HOME SALES PLUNGE FOR BIGGEST DROP IN 40 YEARS. IS THE HOUSING MARKET TANKING AGAIN?

During the last housing crisis in 2007, I predicted almost to the day when prices were going to start dropping like a stone. It wasn't rocket science as the figures, which anyone with a brain had access to, showed a steep drop in sales as the Ponzi scheme the rich were using to artificially inflate the housing market came crashing down, like all Ponzi schemes do.

You see, the wealthy were buying houses, adding a few bells and whistles, then turning them around a few months later and asking lots more money for the property. As rich people don't have to worry about monetary costs, and bought APR loans that mattered little to them as they had no intention of holding on to the house for more than a few months, and many bought the property with no money down and ridiculously low interest rates. By this method, they spent little out of pocket for enormous gains. The only problem was, as prices and interest rates rose, they forced the average home buyer either out of the market or into much more risky loans, both of which had disastrous effects. When homes stopped selling, due to home owners no longer buying and the equity vultures tapping out as prices became too high, the whole shebang blew up in our faces and started the DOW on it's steep downward cascade. So far for those still blaming Freddie Mac and Fannie Mae, the real culprits were the banks in on the scam and the vulture capitalists who stripped the housing market clean in their lust for money.

Here the scary part: it's all happening again. Having learned nothing from our past mistakes, banks are making no money down loans for the rich which has caused a buy out of cheap properties in places like California, Nevada and, especially Detroit, where property can be bought for pennies on the dollar. The problem with all of this, is much like 2007, the smaller buyer, the guy who wants a house to actually live in, is declining rapidly. The reason being is that as interest rates rise as well as home prices, many are being priced out of the market again. Without actual home buyers, this is again a Ponzi scheme that will collapse once the market reaches a saturation point, which some stats is already happening.

The magic number for rates to start slowing is 5% which is now the national average. Yes, if you look hard enough you can find better, but good luck qualifying for any of those unless you have a boatload of money. Investors are seeing the rising interest rates as a sign to stop buying which all stats say is happening. September had the biggest drop in home sales in 40 years. Some idiots have blamed the shutdown, but as that didn't happen until October, that's not even a possibility.

The same factors that caused the last Depression (and is still going on minus the fixed numbers the government keeps telling us) are back and with a vengeance. Yes the stock market has recovered and unemployment is down to 7% but as we all know, neither of those is true. The unemployment rate conveniently leaves out nearly a hundred million people from it's roster and the stock market is only rising due to QE infinity. When those dollars stop, so goes the economy. You can't have a nation make slave wages for the most part and expect economic growth of any sort. Supply and demand does not work when no one has any money. And as health care costs continue to rise, and Obamacare appearing to be dead in the water thanks to rank incompetence and Obama's lack of a spine in standing up to the insurance or pharmaceutical industry, this is going to cause all health care costs to start spiraling out of control. The right must be thrilled because they could use this to win big now in 2014, something that never should have happened. Once again the democrats have found a new way to lose. Swell.

Even economists are looking at the numbers our government gives and laughs. Even if inflation is 2.5% (which it isn't), our growth rate has been half of that. In real numbers, every year, average Americans are losing ground and neither the democrats or Republicans have any solution to fix anything. The GOP is far worse as the solutions they have will destroy this country if implemented. A recent poll said that 80% of America doesn't want changes to Social Security or Medicare. So what have both the President and the Right wingers suggested? Cutting both programs. This is further proof that your representatives don't speak for you but big business. Welcome to fascists America. Enjoy as you voted for it.

One of two things is going to occur in the next year, hyperinflation or economic collapse. There are no other options with what our idiot politicians are proposing so danger lurks around the corner as the housing market is once again the canary in coal mine. As equity monsters are pulling back on the market, prices have started to fall again. Less than half of the new buyers are actual owners, the rest profiteers. Once you get over 30%, which we have sailed by, the market will eventually collapse. The good news is I don't think we have to worry about anything until next year.  But I\if the Republicans throw another fit in January and shut the government down again, all the King's horse and all the King's men won't be able to put Humpty Dumpty back together again.