April 30, 2014

The Miracle Business

The Santa Cruz Sentinel reports from California. “It’s tough for home buyers in Santa Cruz County. In March, the median price was $662,750, the highest in a year except for November, according to Gary Gangnes of Real Options Realty, who tracks the numbers. Judy Brose, an agent with Century 21, helped her client sell a home just under 1,000 square feet for $635,000. Listed for $559,000, it got seven offers. The successful buyer made the highest offer and paid cash, with two of the others asking if they could offer more. ‘I feel like I’m in the miracle business,’ said Brose.”

The San Francisco Chronicle. “Claudia Flores is a 36-year-old professional who has worked in the City Planning Department for eight years. She was booted in October from a three-bedroom condo where she rented a room for $1,000 a month. The rent for the entire place, which is not covered by rent control, was going up to $6,300 a month.”

“The owners said, ‘We would love to keep you because you’re a wonderful tenant, but we don’t think you can afford that rent,’ Flores recalled. They added: ‘Maybe you could find somebody who works for Google or YouTube, and they could take the larger room and that would allow you to stay.’ Now she’s crashing with friends and trusting a space will open up in another friend’s apartment next month.”

The Glendale News Press. “The median price for a home in Glendale dropped below the $700,000 mark last month for the first time since last fall, according to the latest real estate report. The median price for a single-family home was $689,000 last month according to statistics compiled by Realtor Keith Sorem with Keller Williams in Glendale. Diana Walker, a real estate sales agent with Dilbeck Real Estate, said home prices have gradually risen during the past 12 months, but they might have finally peaked.”

“‘I think they’re adjusting now. They’re not just going up constantly like they have for the past year,’ she said. ‘We’re seeing buyers feeling a little more confident.’”

The Desert Sun. “In Palm Springs in March, the year-over-year median price for a home climbed 48 percent to $369,500 in north Palm Springs and rose 44 percent to $325,000 in south Palm Springs. But sales in Palm Springs were slow, dropping roughly 18 percent from March 2013. The high demand for Palm Springs has been largely fueled by retirees and second-home buyers, many from coastal communities, who desire the trendier vibe of the city, said Kevin Stern, a broker for Town Real Estate in Palm Springs.”

“‘Some of the prices are a little too high, and prices are almost back to the point where they were before the fall,’ Stern said.”

“Though prices are rising, the buying frenzy in the rebounding market has started to calm down, agents said. ‘Some of those sellers that were putting their houses at the higher peak prices,’ said Tim Schneider, a Windermere agent in Palm Springs. ‘Now they are sitting a bit longer. Things have leveled out a bit, and some of them have had to reduce their prices.’”

The Street. “Eyebrows were raised all over Wall Street this week, and likely on Main Street, too, after the U.S. Commerce Department released its single-family home sales figure for March. The news wasn’t good for the real estate market, as sales fell by 14.5% for the month, and 13.3% against March 2013 figures. According to Redfin, only 49% of homeowners say they are in a ‘financial position to sell’ their homes right now. That leaves 51% who aren’t ready to sell, for a variety of reasons.”

“‘Competition can still get intense, but because prices have risen so much, my clients and I try to be more discerning about how far we should go to win a home,’ says Minni MacFarlane, a Redfin agent in Orange County, Calif. ‘The past two years we’d compete against people camping out in their cars or entering lotteries to win new homes. This year, a bidding war is more likely to drive the price of a home higher than it’s worth competing for, and I think it will be easier for us to walk away from a situation like that.’”

The Bakersfield Californian. “A climactic chapter in Bakersfield, Calif.’s, long-running Crisp & Cole saga may have closed with last week’s verdict in the trial of Julie Dianne Farmer, but the larger mortgage fraud case is by no means resolved. Still to come are sentencings for nine of the 15 remaining defendants, including Farmer, the former office manager found guilty Tuesday in U.S. District Court in Fresno of five of 12 counts against her. But even those decisions go only so far in putting to rest a case that shook Bakersfield’s real estate industry and which federal prosecutors say cost lenders about $30 million.”

“One of the case’s first whistle-blowers, local real estate appraiser Gary Crabtree, is still asking questions about how the case was pursued. He criticized what he saw as sluggish action on the part of law enforcement he first alerted to the fraud in 2006. ‘When you look back at the case, why did it take 7 1/2 years?’ he asked. ‘I mean, that’s a question that needs to be answered, because the strategy of the Department of Justice and FBI on mortgage fraud was to select the most egregious fraud cases from across the country and prosecute them vigorously in a timely manner.’”

