Bits Bucket for March 20, 2013
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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On March 22, 2005, a trade agreement was signed between Tatarstan and Cypress. The next year, when Cypress joined the EU, Russian oligarchs (who had been pushing for its admission, and who were in increasing danger of being imprisoned in Putin’s political purges) began stashing their cash in Cypress’ secretive banks. As a result, Cyprus is now officially the third largest foreign investor in the Russian economy.
Unfortunately, those Cypriot banks were still investing depositors’ money in long-term Greek bonds, which as we know were offering ridiculous interest rates and which defaulted and were ultimately bought back at about 33 cents/euro last December. (Hedge funds, which had bought them at steep discounts during the late summer and through last autumn, of course made out tidily.) The Cypriot banks, however, lost 4.5 billion euros on their Greek holdings alone, and now Russia may or may not agree to restructure a five-year extension of an existing 2.5 billion euro loan to Cypress as well as a reduction in the interest rate.
Now here’s where this international chess game gets interesting:
Russian energy giant Gazprom (which was once owned by those imprisoned oligarchs) has just offered Cyprus a plan in which the company will undertake the restructuring of the country’s banks in exchange for exploration rights for natural gas on the island, thereby facilitating a Russian incursion into both the militarily strategic island and the European Union itself — which would make for a curious alliance indeed.
Stay tuned.
the restructuring of the country’s banks
Will have to take place one way or the other. The simplest way, of course, is to simply let them go out of existence, and take all their depositors’ money down with them.
“Never attribute to malice that which is adequately explained by stupidity.”
reminds me of Enron.
Enron was indisputably, malice.
have you read “a conspiracy of fools”?
check it out.
summary of an anecdote from the book…meetting with the super genius master mind and CFO Andrew Fastow.
andrew was put in charge of their retail energy division. he met with some other executive to discuss his strategy (the anecdote was told from the other guys point of view but i can’t remember his name). fastow mentioned how re-introducing the red m & m caused a huge surge in sales for Mars Inc. he told the guy that he had been thinking and that he thought they should come up with something similar to that.
the executive he was talking too expressed disbelief that fatow was so high up and yet had no concept of what a commodity was.
Read it? I was there.
They were not fools. That was just an act. Inept maybe. But it was ALL premeditated.
Not to mention it was PROVEN in court.
It opened my eyes to just how often this goes on in every industry and every level of gov from local to federal.
VOA sed:
Somebody must have heard something through the grapevine.
You are aware that it didn’t happen, right? Their legislature voted it down.
You are aware that it didn’t happen, right? Their legislature voted it down.
How does this preclude it from people hearing rumors it’s gonna happen and taking their money out? Better safe than sorry. It was in the works and in the end it didn’t happen. I’m sure plenty of people knew it was in the works.
The story ain’t over yet, either. If you consider the people with money in the banks to be out of the frying pan, maybe now they’re in the fire.
In the end I bet the people who took their money out on the rumor are glad…Unless it turns out it was a mole and this was all a plot to see who would take their money out.
$2.5 billion Euros for natural gas exploration. Is that an insult to Cyprus or a dare to Germany to step up and make a better offer?
Siemens AG (German GE) definitely builds nuke plants (or used to). Do they do natural gas exploration and/or build natural gas power generation plants?
There are 3 names in simple and combined cycle power gen plants;
Siemens
GE
Rolls Royce
There are more than that but those are some of the major players.
Interesting. With Pratt, GE, Siemens and RR are 90%+ of the package gas turbine market.
Alstom, Solar and Mitsubishi probably make up the other 10%
I was thinking more about Russia daring the German government to bail out the Cypriot banks to prevent Russia from moving into the “militarily strategic island” ostensibly under the cover of natural gas exploration.
It’s actually pretty clever. Since it was mostly rich Russian money that was lost, it will be the Russians who are bailed out, either by the Euro union, or by taking parts of the Island itself.
This is where economics crosses a dangerous line. These bankers have been bailing each other out with little more than “confidence” for years. Now the Russians are getting serious. They want something more concrete than attitude.
These bankers have been bailing each other out with little more than “confidence” for years. Now the Russians are getting serious. They want something more concrete than attitude.
Well put, oxy. Finally, _someone_ is demanding some real collateral for a change.
What is worse: A Russian oligarch or a Wall Street bankster?
20 March 2013 Last updated at 07:45 ET
Bolshoi ballet was ‘giant brothel’ claims former dancer
Anastasia Volochkova
Volochkova was controversially fired from the Bolshoi in 2003
The Bolshoi Ballet has been mired in further controversy after a former soloist claimed female dancers were forced to sleep with wealthy patrons.
Anastasia Volochkova accused the theatre’s general director of turning the company “into a giant brothel”.
Outspoken Volochkova, who has dabbled in TV talent and talk shows, was fired from the Bolshoi in 2003 for being too heavy.
General director Anatoly Iksanov dismissed the claims as “ravings”.
Volochkova made the allegations during an interview on a television talk show in Russia on Sunday, later repeating them in a radio interview with Russian News Service.
“It mainly happened with the corps du ballet but also with the soloists,” she said.
‘Dirt and ravings’
“Ten years ago, when I was dancing at the theatre, I repeatedly received such propositions to share the beds of oligarchs.
“The girls were forced to go along to grand dinners and given advance warning that afterwards they would be expected to go to bed and have sex,” she alleged.
“When the girls asked: ‘What happens if we refuse?’, they were told that they would not go on tour or even perform at the Bolshoi theatre. Can you imagine?”
…
Awhile ago there were rumors that various members of the Chinese Communist Party paid millions of dollars to sleep with Zhang Ziyi, the female lead of “Crouching Tiger, Hidden Dragon.” The actress denied it.
http://tinyurl.com/clx395l
Undoubtedly a WS bankster!
IMF’s Lagarde Flat Raided Over French ‘Payout’ Probe
With a population around one million, or roughly one third that of San Diego County, California, is Cyprus small enough to fail?
if lehman wasn’t…cyprus isn’t.
(i know lehman did fail…but i am sure the PTB regret doing it)
March 20, 2013, 6:00 a.m. EDT
Cyprus is euro zone’s very own Lehman moment
Commentary: Needlessly introducing new fear chokes off bull market
By Matthew Lynn
LONDON (MarketWatch) — Only a few days ago, the markets were looking in good shape — indeed in better shape than they have at any time since the crash of 2008.
Japan was coming back to life. The Dow DJIA +0.45% was recovering its highs of five years ago. Some of the European markets were bouncing up again, and gold was falling in value as investors decided the economy was getting back to stability, and perhaps even a normal level of growth.
And then? The euro-zone crisis flares up again. In Cyprus, euro-zone finance ministers meeting late on a Friday night decided to impose a levy on all bank accounts in the country as part of a bailout agreement for the island.
For the sake of 5.7 billion euros — a sum so small it would be an insult to peanuts to compare it to a packet of the salty nuts — the people running the single currency put the recovery in jeopardy.
It was a “Lehman moment” — a tiny decision, with huge consequences. And the euro zone looks set to keep lobbing those moments at the market, choking off every potential bull run.
The proposal to impose a levy on deposits in Cyprus threatened a run on the banks right across Europe, leading to a potential catastrophe for the global economy.
After all, if they imposed a levy on deposits in Cyprus, why not pull the same trick in other floundering European countries? Would anyone really want to have money in a Portuguese, Spanish, Italian, or indeed a French bank after that fateful step was taken? It might easily be confiscated if those nations needed to be rescued.
…
RISK ON!
ft dot com
Stocks firm as Cyprus worries wane
By Dave Shellock
Wednesday 16:30 GMT. Investors regained their appetite for riskier assets on Wednesday as recent concerns about Cyprus began to ease – even after the country’s parliament rejected the terms of a €10bn EU-led bailout, which included on levy on bank deposits.
Instead, the focus shifted to the US amid widespread expectations that the Federal Reserve would spring no nasty surprises at a meeting of its policy-setting Open Markets Committee.
The FTSE All-World equity index was up 0.4 per cent as the S&P 500 in the US was 0.5 per cent higher by midday in New York – putting it within easy reach of a record high – and the pan-European FTSE Eurofirst 300 index closed with a provisional gain of 0.4 per cent.
The euro, which has been very volatile this week, added 0.5 per cent to $1.2951. The single currency on Tuesday touched a four-month low against the dollar below $1.29, but rallied after the European Central Bank reacted to the Cypriot vote by reaffirming its commitment to provide liquidity, within existing rules, to the country’s banking sector.
