Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-61257 Wed, 07 Dec 2016 03:16:11 GMT Donald Trump says he wants to fix cities. Ben Carson will make them worse. http://implode-explode.com/viewnews/2016-12-06_DonaldTrumpsayshewantstofixcitiesBenCarsonwillmakethemworse.html Trump's selection of Carson echoes Ronald Reagan's selection of Samuel Pierce as his HUD secretary. Like Trump, Reagan had lashed out against inner cities and pledged to slash social spending. Like Trump's supporters, the majority of Reagan's voters did not live in cities. And like Trump, he had little support among African Americans. But like Trump, Reagan wanted a black face in a high place for a little legitimacy in a post-civil-rights-movement White House. And, like Trump, Reagan pledged to loosen housing and financial regulations.

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HUD's privatization opened up new possibilities for crony capitalism. HUD staffers channeled money to Republican-connected lawyers, consulting firms and developers. One of the dozens swept up in the investigation was Trump's former campaign manager, Paul Manafort, who successfully lobbied for about $43 million in federal subsidies for a shabby New Jersey housing complex, a place described as "a shamble of cinder blocks long past the point of repair." He received $326,000 in fees for his efforts and eventually owned a 20 percent share of the development, which showed few signs of improvement after winning the HUD grant. Eventually, 16 HUD staffers and external consultants were convicted. (Manafort was never charged with wrongdoing.)

History never repeats itself exactly, but Pierce's time at HUD offers some warnings for Carson's nomination. Like Pierce, Carson is shaping up to be a token black Cabinet member. Trump has not appointed any other black officials so far, and given his lack of high-profile black supporters, he doesn't have many prospects. Like his predecessor, Carson has little management experience. And like Pierce, he will oversee an agency whose budget includes substantial contracts with politically connected nonprofits, real estate developers, and mortgage lenders. The possibilities for corruption are legion with a HUD secretary who knows nothing about the agency, its programs and its vastly complex budget.

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HUD turned 50 last year. Metropolitan America has changed a lot in the half-century since Johnson created the agency. But cities' problems are no less pressing, even if Trump left them unaddressed on the campaign trial as he railed about crime. In most urban areas, economic and racial inequality has spiked. Urban housing is a case study in market failure: too much for the rich and, in many cities, for international speculators. Affordable, high-quality housing is scarce, especially in rapidly gentrifying cities such as New York, Washington and Los Angeles. Even poorer cities such as Detroit, Philadelphia, St. Louis and Milwaukee have huge waiting lists for subsidized housing units. Poverty has risen sharply in the suburbs. Many of the poorest Americans, urban or suburban, are left to the vagaries of a predatory rental market. Few working-class and poor people can afford to live in job-rich suburbs and exurbs or send their children to the best-funded school districts. And many municipalities are struggling with collapsing tax bases, decaying infrastructure, and aging housing.

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iehi-feed-61238 Mon, 05 Dec 2016 22:18:22 GMT Trump nominates Carson to lead U.S. housing, urban policy http://implode-explode.com/viewnews/2016-12-05_TrumpnominatesCarsontoleadUShousingurbanpolicy.html If confirmed by the Senate, Carson will be enlisted to serve as Trump's unofficial envoy to African Americans and to lead the charge to repair what Trump has described as America's blighted and dangerous inner cities, a dystopian, racially charged image criticized as frequently at odds with reality. He will also lead Trump's efforts in an arena where Trump and members of his family have been accused of flouting the law in their own business ventures.

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Carson does not have specific experience with the activities of HUD, which manages low-income housing assistance, facilitates financing for homeownership and administers fair-housing programs. But he has a documented position on fair-housing policies that has advocates nervous about what protections a Trump administration might dismantle -- particularly for racial desegregation.

Last year, then-candidate Carson forcefully criticized an Obama administration rule requiring cities and towns to publicly report racial bias in their housing patterns, saying it would "fundamentally change" communities by requiring affordable housing to be built in wealthier neighborhoods.

