Weekly Open Thread (2015-06-01)

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Here is your open thread for the week of June 1st, 2015. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.

Note: The comment limit in open threads is 25 comments per person.

NOTICE: If you have comments to make about politics or economics that do not somehow directly relate to Seattle-area real estate, they may be posted in the current Politics & Economics Open Thread. If you post such comments here, they will be moved there.


About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

44 comments:

  1. 1

    Forget About the Cheap Gas a Couple Months Ago Pumping Up Spending

    The consumers just squirreled it away in savings.

    http://finance.yahoo.com/news/us-consumer-spending-april-weakest-123120351.html

  2. 2

    RE: softwarengineer @ 1 – I can see that there would be a lag in increased spending after a price savings on a single commodity. It takes a while to change habits. If I had to guess, consumer reaction is probably faster when gas prices rise than when they fall (sort of like how prices tend to be sticky in the downward direction compared to price increases).

  3. 3

    A new Supreme Court decision on Chapter 7 bankruptcy and second mortgages which are completely underwater (amount owed on first exceeds value). The mortgage (deed of trust) will survive the Chapter 7, absent some other basis for avoiding it.

    http://www.nytimes.com/2015/06/02/business/dealbook/supreme-court-ruling-little-help-to-struggling-homeowners.html?_r=0

  4. 4

    In Less Than 2 Years the Bears Invade Seattle Real Estate

    Snippet:

    “…Providing fuel to Flanagan’s call is the size of the recent gains in housing prices amid a job market in which unemployment has declined but worker pay has barely improved.

    “We do not see income growing fast enough to keep up with the past few years of rapid increases in home prices,” he wrote….”

    http://www.bloomberg.com/news/articles/2015-06-01/u-s-home-prices-set-for-a-fall-beginning-in-2017-bofa-says?cmpid=yhoo

  5. 5

    What is a Price Bubble?

    Snippet:

    “…“The Seattle housing market is completely controlled by sellers right now,” said OB Jacobi, president of Windermere Real Estate, covering the Seattle market, where average sale prices were above average estimated market values in all three counties comprising the metro are. “Homes are selling as quickly as they’re listed and usually for well over asking price. Some are concerned about the potential of another housing bubble given the lack of homes for sale and the bullishness of buyers in bidding up properties, but for now I believe that there are sufficient safeguards in place to keep this from happening.”…”

    Read more: http://www.cheatsheet.com/personal-finance/the-10-worst-markets-in-america-to-buy-a-home-right-now.html/?a=viewall#ixzz3buweM0Ud

    Buyers beware, they aren’t calling the current price gouging a bubble? Safeguards in place? LOL, what a joke. The sellers live in a fantasy world.

  6. 6
    Blurtman says:

    By softwarengineer @ 5:

    What is a Price Bubble?

    Buyers beware, they aren’t calling the current price gouging a bubble? Safeguards in place? LOL, what a joke. The sellers live in a fantasy world.

    You will be assimilated.

  7. 7
    Blake says:

    Ian Welsh makes a few points about the so called “recovery” since 2008…
    http://www.ianwelsh.net/fourteen-points-on-the-world-economy-as-us-gdp-drops-7/
    Let us recap the non-recessionary period:
    . The percentage of people employed in the US never recovered;
    . More than the total amount of growth went to the top four percent or so, with most of that going to the top one percent and most of that going to the top .1 percent;
    . The stock market had a huge bull market, even though the economy wasn’t working for anyone but the top few;
    . Outside America, the “south” of Europe never recovered in any meaningful way, and most European nations generally did badly for most of their citizens;
    . Various resource nations did well for a time, but their success was based on demand from developed nations or, more commonly, from China;
    . Chinese demand collapsed some time ago;
    . China has been printing more money than either Japan or the US; much more;
    . Japan’s “unconventional monetary policy” has been a roaring failure–if its intention was to get the Japanese economy going again;
    . The collapse in oil prices last year helped the US briefly, but because the rest of the world has rolled off a cliff and because those gains couldn’t go widespread, it was only briefly (this is as I predicted at the time);
    . Canada’s economy was hurt badly by the oil price crash, and because the mixed economy has been critically injured, there is very little else to hold up the economy;
    . Both Britain (or London…almost the same thing) and Canada have huge housing bubbles, and those bubbles, with the addition of financial games, are all that holds those economies together at this point;

    “…Let me put this another way: The developed world is in depression. It has been in depression since 2007. It never left depression. Within that depression, there is still a business cycle: There are expansions, and recessions, and so on. Better times and worse times.”