“This can buy time but will not solve the Cypriot problems,” said Carsten Brzeski, economist at ING. “With the genie of the deposit tax out of the bottle, time is of the essence. Reopening the banks without a solution would probably lead to a massive capital flight.”
…
“Would anyone really want to have money in a Portuguese, Spanish, Italian, or indeed a French bank after that fateful step was taken?”
Would anyone trust any bank anywhere? How long until the US takes such steps?
What’s really going on in California
California imposed a new law on banks innocuously called “Homeowners Bill of Rights” which forces banks to switch over to a judicial foreclosure process, which they can opt to do on their own, but takes a year or more to renegotiate contracts and compensation structures for the foreclosure law firms who do all the leg work for the banks. And while those changes are being made… it makes it appear that foreclosures have slowed down dramatically in the state.
The reality?
Defaults (undeclared) are spiraling upward that yet have to pass through the foreclosure pipeline.
The truth?
California is still the highest foreclosure state in sheer volume and percentage.
The low-down?
Resale housing is still massively overpriced as a result of unprecedented interference by individual states and the federal government. The market distortions will be removed and the down draft will continue allowing the market to correct.
With millions of excess empty houses and housing demand at 17 year lows, housing prices a long way to fall. A very long way to fall.
Why do you say “17 year low”? SFH completion is half of what it was 17 years ago, 27 years ago, 37 years ago & etc.
http://www.census.gov/construction/nrc/pdf/compann.pdf
He equates “demand” with the number of transactions (at some point in time within the past year or two - he has never really specified). Not particularly persuasive.
Demand=transaction volume.
Now knowing you are what you are, I’m sure you’ll come up with some tripe though. Proceed.
Demand = price-transaction volume relationship for given level of supply.
Given suppressed inventory and massive injection of federally-guaranteed mortgage financing, prices and transaction volume are relatively higher than they would be sans intervention.
How does suppressed inventory increase transaction volume? It can increase prices, but not the number of transactions.
Not to mention that his talking points are becoming outdated, even with his contrived metrics.
For instance…sales of new homes Jan-13 are up about 29% from Jan-12.
Curiously coinciding with increased housing starts…people buying more homes when there are more homes to buy is a clear indication of demand outstripping supply.
25 million excess empty houses are still there looking right at you.
And worse yet for you liars, we’re going to continue adding to the inventory until resale prices are driven in the ground.
My recollection was that he wasn’t even using a year over year comparison. It was one particular set of months, probably months adjacent to each other like comparing November to October or October to September. It was hard. He refuses to define the terms in most of his blanket statements. It took us quite a while to figure out that his blanket statement of no housing being worth more than $50 per square foot included an assumption of the lot price being zero or near zero.
I know truth is “hard” for you. But don’t let that detract from the fact that a lots are <$5k within commutable distance of any major city. So what’s your excuse for grossly inflated prices of resale housing now? You can’t attribute it to “the lot!”, you don’t know what goes into a bid estimate, you’ve never built anything in your life. So what is it?
And no….. I never stated a 20 year old house is worth $50/sq. It’s much less. But then again…. you can’t bring yourself to the reality that we build structures far more costly than a house for less than $60/sq.
Carry on with yourself.
we build
“You didn’t build that” — President Barack Hussein Obama
Some people don’t want to be within your definition of “commutable distance” (whatever that is - define your terms) to any major city. They want a particular location. The fact that you can build and sell in your commutable locations to someone, doesn’t mean that I want to live there. It doesn’t mean that oxide wants to live there. It doesn’t mean that Joe wants to live there. You are talking about large populations because all you care about is finding one buyer. I would never in a million years buy anything on a lot that your could get in or around DC for $5000. It would mean either ducking bullets or commuting for 2 hours each way. It also would mean living in a new development. Something else I would never do.
By the way, when I was moving, it was 8 miles along one of the major commuting corridors. Never took me less than 25 minutes to drive it - even at 1:30 in the morning when half the stop lights had switched over to flashing yellow.
You know, why don’t you do a little real research. Tell us where you can find lots for less than $5000 in the DC area. I dare you. The last time you tried to pull this stunt you told us about cheap lots 20 miles outside Albany, NY. Find something like that as close to downtown DC as you can. Make sure that the location is actually available for development. Montgomery County has a rule that requires a certain amount of the county land be used for agriculture, so just because it is for sale, doesn’t mean you can build a house on it.
“talking points are becoming outdated…”
Did you look at the census data? SFH building has been in an horrific slump for four years. Nothing like this has been seen in our lifetimes, not even close. The construction boom reemerged in January? January?!?
I hang my hat in cottage country. You can pay anything you want for a lot with a view, yet I know construction costs for a pretty regular house are about $35/ft2. The lot I own in town is worth about $10K, and that is with all the infrastructure in place. We had the biggest bubble in history and it has only started to correct.
You know, why don’t you do a little real research. Tell us where you can find lots for less than $5000 in the DC area. I dare you. The last time you tried to pull this stunt you told us about cheap lots 20 miles outside Albany, NY
… and;
Hartford, CT
Boston, MA
Pittfield, MA
Phila, PA
Wilmington, DE
Balto, MD
uhh huh…. You conveniently forgot about those.
Carry on with your ruse. You’re putting on a good show.
@BlueSky:
Year on year housing starts turned positive in Q4 2011..up a measly 4%.
Q1 2012: Up 17% y-o-y
Q2 2012: Up 23% y-o-y
Q3 2012: Up 27% y-o-y
Q4 2012: Up 28% y-o-y
I’m not saying everything is peachy and back to “normal”, but the year-on-year increase in activity started well before January of 2013.
Find me a $5k lot “ready to build” in commutable distance to the San Francisco Bay Area.
Now, after you’ve found 1 to prove your point that they are readily available, find me another 25,000.
There were 90,000 jobs created in the SF Bay Area in 2012.
I hope one of you $35-$50 a sq ft construction guys is willing to take on my remodel in the next year or two. I’ll even spot you an extra $2 per sq ft for demo. Prices are cratering so it should be even less by then.
willing to take on my remodel in the next year or two
You’ll have to bulldoze your buildings before they take on that ‘remodel.’
I don’t want to live a “commutable distance” from any of those places. And I certainly don’t consider 20 miles from downtown DC to be commutable.
Find a buildable lot for $5000 or less as close to downtown DC as you can. Then tell me where it is so I can figure out the commute and whether it is near anything else I consider important and is even remotely safe. I’ll tell you that someone built a new house on a tiny lot not too far from my location very recently. Neighbor told me they paid several hundred thousand dollars for it because the contractors told her that if they couldn’t sell the house (about 4K square feet, house practically fills the lot) for at least $1.4 million, it wouldn’t work at all.
Go find it yourself and put your own contract out to bid.
See how that works?
Find me a $5k lot “ready to build” in commutable distance to the San Francisco Bay Area.
Now, after you’ve found 1 to prove your point that they are readily available, find me another 25,000.
There were 90,000 jobs created in the SF Bay Area in 2012.”
And unemployment is still at 10% and rising in your dump of a state.
Now go find your own lot….liar.
I live 30 miles from DC & at my distance the commute only works because of living and working near the two endpoints of the train (Camden Yards and Union Station). 20 miles of driving in the DC area is ridiculous. Stop/start/stop/start/merge/stop/etc.
When I was moving, I did part of the hauling myself. Never took less than 20 minutes to drive the 8 miles along one of the major commuting roads - even at 1:30 in the morning when a bunch of the traffic lights had switched to flashing yellow instead of the regular timing and the traffic was essentially nothing. At more normal hours (8 in the evening, for example, and driving opposite the majority of the traffic) it would take twice as long.
Oops, sorry for double information. The 25 minutes referred to door to door. The 20 minutes is only the time on the major highway, so doesn’t include getting in to and out of parking lot, and along a small amount of less busy road.
$4.00 gallon gas and the $5.00 a pop for bridge toll. Commuting from someplace cheaper can easily cost $400 month or more.
Plus the hours of he!! spent trapped in traffic.
No thanks.
And then there is the cost of parking in the city (or at a train station), if by living closer in you can do it all by public transportation. I walk to the Metro on both ends. I could live with a Metro transfer if I had to, but I prefer to avoid it and stick to just one train.
