Don't let Trump take the lead on housing

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By JENNY DURKAN and JIM KENNEY

Walk through any major city today, and it’s easy to see why housing affordability and homelessness are top concerns across the country. Minimum wage workers are relying on food banks and overnight shelters. Unsheltered veterans, families and neighbors are living in desperate, unsanitary conditions. Students leaving school after the final bell meet their parents and siblings where they live together: in their cars, unable to find affordable homes. Too many families in cities like ours are now living in cars, vans or RVs.

Last year, 550,000 people in the United States experienced homelessness for at least one night, and the crisis is worsening: Right now, we are short more than 7 million units of affordable housing, while existing housing prices continue to outpace wages, squeezing the growing number of households that are barely hanging on. Yet this critical issue, which manifests in our country’s legacy of poverty and the bleak reality of a vanishing middle class, rarely makes national headlines and hasn’t received the thoughtful national attention it deserves.

One 2020 candidate, however, is bringing attention to the crisis—just not the kind America needs or deserves.

Last week, the Washington Post reported that President Donald Trump is ordering a “crackdown” on homelessness and that his aides have been mulling the possibility of the federal government moving into cities to round up people experiencing homelessness. This week, Trump’s Council of Economic Advisors released a report that focuses on misleading assertions that this crisis could be cured by deregulation of the housing market. Afterward, the president visited California and spread more false narratives about the problem of homelessness.

So, where are the Democrats? Last week, most of the 2020 Democratic candidates had an opportunity to show leadership on the issue and seize it to their advantage during their debate in Houston. They hardly mentioned it.

Let’s be clear: Cities have been asking for help. We desperately need collaboration from the federal government, with its unique ability to catalyze fundamental policy change and make investments at the scale the problem demands. But instead of looking for ways to support and partner with America’s cities to help solve this human crisis, Trump hurls insults, floats poisonous policy proposals and pushes sensational headlines, not solutions. It is time to end this political game.

https://www.politico.com/agenda/story/2019/09/19/homeless-housing-affordability-000976

Jenny Durkan is Mayor of Seattle. Jim Kenney is Mayor of Philadelphia.

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1. If you think housing is expensive now, wait until.....

Trumpy forces FED to go negative interest rates!

5 Biggest asset bubbles in History:

The Dutch Tulip Bubble: The Tulipmania that gripped Holland in the 1630s is one of the earliest recorded instances of an irrational asset bubble. By one account, tulip prices soared 20-fold between November 1636 and February 1637, before plunging 99% by May 1637, according to former UCLA economics professor Earl A. Thompson. As bubbles typically do, Tulipmania consumed a wide cross-section of the Dutch population, and at its peak, some tulip bulbs commanded prices greater than the prices of luxury homes.

The South Sea Bubble: The South Sea Bubble was created by a more complex set of circumstances than the Dutch Tulipmania, but has nevertheless gone down in history as another classic example of a financial bubble. The South Sea Company was formed in 1711, and was promised a monopoly by the British government on all trade with the Spanish colonies of South America. Expecting a repeat of the success of the East India Company, which had a flourishing business with India, investors snapped up shares of the South Sea Company. As its directors circulated tall tales of unimaginable riches in the South Seas (present-day South America), shares of the company surged more than eight-fold in 1720, from £128 in January to £1050 in June, before collapsing in subsequent months and causing a severe economic crisis.

Japan's Real Estate and Stock Market Bubble: In the present era, asset bubbles are sometimes fuelled by overly stimulative monetary policy. The Japanese bubble was a classic example. The yen's 50% surge in the early 1980s triggered a Japanese recession in 1986, and to counter it, the government ushered in a program of monetary and fiscal stimulus. These measures worked so well that they fostered unbridled speculation, resulting in Japanese stocks and urban land values tripling from 1985 to 1989. At the peak of the real estate bubble in 1989, the value of the Imperial Palace grounds in Tokyo was greater than that of the real estate in the entire state of California. The bubble subsequently burst in early 1990, setting the stage for Japan's "lost decades" of the 1990s and early 2000s. (For more, see: From Mrs. Watanabe to Abenomics: The Yen's Wild Ride.)
The Dot-Com Bubble: For sheer scale and size, few bubbles could match the NASDAQ bubble of the 1990s. The introduction of the Internet triggered a massive wave of speculation in "New Economy" businesses, and as a result, hundreds of dot-com companies achieved multi-billion dollar valuations as soon as they went public. The NASDAQ Composite, home to most of these technology / dot-com companies, soared from a level of under 500 at the beginning of 1990 to a peak of over 5,000 in March 2000. The index crashed shortly thereafter, plunging nearly 80% by October 2002 and triggering a US recession. The Composite eventually reached a new high only in 2015, more than 15 years after its previous peak.

The US Housing Bubble: Some experts believe that the bursting of the NASDAQ bubble led US investors to pile into real estate in the mistaken belief that this was a much safer asset class. While an index of US house prices nearly doubled from 1996 to 2006, two-thirds of that increase occurred from 2002 to 2006, according to a report from the US Bureau of Labor Statistics. Even as house prices were increasing at a record pace, there were mounting signs of an unsustainable frenzy—rampant mortgage fraud, condo "flipping," houses being bought by sub-prime borrowers, etc. US housing prices peaked in 2006, and then commenced a slide that resulted in the average US house losing one-third of its value by 2009. The US housing boom and bust, and the ripple effects it had on mortgage-backed securities, resulted in an global economic contraction that was the biggest since the 1930s Depression and has come to be known as the "Great Recession."

The Bottom Line

The five bubbles discussed here were among the biggest in history, and hold valuable lessons that should be heeded by all investors.