"These government-engineered attempts to legislate racial equality create consequences that often make matters worse," Carson wrote in the Washington Times. "There are reasonable ways to use housing policy to enhance the opportunities available to lower-income citizens, but based on the history of failed socialist experiments in this country, entrusting the government to get it right can prove downright dangerous."

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iehi-feed-61237 Mon, 05 Dec 2016 15:43:38 GMT Vancouver Housing Tax Pushes Chinese to $1 Million Seattle Homes http://implode-explode.com/viewnews/2016-12-05_VancouverHousingTaxPushesChineseto1MillionSeattleHomes.html Just a few days after Vancouver announced a tax on foreign property investors, Seattle real estate broker Lili Shang received a WeChat message from a wealthy Chinese businessman who wanted to sell a home in Canada and buy in her area.

After a week of showings, he purchased a $1 million property in Bellevue, across Lake Washington from Seattle. He soon returned to buy two more, including a $2.2 million house in Clyde Hill paid for with a single cashier's check.

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Home-purchase inquiries from China have jumped in Seattle and Toronto since the Vancouver tax was announced, according to Juwai.com, the country's largest overseas property website.

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About half of the homes sold in Seattle's suburbs are going to Chinese buyers, with many of the transactions requiring the use of interpreters, international banks and multiple escrow deposits, according to Dean Jones, chief executive officer of Realogics Sotheby's International Realty. That's up from about 30 percent last year, he said.

"This is Vancouver 2.0," said Jones, who lived in the Canadian city about two decades ago, when the capital flow from Asia started to accelerate. "A lot of the same motivations and goals are being replicated in Seattle."

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iehi-feed-61215 Sat, 03 Dec 2016 15:03:16 GMT Vancouver Housing Market Freezes Up, Sales Crash, Prices Sag, For-Sale Signs Proliferate (PHOTOS) http://implode-explode.com/viewnews/2016-12-03_VancouverHousingMarketFreezesUpSalesCrashPricesSagForSaleSignsPr.html iehi-feed-61214 Sat, 03 Dec 2016 14:53:25 GMT The Great Unwind Unravels Hottest Rental Markets in the US http://implode-explode.com/viewnews/2016-12-03_TheGreatUnwindUnravelsHottestRentalMarketsintheUS.html ... averages can cover up more than they reveal. On a city-by-city basis, a different scenario emerges, with rents going totally crazy in some la-la lands, as if it were still the summer of 2015, and in other cities, including the three most expensive rental markets in the US, rents are coming down hard.

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Asking rent for a median one-bedroom fell to $3,330. That's still a lot of moolah: $40,000 a year for a small, very average apartment. But that's down 9.3% from the peak of the rental bubble in October 2015.

The median asking rent for a two-bedroom dropped to $4,500. So $54,000 a year. That's down 6.8% from a year ago, and down 10% from the October 2015 peak...

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iehi-feed-61205 Fri, 02 Dec 2016 00:40:57 GMT Mortgage Rates Surge Above 2-Year Highs (AT SPEEDS NOT SEEN IN 20 YEARS!) http://implode-explode.com/viewnews/2016-12-01_MortgageRatesSurgeAbove2YearHighsATSPEEDSNOTSEENIN20YEARS.html ``Mortgage rates spiked abruptly today, bringing them to the highest levels in well over 2 years.  The average lender is now quoting conventional 30yr fixed rates of 4.25% on top tier scenarios with more than a few already up to 4.375%.  You'd have to go back to the summer of 2014 to see a similar mortgage rate landscape.  

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The pace of losses has only been seen 2 other times in the last 30 years (in 1987 and 1996). For the record, 2013's taper tantrum resulted in a bigger rate spike than we're seeing currently, but it took more than twice as long to play out... Some people may think its funny, but they are terribly wrong. When borrowing costs move higher, this much, this fast, it is toxic to many areas of the economy. Unfortunately it takes a while to surface

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iehi-feed-61202 Thu, 01 Dec 2016 22:50:21 GMT Melbourne Apartment Prices Drop by Most Since 2014 (AU'S HOUSING BUBBLE GOING BUST) http://implode-explode.com/viewnews/2016-12-01_MelbourneApartmentPricesDropbyMostSince2014AUSHOUSINGBUBBLEGOING.html Apartment prices in Melbourne fell at the fastest pace in more than two years in November, reinforcing concerns about a looming oversupply of units in Australia's second-largest city.  The 3.2 percent month-on-month drop is the largest such decline since May 2014, according to figures from data provider CoreLogic Inc.