“Unfortunately, those Cypriot banks were still investing depositors’ money in long-term Greek bonds, which as we know were offering ridiculous interest rates and which defaulted and were ultimately bought back at about 33 cents/euro last December. ..”
The long-term Greek bonds that the ECB and the leaders of the EU TOLD everyone to buy and SWORE that were SAFE because the Greek crisis was “fixed” and they should know, right? I mean, they got a NOBEL PRIZE for their handling of the crisis! Hell, the ECB told everyone it was OK to eat the poison- now they blame them for getting sick.
The party will soon be over. Perhaps good news for the King cash?
SAN LUIS OBISPO, Calif. (MarketWatch) – InvestmentNews latest cover is so powerful you can actually hear sirens atop a flashing neon billboard, megawarning in huge bold type: “Tick, Tick … Boom!”
A warning: InvestmentNews wants to make damn sure its readers, the 90,000 professional financial advisers who rely on timeliness and accuracy of every INews forecast: “What will your clients’ portfolios look like when the bond bomb goes off?” Get it? Not if but when it happens.
Yes, they do expect the bond bomb to explode and are publishing “a special report on the impending crisis in the bond market.”
Yes, you heard them. “Tick, Tick … Boom!” Wake up, it’s an “impending crisis,” dead ahead. And to punctuate their message, InvestmentNews added an alarming photo of an alarm clock with huge bells, wired to rolled up bonds looking like a stack of dynamite sticks. “Tick, Tick … Boom!”
http://www.marketwatch.com/story/bond-crash-dead-ahead-tick-tick-boom-2013-03-20?link=MW_story_investinginsight
The long-term bond crash must be getting close now, as I actually stepped up and bought a long-term bond fund investment last week.
AUDIO: New York’s Police Union Worked With the NYPD to Set Arrest and Summons Quotas
Audio obtained by The Nation confirms an instance of New York City’s police union cooperating with the NYPD in setting arrest quotas for the department’s officers. According to some officers and critics of quotas, the practice has played a direct role in increasing the number of stop-and-frisk encounters since Mayor Michael Bloomberg came to office. Patrolmen who spoke to The Nation explained that the pressure from superiors to meet quota goals has caused some officers to seek out or even manufacture arrests to avoid department retaliation.
http://www.thenation.com/article/173397/audio-new-yorks-police-union-worked-nypd-set-arrest-and-summons-quotas
NYC: Overhyped craphole.
Tell us about that paradise called Houston, please.
No paradise there either. Nor LA. Nor Chicago. Nor Miami. Nor DFW. Nor just about any large city in this country.
Craphole… compared to any other large city in the U.S., that is.
The real craphole is D.C.
The real craphole is D.C. ??
+ 1 Yep….
NYC: Overhyped craphole.
Bullseye.
Well. To be fair, NYC is less of a crap hole than it used to be.
The lines at Applebee’s are getting shorter:
“Restaurants are reeling from their worst three months since 2010, as American diners spooked by higher payroll taxes cut back on eating out.
Sales at casual-dining establishments fell 5.4 percent last month, after declining 0.6 percent in January and 1.6 percent in December”
Welcome to the recoveryless recovery.
http://mobile.bloomberg.com/news/2013-03-20/americans-cut-restaurant-spending-as-taxes-bite-ecopulse.html
Applebees and olive garden shouldn’t even count as restaurants.
Anyone who goes to some sh–ty chain like these instead of a good local diner our pub should be drug out in the street and shot.
i actually kinda like olive garden.
apparently my good local italian place shares your snobbery…very overpriced.
A clinically obese co-worker (who is a Fed, not a contractor) was just discussing how much she loves Olive Garden and Red Lobster.
And what kind of gun are you going to shoot them with there, Internet Tough Guy?
True, I don’t even own a gun. I practically wet the bed everytime gunz are discussed.
“And what kind of gun are you going to shoot them with there, Internet Tough Guy?”
in the online gaming world we call that “nerd rage”.
Sorry joe, but my local eateries that aren’t nosebleed priced, tend be worse than the chains… and I’m not real fond of chains either.
The problem is that the locals don’t pay as good as the chains, especially the chefs and cooks. They tend to to “save themselves right out of business.”
So the quality is…. bad. Real bad. I can cook better than most locals.
That is super sad to hear.
My parents, in laws, and other relatives (several cousins) all have low/medium end places that make fantastic food for the price, right around chain prices (except for specials, which are more because it’s fresh seafood usually that they only buy in season and buy small amts bc they must sell it). They also carry non-crappy beers that the chains would never have in a million years.
If you know where to look, I’m sure you have food hot spots near you. There are a couple near me, mostly O’Donnell Square in Canton and along Bond Street/Thames Street in Fells Point.
Instead of gigging at your favorite restaurant with your harpsichord, broaden your horizon and get more exposure at Olive Garden. You could negotiate an national contract and hire all your harpsichordist friends.
Bullcrap. This time of year (end of jan thru march) are traditionally bar/restaurants slowest time of year.
But most people don’t know this.
a lot of people quit going out to bars around here cause of the crakdown on DUI’s.
crakdown on DUI’s ??
Yep…Three beers then drive can cost you your lifetime job and regulate you to secondary class employee for a very long time…
On the other hand, we have millions of pharm junkies going back & forth to work each day without incident…
I read some time ago, some article suggesting that driving with the flu adversely effected driving ability much greater than someone slightly over the minimum DUI limits…
But hey, the DUI system is a money-making-machine from the DA’s office all the way to the DMV and everyone in between…
your right dave. turned into a money maker.
Have you ever driven with the flu? Not a cold. The flu.
I did, sort of. Wasn’t feeling great so I left (work) to go home. Got worse as I was driving (about 30 minutes). By the time I got home, I couldn’t get my luggage out of the trunk and barely made it to the door. The next morning my fever was 102.5.
Fortunately the roads were pretty empty, but I probably came closer to dying that night than any other day of my life. Dumb decision. Should have called for a ride.
no way…i was just out last night in DC having drinks and dinner in 40 degree weather at a restaurant with a heated outdoor patio and the place was packed.
(millions of people across the country are experiencing severe long-term unemployment and the DC ruling class along with their crony technocrats are eating at expensive restaurants with outdoor heated patios.)
It’s good to be the King!
(there ya go)
I can’t tell if you’re joking or not, but this doesn’t sound far off the mark based on what I see on a daily basis. Every night when I walk by Acadiana, for example, it is busy. Meanwhile, most of DC really isn’t fancy and has a lot of suffering people (mostly black). But you don’t need to go to DC to see this disparity.
Go to any nice place in Fells Point or Federal Hill (Baltimore) on a weekend and take a stroll. Construction is going nuts, the restaurants are packed, and half the cars are Audi (OK that is an exaggeration). I assume this trend plays out in any big city. Meanwhile, vast areas of the city are very depressed.
I and the other Lucky Duckies were eating 65 cent wings at Buffalo Wild Wings last night. Those, and great local beer selection made even the NCAA First Four games a great eve out.
Wall Street Journal - Jobless Aid Shrinks Unevenly:
“Workers across the country are seeing the length of their jobless benefits pared back, a shakeout that is playing out unevenly and pinching people in states still struggling with unemployment above the national average.
The changes in benefits are partly the result of an improving job market (that’s a LIE) but are also due to budget pressures at the state and federal level.”
The future belongs to Lucky Ducky.
http://m.us.wsj.com/articles/a/SB10001424127887323639604578370182707366240?mg=reno64-wsj
Improving job market. Lol.
I remember in college the wsj wasnt owned by newscorp yet. It still published quality journalists reporting real news, as opposed to this propaganda schlock.
I wonder if econ profs even encourage college students to read wsj anymore.
I remember as well.
Murdoch can rest in hell.
Re-post from yesterday:
http://theamericanconservative.com/images/beyond-fox-news-chart.jpg
Wall Street Journal - Capital Area’s Apartment Boom Could Fizzle:
“The construction cranes that have crowded this city’s skyline for the past few years were symbols of its red-hot apartment market. But now, the sight of them could be an ominous sign of overbuilding.
This year alone, developers are expected to deliver more than 15,000 new apartment units in the greater metro area, with 11,000 more expected in 2014. That is well above the more than 6,000 units delivered, on average, each year during the prior decade”
The losses in Washington will be incalculable.
http://m.us.wsj.com/articles/a/SB10001424127887324392804578362722741053596?mg=reno64-wsj
I took pictures yesterday. Will post in a few hours.