“That strategy was supposed to send a message to the real estate industry, he asserted. ‘If that was the goal, it failed miserably,’ he said.”

Bits Bucket for April 30, 2014

Post off-topic ideas, links, and Craigslist finds here.

April 29, 2014

It’s Never Going To End

The Boston Globe reports on Massachusetts. “The success of shows like ‘Flipping Boston’ has been one factor contributing to the boom in house-flipping since the economic downturn began in 2008. Kerry Sullivan, a Wellesley-based real estate agent, and Lenny Rowe, a member South Shore Association of Realtors, haven’t seen much flipping activity at all. Peter Souhleris, when not on TV, runs Peabody-based CityLight Homes, speculated that his and other flipping TV shows could be creating more competition. ‘Are we shooting ourselves in the foot? I don’t care. We know the market so [well]. . . I think there is so much out there that it’s never going to end,’ he said.”

The Philadelphia Inquirer in Pennsylvania. “The city’s for-sale housing market is experiencing fits and starts on a seemingly unending road to recovery. The luxury rental market, on the other hand, remains hot. Economist Kevin Gillen, who tracks real estate in the region, said, ‘I can’t help but have the same feeling about the rental market today that I had about the housing market back in 2005. I don’t know exactly when the market will rebalance itself between renters and owners,’ Gillen said, ‘but I do know that if something can’t go on indefinitely, it won’t.’”

Foster in New Hampshire. “A large part of the population is still choosing to rent rather than buy, even though rent can cost up to 30 percent of their income. ‘Over the past 5-10 years, we’ve seen a decline in the number of homeowners in the age group from 25-34. What’s happening is that particular age group is putting off home purchase,’ Dan Smith, the director of Housing Research at the New Hampshire Housing Finance Authority, said.”

“Pat Beaver, who has been selling homes in Strafford County area for more than 15 years, agrees the economy has had a negative effect on the number of young homeowners. Beaver explained that many people refuse to sell unless they can get back what they owe on the house. ‘A lot of people put their houses on the market expecting to cover what they owe against them. During 2003, 2004 and 2008, a lot of those homes were overvalued. A home could be worth $200,000 on paper and actually be worth only $175,000. If you have an overinflated price to begin with, you’re not going to get it back unless the market goes up again and that’s not happening.’”

Press of Atlantic City in New Jersey. “Home sales dropped nationally and in South Jersey in March during the early portion of the spring buying season, according to data from national and state Realtor associations. Some of the inventory includes distressed properties that may be in inferior condition and unappealing to house hunters discouraged by lengthy and uncertain settlement periods.”

“In the first quarter of 2014, foreclosure activity in Atlantic, Cape May, Cumberland and Ocean counties increased faster than the state average of 66 percent from the year before, according to RealtyTrac. In Atlantic County, year-over-year filings — including pre-foreclosures, notices and banks taking ownership of properties — were up 116 percent in the first quarter; 127 percent in Cumberland; 71 percent in Ocean; and 90 percent in Cape May County, RealtyTrac said.”

“‘The only downside we’re having right now is there’s not a lot of quality inventory — a great percentage of the inventory is still distressed sales,’ said Brenda Lawn, of Berkshire Hathaway HomeServices Fox & Roach in Northfield.”

The Lohud Journal News in New York. “In Westchester, foreclosure judgments this first quarter nearly tripled to 180 from 62 in the first quarter of 2013. Rockland County had 46 judgments in the quarter, compared with 18 in first-quarter 2013. ‘The number of foreclosure judgments in the first quarter of 2014 is almost three times the number from the first quarter of 2013,’ Westchester County Clerk Timothy C. Idoni said. ‘But rather than a rash of all new filings, we are seeing a cleanup of situations where homeowners have been in trouble for a long time.’”

“James Passabet Jr., a 27-year mortgage loan professional now with PNC Bank, says he isn’t shocked by a flurry of judgments this first quarter. ‘A lot of these are coming home to roost. It is a function of the system saying, ‘Enough is enough.’ I have known people where it has taken three to four years with reviews, modifications and more paperwork,’ Passabet said. ‘It has finally come to the point where the court is asking if borrowers want to keep the property or walk away.’”

“Putnam had 81 judgments distributed among its six towns, said Michael Bartolotti, first deputy county clerk. The numbers range from 19 in Carmel and 16 in Southeast to four in Philipstown. Rockland had 84 judgments for 2013, with no town immune. An analysis shows there were 26 in Ramapo, 17 in Haverstraw and five in Stony Point, for example. ‘Foreclosures are in every community and (it) causes a certain amount of shell shock in buyers,’ said Bartolotti. ‘People looking to buy are concerned when they see these numbers, and they don’t want this to happen to them.’”

