The Housing Bubble

Asked how long Greece can hold out, Prime Minister Antonis Samaras was quoted as telling German daily Handelsblatt that “the till will be empty” by the end of November.

Mr Samaras said he is confident the money will arrive on time, but warned it is “very difficult” to make further cuts to pensions and wages that the country’s debt inspectors are seeking.

Greece has relied on bailouts from increasingly impatient international creditors since May 2010. In return, it imposed a punishing austerity programme, repeatedly slashing incomes, hiking taxes and raising retirement ages.

http://www.google.com/hostednews/ukpress/article/ALeqM5iONsoB5xbEWy995TsldajPvtwqug?docId=N0058091349425021712A

The 77-year-old widow raised two children with her husband in their fourth-floor apartment behind Lisbon’s Campo Pequeno bull-ring. It has been the family home since 1966. Living alone there now among black-and-white photographs of her children and with her husband’s framed paintings, she pays a controlled rent of €100 ($128) a month. That just about allows her to get by on her monthly pension of €414.

But Portugal is scrapping its long-standing rent controls in one of the government’s most radical economic and social reforms since the ailing country needed a €78 billion bailout last year, when it was engulfed by Europe‘s financial crisis. Critics say the anticipated rent hikes from next month could price thousands of families out of their homes. At the very least, the change — aimed at boosting and modernizing the economy — will add to the financial burden on those struggling to cope with pay cuts and tax hikes designed to ease the country’s crippling debt load.

Read more: http://world.time.com/2012/10/02/portugal-scraps-rent-controls-alarms-low-earners/#ixzz28PsT88uH

Comment by Ross Peroxide
2012-10-04 07:57:57

Something funny.

http://ll-media.tmz.com/2012/10/04/1004-hilary-clinton-christina-aguilera-getty-3.jpg
———————————————————————————-
seinfeld…peeking at cleavage - YouTube
http://www.youtube.com/watch?v=HvGqPencrJQ - 162k -

The Number is…..More unemployment and less JOBS….way to go ohbewanna

I was going through the coupon circulars last night. Seems they are trying to get people to start their Christmas shopping because there were coupons for some toys.

I am really offended.

There should not be such a thing as a “My Little Pony” Pony Princess Wedding Castle. Really. The ick factor is just way too high.

In the DFW area we are getting a lot of ‘get rich in Real-estate’ ads on the radio and TV. This is just the beginning so it’s not a another bubble yet. Shadow inventory is just a conspiracy put out by people on blogs.
Go long housing.

Atwater California is next;

Atwater Declares Emergency - Bloomberg | Brief
http://www.bloombergbriefs.com/2012/10/04/atwater-declares-emergency/18 hours ago – Atwater Declares Emergency. Tweet. Atwater, California, declared a fiscal emergency and told almost a quarter of its employees they will lose …

Looks like Arizona’s housing market isn’t roaring back after all. And another bubble may be forming. Story from Tucson’s leading daily fishwrap:

New housing dip viewed as possibility in Arizona
Purchases by real estate investment trusts can’t go on forever, UA economist warns

Super-happy fun money quote:

Marshall Vest of the Eller College of Management at the University of Arizona said the current demand for homes is not coming from people moving here. That’s just not happening.

And he said that until the employment situation improves, there’s no sign that the kids who moved back in with mom and dad during the recession are in a financial position to form their own households.

What is driving the market, he said, is purchases by investors.

“Some real estate investment trusts have been in here buying up properties with the idea of renting those properties out,” Vest said during a meeting at the Capitol of the state’s Finance Advisory Committee. That cannot continue forever, he said.

“As soon as they’ve parked all of the money they have raised, there’s a source of housing that’s going to go away,” Vest said, adding that there is not yet the internal demand to “take up the slack.”

10/03/2012 @ 6:00AM

The Truth About Bain: Inside The House That Mitt Built
This story appears in the October 22, 2012 issue of Forbes.