Would love to share some pictures of the Boyz In Tha Hood, but that could reveal too much about our top secret location. And they’re not as architecturally interesting as DC. Some of the Boyz nearby are:
Lockheed
Raytheon
Diebold
Everyone should check these out. This is a different location than my previous picture set. My previous set was K Street between 5th St and New Jersey Ave. This set is from Mt. Vernon Square area, next to DC Convention Center, where NY Ave intersects Massachusetts Ave btwn 7th Street and 9th Street. I moved around a little to capture different cranes. There were still some I couldn’t capture bc of tall buildings and I didn’t feel like leaving my commuting path.
This is what D.C. is doing while the rest of the country’s economy is rotting.
Best viewed at large size (click on the picture to blow it up):
http://picpaste.com/116fc03cdaf7e3261fb0331434a4d003.jpg
http://picpaste.com/4e2bc784d3f3186c406a4a1dc6264676.jpg
http://picpaste.com/cbf18632ff44cec0e0b9dabc24f04aaa.jpg
http://picpaste.com/eeb18482fff11fa95bf7db4e7241f18a.jpg
http://picpaste.com/98309e2dd1bdcf5d21d11b62847d10b0.jpg
Are you sure you didn’t mistakenly upload photos from China?
No, not China… Craterton, D.C.
More:
http://picpaste.com/38f3de0c3db463fd6d9a8d267fad1b31.jpg
http://picpaste.com/d60aa3b70ace8e00706ec2545a371bb3.jpg
http://picpaste.com/f6c44b76b54076251203e8507e2cf84c.jpg
http://picpaste.com/62cff7413dc8c134da681faa37715852.jpg
http://picpaste.com/3fd8b834b7a4676dfe23d999044a94d6.jpg
Even more:
http://picpaste.com/63c46c25cc4ead849683ddff17891a3c.jpg
http://picpaste.com/024cb713ed84eaa4a1f953cc98e1d7b8.jpg
http://picpaste.com/f4605cbb907c0480c1cfdc2f7aeffa50.jpg
http://picpaste.com/145e389207b0009cd8fa36f2a34c78ae.jpg
http://picpaste.com/9609a4391a247d774af377361ab8db27.jpg
http://picpaste.com/ba65aec06e7b870e78a2a74b8edd22bc.jpg
And here are the pictures I posted last Friday:
http://picpaste.com/4fca86b125ba6f3591204faf65603ff1.jpg
http://picpaste.com/a9762ef9e7f2f204ee89a5a7378858e1.jpg
http://picpaste.com/e183cc6dcb742739a43e901d7c353750.jpg
http://picpaste.com/22330e84b42eac632862a7bd54049f0c.jpg
http://picpaste.com/8826a7c6222dbaa5120b8260051b41ea.jpg
These areas are all just a matter of blocks (6-10) from the White House, btw.
Google “Mt. Vernon Square Carnegie Library DC” to get an idea of where this is.
The section of DC around Gallery Place used what I call “old Washington,” i.e. Reconstruction-era two story brick rowhouses with turrets. It was a hole. As late as 1992, the other side of the street from the FBI building was the red-light district, all-ratings “book”stores and peep shows from the sidewalk . This two-story stuff is what’s being ripped down (sometimes they save the facade). I don’t know what they intend to put in these shiny new buildings, but the area was overdue for a gentrification.
Almost all the office space is Class A type stuff. As reported previously, steel & green glass exterior, marble and dark wood interiors. Private contractor offices, law firms, accounting firms will occupy.
The housing looks like mostly luxury rentals but I’m sure a few are condoze.
You are correct, this was mostly 2 story brick structures before, it is all being ripped down, no facades have been saved. It wouldn’t be possible, these mostly have parking garages underneath. The foundations alone are impressive structures. I didn’t take any pictures of buildings at that stage because I’d have to get up close. I just made a half-a**ed effort to point and shoot this area from a distance while going between work and Union Station.
Has the Fed announced the continuation of their reverse-Robin Hood wealth redistribution scheme yet (rob from the poor, give to the rich)?
Richard Grant, Contributor
I cover what emerges from human action - and why.
3/04/2012 @ 3:29PM
The Fed and The Power To Redirect and Redistribute Wealth
A butterfly flapping its wings in a rain forest is nothing compared to a central banker flapping his lips. Federal Reserve Chairman Ben Bernanke recently told a congressional committee that, although he wouldn’t rule out another round of quantitative easing, he did not foresee another round in the near future. With this statement, the dollar rose compared to other assets, as reflected in a sudden 5 percent drop in the price of gold. The silver price also plunged, as did stock prices and Treasury securities.
Other than the good news – that the Fed won’t be inflating the money supply as much as it has been recently – it highlights the economic impact of one of many government-created agencies. The Federal Reserve Board, through its statutory power to create currency, does not create wealth but has the power to redirect and redistribute wealth.
When it inflates the money supply to hold down interest rates, it ensures that those who sell bonds get a higher price (at the expense of buyers) and that those who buy and hold bonds receive lower income streams than they would have. Investment choices and patterns are different than they would have been under a different monetary regime. Interest rates no longer reflect the preferences and decentralized market knowledge of millions of market participants. Instead, interest rates are manipulated by a small group of government-appointed individuals according to their much narrower judgment and preferences.
…
March 20, 2013, 9:28 a.m. EDT
Stock futures shake off Cyprus, look to Fed
Fedex falls in premarket after results
By Kate Gibson and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) — U.S. stock futures gained Tuesday as investors looked to the Federal Reserve’s monetary-policy decision while keeping tabs on Cyprus and potential steps by euro-zone leaders.
…
is ben b good for another 100 pts today?
March 20, 2013, 9:24 a.m. EDT
Treasurys fall ahead of FOMC decision
By Saumya Vaishampayan, MarketWatch
NEW YORK (MarketWatch) — Treasurys fell on Wednesday, pushing yields higher for the first trading session since the controversial deposit levy was announced as part of Cyprus’s bailout package, as the market looked ahead to the conclusion of the Federal Open Market Committee meeting.
Federal Reserve Chairman Ben Bernanke is scheduled to speak in a press conference at 2:30 p.m. Eastern.
…
Continuation?
When did it stop?
He means a continuation of the continuation.
New package but same great product?
Bernanke Tightens Hold on Fed Message Against Hawks
By Steve Matthews & Aki Ito - Mar 19, 2013 10:53 AM PT
Ben S. Bernanke is tightening his control of Federal Reserve communications to ensure investors hear his pro-stimulus message over the cacophony of more hawkish views from regional bank presidents.
The Fed chairman, starting tomorrow, will cut the time between the release of post-meeting statements by the Federal Open Market Committee and his news briefings, giving investors less opportunity to misperceive the Fed’s intent. In recent presentations, he has pledged to sustain easing, defending $85 billion in monthly bond purchases during congressional testimony last month and warning that “premature removal of accommodation” may weaken the expansion.
…
What percent of all stock shares are owned by the 1%?
And what is the “cost” of QE3 seigniorage creation?
Shares up as Cyprus fears ease, Fed supports
By Ryan Vlastelica
NEW YORK | Wed Mar 20, 2013 2:38pm EDT
(Reuters) - Stock markets around the world rose and the euro held firm on Wednesday on hopes that European policymakers would contain the financial crisis in Cyprus after lawmakers there voted down a rescue plan.
Shares were also supported by the latest statement from the Federal Reserve’s policy-setting committee, which held firm to its plan to stimulate the economy despite data indicating improved conditions.
The U.S. central bank held to its policy of large-scale bond purchases to boost economic growth, as expected, though it suggested that the size and pace of the purchases may change based on their expected efficacy and cost.
“This is exactly what we want to hear right now. We should continue to move higher, and gains could accelerate moving forward,” said Todd Schoenberger, managing partner at LandColt Capital in New York, who called the statement “fabulous news for equity investors.”
…
Wall Street Journal - Hispanics Extend Reach Beyond Enclaves
“South Americans, Puerto Ricans and Cubans are settling among the existing U.S. population more readily than Mexicans, the nation’s largest Hispanic group, a trend with implications for politics, the economy and other areas of daily life.”
Note the graphic attached to the article, specifically educational attainment and percent below poverty. For Hispanics of Mexican origin living in USA, only 46.4% have a high school diploma, and 25.5% live below poverty.
