Where is Germany's gold? Last January, Germany announced that it wants 700 tons of its gold back from the US and France, because the Bundesbank, the central bank of the Federal Republic of Germany or Germany's equivalent of our Federal Reserve, (the biggest difference being that the Bundesbank can print Deutschemarks and the Federal Reserve can print dollars and Germany does not presently use Deutschemarks), plans to store half of Germany's gold reserves in Germany's vaults by 2020. This is 100 deutschemarks. If you are like me, and you probably are, except you are a bit smarter, and handsomer, and more personable, and more sophisticated, ok, not at all like me, you are probably wondering why Germany's gold is in…[READ MORE]

Mark Hanson claims housing data points to a bubble. Robert Shiller warns the housing market shows early signs of a bubble forming. Mark Hanson is the Rodney Dangerfield of housing market economists; he doesn't get much respect. John Burns, the local darling of the MSM, recently said, “I give him zero credibility.” Stern stuff. So when Mark Hanson argues the US is enmeshed in a housing bubble, he's dismissed as a perma-bear, a headline grabber, a fool who gets on TV for comic value. Housing pundits who don't share Mark Hanson's views find it easy to disregard him; dismissing Robert Shiller isn't so easy. Robert Shiller published a book called Irrational Exuberance that predicted a collapse in stock prices at…[READ MORE]

Home sales volumes will decline, particularly in the Bay Area and the Inland Empire, largely due to a lack of owner occupant buyers. Failed loan modifications will cause delinquencies to remain high; foreclosures will increase. Low down payment loans will come back. Last year, the housing market rebounded sharply as inventory remained low, investor activity remained high, and low interest rates spurred an early-year rally that reflated much of the air back into the old housing bubble. Why do I insist on portraying the strong market action as reflating the housing bubble? Three reasons: manipulated inventory, weak owner-occupant demand, and fabricated mortgage interest rates. First, inventory was artificially low due to bank policies regarding loan modifications, short sales, foreclosures, and…[READ MORE]

The current housing boom (or headfake) is the first nationwide increase in house prices since the postwar era not driven by increased demand for owner-occupied housing. Welcome back, everyone. I hope you enjoyed your holidays. In a sustained housing boom, demand comes from new workers forming households with enough qualifying income and liquid savings to purchase real estate at prevailing market prices. This increased demand outstrips supply, house prices rise, and homebuilders respond by increasing the housing stock. The increased homebuilding activity further stimulates employment and housing demand, and the entire economy benefits. House prices can keep rising as long as employment remains strong, wages grow, and interest rates remain stable or decline slightly. Every housing boom since WWII, and…[READ MORE]

Tony Bliss was a close friend of mine who lost his heroic battle with cancer in late 2012. He wrote about his experience in a series of gripping posts that reveal a beautiful and courageous man. I was deeply moved by these posts — some of which are admittedly difficult to digest. This writing is raw. Real. Be forewarned that if you read what follows, you will never be the same. You will laugh, cry, fear, hope, and stare into the abyss of your own mortality. I am honored to share this great work with you here. “Houston, we have a problem!” The clot thickens! Oh What A Night! How the Grinch Stole the Last Half of July and the…[READ MORE]