The usual real estate market forecasters have been saying for at least a year now that the U.S. real estate market is due for a major correction. Their position seems to largely be based on the “fundamental” fact that average income is not keeping pace with the extremely fast-growing and high-flying prices of homes. In focusing on these “basics” these forecasters ignore all the big words and complicated theories that tell most economists that the real estate market is strong.
But it seems like things are starting to break up, after many months of warning the forecasters clearly are seeing something going wrong in the high end real estate market. The big players are still trying to play it cool, for example the Fiscal Times reports that the luxury real estate market is “cooling off.”
Coast to coast though, we seem to have a problem. For example, we see “Billionaires Row” in New York, New York, headed for its first foreclosure. We also see what the Wall Street Journal calls a “fraying” of the luxury housing market in Greenwich, Connecticut.
Meanwhile, on the West Coast, some are saying that San Francisco’s high-end real estate market has finally “peaked” after years of growth that is divorced from all economic realities…which created a market where a small “starter home” goes for $730,000.
Folks on the lower end who do not live in the red-hot markets (SF, LA, Portland, Seattle, NY, etc.) never really saw much of a recovery after the 2007 crash. Thus, if we see another real estate “correction” it stands to reason that people in fly-over Trump country will be hardest hit when their homes suffer another blow after never fully recovering from the last one. A double whammy, ten years in the making. Why should you care about the high-end luxury United States real estate market? How would a crash in New York impact me in Omaha? It’s simple: shit flows down hill.
We learned today that Jared Kushner is a person of interest in the FBI investigation into Trump campaign connections to Russia. Coincidentally, it was also reported recently that Kushner pushed very hard to have Comey fired and also pushed to retaliate for the appointment of a special counsel. He wanted to fight the investigations into Trumpland very hard—as if it was the fight of his life.
But what has Kushner done to become a potential target of a federal criminal investigation? We know that back in December 2016, Kushner met with a Russian banker at the request of the Russian ambassador to the United States.
This raises questions because “Russian bankers” usually are agents of the Russian government and work very hard to move dirty Russian money around the world and help cover up Russian financial crimes. In fact, a Russian banker was sentenced to 30 months in prison after he was prosecuted in federal court in New York. The charge? Conspiring to work for Russian foreign intelligence services in the United States. The prosecutor who took down the Russian banker? The U.S. attorney that Trump fired earlier this year.
As for Kushner’s meeting in December 2016 with Banker Sergey Gorkov, Gorkov is also someone on the feds’ radar. Gorkov used to serve on the Executive Board and was Vice President of another Russian bank, Sberbank. (source) This week Trump named Marc Kasowitz, an attorney who previously represented Sberbank in federal court, as his private counsel for the Russia investigation. Kasowitz has another Russian client: a company operated by Oleg Deripaska, a man who Paul Manafort, Trump’s former campaign manager, signed a $10M annual contract with to influence politics, business dealings and news coverage inside the United States. Manafort’s contract with Deripaska had one major purpose—to benefit President Vladimir Putin’s government.
Trump and his buddies are pushing their way to the top of the FBI’s list.
On the same day that Trump announced a record weapons deal with Saudi Arabia, news broke that the Saudi terrorist group ISIS murdered 22 people in England. Before the attack, Trump was busy negotiating down the price from American companies for the Saudis–in other words he was negotiating against America for his Saudi friends. His little shit stain son-in-law Kushner even called the American company Lockheed to get a better price for the Saudis. Right after Trump bent over and gave the Saudis everything they wanted, the Saudis then turned around and donated $100 million to Trump’s daughter’s charity. Smell like a scam to you?
The Saudi Arabian royal family are Trump’s new lovers. They use American weapons to murder civilians and bomb hospitals, causing a Cholera outbreak in Yemen. They also spend their money on funding groups like ISIS or paying for and planning the 9/11 attack. Trump knows this and yelled at Hillary during the election for taking Saudi money. Now that he is in the White House and sees dollar signs, however, he’s ready to take a bow for his Saudi masters just like Obama and Bush did before him. There’s too much money on the table to care about dead Americans and civilians around the world.
Just when you thought the week might be calming down, the NYTimes drops the bombshell that Trump told the Russian spies, who he invited to the Oval Office, that he fired Comey for being a nutj ob, and to “take the pressure off” the Russia investigation. Trump’s spokesman, Spicer, refused to deny that Trump made the comment. Which either means it’s on tape or video or that there were so many witnesses to the statement it would be impossible to deny it.
Then, a few minutes later, just as soon as Trump’s plane went “wheels up” for his trip to the Middle East, the WaPo dropped another bombshell: a current, and very senior member of Trump’s White House team has been swept into the FBI’s Russia probe.