But it’s Racist® to discuss any of this. Our differences only make us stronger.
http://m.us.wsj.com/articles/a/SB10001424127887323639604578370801217312718?mg=reno64-wsj
“Eh vato, we ain’t racist. We love gabachos. Why they hatin’ on us?”
Better yet, look at the mean wages. Nothing above $30K per year.
But when splitting the rent ten ways, at those wages they’ll still be able to afford to rent in your neighborhood.
“But when splitting the rent ten ways…”
+1 LOL!
After Deal Is Rejected, Cyprus Scrambles to Find Funds
By LIZ ALDERMAN and DAVID M. HERSZENHORN
Published: March 20, 2013
NICOSIA — Cyprus’s three international lenders descended upon the presidential palace here Wednesday for discussions on whether and how a financial lifeline for the crisis-hit nation could be secured, as the country’s finance minister pressed his case in Moscow in hopes of securing further aid from Russia.
The talks come a day after the Cypriot Parliament rejected a bill to impose a tax on average depositors’ bank accounts as a condition for a bailout deal.
The government, and even the Church of Cyprus, scrambled Wednesday to come up with new ways to meet the demands of the three lenders — the European Commission, the European Central Bank and the International Monetary Fund, known as the troika — to avoid an imminent collapse of its banking sector.
A deal must be reached by Thursday, the day that a bank holiday in Cyprus is scheduled to end, according to the Cypriot central bank. In case an accord is not struck, the Finance Ministry is preparing to order banks to stay closed through at least next Tuesday.
European officials, and especially the European Central Bank, are watching the situation with alarm, said one person with direct knowledge of ongoing discussions, who was not authorized to speak publicly.
If a deal is not reached soon for a bailout that would support the banks, or if Cyprus does not find funds through some other route in the meantime, European officials fear that “the damage would be enormous, and the country itself would be at risk of collapse,” the person said.
If that happens, the person added, officials are concerned that a clear risk would arise that Cyprus could “go out of the euro,” creating “a painful situation that would spur chaos.”
…
Once successfully leaving the euro is shown to be a viable option, it’s over. Thus no member ever can be permitted to try. I”m amazed that we haven’t seen military intervention, under the guise of “peacekeeping” of course. Europe may even be the next destination for American troops, in addition to those already there and needing a purpose.
I think the Eurozone’s biggest mistake was focusing on being a currency union, rather than a political union. Now we’re seeing the results of that decision.
I think that it was an easier sell.
I think the Eurozone’s biggest mistake was focusing on being a currency union, rather than a political union. Now we’re seeing the results of that decision.
that’s correct. i said a long time ago on this blog that the euro would fail. you can have a shared currency, but not a ‘fractured’ currency, which is what the euro is.
if people understood how a fiat currency works, they’d have a much higher chance to make a fortune in investing. their misunderstanding cause them to make huge mistakes instead.
i’ve read articles by many economists, painstakingly looking for evidence that they understand fiat currency. so far, i haven’t seen evidence that a single one does. but i’ve seen plenty of evidence that most don’t.
the euro will fail for the reason you stated. the euro isn’t a sovereign currency. even if they prune the countries back to the strongest two, it will just delay the inevitable. sooner or later they’ll give up trying to hold it together.
The problem is being a currency union WITHOUT a political union.
But since the latter isn’t really possible practically, they were left with just trying a currency union.
The problem is being a currency union WITHOUT a political union.
yes. in the same way that the states couldn’t have formed a common currency without becoming the USA first.
But since the latter isn’t really possible practically, they were left with just trying a currency union.
it’s possible practically, but they don’t want to form a united states of europe.
I’ve been hearing about the end of the Euro since the day the Euro was adopted.
Wake me when it really happens.
In the meantime, remember that the Eurozone is THE largest economy in the world. I wonder who might not like that?
Hmm…
March 19, 2013, 10:45 a.m. EDT
Is the market telling us to cash out?
By Oliver Pursche
Recently I wrote a piece listing 10 reasons why I believe the S&P 500 will reach 1,600 before the end of this year, and ultimately settle around 1,575 by year-end. I still believe this to be true, however, given a near 10% rise for the index in the first two-and-a-half months of the year (some 60 points, or 4%, since I wrote the article three weeks ago.) By some indicators, markets are ahead of themselves, and it may be time to (at least temporarily) cash-out.
…
” By some indicators, markets are ahead of themselves, and it may be time to (at least temporarily) cash-out.”
Translation: the big guys bought before you on the cheap and now they got out at a top, so sell quickly so they can buy back at a lower rate and resell to you once again on the way up.
how many etrade accounts have been opened this month?
“the big guys bought before you on the cheap and now they got out at a top”
The real ballers are in before the stock is available to J6P. And they’re out shortly after the IPO run-up, if not before.
Exactly.
Doesn’t mean you can’t make money being the lowly retail sucker, but you do have to be smart (and VERY patient) about it.
More Middle finger Management hurt the most people you can:
The federal Indian Health Service, which serves 2.1 million tribal members, says it would be forced to slash its number of patient visits by more than 800,000 per year. Tribal programs under the U.S. Department of Interior and the U.S. Bureau of Indian Affairs that fund human services, law enforcement, schools, economic development and natural resources stand to lose almost $130 million under the cuts, according to the National Congress of American Indians.
http://abcnews.go.com/US/wireStory/tribes-plan-worst-looming-budget-cuts-18745542
This is the current view Indian Health Services patients have:
http://www.nlm.nih.gov/nativevoices/assets/timeline/000/000/155/155_w_full.jpg
The USA is in an endless, stagflationary depression:
“After a long era of planning on earlier exits from the workforce, more Americans are planning to work longer to make up for their failure to save enough for retirement.
Nearly half of Americans have little or no confidence they are financially prepared for retirement…
Only two-thirds of workers say they, or their spouse, have saved any money for retirement. And only 57 percent says they are actively saving for retirement now.
Nearly three in five workers have financial assets, beyond their homes, of $25,000 or less. And a third of those withdrew savings to pay for current expenses in the last year”
The future = there is no future.
Welcome to the recoveryless recovery.
http://m.washingtonpost.com/business/economy/strapped-for-retirement-more-workers-hope-to-work-longer/2013/03/19/0d7628b4-90c6-11e2-9cfd-36d6c9b5d7ad_story.html
people are not meant to be slaves their whole lives. Take time off when your young and enjoy life.
enjoy life
The resulting misery from overpaying for housing is incalculable.
Indubitably.
Nearly half of Americans have little or no confidence they are financially prepared for retirement…
Die young, stay pretty.
Are you referencing Buffy or Blondie?
Blondie. That dates me, huh?
Yes. How’s Dagwood?
Nice.
“Live fast, die young, and leave a good-looking corpse”
-Willard Motley
Justice is getting harder to find in America:
Alabama’s court system is in “dire” financial condition and 300 of its workers may lose their jobs under budget proposals being considered by the Legislature, Chief Justice Roy Moore told a Montgomery civic club Monday.
Moore told members of the Montgomery Rotary Club Monday that the court system has $38 million less now than when he took office for the first time in 2001. He said there are 498 fewer court employees now than in 2001, and proposals before the Legislature could cost another 300 their jobs.
Moore said if the cuts continue, the system eventually will reach a breaking point. “There comes a time when you can’t keep the power on,” the chief justice said.
Moore recently ordered court clerk’s offices closed on Wednesdays. He said the offices will still be staffed on Wednesdays but closing the doors to the public will allow staff to tend to filing court papers and other duties.
Moore says he believes extra money could be found by prioritizing spending. Some have suggested raising taxes or expanding gambling as ways to raise money for the courts. The chief justice says he opposes those ideas.
Moore said doesn’t believe raising taxes would solve the problem and he’s opposed to using gambling as a way to raise money. “I don’t consider gambling a solution to anything,” Moore said after the Rotary Club appearance,
Moore urged the Legislature to work to keep drug courts open. He says those courts keep some drug offenders out of prison. “Drug courts are doing an excellent job,” Moore said.
Moore was elected to his first term in 2000 and took office in 2001. He was removed from office in 2003 for refusing a federal judge’s order to remove a Ten Commandments monument from the lobby of the Alabama Judicial Building.
Why is 2001 the benchmark year? Why not 1991?
Or was 2001 when the department had the largest budget and payroll, and it makes the most sense to compare to that year?
So you didn’t see the words that explained that he first took office in 2001? He is comparing it to when he was first there. Maybe he thought they were doing a good job in 2001. But he has no personal experience with being a high official in 1991. Why would he compare today to a time when he wasnt’ there?
