BUBBLES ABOUND AS THE ECONOMY ENTERS VERY SHAKY GROUND FOR 2014.

As I pointed out yesterday, the media has become cheerleaders for the government rather than the watchdogs they were originally meant to be. 60 Minutes was caught red handed trying to force their own version of history down our throats all in pursuit of the almighty dollar and not anything so noble as journalistic integrity. I watched NBC news lie to my face that the housing market is rebounding and we should all rejoice that prices continue to climb in places like CA, NV and TX. The same day, I read a column in my local newspaper that said the exact opposite was happening. They both can't be right, so who was? Not surprisingly, my local paper was right and NBC was full of it according to data I looked up today. Let's take a look at why the housing market is entering bubble territory and why the nightly news, for whatever reason, is sowing the seeds of our own destruction.

Housing in 2008 collapsed because people were using the homes for get rich quick schemes that were artificially pumping up the prices on houses and creating a demand that really wasn't there. Guess what investors are doing again, especially the Blackstone Group which is the largest private equity firm devoted to buying foreclosed houses and then renting them out for a profit? That's right, these companies are buying huge tracts of houses on the open market and then renting them out, meaning many of these houses are vacant as we speak. Cash buyers represent at least 30% of the market right now and growing.

So basically what happened here is the banks stole out houses, and are now granting us the privilege of renting them back for more money then the mortgage and for slumlord like upkeep. Ain't progress grand. As of today, the Blackstone Group has spent $7.5 billion on housing since 2008 and owns at least 40,000 properties nationwide. This group also owns part of the Hilton Hotel Chain, Sea World, the Weather Channel and dozens of other companies. Here's the best part, corporate structure is filled with the best of the best from every major banks including Goldman Sachs, Bank of America and JP Morgan/Chase or the very people that caused the first housing collapse in 2008. Swell.

Insiders say black and Hispanic owners are practically non-existent in the home buying field and that up to 90% of the people looking are the 1%. And of that numbers, at least 30% are equity firms. So if you have money, lots of it, houses a dime a dozen. If you're not, good luck because some rich white dude is just going to out bid you, and either sell it or rent for a profit. This is the very definition of a Ponzi scheme because, just as we saw in 2008, when the market gets too high, investors flee and, as they were ones buying most of the market share, housing started to plummet when no new buyers were interested.

But wait it gets better. Remember those real estate bundles where banks threw together a bunch of shitty loans and said they were triple A rated? Well they're back baby, only this time they are using rental properties for the same type of bundle deal. What could possibly go wrong? This is from RINF news:

"The company (Blackstone) wants money upfront to purchase more cheap, foreclosed homes before prices rise. So it’s joined forces with JP Morgan, Credit Suisse, and Deutsche Bank to bundle the rental payments of 3,207 single-family houses and sell this bond to investors with mortgages on the underlying houses offered as collateral. This is, of course, just a test case for what could become a whole new industry of rental-backed securities.

Many major Wall Street banks are involved in the deal, according to a copy of the private pitch documents Blackstone sent to potential investors on October 31st, which was reviewed by TomDispatch. Deutsche Bank, JP Morgan, and Credit Suisse are helping market the bond. Wells Fargo is the certificate administrator. Midland Loan Services, a subsidiary of PNC Bank, is the loan servicer. (By the way, Deutsche Bank, JP Morgan Chase, Wells Fargo, and PNC Bank are all members of another clique: the list of banks foreclosing on the most families."

So, to recap, banks are doing EXACTLY the same thing that got us in to this whole mess to begin with. The other problem is if these rental bundles go up in smoke, millions might be thrown out of their homes through no fault of their own. This could lead to a homeless problem the likes of which we have never seen.

The other problem is that Blackstone Group has been a shitty landlord as well. I love my landlord. I ask to get something done and it gets fixed rather quickly without any fuss. The private equity firm is not so good as stories have emerged of roach infested homes, leaky pipes and other maintenance issues. When people call to complain they either get a brush off or no response. Most renters say they would never sign another lease, some of which are an astonishing two years long. Who the hell signs a two year lease in this day and age? Some are being hit with fines for issues that they were not responsible for or even for lost payments that the Blackstone Group accepted and then lost the paperwork saying they hadn't been paid, even though the claimants had bank statements proving otherwise.

In Florida, a local subsidiary of the Blackstone Group sent out fake eviction letters, which resulted in a man nearly getting evicted form his home which he rightfully owned. I am against violence but if someone comes to take your house for any reason not legitimate, you have every right to defend yourself. You will probably die in the process, but if enough people stand up to this kind of tyranny, they will back down. The alternative is to enjoy living on the street.

So what we have is a predatory company buying up housing, repackaging them to look better than they are, charging sky high prices for the property and expect us all to go along with it. Fuck you, Blackstone Group. Fuck you.