The New York Post. “A Queens man convicted of defrauding distressed homeowners in a mortgage scam is seeing his own Howard Beach home overrun by squatters while he’s sitting in the clink. Neighbors of the two-story house worth $562,000 on 90th Street say the brazen interlopers have been bounced and arrested — but they keep coming back. ‘Who are they, and where did they come from?’ fumed one resident, adding that one squatter laughed when police cuffed him last week. ‘When the cops came, he had no shame.’”

“The house’s owner, Isaak Khafizov, 27, was sentenced to nine years in federal prison last month for bilking people out of hundreds of thousands of dollars after promising to get their mortgages modified and lower their monthly payments. Vicki Tepper, a victim of the scheme, said that with his new home woes, Khafizov was getting ‘what he deserves.’ ‘He messed with a bunch of people’s lives,’ said Tepper, who owns a pet shop in New Jersey. ‘He took our money, and he tricked us into believing things that weren’t true.’”

“Assemblyman Phillip Goldfeder said a bank has repossessed the home and plans to take legal action to remove the squatters. ‘The most ironic part is the guy went to prison for mortgage fraud, and now his home has been a hub for criminal activity,’ Goldfeder told The Post.”

Bits Bucket for April 29, 2014

Post off-topic ideas, links, and Craigslist finds here.

April 28, 2014

After Touching The Ceiling

Xinhua reports from China. “Economists from China’s leading think tanks have dismissed predictions that a possible property meltdown would trigger a crisis or even a crash in the world’s second largest economy. ‘It can be said that China’s property bubbles are now the biggest risk in its economy, but bearish talk of a collapse of the whole economy smells of ulterior motives,’ Wang Xiaoguang, a researcher at the Chinese Academy of Governance, told Xinhua.”

“Jia Kang, director of the Research Institute for Fiscal Science at China’s Ministry of Finance, warned against the ‘divergence’ in China’s housing market. ‘In big cities like Beijing and Shanghai, the risks of the property market are not so big,’ Jia told Xinhua.”

From Reuters. “Prices of several residential properties on sale in China’s eastern cities of Shanghai and Hangzhou dropped sharply over the weekend, feeding industry speculation of a fresh round of price cuts by developers to boost sales, the Shanghai Morning Post reported on Sunday. The developer of a high-end residential property project on the outskirts of Shanghai on Saturday slashed average prices of a batch of homes on sale by 28 percent to 36,000 yuan ($5,800) per square metre amid sluggish sales, the newspaper reported.”

From East Day. “High-end residential market in Beijing experienced downturn in sales volume and price in the first quarter, fresh evidence of slowdown of the red-hot housing market, said the world’s leading real estate consulting company DTZ. The average high-end housing price in Beijing dropped by 5.45 percent quarter on quarter to 49,287.77 yuan (about 8,014 U.S. dollars) per square meter in the first quarter, according to data from DTZ. The high-end housing transaction volume in Beijing plunged by 23.85 percent quarter on quarter in the first three months.”

Want China Times. “The Hangzhou government announced that real-estate developers have to report to government agencies before making large price adjustments to houses on sale. According to government statistics, 10,112 residential housing units were sold between January and March this year in the city, a 37.8% plunge year-on-year. In the same period, the average selling price for residential units in the downtown area dropped to 15,388 yuan (US$2,467) per square meter, down by 11.3% from a year ago.”

“The number of available houses has reached a record high. As of March this year, 76,004 residential housing units were available for sale, an annual increase of 36.2%. Price competition in some areas of Hangzhou that have an excessive house supply is intense, which has hurt fair competition in the market. A real-estate agent said that in some areas, if one real-estate developer lowers prices, other real-estate developers will follow suit immediately.”

From ECNS. “Stringent bank loans since the end of last year have dealt real estate firms, medium- and small-sized ones in particular, a blow in securing their fund chain, said Hu Baosen, board chairman of Central China Real Estate Ltd. Among the 35 major cities surveyed by Centaline Property Agency Ltd., 25 have seen their banks suspend housing loans.”

“‘China’s property market is adjusting after touching the ceiling, and the extent of adjustment will go beyond the anticipation,’ said Tian Ming, board chairman of Landsea Group. ‘No property enterprises, big or small, are safe,’ Tian said.”