Alabama’s court system is a joke.
Any civil case over some pitiful amount (either 50k or 100k, I forget which) bypasses county courts and goes straight to the state supreme court.
[note: this is secondhand, but overheard in the elevator a few weeks ago. the guy who said it is a former Souter law clerk so I tend to believe him.]
$100K is considered a “pitiful” amount?
I remember when $1500 was the maximum you could sue for in People’s Court. I’m not sure if you’re being a snob or if $100K really IS pitiful compared to what people win in court cases these days. What are they suing for?
I’m not being a snob. 95%+ of litigation is done at the state level (use of Federal Courts is fairly rare; Subject Matter Jurisdiction and Diversity Jurisdiction govern when you can use a fed court).
Think of any accident or employment-related litigation. In most states, you’ll be on the bottom run of the state court ladder (in Maryland, this puts in you District Court). Maybe, just maybe you get to the next level up (in MD, Circuit Court). This is for amounts in the 100s of thousands, if not in the millions. The state supreme courts usually only handle novel issues after a case has been appealed from a lower appellate court. Usually state supreme courts can’t be bothered to handle random cases. And 100k is a fairly small amount of money to be in question.
Read (and watch) this if you can stomach it. The acrobat pouring champagne while suspended upside down from a trapeze is like time travel to 2005. Ben, this is worth a post all by itself.
Miami is back. Back to insanity, that is. The quest for greater fools has gone global and all that foolishness is a great foundation for growth, and the only one left too. Party on!
http://www.cnbc.com/id/100568846
will this bubble be bigger than the last?
Yes
New headline:
Housing Pundit Lies About Strength of Miami Property Market
“Ok, I lied,” said Dianna Olick.
for the love of god…i can’t believe we allowed them to blow another bubble in real estate.
or perhaps it’s not a real estate bubble…but some sort of isolated pockets of bubbles.
could the u.s. experience regional inflationary economies while at the same time experiencing stagflationary ones in other parts of the country?
NY and DC for example seem to be going gangbusters.
kinda like hypothermia…when your body fights to keep the vital organs alive…allowing the extremities to fail first.
Our extremities already have failed. Go to any small town without a state university or nearby oil drilling and drive down the main street. When you look at remaining pockets of concentrated wealth, everything looks like it’s OK. But it’s not OK.
Our extremities already have failed. Go to any small town without a state university or nearby oil drilling and drive down the main street ??
Yep….They are in a death spiral only being supported by transfer payments…I see it all the time in my RV travels…
you should see the towns in CA that once had thriving timber industries.
The economies of New York and Washington are dominated by the parasite class.
And they will be fed, very well fed, until the flyover host is bled dry and the last drop of marrow sucked from its bones. The 21st century will be the 19th century but with smartphones.
“We” didn’t allow anything.
Do you really think the American “sheeple” have ANY say in how things are run?
i voted for ron paul.
I voted for AND donated money to Ron Paul.
“i voted for ron paul.”
“I voted for AND donated money to Ron Paul.”
Well at least it got you on the list.
on the list
What list? Obama’s DHS list of thought criminals?
Didn’t vote in prez, gave money to Ron Paul, RP delegate in NV. On the list.
The dog walk index is seeing more “For Sale” signs popping up in the nabe, far more than last year. It will be interesting to see if the proliferation of “Contract Pending” stickers will continue as well.
Here in Tucson, the Cycling Intelligence Agency has been quite busy. Here’s my latest report:
I’m seeing quite the proliferation of “for rent” signs in nabes near the University of Arizona. During a two-mile stretch ridden yesterday, I saw 19 of them on SFR and multi-unit properties.
As for the “for sale” signs, not seeing a huge increase. But I’m noticing an uptick.
From my recollection of life in a Big 10 college town, the weeks immediately after spring break marked the beginning of the big push for the student slumlords to reel in the next school year’s tenants.
On campus housing is really underrated.
Only if you don’t drink.
I cover san diego coastal. near where I live I am seeing quite of few houses for rent and apartments in and around Oceanside. Must be a Marine thing!
I have a buddy who just bought an Oceanside fixer-upper in order to gain entry to the Landlordship Society.
http://www.oftwominds.com/blog.html
this explains it.
http://www.washingtonpost.com/wp-srv/special/nation/census-high-income/
where the bubbles are.
Nice graphic, thank you. And the high pay counties are the defense contractor counties.
San Diego County has a surprisingly low 7% of households in the top 5% of the national income distribution — same as St. Louis County, Missouri, but with three times the housing prices.
It’s the sunshine dollars, baby!
More breaking San Diego news: San Marcos!
Should a Bakery With More Than 50 Employees Offer Health Insurance?
By JULIE WEED
Sandy Huffaker for The New York Times
Rachel Shein, center, is trying to figure out how to comply with the new health insurance law.
CASE STUDY
What would you do with this business?
We just published a case study about Baked in the Sun, a wholesale bakery and distributor trying to decide how best to comply with the Affordable Care Act, which requires businesses with 50 or more employees to offer health insurance or pay a penalty. The company, owned by Rachel Shein and Steve Pilarski, who are married, started out making scones 16 years ago and expanded with the growth of coffeehouses. Baked in the Sun now produces nearly 200,000 items per day — almost 200 different products, including brownies, coffee cakes, muffins and cookies — and employs nearly 100 people in San Marcos, Calif.
Ms. Shein, who is chief executive, needs to decide if the owners will provide health insurance, which they estimate will cost up to $108,000 per year, or pay the penalty, which they estimate will cost $130,000. One benefit of paying the penalty is that the company would not have to take on the burden or expense of managing the insurance plan, which Ms. Shein estimates would take $10,000 of staff time. She is also considering a third option: outsourcing certain jobs to reduce staff. That is because businesses with 50 or fewer employees will be exempted from the law. It is important for Ms. Shein to make a decision soon on staffing levels because the number of full-time workers a business employs in 2013 will determine its status in 2014. Ms. Shein said she believes all workers should have health insurance, and she and her husband have offered it to employees in the past, but most are young and healthy and have not been receptive to plans that require them to contribute.
Below, you will find the recommendations of a tax accountant, an economist and another baker. Please use the comment section to tell us whether you agree or disagree with their advice — and to offer your suggestions for Ms. Shein and Mr. Pilarski. Next week, we will publish a follow-up.
John G. Ebenger, an accountant in the tax practice of Berkowitz Pollack Brant Advisors and Accountants in Miami: “It is a challenging situation, especially since the details have not been fully worked out. The bakery could opt to bite the bullet and pay the penalty next year, with plans to revisit the types of insurance that become available in 2014. With a year to plan, insurance companies will come up with more options for employers.”
Jonathan Gruber, an economics professor at M.I.T. who advised the Obama administration on health care reform: “Rachel and Steve face a difficult decision, but it seems that the third option to reorganize production and outsource functions to end up with fewer than 50 workers will be too expensive to make much sense. Offering insurance won’t cost much more than the penalty, and in an industry where many of their competitors don’t offer insurance, they could advertise themselves as a better place to work.”
Jody Hall, owner of Cupcake Royale, with 80 employees in Seattle, and a leader of the Main Street Alliance, a national network of state-based small-business groups: “I’d recommend offering health care insurance for full-time employees, like we do at Cupcake Royale, as part of our responsibility to help strengthen the health of our employees, our community, and our business. Ms. Shein is probably overestimating her costs because not all employees will use the health insurance she offers. At our bakery only about half our employees use the health insurance we provide. Some are under 26 and covered by parents, others have spouses with coverage, and some just choose not to take it. Small businesses like mine who have been offering health care will be better off when all businesses are paying into the system because the cost increases will slow down.”
What do you think?
What do I think? I think that health insurance is the biggest ripoff in America.
Offering insurance won’t cost much more than the penalty, and in an industry where many of their competitors don’t offer insurance, they could advertise themselves as a better place to work.
To me that’s a no brainer…yet it’s so hard for them to accept.
Carl Its the same dumb attitude of Landlords who want to break the lease and refuse to pay tenants to leave….so they’d rather spend it on a penalty or lawyers.
By contrast, the DC-NYC Northeastern Seaboard corridor has a huge concentration of counties with over 10% or even 20% of households in the top 5% of the national household income distribution. It’s almost like a giant wealth vacuum sucked the money out of the rest of America and dropped it out of helicopters along the Northeastern Seaboard.
wonder how it would look if you onverlayed a map of blackstone’s SFH purchases?
i bet they figured out the fed’s policies would only benefit the top 5% (or less) and acted accordingly.