  8. 8
    pfft says:

    Hey look at the big ideas coming out of the GOP! I bet Hillary and Bernie(!) share the same sentiments because as smart people tell me the parties are the same. By the way with actually evidence I debunked that meme.

    Scott Walker: Let’s Gut The EPA
    http://thinkprogress.org/climate/2015/06/02/3664995/walker-climate-epa/

  9. 9
    pfft says:

    “Japan’s “unconventional monetary policy” has been a roaring failure–if its intention was to get the Japanese economy going again;”

    yeah that’s FALSE! Japan’s problem, which Krugman pointed out, was that Japan also raised taxes. Stupid thing to do in a time of economic weakness.

  10. 10
    DrRick says:

    I like Bernie Sanders. Time for a non oligarch to be in the chief executive suite.

    tempus est talos iacere “Time to roll the dice”

    Fel Temp Reparatio

  11. 11
    pfft says:

    By DrRick @ 10:

    I like Bernie Sanders. Time for a non oligarch to be in the chief executive suite.

    tempus est talos iacere “Time to roll the dice”

    Fel Temp Reparatio

    I like Bernie but Tommen would be a better President. I don’t know why Hillary is an oligarch or even why you used the word.

  12. 12
    Blake says:

    By pfft: “I don’t know why Hillary is an oligarch or even why you used the word.”

    Hillary and Bill are worth over $100 million, which puts them in the top 1% of the 1%! The 0.01%… richest 16,000 American families!! With their wealth, connections with Wall Street, the largest corporation and government officials, yes Hillary and Bill are American oligarchs.

    “Oligarchy is a form of power structure in which power effectively rests with a small number of people. These people could be distinguished by royalty, wealth, family ties, education, corporate, religious or military control. Such states are often controlled by a few prominent families…”

    Hillary Clinton kicks off fundraising with Wall Street moguls
    http://www.vox.com/2015/4/28/8509573/Clinton-fundraising-Wall-Street

    Hillary Clinton’s awkward Wall St. gala
    http://www.politico.com/story/2015/03/clinton-foundation-gala-comes-at-tough-time-115766.html
    … But the scene — close to Wall Street and likely to include banking industry officials alongside former Clinton administration honchos and other friends of Bill and Hillary — seems destined to highlight some of the less flattering aspects of Clinton’s potential candidacy, including the common critique that she has so far spent more time thus far behind closed doors with bigwigs than with voters.

    Clinton v. Bush 2016… 2020… 2036?

  13. 13

    The nonsense news article of the day: The sale of an office building will somehow affect rents.

    http://www.kirotv.com/news/news/sale-columbia-center-could-mean-higher-downtown-se/nmTYw/

  14. 14

    RE: Blake @ 7
    So True Blake

    Even the Great Depression went on for about 10-15 years, before WWII got things going again…

  15. 15
    Blake says:

    Wow… speaking of bubbles. China’s stock market is a classic! I recall reading John K. Galbraith’s “The Great Crash of 1929” back in my teens about how uneducated investors got drawn into stock investing frenzy in the 20s. Look at China this year…

    http://foreignpolicy.com/2015/05/28/china-stock-market-shanghai-composite-index-plunge-media-bubble/
    Over the past six months, China’s capital markets have soared to heights not seen for years, enriching millions of savvy investors — not to mention pensioners, farmers, college sophomores, urban migrant laborers, and grifters peddling get-rich quick schemes out of seedy bucket shops. As always, fear and greed are everywhere in China, but right now an impressive quantum of both are lodged in the country’s stock market, as citizens chase what looks like one of the last big chances to get rich fast before the country’s economy settles back to earth.