We do not know who the senior official is. However, based on what we know, the best guess seems to be on Trump’s son in law, Jared Kushner. This is based on his track record: he forgot to mention on his security clearance forms that he had a meeting with Russians, met with a Russian banker with direct ties to Putin, did not want to appoint a special counsel, and pushed hard for Comey’s firing. Kushner has also “lawyered up.” Kushner’s dad is also a known criminal felon for . . . you guessed it, illegal campaign contributions, among other things.
According to Washington Post reporters on Twitter, the day is not over . . .
The fun started on May 10, 2017, when president Trump met with the Russian foreign minister Sergey Lavrov and the Russian ambassador Sergey Kislyak in the Oval Office of the White House. Kislyak is a known Russian spy. Trump prohibited all American media from the meeting, but allowed Russian state news agency TASS, a Russian propaganda network, into the meeting.
Then on May 15, 2017, the Washington Post reported that Trump told the Russian spies during the meeting “highly classified information.”
Trump’s people quickly came out and said it wasn’t true. But that didn’t last long. Instead of denying that he leaked classified information, Trump admitted it. He said he had the “absolute right” to share classified information with the Russians. He also said he shared the classified information for “humanitarian” reasons.
In response to Trump leaking classified information, Republican senator Collins has asked for a briefing on all of the info Trump passed to Russian spies. Republican congressman Justin Amash is demanding that Trump share with Congress, in a classified setting, the “precise” details of Trump’s meeting with Russian spies. Republican senator John McCain said that Trump’s sharing of information with Russian spies is “deeply disturbing.”
The intelligence community is also very angry. A former CIA agent said that Trump’s leak to Russian spies “will get Americans killed.” And Israeli media is reporting that U.S. officials warned Israel not to share sensitive intelligence with Trump because Trump would pass the information to Russian spies would would then pass the information to Iranian spies. Iran is on record as wanting to destroy Israel.
Even Trump himself demanded that Edward Snowden be “executed” for giving “serious information” to Russia.
President Donald Trump fired the FBI director and later explained in a news interview that part of the reason why the FBI director was fired was the ongoing Russian investigation against Trump and his campaign. Of course, when the firing was first announce the president said the real reason was the botched Hillary investigation by the FBI. He didn’t want to say that he fired a guy because he was tired of the guy investigating him for criminal wrongdoing. That would be . . . a crime! But eventually he stopped caring and admitted it–he fired Comey over the Russian investigation.
Even though Trump has now come right out and said that he fired Comey due to the investigation, republicans REFUSE to believe that the Russian investigation had anything to do with the firing. Trump tells them the reason right to their face and yet, they don’t believe it. His supporters seem unwilling to believe anything negative about Trump, even when he himself admits it.
The Trump tax plan will, of course, save the rich millions of dollars. It will also help some people at the bottom by pushing them off the tax rolls. The middle class, however, will get beaten over the head with a massive tax increase. Essentially, Trump’s plan would eliminate the mortgage interest deduction that middle-class American homeowners depend on. It would also eliminate other tax deductions middle-class Americans depend on such as the mortgage insurance deduction and state income tax deduction. Translation: if you are in the middle class, be prepared for Trump to tax you heavily if his plan passes.
Take a single female who’s earning $65,000 a year and paying $1,000 a month in rent in Colorado. She decides to make a little higher monthly payment to become a homeowner. She puts 5 percent down on a $265,000 condo, which increases her monthly housing costs to $1,193 (principal and interest). That’s a common scenario for a first-time buyer like her, because while her costs go up, she now has a home of her own and the chance to build equity over time.
But under today’s tax code, her monthly costs actually go down, according to an NAR analysis, because when she claims all of the itemized deductions available to her as a home owner, she ends up with a net tax benefit of over $3,300, or roughly $275 a month, compared to what she would get by taking the standard deduction. When that $275 a month is factored into her monthly housing costs, she’s paying significantly less than she was as a renter.
Under the Administration’s tax plan, that advantage goes away almost entirely because she can only deduct her mortgage interest and charitable contributions Without the option to deduct real estate taxes, state and local taxes, and mortgage insurance premiums, her net tax advantage over taking the standard deduction falls to a little more than $150. Although that’s still a net gain, it’s just a shadow of her current benefits and not nearly enough to bring her monthly housing costs down to what she was paying when renting.
The bottom line is that for 95% of homeowners in America, the Trump tax plan will destroy the mortgage interest deduction. The middle class bailed out the rich and the poor during the Great Recession–they bailed out the rich bankers who destroyed the economy and the poor who took out loans they couldn’t afford. Looks like the middle class will be bailing out the rich and the poor once again.