If you used top 5% by assets, it would probably be even more skewed to the midatlantic/NE. Especially if you could uncover hidden & hard to value assets.
Some local housing news:
“No one knows how many homes along the Front Range are contaminated by meth, and there is no requirement to test for it unless evidence of meth use is already known.
But state and industry officials say, as more testing is done, they are discovering more meth-contaminated properties, particularly among foreclosed or rental homes that are coming back on the market amid a housing recovery.”
http://www.denverpost.com/news/ci_22827863/meth-contaminated-homes-its-buyer-beware
Hmm… I wonder if well see descriptions like “owner occupied - never rented” appear on listings?
Test? Seriously? If you can’t smell it, it ain’t worth worrying about.
If you test money, more than half it tests positive for cocaine.
More local news about the Recovery®
“Colorado has the second fastest growing rate of child poverty in the nation … the rate of children living in poverty almost doubled between 2000 and 2011, to 18 percent from 10 percent, a trend experts say could get worse as the state slowly recovers from recent economic recessions.”
http://www.denverpost.com/breakingnews/ci_22826422/colorados-child-poverty-rate-almost-doubles-10-years
Interesting how the child poverty rate doesn’t decline during the “jobless recoveries”.
Like goon squad says: It’s going to get worse, then it’s going to get more worse.
I’m shocked Colorado and Nevada are beating out certain southern states.
That’s bad. Real bad.
Yup, we’ve almost caught up with the national average. I suppose that the rates in those “southern states” are still higher, but pretty much doubled our rate. Not a good thing.
I wonder how much of it has to do with who is having kids. In other words, if the upwardly mobile aren’t and the poors are, then one would expect the rate to grow.
“I’m shocked Colorado and Nevada are beating out certain southern states.”
“…second fastest growing rate…”
Rate of change likely hasn’t changed much in the deep south where they’ve been at the bottom for some time.
Here’s a special picture for Banana Boy (who just last week tried to imply that homosexuality is a choice people make)
http://picpaste.com/5b900e1d8a146b6596ef41749aee3a07.jpg
Take that, Westboro Baptist Church!
Senator Lindsey Graham’s attraction to Abercrombie & Fitch model-type twink bois may not be a “choice”, but his decision to wear women’s panties while speaking on the floor of the U.S. Senate is a choice.
Oh that is fabulous.
The latest bit of real estate cheerleading from NPR:
For Some Ready To Buy, A Good Home Is Hard To Find
Key point from the story: Part of the reason few houses are going up for sale is that about a fifth of all homes in the U.S. — as well as in Baltimore — are underwater, meaning the loan is bigger than what the house is worth. So a sizable number of homeowners can’t afford to sell.
Also, with few recent comparable sales, agents say some offers are falling through because the appraisal comes in below the sale price.
To which I say: Appraisals coming in below the sale prices is what signaled the end of Tucson’s housing bubble. Our local paper reported this trend during the spring of 2005.
It wasn’t but a few weeks later when the “for sale” signs started proliferating like mushrooms. And then our local house prices went down, down, and down.
Housing Bubble II – But This Time It’s Different
We have seen it for several years now: foreclosure sales—there were 5 million since the peak of the housing bubble—have become the hunting grounds for investors with two goals: hanging on to these homes until the Fed’s flood of money drives up their value; and defraying the expenses of ownership by renting them out. And funds have a third goal: collecting management fees. Thousands of smaller investors have piled into the game. And so have the giants.
Blackstone Group LP, the world’s largest private equity firm, plowed over $3.5 billion into the housing market, according to Bloomberg, to gobble up 20,000 vacant and foreclosed single-family homes. It just fattened up a credit line to $2.1 billion to do more of the same. Colony Capital LLC, which already owns 7,000, is putting $2.2 billion to work.
Last year, institutional investors made up 19% of all sales in Las Vegas, 21% in Charlotte, 23% in Phoenix, and 30% in Miami. It had an impact. In the latest Case-Shiller report—a three-month moving average for October, November, and December—home values soared 9.9% in Atlanta, a bigger jump than even during the peak of the housing bubble. Las Vegas popped 12.9%, and Phoenix 23%. It’s getting hotter. In February, compared to prior year, asking prices jumped 14% in Atlanta, 18% in Las Vegas, and 25% Phoenix. Seen from another point of view: in January, the median price of a single-family home in Phoenix skyrocketed 35%.
“We recognized that prices were moving faster than people expected,” explained Devin Peterson, a Blackstone real estate associate, to Bloomberg. Despite that, they’re still “finding opportunities to buy.” They might not be able to rent them out very quickly, but they’d rather not be “missing out on a few points in home price appreciation.” The race to buy is on. The next housing bubble is inflating.
And that’s great. Money—which the Fed hands to its cronies at the frenetic pace of $85 billion a month—magically finds places to go and drives up values, and transactions take place, and paper gets shuffled around, and homes change hands as banks get out from under them, and fees and commissions change hands too. It inflates GDP, which is what everyone wants. And Chairman Bernanke can contort his arm slapping himself on the back.
Trying to rent these places is another story. Housing is zero-sum: when you move into a new place, you move out of the old place at the same time. So it becomes available. And someone else goes through the same process. Only household formation solves the problem of vacant homes—but that takes years or decades.
Best of all, these formerly foreclosed homes have now been pulled off the for-sale inventory list. Hence the “tight” inventory. And they’ve been transferred to the for-rent inventory list where they don’t bother anyone. Except the owners. Colony Capital, for example, with its 7,000 homes, has an occupancy rate of 53%.
Suddenly, the market for single-family rental homes—unlike apartments, which cater to different people—has turned into an elbow-to-elbow affair. The pressure on rents is huge. Year-over-year, rents edged up only 0.5% in Atlanta and dropped 1.7% in Las Vegas. For Phoenix, Bloomberg cited Fletcher Wilcox, a real estate analyst at Grand Canyon Title Agency: median rent per square foot rose 3% year-over-year in February 2011, and 1.5% in February 2012. But in February 2013, it fell 3%.
Timing couldn’t be worse. Occupancy rates of single-family rental homes are already low— 53% for Colony Capital. But investors are buying ever more properties and flood the rental market with them. Just when the stream of people who’ve gotten kicked out of their foreclosed homes is tapering off. With rising costs and declining revenues, the rental part of the business model collapses.
As the Fed’s money is trying to find a place to go, prices may continue to rise. But with the economics to support these prices—namely rental revenues—giving way, the remaining reason to buy would be a singular hope: economically unsustainable price appreciation. The definition of a bubble. At some point, not being able to make money on rentals, investors will try to bail out. Then, the process of a Fed-inspired housing bubble blowing up starts all over again.
investors are chasing returns in homes and stocks cause there is no return on savings in the bank.
I guess if wages grow more than inflation things will be ok. Are your wages growing?
Most of america is living on < 2000.00 a month and the jobs that are being created dont pay much.
Thank you, sfhomowner, for posting this one again.
“Then, the process of a Fed-inspired housing bubble blowing up starts all over again.”
But can’t the Fed always step in to prop up prices as buyer of last resort in case there is evidence a race to the exits is underway?
Are inventories only 20% low?
The 1/5 of homes being underwater doesn’t explain the lack of sellers.
Appraisals are not relevant for cash buyers–there were no cash buyers at the peak in 2005 to set a floor for home prices. Buying activity at the peak was driven by ultra-cheap debt and lax underwriting. Without the appraisals coming in, there were no buyers. There are lots of cash buyers now which have set a floor for home prices.
And by the way, appraisers coming in below the sale price is EXACTLY why cash bidders are winning the bids…even if their offering prices are less than people who want to buy with a mortgage. This is exactly why when there is a low priced home on the market, it is going to Wall Street, not the local who has a reasonable down payment and wants to borrow the remainder. Is this good? Should we be thanking appraisers for this?
“Lack of sellers”
Hey liar…… there is only lack of buyers. Housing demand is at 1997 levels and falling.
how many of the cash buyers are simply borrowing from someone else to bring cash to the table. Are hard money lenders playing a role here?
Not that I’ve seen. However, I haven’t seen every cash transaction–but I have seen hard money debt proposals (and what wealthy families expect to receive as interest when part of these “hard money” debt pools–8-10%, if not more).