    The latest bull market began with the cooperation of China’s massive, state-controlled media apparatus. An April 17 retrospective from Beijing Youth Daily, itself state owned, is instructive…”
    (end quote)

    Blake sez: So 21st century… to have speculative frenzy stoked by the official communist youth media!

    http://www.businessinsider.com/zodiac-nails-whats-going-on-in-the-chinese-stock-market-2015-5
    The unprecedented gains have been fueled by a herd-like behavior that has seen both local and international investors gobble up shares at a frantic pace. And a lot of those investors and traders are betting on stocks with borrowed money, or margin. In the Reserve Bank of Australia’s May statement, the central bank warned:

    “Outstanding margin positions in Chinese equities have more than quadrupled since early July 2014 to CNY1.9 trillion, equating to almost 9 per cent of the free float market capitalization in China (compared with 2½ per cent for the United States and 1 per cent for Australia). Daily purchases using margin financing have increased tenfold over this time, and currently account for almost 15 per cent of turnover.”

    The extent of the mania was apparent in the March China Household Finance Survey, which showed 5.8% of new stockholders are illiterate and more than 67% haven’t received schooling past junior high.
    (end quote)

    Hard landing ahead for China!

    Wise men learn by others’ mistakes, fools by their own.”
    – Poor Richard (aka Ben Franklin)

  16. 16
    pfft says:

    By Blake @ 12:

    By pfft: “I don’t know why Hillary is an oligarch or even why you used the word.”

    Hillary and Bill are worth over $100 million, which puts them in the top 1% of the 1%! The 0.01%… richest 16,000 American families!! With their wealth, connections with Wall Street, the largest corporation and government officials, yes Hillary and Bill are American oligarchs.

    complete nonsense. Bill and Hillary as a couple basically worked up from nothing. Bill was Gov of Arkansas. Oligarch? Hillary was the first female partner at a law firm(or her law firm I don’t know). She was first lady, then a twice elected Senator from NY and then Sec of State. She worked for it. Look at Jeb and W, they were the sons of a president. It doesn’t matter though because just because you were born into a prominent family it doesn’t mean you can’t do good.

    Hillary is the most popular politician in the US if not the world and will probably be our next president. she will probably get more of the popular vote than Obama.

  17. 17
    Blake says:

    By pfft: Hillary is the most popular politician in the US if not the world and will probably be our next president. she will probably get more of the popular vote than Obama.

    My oh my… pfft. You just shoot from the hip don’t you?

    Hillary Clinton unfavorable numbers highest in 14 years (6/2/15)
    http://www.politico.com/story/2015/06/poll-hillary-clinton-unfavorable-numbers-118532.html
    http://elections.huffingtonpost.com/pollster/hillary-clinton-favorable-rating
    Hillary’s approval ratings have been dropping and she now has more people that have an unfavorable view of her (48%) than favorable (45%)… look at THAT graph! She is a such an abrasive person, with little of the genuine human warmth that other great politicians have had… She is lucky the Repuglican clown car is full of such losers and freaks! We may see record low turnout in 2016 as more and more Americans are revolted by our electoral system and the choices provided.

  18. 18
    pfft says:

    It’s time for the media to admit that Hillary Clinton is popular
    http://www.vox.com/2015/6/1/8676727/hillary-clinton-popularity

  19. 19
    Blake says:

    By pfft @ 18:

    It’s time for the media to admit that Hillary Clinton is (more) popular (than the Republicans in the clown car … but more people dislike her than like her)
    http://www.vox.com/2015/6/1/8676727/hillary-clinton-popularity

    There, I fixed that headline to match it with the content of the article!
    Vox tends to have problems with that…

  20. 20
    Blurtman says:

    Fiorina-Santorum 2016!

  21. 21
    Blake says:

    By Blurtman @ 20:

    Fiorina-Santorum 2016!

    Yeeesh… sounds like a new strain of hemorrhagic fever virus!?

  22. 22
    Blake says:

    This is hilarious:
    The Wall Street Journal writes an open letter to “stingy American consumers” – – WHY WON’T YOU SPEND MORE!?
    http://blogs.wsj.com/economics/2015/06/02/grand-central-a-letter-to-stingy-american-consumers/
    … Really puzzling, eh?