(Credit: Illustration: Peter Horvath; Photographs: Getty Images)

Among the private equity deals of this century, HCA stands among the very best. Bain Capital partnered with KKR and Merrill Lynch to buy the hospital chain for $33 billion in November 2006. Bain invested $1.2 billion for a 25% stake and recovered almost all its money with a trio of special dividends in 2010. The Boston firm pulled out another $457 million when HCA went public again in March 2011 and still owns shares worth almost $3 billion. Despite the financial crisis and periodic whiffs of scandal swirling around the for-profit hospital chain, HCA is worth 26% more today than it was seven years ago, and Bain investors have more than tripled their money.

If only they could all turn out like HCA. But they haven’t. Not even close.

Actually, few of Bain’s biggest deals since buying HCA have panned out so far, leaving it with a decidedly middling recent investment record far outstripped by its mythology.

Bain Capital has endured more dissection, debate and criticism this year than any firm in the half-century-old history of private equity, owing to its founder, GOP presidential candidate Mitt Romney, who launched the firm in 1984. Yet even after all this it remains among the least understood, due to its insular nature and distracting history. While both the White House and Romney himself focus on Bain’s job-creation record, no one has gauged the firm using industry-standard metrics to see how well it has performed in its core mission: making money for its partners and investors.

An exclusive analysis of the firm’s returns conducted by FORBES reveals that despite the hype surrounding Bain, investors in the firm’s biggest funds, raised in 2006 and 2008, would have been better off in a simple stock index fund. And while Bain churned out serious returns for partners and investors alike during Romney’s tenure, it’s that reputation, rather than results, that has carried Bain for the past decade.

Stephen Pagliuca, a managing director of Bain Capital, defends the firm’s recent record: “We are in the business of being long-term right.”
…

Would you guys watch a baseball game in which they just picked each inning who would win and who would lose ,and it didn’t matter what
any team did . How about if it was based on how much money a team had to bribe the scorekeepers and that determined who won the innings and they could just make up scores based on that ? That’s the game we are watching and its boring because I already know who has
the most money to buy the game . I just want a new game .

There is growing unrest among the ranks at America’s largest employer: Wal-mart (WMT).

Workers from a dozen stores in the Los Angels-area went on a one-day strike Thursday “in the first-ever Wal-mart Associate walk-out in protest of attempts to silence and retaliate against workers for speaking out for improvements on the job,” according to a press release from the strike’s organizers.

Can you believe these slobs feeling entitled to a wage that supports food and shelter. Who will stand up to these union goons.

I seem to be lost. Can you all direct me to the earwax blog?

Prediction: There will be revised unemployment numbers by Thursday just like every other time in the last 3 years.

The latest bubble/scam = “Retraining workers”

Here’s how it works….(at least in my area of expertise)

-Open mechanic’s school on shoestring

-Heavily advertise “High-paying careers in aviation”…..”Coming shortage of workers”

-Sign up young, gullible preferably poor kids to $30-50K Federal school loans. Make sure you include borrowing money for room and board, associated expenses.

-When they start classes, bill for everything up front. Pocket the cash.

-After 2-3 months, the kids find out two things….either that they don’t have the smarts/math skills/mechanical aptitude to pass the “General” courses (much less the “A” or “P” courses, or that the FAA will not issue them a license due to prior drug/DUI/etc. convictions….

-Kid drops out of school and goes home. You have pre-billed for an 18-24 month school including expenses, so you walk with cash.

-Federal Government is stuck with the problem of sqeezeing blood from turnips, assuming they can track down the turnips.

Of course, nobody will “see it coming”…….

On Wednesday morning, the EIA reported a sharp drop in gasoline demand versus a year ago - leading futures to fall to the low of the week. But prices quickly recovered after the fire at the Exxon Baytown refinery.

(More From CNBC: ‘Drunken’ Broker Drove Oil to 8-Month High in 2009: Report)

And then there are pockets of the country where the supply crunch is more pronounced.