From IFR Asia. “Chinese banks are cutting their exposures to risky borrowers amid fears of increasing default rates in a move that threatens to trigger a wave of bankruptcies across the country. ‘Since the beginning of this year, we have stepped up efforts to stop rolling over loans to risky borrowers in underperforming industries,’ said a banker in the credit-approval department at Industrial and Commercial Bank of China’s Zhejiang branch. ‘We expect more defaults this year and, so, need to tighten credit-risk control.’”

“As banks stop rolling over troubled loans, however, they are forcing hundreds of companies in these industries to shut down, according to Robert Davis, senior portfolio manager of INGIM emerging markets high yield dividend fund, who went on an investment trip to China in March. ‘We heard many smaller companies are failing due to a liquidity crunch and we expect the situation to worsen,’ he said.”

“‘It is increasingly the case of ‘we want to get back loans and stop renewing as much as possible to risky industries,’ said a Hangzhou-based loan banker from Evergrowing Bank, a medium-sized joint-stock commercial bank. ‘A further uptick in bad loan rates could wipe out most of the bank’s profits,’ she said.”

Bits Bucket for April 28, 2014

Post off-topic ideas, links, and Craigslist finds here.

April 27, 2014

An Attempt To Reestablish An Unsustainable Charade

Readers suggested a topic on the changing housing market. “How long from now will the MSM openly acknowledge U.S. housing price declines?”

A reply, “I do not expect ‘rebubble pricing’ to continue. My expectations of the market are that housing prices will bounce along with the seasons, some increases, some decreases, but generally a moderately upward trend of 0-5% annually. I believe the Fed will continue to taper, the economy will continue to percolate and recover and the two will offset each other.”

“I do know that 85% of the residents in my properties are seriously saving to buy their own home. That seems like a telling statistic. All the young members of my family are in the market to buy homes for themselves in the next few years. Household formation is a powerful factor in the markets.”

One said, “I’m not trying to live a single life and I would give in to actually owning a house but not if I’m going to be ripped off by the hucksters in the REIC colluding to prevent a drop back to where things would be if not for the fraud and crookedness. My stridency this time comes from the blatant shills and pimps who deny recent and obvious history. Prior to the last fall at least there wasn’t this obvious data point staring you in the face.”

And finally, “A moth goes to the light. A mariner keeps it to one side. It is not negative to avoid obvious hazards. I boat through water with rocks and shoals. I am optimistic that I will arrive safely at my destination because I do all possible to identify the rocks and go around them.”

The Wall Street Selector. “The contraction that follows on the heels of a major real estate bubble is often just as sticky as the previous expansion was. The reason (as e.g. Japan demonstrated) is that someone has to bear large losses once the phantom wealth disappears – whether the losses are admitted to or not. The illusory accounting profits of the boom were very large, and the subsequent losses are essentially their mirror image.”

“One therefore ends up with a banking system unwilling and incapable of restarting the inflationary lending cycle (mind, it would be capable in theory, but in practice it would maneuver itself into an even more vulnerable position) and scarred would-be borrowers who are no longer interested in burdening themselves with debt that might come back and haunt them in the future.”

“We subsequently watched with awe as Bernanke’s ‘QE’-driven echo bubble grew ever larger, eventually beginning to take house prices back up as well, in spite of still widespread mortgage delinquencies.”

“However, as our resident real estate expert Ramsey Su (who has been active in the RE business for decades) never tires to point out, there is no reason to believe that the echo bubble is any more stable than its predecessor, as it largely depends on all sorts of government interventions, with the Fed’s money printing and interest rate manipulation the most important. While fewer and fewer people voiced skepticism over time, Ramsey has kept at it, inter alia warning that Wall Street firms buying up homes in REO-to-rental schemes don’t represent organic demand, and in fact only serve to price out potential first time buyers.”

“Moreover, the ever higher pile of new rules and regulations bedeviling the mortgage industry has slowly but surely created housing finance socialism, with government-subsidized entities such as the carcasses of the GSEs completely dominating the market.”

“Who is served by rising house prices? In the end they are the outgrowth of an attempt to resurrect the illusory wealth of the expired bubble. They may help ‘repair’ credit that the bust has revealed to be unsound. However, this ultimately means that unsound investments are not liquidated. Instead there is an attempt to reestablish what is essentially an unsustainable charade.”

Business Insider Australia. “Below is an interview with Jed Kolko, chief economist at Trulia. BI: What is the most under-reported story in housing?”