    A reply from Anthony Sanders:
    https://confoundedinterest.wordpress.com/2015/06/02/the-hilsenrath-omen-wsj-wonders-why-consumers-spend-so-little-stagnant-wage-growth-and-rising-housing-costs/

  23. 23
    Blake says:

    A few other items of interest:
    Glut of Chinese Goods Pinches Global Economy
    Plants in China keep producing as growth falls, fueling deflationary pressure world-wide
    http://www.wsj.com/articles/glut-of-chinese-goods-pinches-global-economy-1433212681

    http://blogs.wsj.com/economics/2015/06/01/inflation-misses-feds-2-target-for-36th-straight-month/
    Look at that graph! … inflation keeps dropping below the Feds 2% yearly target… 36 months in a row! Gotta raise rates to tame inflation BEFORE it rears its ugly head!

  24. 24

    By Blake @ 17:

    By pfft: Hillary is the most popular politician in the US if not the world and will probably be our next president. she will probably get more of the popular vote than Obama.

    My oh my… pfft. You just shoot from the hip don’t you?

    Hillary Clinton unfavorable numbers highest in 14 years (6/2/15)
    http://www.politico.com/story/2015/06/poll-hillary-clinton-unfavorable-numbers-118532.html
    http://elections.huffingtonpost.com/pollster/hillary-clinton-favorable-rating
    Hillary’s approval ratings have been dropping and she now has more people that have an unfavorable view of her (48%) than favorable (45%)… look at THAT graph! She is a such an abrasive person, with little of the genuine human warmth that other great politicians have had… She is lucky the Repuglican clown car is full of such losers and freaks! We may see record low turnout in 2016 as more and more Americans are revolted by our electoral system and the choices provided.

    Blake, you missed today’s news story, where even W polls higher than Hillary.

    https://img.washingtonpost.com/wp-apps/imrs.php?src=https://img.washingtonpost.com/blogs/the-fix/files/2015/06/Fave_Almost.png&w=1484

  25. 25

    RE: Kary L. Krismer @ 13

    If Anything You Could Allege Sales of Office Building

    Means rent decreases.

  26. 26

    RE: Blake @ 15

    China is Noted for It’s

    Empty giant shopping mall they built, its empty condominium complex it built, bridges ending in nowhere….

  27. 27

    RE: pfft @ 16

    Pfft, You Never Give Up, You’re a Great “Blue Dog” Democrat to the Core

    Ever since the Democrats [Clintons] cashed in and sided with the WTO environmental degradation plans in 1999, they’re sudden swimming in dough. Face the facts, remember the Battle of Seattle?

  28. 28
  29. 29
    Blurtman says:

    The real reason the Seattle RE market is on fire!

    “Home prices have shot up by double-digits, inventory has fallen dramatically and multiple offers with bidding wars have become common.

    One factor driving the demand: pot. The budding industry has impacted home prices since the state legalized marijuana in 2012.

    “There has been a huge bump in real estate prices due to the legalization of marijuana,” according to James Paine, managing partner at West Realty Advisors. “It’s massively pushed up raw land and industry prices.”

    In March, Denver experienced the second-largest jump in annual home prices at 10%, just behind San Francisco, according to the S&P/Case-Shiller Home Price Index.”

    http://money.cnn.com/2015/06/04/real_estate/marijuana-denver-housing-market/index.html

  30. 30
    John Wake says:

    Hilarious post from a Chicago real estate agent.

    The Cost of Friendship

    Yet they are basically stuck with the traditional real estate model just because they have a friend or relative in the business who would be “offended” if they chose to work with a different realtor or if they asked that friend for a commission rebate or discount. As they explained it to Harry “it would be just too awkward”. Wow!

    The best part;

    Of course Harry considers himself fortunate to not have any friends or relatives in the business…

    As Bart Simpson would say, “It’s funny because it’s true.”

    http://www.chicagonow.com/getting-real/2015/06/why-real-estate-commissions-are-so-high-the-cost-of-friendship/

  31. 31
    pfft says:

    Doesn’t sound like a move an oligarch would make.

