Free market capitalism my ass! With the Federal Reserve Board (FRB) reportedly buying $40 Billion per month and I believe it is far higher than that and the massive injection of bailout funds into zombie banks whom would have long ago closed their doors, it is not difficult to see the writing on the wall — that wall is the stall door of the public restroom! When you look across the board one startling fact rings true: In upwards of seventy percent (70%) of all buyers in today’s residential real estate market are cash buyers. In essence, large institutional players are the ones buying homes and not average families. The first question is why? Well, the big money players are able to borrow at zero percent (0%) interest. You and I are not. This is a pretty clear signal that FRB is going to keep rates at zero for the foreseeable future, as Fabian Calvo, a real estate investor, was quoted saying. When the prices go back up; prices with respect to the mortgage backed securities (MBS)/toxic assets, we are going to see this new bubble burst. Smoke and mirrors folks; just another dog and pony show.
What does this mean in layman’s terms? Pretty simple: Because the FRB is pumping all this cash into the zombie banks, the banks are allowed to hold back on dumping their toxic assets onto the market. This, my friends, dovetails into my position that the Shadow Foreclosure Inventory contains an enormous amount (20 MILLION Plus) of zombie foreclosures! My article on this comes out later this evening.
Truth be known, between Institutional Investors and the FRB are on a shopping spree like a Soccer Mom on the Jenny Crank diet! And why not?! The mess that the banks created became funded by the taxpayers; US Taxpayers, in essence, funded the foreclosure upon their own homes! Now, the very same banks that settled close to $10 Trillion +/- in questionable foreclosures for $25 Billion are out snapping up these very same properties for resale back to the Sheeple — ahem, US Taxpayers — by and through shell companies and Investment firms!
Under any true free market economy we would be having hundreds of banks going out of business a month flooding the market with tens of thousands of properties forcing the crash of the real estate market. What we see, though, is the artificial buttressing of these zombie financial institutions by FRB Chairman Ben Bernanke by and through Quantitative Easing (QE). As a direct result the incestuous relationship between the US Government, the financial institutions and the Ivy League Schools they all attended are brought into full focus. The by product of this madness; this adolescent wet dream, is that inflation which Bernanke states is low is actually sky high when you look at the Food and Energy Markets. Further, since the inception of QE Policy we have seen a devaluation of the dollar by over fifty percent (50%)!
The last paragraph is of GREAT importance to the Property Preservation Contractor. Not only have our wages fallen; not only have the National Order Mills such as Safeguard Properties, et al., began to extend their tentacles into the insurance servicing and rehab portions of the market so as to consolidate a monopoly control in my opinion, but the prices being paid today MUST be reduced by an additional FIFTY PERCENT! You think about that the next time some schmuck at a Regional or National tells you to cut a lawn for $20!