“JK: There are actually still a lot of vacant homes out there. Even though the inventory of homes actually listed for sale is below long-term norms, the share of vacant homes is still higher than pre-bubble levels, including in many markets that have traditionally been fast-growing. The elevated vacancy rate holds back construction activity because builders don’t want to build where there are already a lot of vacant homes. The main sources of housing data don’t tell us for sure why there are a lot of vacant homes being held off the market (i.e. neither for sale nor for rent).”

The Market Oracle. “The Cameron/Osborne Help-to-Buy bubble is already well past its best-before date. Even if thousands more foreign buyers high on cheap credit and shady deals may flock in before this city-of-cards comes tumbling down. What Downing Street 10 will have done is to dislocate huge numbers of Londoners unable to keep up with rising prices, and fool many many gullible thousands more into signing up for the property ladder only to to be unceremoniously kicked off with huge debts tied around their necks.”

“There are those who would argue that in financial systems and ‘free’ markets, those who don’t pay attention get fleeced, and that this has a function. But for a government and central bank to push and advocate this sort of development, just to look better for a short time, is a whole different story.”

“Not a day goes by that I don’t hear and read yet more about the miraculous recovery Britain has accomplished for itself. Obviously, there are very similar ‘miraculous recovery’ stories doing the rounds about the US. And for very similar reasons. Nevertheless, both existing and new home sales numbers that came out this week spell it out as clear as you can wish it to be: the US housing recovery is dead. Falling sales, construction dead in the water, the works.”

“I read something toady to the extent that ‘100% of experts polled agreed that US interest rates would start rising significantly this year.’ I’ve said it many times before, and I’ll say it again: GET OUT! You’re not all going to be among the 1% of people who beat the markets. Go find something more useful to do with your time and your money and your life than to spend it all in this cheap credit casino that was constructed specifically to take it all away from you.”

Bits Bucket for April 27, 2014

Post off-topic ideas, links, and Craigslist finds here.

April 26, 2014

Bits Bucket for April 26, 2014

Post off-topic ideas, links, and Craigslist finds here.

April 25, 2014

It’s A Madness

It’s Friday desk clearing time for this blogger. “In 2005. Peter Fields, the president of Fields Construction, began work on a 100-house subdivision called North Oaks, in neighboring Salem, Virginia. Now those houses have owners, and new houses are rising. But things aren’t good enough to lead a builder like Mr. Fields to crank up the pace of production. What is keeping Peter Fields from building more houses isn’t too much competition from foreclosures or excess houses from the boom years (inventories are fairly tight by historical standards) or a shortage of land (he has 30 more lots graded and ready to build upon) or a shortage of capital (his bankers are eager for him to continue building).”

“It’s simple as can be: ‘We’ll build more houses as soon as we see some people ready to buy them,’ he said.”

“Continually sagging permit volume for single-family homes means demand for newly built homes in the Tucson area is waning — and maybe their prices aren’t helping. Ginger Kneup, who publishes the monthly Southern Arizona Housing Market Letter, suggests looking at new-home pricing to see how competitive the local industry truly is with its resale counterpart. The current median resale home goes for about $160,000. The current median new home sells for about $248,000.”

“Roughly a quarter of a million dollars may be too high now that pent-up demand has been relieved in the recession-stalled move-up market, Kneup submits. And really, what can Tucson afford? Pairing that with another question: ‘With income barely keeping up with inflation,’ she asks, ’should we really be so surprised that demand is weakening?’”

“What is going on here in East Idaho? The newest numbers from Greg Johnston at Keller Williams Realty show over 500 houses on the market in Bannock County alone. ‘At the end of March of 2014, we had 523 homes on the MLS listed for sale,’ said Johnston. ‘At the same time a year before we only had 463 homes for sale. ‘What’s happening is now we’re getting too many homes on the market where it is going to prevent homes from appreciating like they have in the last year.’”

“A dominant force at play in South Florida’s market is the dramatic increase in residences for sale. In Miami-Dade, 6,074 single-family homes were for sale in the MLS in March, up 23 percent from a year earlier. Miami-Dade’s rising inventory of existing condos comes in the midst of a major boom in the development of a new generation of towers. Condo expert Peter Zalewski said a build-up in condo inventory east of I-95 — where according to his analysis there is currently 9.9 months of supply — warrants watching. ‘It’s not dangerous yet, but if that number continues to grow, it could be an early sign of recalibration occurring,’ he said.”

