more than one quarter of its value in the dot-com crash. In the real-estate crisis it lost about half. It too has more than doubled since the late 00s.

Now imagine the bubble we are in now, the largest rise since 2000, having the same crash, but one in which not just the bad actors see their stock drop 80%, but the entire market.

Why think about this now? When I was born in 1987 the NASDAQ Composite was at ~$455. As of this month, it’s broken $4,555. A 1000% rise.