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Record low interest rates put in place by the Reserve Bank of Australia to help ease the economy's shift away from mining investment and combat low inflation have helped to spur a housing boom in the nation's biggest centers and the central bank has repeatedly voiced concern that apartment gluts are developing in central Melbourne and Brisbane.

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"There are emerging signs of stress" in the economy, the head of Australia's third-biggest bank told a Reuters event in Sydney.

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iehi-feed-61199 Thu, 01 Dec 2016 17:55:47 GMT Manhattan Version of "European Castle", Facing Foreclosure, Is Going Up for Auction (EXPECTED TO FETCH LESS THAN HALF OF 2012 LIST) http://implode-explode.com/viewnews/2016-12-01_ManhattanVersionofEuropeanCastleFacingForeclosureIsGoingUpforAuc.html A 37-foot-wide mansion on Riverside Drive on the Upper West Side has been on the market on and off for four years at prices as high as $40 million. Now the owner, facing a threat of foreclosure, is taking a new approach: putting it up for auction to the highest bidder. The auction is scheduled for Dec. 20 and the auction house, Concierge Auctions, estimates that it will sell for $13 million to $16 million.

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Since 2013, Ms. Kislin has been facing a foreclosure action on a $4 million mortgage on the house. In court filings last year, Ms. Kislin's lawyers argued that the bank negotiated in bad faith, after reneging on an agreement that would have given her reduced payments for two years to give her time to sell the mansion.

... "It is as close as a Manhattanite can come to living in a European castle." [Dexter Guerrieri, president of Vandenberg Inc.] said.

Amusingly, the property was turned from apartments into a single-family home, trophy property -- exactly the the opposite of what should have been done to cater to the strengths in the NYC market (luxury has been first to bomb, with effectively a shortage of "normal-people" apartment rental units).

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iehi-feed-61194 Thu, 01 Dec 2016 01:31:58 GMT Mortgage Activity Will Be Crushed By Rising Rates - Freddie Mac http://implode-explode.com/viewnews/2016-11-30_MortgageActivityWillBeCrushedByRisingRatesFreddieMac.html iehi-feed-61191 Thu, 01 Dec 2016 00:49:52 GMT Manhattan Homeowners Looking for 40%+ 5-Year Returns Are Responsible For Market Freeze http://implode-explode.com/viewnews/2016-11-30_ManhattanHomeownersLookingfor405YearReturnsAreResponsibleForMark.html This year through September, sellers listing apartments priced at $3 million or less that were bought in 2010 sought a median of 47 percent more than their purchase price, data compiled by StreetEasy show. Owners who bought in 2011 have returned homes to the market for a median 42 percent markup, and buyers from 2012 listed for 35 percent more, according to the real estate website.

"That detachment from the market, from what the value actually is, is a big part of why sales are down," said Jonathan Miller, president of appraiser Miller Samuel Inc... "In my experience, it takes sellers a good one to two and a half years to believe in the new market," Miller said. "The buyers are with the program immediately."

... Growth in actual transaction prices hasn't matched sellers' aspirations. The median for all Manhattan resales in the third quarter was $950,000, or 11 percent more than in the same period of 2011, according to Miller Samuel.

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iehi-feed-61190 Wed, 30 Nov 2016 22:47:59 GMT What Happens "If the Boom Ends with a Bang?" (CA) http://implode-explode.com/viewnews/2016-11-30_WhatHappensIftheBoomEndswithaBangCA.html iehi-feed-61187 Wed, 30 Nov 2016 15:20:36 GMT Trump announces he will leave business `in total' -- leaving open how he will avoid conflicts of interest http://implode-explode.com/viewnews/2016-11-30_Trumpannounceshewillleavebusinessintotalleavingopenhowhewillavoi.html ... it remained unclear whether the new arrangement would include a full sale of Trump's stake or, as he has offered before, a ceding of company management to his children, which ethics advisers have said would not resolve worries that the business could still influence his decisions in the Oval Office.