“Activity seems particularly brisk in Shore counties hit hard by Hurricane Sandy, where ‘there’s a lot of rebuilding and renovations taking place’ and delayed projects coming on line, said Cindy Marsh-Tichy, president of the New Jersey Realtors Association. That has not been enough to prevent New Jersey’s real-estate market from shrinking. Even more than underwater mortgages, Marsh-Tichy said real-estate spending prior to the bust is keeping people out of the New Jersey market now.”

“‘People tell me they bought at the top of the market and then put money into the home,’ she said. ‘They’re worried that they’re not going to get their equity back.’”

“Mum and Dad property investors could be hit by the next raft of clampdowns on mortgage lending from the Reserve Bank. Wellington Property Investors Association president Jackie Thomas-Teague said the change would have an impact on smaller investors, as commercial rates would be unaffordable for them. While anyone who had five rental properties should be taking it seriously as a business, it would be wrong to treat them all as if they were major property investors.”

“‘I would be losing money hand over fist’ paying commercial rates, she said. ‘If they do this, rents would [have to] rise to make investments worthwhile, or the bottom would drop out of the investment market and, by extension, the property market.’”

“Luxury property developers in Singapore are facing their worst sales outlook in six years as a raft of government measures to cool one of the world’s most expensive real estate markets bite. The dearth of buyers has created a supply glut which is only likely to worsen within the next four years. Government data shows 82,575 new, private residential units are expected to be built between 2014 and 2018. That means an annual rise in the supply of property of around 20,000 units, around twice the average of the last 10 years.”

“‘Either the population will need to increase tremendously in the next few years or else there will be a lot of vacant units,’ said Nicholas Mak, executive director at SLP International Property Consultants.”

“Over 100 villas here have stood empty six years after they were built for locals in the Chinese city of Beihai in Guangxi Zhuang Autonomous Region. Some of the homes cost over three million RMB (285,900 GBP) and it was thought that a new rising class of wealthy people would snap them up. Entire cities have been built complete with skyscrapers, shopping malls, highways, parks and other facilities. But like in Beihai, they are empty of people and have morphed into soulless dead zones.”

“The construction industry not only employs hundreds of thousands of Chinese, but it has displaced hundreds of thousands of others who have been forced off their land and homes to make way for construction projects. ‘It’s a madness – homes built to stand empty!’ said one local who lives in a wooden shack.”

“Recently, the International Monetary Fund warned that China’s economy is likely to face a hard landing. Many economists believe that the Chinese regime needs to move quickly, in order to wean its economy from runaway credit, over-investment and excess capacity. Booming credit growth has swollen debt in China to roughly double the GDP. ‘The risk is not slower growth,’ said Markus Rodlauer, Head of IMF’s China mission. ‘The risk is that growth is not allowed to slow.’”

“Our central bank is essentially taking billions of dollars a year from average Americans, who are still struggling to get by in a bombed-out economy, and it is giving it — yes, giving it — to the very banks that helped cause the 2008 financial crisis in the first place. Analyst Richard Barrington estimates the Fed’s policies have cost savers $757.9 billion since the crisis. ‘It’s a stealth bailout,’ Barrington said. ‘Low-interest-rate policies have helped bail out banks, the stock market and real estate, but the Fed has not publicly acknowledged the cost of those policies. Unlike the other bailouts we’ve seen, this one has become open-ended.’”

“It just doesn’t make sense to the average mind. The Fed has responded to a crisis caused by too much borrowing by encouraging even more borrowing. It has allowed too-big-to-fail banks to become even bigger. It has helped inflate the national debt to nearly $18 trillion with its monthly asset purchases. It has created a junkie economy that seems hopelessly addicted to historically low interest rates, ever-increasing borrowings, and a non-stop printing press rolling out dollars.”

“Boisterous cheers for rising asset prices, largely fueled with the Fed’s funny money, have shouted down the debate. Payoffs are how corruption spreads. Now some might ask, what do I mean by corruption? Let’s put it this way: Ugly people don’t always know they’re ugly. And people who’ve been completely co-opted by the wealth and power of a globalized banking system, do you think they know when they’ve become tainted by the normalized corruption all around them?”

“I’ve noticed they rarely, if ever, use the term ‘moral hazard’ anymore. They have blinded themselves even to the law of gravity with the sheer amount of brain power that they put into everything they say and do. And they’re completely trapped in this thinking that trillions for the banks will solve everything.”

Weekend Topic Suggestions

Please post topic ideas here!

Bits Bucket for April 25, 2014

Post off-topic ideas, links, and Craigslist finds here.