    Hillary Clinton Calls For 20 Days Of Early Voting Nationwide
    http://talkingpointsmemo.com/livewire/hillary-clinton-voting-rights-speech

    If you want to protect voting rights hillary is your champion!

  32. 32
    pfft says:

    By Blake @ 19:

    By pfft @ 18:

    It’s time for the media to admit that Hillary Clinton is (more) popular (than the Republicans in the clown car … but more people dislike her than like her)
    http://www.vox.com/2015/6/1/8676727/hillary-clinton-popularity

    There, I fixed that headline to match it with the content of the article!
    Vox tends to have problems with that…

    I guess you really don’t understand most popular do you? It doesn’t count because the republican field is a bunch of clowns. guess what, all those clowns’ supporters drag down hillary’s favorable numbers. she is still one of the most popular politicians around. you may not like that fact but there it is. republicans and their voters are as conservative as they have been in decades.

  33. 33
    pfft says:

    By Kary L. Krismer @ 24:

    By Blake @ 17:

    By pfft: Hillary is the most popular politician in the US if not the world and will probably be our next president. she will probably get more of the popular vote than Obama.

    My oh my… pfft. You just shoot from the hip don’t you?

    Hillary Clinton unfavorable numbers highest in 14 years (6/2/15)
    http://www.politico.com/story/2015/06/poll-hillary-clinton-unfavorable-numbers-118532.html
    http://elections.huffingtonpost.com/pollster/hillary-clinton-favorable-rating
    Hillary’s approval ratings have been dropping and she now has more people that have an unfavorable view of her (48%) than favorable (45%)… look at THAT graph! She is a such an abrasive person, with little of the genuine human warmth that other great politicians have had… She is lucky the Repuglican clown car is full of such losers and freaks! We may see record low turnout in 2016 as more and more Americans are revolted by our electoral system and the choices provided.

    Blake, you missed today’s news story, where even W polls higher than Hillary.

    https://img.washingtonpost.com/wp-apps/imrs.php?src=https://img.washingtonpost.com/blogs/the-fix/files/2015/06/Fave_Almost.png&w=1484

    Bush isn’t a politician. Hillary had very high numbers while Sec of State. Once you become a politician again people remember they don’t like you!

  34. 34
    pfft says:

    By softwarengineer @ 27:

    RE: pfft @ 16

    Pfft, You Never Give Up, You’re a Great “Blue Dog” Democrat to the Core

    oh god no. I am always trying to be as liberal as possible.

  35. 35

    RE: pfft @ 32 – People remembering things is a politician’s worst nightmare. Usually they can count on most people having very short memories.

  36. 36
    pfft says:

    Over his Presidency Obama is on pace to create 17 million jobs. That is incredible considering where we were and how much obstruction he has faced.

  37. 37

    Apparently it’s easier to get a permit to build a garage than build a house. /s

    http://www.kirotv.com/news/news/west-seattle-builder-cited-building-house-instead-/nmXNL/

  38. 38
    Blurtman says:

    Embrace the recovery! All hail!

  39. 39
    pfft says:

    By Blurtman @ 37:

    Embrace the recovery! All hail!

    hating on a recovery is always popular. I remember even during the clinton years when he produced 20 million jobs there were haters. on the evening news they repeated the joke about how the economy created millions of jobs and I have 3 of them!

  40. 40
    Blurtman says:

    RE: pfft @ 38 – Sure. But everyone would have to agree on the definition of a recovery. Is a recovery more jobs at lower wages? Are we only focused on nominal values versus real values? I think it ultimately gets down to the individual’s perception of his/her own situation.

    When Clinton 1 was president, it was quite easy to park money in the average index fund and watch it grow 20% annually . I lived quite frugally then, and put every last dollar in the market. In 1999, I virtually doubled my salary. I think young professionals working in tech today are experiencing good times.

  41. 41

    And the more realistic news on the jobs market, one that doesn’t just project raw numbers into the future.

    http://www.komonews.com/news/business/For-many-in-US-more-jobs-dont-mean-more-financial-security-306372191.html

  42. 42
  43. 43
  44. 44
    Blurtman says:

    RE: wreckingbull @ 41 – Wisely shunning debt?

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