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Giving company management to his children -- Donald Jr., Eric and Ivanka -- would still leave open the potential for Trump to make presidential decisions for their benefit. The children have already played a key part in Trump's governing preparations, serving on the transition team now selecting key appointees and sitting in on meetings with foreign heads of state.

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iehi-feed-61186 Wed, 30 Nov 2016 15:19:01 GMT Higher interest rates crush mortgage application volume, down 9.4% http://implode-explode.com/viewnews/2016-11-30_Higherinterestratescrushmortgageapplicationvolumedown94.html The highest interest rates in well over a year are putting a dent in the mortgage business. Total mortgage application volume fell 9.4 percent last week versus the previous week, on a seasonally adjusted basis. The Mortgage Bankers Association adjusted the weekly reading to account for the Thanksgiving holiday. Volume was 0.5 percent lower than the same week one year ago, the first annual drop in total volume since January.

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Refinance volume has been falling steadily as rates rise, but it took another sharp drop, down 16 percent for the week, seasonally adjusted. Refinances are most rate sensitive and are now down 3 percent from a year ago, when rates were not much different than they are today.

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iehi-feed-61174 Tue, 29 Nov 2016 15:44:17 GMT US home prices hit new peak, up 5.5% in September (Case-Shiller), Pre Rate-Jump http://implode-explode.com/viewnews/2016-11-29_UShomepriceshitnewpeakup55inSeptemberCaseShillerPreRateJump.html Prices were 5.5 percent higher than September of 2015, up from the 5.1 percent annual gain in August, according to the S&P CoreLogic Case-Shiller Index. The index has now surpassed its previous peak of July 2006. The nation's 20 largest cities reported a 5.1 percent annual gain, unchanged from August.

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These prices were measured before mortgage interest rates rose sharply in November. The average rate on the 30-year fixed loan had been hovering around 3.5 percent for several months but then jumped well over 4 percent following the presidential election. It is now around 4.25 percent.

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iehi-feed-61164 Mon, 28 Nov 2016 22:31:51 GMT New questions arise over Trump's potential business conflicts http://implode-explode.com/viewnews/2016-11-28_NewquestionsariseoverTrumpspotentialbusinessconflicts.html Articles over the weekend in The Washington Post and The New York Times offered new details on how Trump and his family met with their overseas business partners after the election. The Post story described plans for a luxury Trump tower in the country of Georgia that had been bogged down for years in government red tape, but suddenly got clearance to proceed.

Separately, The New York Times reported that Trump's business partner in the Philippines, Jose E.B. Antonio, flew to New York to meet with the Trump family after the election. Antonio was recently appointed the Philippines' official envoy to the U.S., and he and the Trumps discussed expanding their relationship after Trump becomes president, the report said.

The stories follow news that Trump met with his Indian business partners after the election, and that he spoke with British politician Nigel Farage about offshore windmills that could affect his Scottish golf course.

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It's clear, however, that Trump will need to do something to answer even his supporters, who say he needs to build a wall between his company and office. But so far, all of the solutions proposed have been unrealistic or ineffective window dressing, legal and ethics experts have said.

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iehi-feed-61163 Mon, 28 Nov 2016 22:02:55 GMT More Than Half Of New Yorkers Are One Paycheck Away From Homelessness, Says Study http://implode-explode.com/viewnews/2016-11-28_MoreThanHalfOfNewYorkersAreOnePaycheckAwayFromHomelessnessSaysSt.html Nearly 60 percent of New Yorkers lack the emergency savings necessary to cover at least three months' worth of household expenses including food, housing, and rent, but that statistic isn't spread evenly across the five boroughs... landlords are increasingly claiming "chronic rent delinquency" after just a single late payment, which allows them to begin eviction proceedings earlier on than they would otherwise.

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As DNAinfo notes, advocates say that rental assistance is crucial in preventing homelessness citywide, especially in neighborhoods where rents rise faster than incomes--many of which overlap with the neighborhoods where families lack adequate savings.

