Wednesday, July 11, 2018

Rental Investors Gamble

Yesterday I saw in the Wall Street Journal an interesting article discussing the huge transfer of housing wealth that occurred in the wake of the recession and the renewed push by financial firms to gobble up housing, particularly in the sunbelt:
Dezember, R. & Kussito, L. (2018, July 10). Rental investors gamble on affluent tenants. The WSJ, p. B1-2.The number of home purchased by major investors in 2017 was at least 29,000, up 60% from the previous year.... The number of homes purchased by major investors since 2013 - when Blackstone Group LP... and Starwood Capital Group gobbled up foreclosed homes - that investors bough more houses year-over-year. Single-family homes have become far more attractive...
In my blog and academic research, I've provided detailed accounts of how this transfer in housing ownership from people to financial firms resulted from decisions made by government and federal reserve officials to "save the economy" by bailing out the banks and insurers with unlimited access to loans. NO such programs were delivered to citizens.

Fed banks received access to funds at ZERO interest rate.

Banks were not sharing funds to everyday citizens, but rather were using them to purchase up the economy their risk-seeking and crashed.

What has been the result? Well, as Michael Hudson has described, we are moving to a toll-booth economy where everything is owned by a few private entities.

Housing is a very good case example of this trend.

Houses lost during the recession for many complex reasons - especially job losses and lenders' unwillingness to re-negotiate terms - were purchased by investors, leading to an unprecedented transfer of wealth as former owners became renters.

Since average Americans hold most of their wealth in their houses, this transfer of ownership is likely to significantly and adversely impact Americans' lifetime accumulation of wealth, contributing to impoverishment in retirement.

This transfer is again accelerating, as described by the WSJ article.

I used Google to search "Majia's blog and housing crisis" yet very, very few of my many posts turn up  as results (9 results, only 5 of which refer to anything I wrote).

I then tried "majia's blog and credit default swaps" and couldn't find any of my related posts! What is going on here? Censorship perhaps?


Majia's Blog: The Death of Liberal Biopolitics and the Rise of the ...

Majia's Blog: De-Regulating the Would-Be Masters of the Universe ...

Majia's Blog: The Instruments of Financial Sovereignty


Essay: The Biopolitics of Transactional Capitalism:

Book: Crisis Communication, Liberal Democracy and Ecological Sustainability: The Threat of Financial and Energy Complexes,




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