Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us 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.'']]> iehi-feed-61122 Mon, 21 Nov 2016 15:18:40 GMT Whiff of Panic in Miami's Condo Market http://implode-explode.com/viewnews/2016-11-21_WhiffofPanicinMiamisCondoMarket.html The Miami-Dade County condo market is coming under severe stress, and turmoil is spreading. There are two aspects: supply and sales activity overall, and the more obscure but highly indicative "preconstruction market.''

...only 47 [preconstruction] resales have actually occurred over the last six months. This makes for a supply of 112 months, or nearly a decade, at the current sales rate... Of those 47 sales, 43% produced net losses after commissions. Now even more flippers are willing to take a loss: 70 units have been listed with underwater asking prices, up from 44 on August 1 and from 14 on May 1....

And it will spread from there: These losses are establishing a down-trend in the "comparable sales" data -- the Holy Grail by which the industry values properties -- which will depress future asking and sales prices further.

Just then, new supply will flood the market. Over the next 24 months, another 10,328 units at large developments are scheduled to be completed.

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iehi-feed-61110 Sat, 19 Nov 2016 16:08:43 GMT Trump agrees to $25 million settlement in Trump University fraud cases http://implode-explode.com/viewnews/2016-11-19_Trumpagreesto25millionsettlementinTrumpUniversityfraudcases.html President-elect Donald Trump, who has repeatedly bragged that he never settles lawsuits despite a long history of doing so, has agreed to a $25 million settlement to end the fraud cases pending against his defunct real estate seminar program, Trump University.

The settlement eliminates the possibility that Trump will be called to testify in court in the midst of his presidential transition. It ends three separate lawsuits that made claims against Trump University, including a California class action case that was scheduled to go to trial later this month, as well as a second suit in that state and an action filed by New York Attorney General Eric Schneiderman.

In a statement, Trump Organization General Counsel Alan Garten said he thought Trump would have prevailed at trial but settled so Trump could "devote his full attention to the important issues facing our great nation" during his presidential transition.

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The Trump University settlement appears to fit a pattern in which lawyers for the president-elect are working to reduce the number of his legal entanglements before he takes office.

On Wednesday, Trump's attorneys dropped an unrelated lawsuit he was pursuing in Florida against Palm Beach County, in which he had complained about commercial air traffic over his Mar-a-Lago estate.

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iehi-feed-61109 Sat, 19 Nov 2016 02:08:30 GMT Globalization Failures Have World at a Turning Point: Der Spiegel http://implode-explode.com/viewnews/2016-11-18_GlobalizationFailuresHaveWorldataTurningPointDerSpiegel.html Now, in 2016, many people in Western, industrialized countries are worried about losing their jobs, their prosperity and that of their children. They see themselves as the losers of a development that has only helped the elite.

The belief that politics doesn't serve the body politic and that the economy doesn't serve the people has taken firm hold. That only corporations and the rich profit. And that globalization, with its open borders and freedom of movement for both goods and people, is to blame for it all. "Globalists" is the word Trump derogatorily uses for people who promote these values.

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The world finds itself at a turning point. It must try to eliminate the drawbacks of globalization without destroying its advantages. If, on the other hand, protectionism and populism gain the upper hand, there is a danger that global prosperity could shrink. The age of globalization would be at an end.

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iehi-feed-61092 Wed, 16 Nov 2016 21:12:29 GMT Trump's name to be removed from three NYC high-rises following petition by 'embarrassed' residents http://implode-explode.com/viewnews/2016-11-16_TrumpsnametoberemovedfromthreeNYChighrisesfollowingpetitionbyemb.html  In October, residents from a trio of apartment complexes on the Upper West Side petitioned to have the name "Trump Place" removed from the towers' facades, saying they were embarrassed to be associated with Trump. On Tuesday, they got what they asked for. The company that owns the buildings said it would rename them after their street addresses -- 140, 160 and 180 Riverside Blvd. -- and take down the all-caps gold letters spelling out "Trump Place," the Real Deal reported.

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Located between 59th and 72nd Streets, the buildings were developed by Trump and a group of billionaire investors from Hong Kong in the 1990s, the Times reported.

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iehi-feed-61090 Wed, 16 Nov 2016 21:05:17 GMT Report: Lack of new building not to blame for soaring house prices (UK) http://implode-explode.com/viewnews/2016-11-16_ReportLackofnewbuildingnottoblameforsoaringhousepricesUK.html Soaring house prices and plummeting home ownership rates in the UK have not been primarily driven by a lack of new housing construction, a Labour party-commissioned review has found, contradicting conventional wisdom on the nature of the housing crisis.

The Redfern Review, published today, states, instead, that the biggest drivers of the large increase in house prices over the past two decades have been rising incomes and falling interest rates. And, more recently, a lack of mortgage finance availability for first-time buyers and the weakness of this group's income growth has been mainly responsible for the slump in the home ownership rate.'

Amazing that this kind of malarkey is still going around and has to be debunked -- the "conventional wisdom" that more homes needed to be built and that interest rates being artificially low had nothing to do with demand in the U.S. housing bubble of the 2000s was one of the major exacerbating factors (leading to vastly more pain in the crash).

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