The cash market for gasoline - which sets the price for retail gasoline prices that consumers pay - in California soared $1.15 cents in 9 days to $4.24 a gallon on Thursday.

The rapid increase came after a Chevron (CVX) refinery fire and power failure at an Exxon refinery in the state exacerbated the condition of already low gasoline supplies. Retail gasoline prices in California are usually the highest in the nation.

The spike this week “is like something out of the Wild, Wild West,” says OPIS analyst Tom Kloza. The state-wide average in California jumped 17 cents overnight, a 4 percent surge spurred by refinery issues, tight supplies of the state-mandated special blend of gasoline required.

In other states, such as Mississippi, the statewide average is $3.52. Here in New York, gasoline averages at $4.13 per gallon. California tops the list with an average of $4.49 per gallon.

Think how good it feels to tell market manipulators to suck on an egg. That’s what VOLT, Tesla, electric and hybrid drivers get to do. I’ll drop my gas usage another 30-40% when we pick up our VOLT this week and 90% when I pick up my new electric.

“The jobs report is prepared under tight security each month by a relatively obscure government agency — the Bureau of Labor Statistics — without any oversight or input from the White House. It is based on data collected by an army of census workers, who interview Americans in 60,000 households by telephone or door-to-door.”

“Economists offered more plausible reasons for skepticism. A big chunk of the increase in employed Americans came from those who had to settle for part-time work: 582,000 more people reported that they were working part-time last month but wanted full-time jobs.”

Army of census workers? 582,000 more people reported that they were working part-time last month? Right LMAO

Fot the next trick they will feed 582,000 part-time workers with one fish. It`s a miracle!

Posted: 6:15 p.m. Friday, Oct. 5, 2012

Steep drop in unemployment rate spawns conspiracy

By CHRISTOPHER S. RUGABER

The Associated Press

WASHINGTON —
Conspiracy theorists came out in force after the government reported a sudden drop in the U.S. unemployment rate one month before Election Day. Their message: The Obama administration would do anything to ensure a November victory, including manipulating unemployment data.

The conspiracy was widely rejected. Officials at the Labor Department said the jobs figures are calculated by highly trained government employees without any political interference. Democrats and even some Republicans said they also found the charges implausible.

Yet that didn’t stop the chatter. The allegations were a measure of how politicized the monthly unemployment report has become near the end of a campaign that has focused on the economy and jobs.

The conspiracy erupted after former General Electric CEO Jack Welch, a Republican, tweeted his skepticism five minutes after the Labor Department announced that the unemployment rate had fallen to 7.8 percent in September from 8.1 percent the month before.

“Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers,” Welch tweeted, referring to the site of Obama campaign headquarters.

The drop in unemployment was announced two days after Obama’s lackluster performance in his first debate with Republican challenger Mitt Romney.

Republican Rep. Allen West of Florida soon announced via Facebook that he agreed with Welch.

“Somehow by manipulation of data we are all of a sudden below 8 percent unemployment, a month from the presidential election,” West wrote. “This is Orwellian to say the least.”

The Obama administration wasn’t given much time to gloat about the strong economic improvement. Instead, it had to defend statisticians and economists against accusations made without any supporting evidence.

“No serious person … would make claims like that,” said Alan Krueger, chairman of the White House Council of Economic Advisers.

The jobs report is prepared under tight security each month by a relatively obscure government agency — the Bureau of Labor Statistics — without any oversight or input from the White House. It is based on data collected by an army of census workers, who interview Americans in 60,000 households by telephone or door-to-door.

Eight days before the unemployment rate is made public, the bureau’s office suite goes into lockdown. Tom Nardone, a 36-year veteran at the agency who oversees preparation of the report, keeps crucial papers in a safe in his office.

A big reason for the security has nothing to do with politics. The data could move financial markets if it were released early.

“These are our best-trained and best-skilled individuals,” Labor Secretary Hilda Solis said on CNBC. She called the claims of manipulation “ludicrous.”

The BLS, the statistical division of the Labor Department, collected and analyzed data and calculated the unemployment rate before Wednesday night’s presidential debate.