And although an increase in rental assistance services like the one proposed by Queens Assemblyman Andrew Hevesi could cost the cost $450 million in state and federal funding, it would be more cost-effective than allowing more families to enter the chronically underfunded shelter system.

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iehi-feed-61153 Sat, 26 Nov 2016 03:45:17 GMT The ‘ownership society' came and went -- a long time ago http://implode-explode.com/viewnews/2016-11-25_Theownershipsocietycameandwentalongtimeago.html iehi-feed-61152 Sat, 26 Nov 2016 03:41:18 GMT How (Slightly) Higher Mortgage Rates Maul Housing Bubble 2.0 http://implode-explode.com/viewnews/2016-11-25_HowSlightlyHigherMortgageRatesMaulHousingBubble20.html ``from a historical point of view, nothing major has happened so far. That spike is still small compared to what came before, including the spike during the Taper Tantrum in the summer of 2013, when the Fed started musing about ending QE Infinity. Compared to prior years, rates are still very, very low, but home prices have since soared, and for home buyers even a minor uptick makes a world of difference.

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[Estimates based on a] median house [in San Francisco], at $1.3 million, with a 20% down payment ($260,000!) [at] the recent increase in rates from 3.57% to 4.125% jacks up costs by $330 a month, or almost $4,000 a year. If rates drift up to 4.5%, costs jump by $560 a month, or $6,700 a year. If rates reach 5%, the additional costs jump by $10,600 a year.

What happens in some saner parts of the country is similar, but on a lower scale, depending on taxes and insurance costs. For example, for the national median home, priced at $232,200, with rates going from 3.57% to 4.5%, costs would rise by about $1,200 a year. If rates hit 5%, costs would jump by about $1,900 a year. For households on a tight budget, these additional costs would turn into an impossible squeeze.

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iehi-feed-61146 Wed, 23 Nov 2016 21:07:48 GMT In Betsy DeVos for Education, Trump Taps Into Michigan Royalty; Carson Teed Up For HUD Head http://implode-explode.com/viewnews/2016-11-23_InBetsyDeVosforEducationTrumpTapsIntoMichiganRoyaltyCarsonTeedUp.html

The DeVos family, heirs to the Amway fortune, has long been a leading source of money for Republicans in Michigan and beyond. Just in the last three elections before 2016, members of the family gave nearly $9.5 million to party committees and candidates.

Mrs. DeVos had money of her own before she married Richard DeVos Jr., the Amway scion. Her father, Edgar Prince, built his own auto parts supplier, in Holland, Mich. Her brother, Erik Prince, founded Blackwater USA, a private security contractor whose guards were convicted of killing 14 civilians in Baghdad in 2007.

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With nominees chosen for C.I.A., national security adviser, secretary of education and ambassador to the United Nations, the next pick is expected to be the retired neurosurgeon Ben Carson to head the Department of Housing and Urban Development. That could be official as early as Friday.

Mr. Trump posted on Twitter that he was "seriously considering" Mr. Carson, a former rival in the Republican primaries, as housing secretary.

The department is no small corner of the government. Its programs fund public housing, subsidize rent for the poor, promote homeownership and work to revitalize struggling cities. And housing policy has been in a deep freeze since the Great Recession, when the nominally independent mortgage giants Fannie Mae and Freddie Mac collapsed and fell under federal control.

For nearly a decade, the mortgage industry has basically been government run, with much of its profits going right into the Treasury. Mr. Carson would have a big role in figuring out how to move forward.

Writing in the conservative Washington Times last year, Mr. Carson let it be known that he is no fan of government intervention in the housing market, specifically to force racial integration.''

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iehi-feed-61128 Tue, 22 Nov 2016 18:43:44 GMT Bank of England Trips over London House-Price Bubble, Hilarity Ensues http://implode-explode.com/viewnews/2016-11-22_BankofEnglandTripsoverLondonHousePriceBubbleHilarityEnsues.html market competition, of all things, in the rental market: too many high-priced rental apartments for too few wealthy tenants.'']]>