Wolf posted his latest update on housing prices. Nothing new there. The usual combination of Larry Fink evading taxes and Chinese billionaires evading taxes. Just the US economy operating as intended for the benefit of all Americans. (All Americans = Larry Fink and Chinese billionaires.)
One commenter hit a new and previously unasked question:
When is high or lack of insurance going to become a factor? And who will pay it?
I’ve been asking about the missing insurers since 2008, and haven’t found a satisfying answer. Insurance companies are BIG and RICH and INFLUENTIAL. They naturally depend on interest-bearing bonds, and are often legally required to stick with bonds. Why did they allow ZIRP to continue for so many years?
This new question is equally good. We blame higher rates for the stalled housing market, but rates make a VERY SMALL DIFFERENCE compared to the insane asking prices caused by Larry Fink cornering the market. Prices are THREE TIMES what they should be, which dwarfs the rise of interest from previous 3% to current 7%. The current 7% is HISTORICALLY NORMAL, while the current asking prices are way beyond unprecedented.
Are some people unable to buy because insurance rates have increased along with the price? It would make sense, but we’re not hearing about it. If insurance premiums are not increasing in proportion, why not?
The last question reminded me that I saw part of the answer earlier today. Insurers are leaving California because Calif laws forbid them to raise rates in proportion to prices. Prop 103 is parallel to the more famous Prop 13 which halts rises in property taxes. Newsom is pretending to deal with the problem but not really trying. If he solved it, he’d lose the ability to blame and frame an innocent bystander (weather aka BURNING BURNING BURNING CLIMATE EMERGENCY EMERGENCY EMERGENCY) for a simple law that he could change by a stroke of the pen if he wanted a solution.
Polistra's Mill 