Joel Naroff, president of Naroff Economic Advisors, said that it’s “not that unusual” for the rate to move by three-tenths of a percent in one month. It’s happened 12 times in the past 10 years.

“In other words, at least once a year, you should expect that large a move,” he said in an email to clients. It last happened 20 months ago, “so we were overdue. That is just the reality of the data.”

Romney didn’t discredit the government data. But plenty of conservatives did that work for him.

Conn Carroll, an editorial writer at the Washington Examiner, tweeted: “I don’t think BLS cooked numbers. I think a bunch of Dems lied about getting jobs. That would have same effect.”

Rick Manning, communications director of Americans for Limited Government and the former public affairs chief of staff at the Labor Department, said “anyone who takes this unemployment report serious is either naive or a paid Obama campaign adviser.”

Rep. Paul Broun, a Maryland Republican, weighed in with a statement saying the report “raises questions for me, and frankly it should be raising eyebrows for people across the country.”

Economists offered more plausible reasons for skepticism. A big chunk of the increase in employed Americans came from those who had to settle for part-time work: 582,000 more people reported that they were working part-time last month but wanted full-time jobs.

Conspiracy theories are nothing new for Obama. He has been dogged by discredited claims that he wasn’t born in this country and that he is Muslim.

“Stop with the dumb conspiracy theories. Good grief,” Tony Fratto, who worked for President George W. Bush, weighed in on Twitter.

It wasn’t just the political elite commenting. Angelia Levy, a researcher at the Federal Judicial Center, the research arm of the federal judiciary, told her 588 Twitter followers that Welch’s comments were “unbelievable.”

“All of the sudden they’re questioning this data that’s been reported for decades,” the Democrat said in a phone interview. “It’s so hypocritical and ridiculous.”

Justin Wolfers, a professor of business and public policy at the University of Pennsylvania’s Wharton School and research associate at the National Bureau of Economic Research, went on Twitter to say Welch “just labeled himself an idiot.”

In a follow-up phone call, Wolfers said the economists who calculate the monthly jobs report “are nerds who spend their lives crunching numbers for the public service. To impute their integrity is outrageous.”

The agency has been in the political glare before.

In 1971, President Nixon took aim at it after a top official, Howard Goldstein, publicly attributed a steep drop in unemployment to largely technical factors. The administration reorganized the agency and installed several officials in newly created positions. That led to charges from Democrats that the Republican administration was politicizing the bureau.

Welch said later in the day in a Fox News interview: “I don’t know what the right number is, but I’ll tell you, these numbers don’t smell right when you think about where the economy is right now.”

Tonight’s IEM 2012 US Presidential Election Winner Takes All Market Price Graph suggests that the unemployment rate data release erased about 1/3 of Romney’s post-debate price gain. The bounce in Obama’s favor also shows up in the 2012 US Presidential Election Vote Share Market graph.

The implied Vote Share Market odds against Romney are currently about 11:9 — the highest of the month so far:

Date Contract Units $Volume LowPrice HighPrice AvgPrice LastPrice
10/01/12 UDEM12_VS 210 113.810 0.538 0.548 0.542 0.539
10/01/12 UREP12_VS 0 0.000 0.000 0.000 0.452
10/02/12 UDEM12_VS 4 2.172 0.539 0.547 0.543 0.539
10/02/12 UREP12_VS 0 0.000 0.000 0.000 0.452
10/03/12 UDEM12_VS 60 32.038 0.530 0.547 0.534 0.530
10/03/12 UREP12_VS 283 134.624 0.465 0.487 0.476 0.475
10/04/12 UDEM12_VS 51 27.274 0.530 0.546 0.535 0.544
10/04/12 UREP12_VS 36 16.895 0.465 0.480 0.469 0.470
10/05/12 UDEM12_VS 363 199.399 0.544 0.550 0.549 0.550
10/05/12 UREP12_VS 310 142.420 0.451 0.465 0.459 0.451