Even IF hard money lenders were in play, they generally will only lend 50-60% of value (which by the way is what we are seeing banks lend to cash investment buyers), AND their interest rates are “hard” (double or more the Fed ZIRP affected rates)…even if the appraisers come in low, they wouldn’t care too much.
And, candidly, appraisers are facilitators of a transaction, not a party to the transaction. If the buyer wants to pay $x, a seller is willing to accept $x, a hard money lender is willing to lend 60% of $x, and the borrower willing to pay a high rate of interest on that 60% of $x, all with eyes wide open, isn’t that a pretty good indicator of “market”? Isn’t that a better indicator of “market” than what an appraiser says “market” should be?
We were all very quick to note how appraisers were driving the housing bubble, since they facilitated crazy lending during the bubble…but now they somehow have credibility?
Appraisers are motivated by more than the reality of the market. I live in the SF Bay Area, and I had my home appraised for a refi within about a year of buying it (appraisal in mid-2012). I bought off-market, so was not subject to a bidding war–it was a one-on-one negotiation. When the appraiser walked through the house, he commented on the lack of deferred maintenance for a 20 year old home (I described the new roof, kitchen less than 10-years old, completely redone backyard, etc., etc., etc.). Point blank, he told me that even though it looked like I got a good deal based on the comps and house itself, he couldn’t appraise the property for more than 5% more than I paid…because my purchase was deemed to be the best indicator of market value, and even though the comps at the time of appraisal supported a significantly higher value, he didn’t want the appraisal questioned.
It didn’t matter, since I didn’t want cash out, but at the same time, I question the value of the appraisal process as an objective indicator of value…what would he have said my home is worth if he didn’t look at what I paid?
Colorado prisons chief shot, killed answering his front door
The only reason to open your front door is if you want to exit. IMHO.
Yeah, was trying to figure that out myself. Why DID he open the door?
Unless I’m expecting someone here at the Arizona Slim Ranch, I don’t open the door.
I am amazed at how many people feel compelled to open their doors to whoever happens to knock. I quit doing that a very long time ago when I figured how that 99.5% of people who came to my door unexpectedly, were people I didn’t want to meet in the first place. Almost all were unwanted solicitors. The key term is ‘unexpectedly’.
Forget doors—why are people answering their phones and getting sucked in by all of these telemarketing scams? Why would anyone answer a call from a number they don’t recognize? That’s what voice mail is for.
That’s why I friggin’ love my caller ID. It’s to the point where I type unfamiliar numbers into a search engine as the phone is ringing. More often than not, the number is associated with some scammer.
http://www.theawl.com/2013/03/housing-insane-again
Real Estate
11
Welcome To The New American Housing Bubble (In Coastal Elite Cities)
Ken Layne @ 1:00 pm
Well here’s about $5 million in monthly rent checks!”Most of my buyers are averaging four offers before they have one accepted,” my new real estate agent in the Bay Area said yesterday. “It can be an emotional and stressful time.”
Probably! And especially if you’re moving from a still-depressed housing market, which is roughly the area between the Eastern Seaboard and San Francisco. But, as NPR is reporting as I type these words, the American housing market (in the coastal elite cities) is “fast changing.” From causing the collapse of the Earth’s economy just five years ago to a breezy NPR feature about an insane couple putting in offers at 2 a.m. after driving by a new listing, at night, the simple matter of having a place continues to cause misery, heartbreak and insomnia for those who would like to not deal with landlords and $5,000 monthly rents.
When the radio man says that “historically low interest rates are driving the recovery of the housing market”—a quote I just invented that you can probably hear, word for word, on Bloomberg right now—what he’s really saying is that rents are going crazy because enough people have money again to drive up the rents, but 3.4% annually on a half-million-dollar home means a monthly payment of about $1,800. Bring it up to $2,400 to include property taxes and homeowner’s insurance, and it’s still less than a three-bedroom place in a city with an economy. Especially if you need a patch of dirt outside for your dog to poop on.
If cannot afford $5,000 a month for rent because you do not work for Facebook an hour away from San Francisco, buying is a “good idea,” and also the only other option beyond sleeping beneath the 101 … but only if you’ve somehow maintained your credit during the worst financial crisis of our lives, and also somehow saved a hundred thousand dollars, etc. And so people are buying anything, any old moldy box of urine-soaked flooring next to a poison factory and a Pentecostal church, because it “makes financial sense.”
But is this growing frenzy real or is it just another bubble that will deflate as soon as underwater mortgage holders figure they can finally get out from their terrible investment of 2007? From another NPR housing story, this one about how it’s not actually fixed after all:
Despite a recent upturn in sales and prices, “the housing market is still very weak,” said Sheila Bair, who headed the Federal Deposit Insurance Corp. from 2006 to 2011. Bair, speaking at a Washington “economic summit” organized by The Atlantic magazine, warned homeowners that “we need more experience and data to know if it’s really turned around.”
Bair said lenders may be sitting on huge numbers of foreclosed upon houses that have been held back from the market. As housing prices start to perk up, that hidden inventory may come flooding into the market – and pushing prices back down, she said.
Moreover, millions of homeowners are “under water,” i.e., they still owe more on mortgages than they could get by selling their homes. As soon as they can sell at prices high enough to pay off old loans, they’ll put their properties on the market—and again drive down prices, she said.
This is still a problem even in fancy Twitter cities such as San Francisco, which is where Twitter is based and where Twitter itself stands as a temple to the way a cool tech company can save even a forever-doomed stretch of hobo land and plywood-covered windows like mid-Market Street.
Across from the new Twitter headquarters is an ugly brown stucco high-rise called Fox Plaza. It stands on the site of the beautiful old Fox Theater. When redevelopment bores approved the demolition of the grand theater in the 1960s, the Church of Satan’s Anton LaVay put a curse on the new building. Over the next forty years, not only the hideous Fox Plaza but the entire mid-Market Street corridor suffered endless humiliation and decay. The magic of Twitter has even reversed this satanic curse: Fox Plaza with its 1970s-style prison apartments now has a waiting list for bigger units, but you can get this nostalgic 1970s’ garbatecture one-bedroom for $3,070 per month.
Should all the financially strapped San Francisco homeowners suddenly put their homes on the market, it would make a dramatic difference in the current low inventory—8% of the city’s homeowners still owe more on their bubble-era mortgage than the property’s current market value. But with values rising so fast, even houses that sold at the height of the 2007 insanity are getting close to parity. More houses on the market might bring some sense back to people, because it is reportedly damaging to sanity when you’re shown four crappy little houses that all need a lot of work, and you’re outbid on all of them, immediately.
Meanwhile, just an hour away in California’s Central Valley, lots of towns still have a huge shadow inventory of foreclosed homes and people waiting for the good times to return to Adobe Falls Estates behind the old Circuit City and the Applebee’s.
At least they’re acknowledging the fact that another housing price collapse is imminent.
Imagine the losses this time.
“From causing the collapse of the Earth’s economy just five years ago to a breezy NPR feature about an insane couple putting in offers at 2 a.m. after driving by a new listing, at night, the simple matter of having a place continues to cause misery, heartbreak and insomnia for those who would like to not deal with landlords and $5,000 monthly rents.”
All that is needed to complete the picture is a major earthquake or hurricane just before the insane couple goes on its house shopping spree.
Sheep will be sheared.
If I didn’t find the leak my losses would have been massive !
Found pin hole in copper pipe in wall. Plummer cut out section and replaced
not much mositure on wood no mold got a fan on it now
Plummer says copper pipes start failing after around 20 years. House is around 30 year old.
big ol burn mark up there ( right under plywood floor ) when it was first soldered
sloppy contractor work. Bent copper pipes when they don’t line up stuff like that
Plummer says copper pipes start failing after around 20 years. House is around 30 year old.
— In 2001 I inspected the house my dad built between 1954 & 1963. He did all the copper piping, which included the water supplies and the hot water heating system. Zero problems after that, according to the people who lived there.
— House I live in now, I have been in since 1980. During that time I have had 2 pipes leak, both of which had been stupidly installed in non-insulated sections of exterior walls, and both leaks started during weather -20 deg F or less. I have had 1 pipe fail in an interior partition, cause of which has not yet been determined (remodeling this bathroom & have shut off this section until complete. No other pipe problems of any kind.
If I didn’t find the leak my losses would have been massive !
I always shut off my house water supply if I am leaving for overnight or longer. Just a few hours of uncontrolled pipe leakage can = massive damage.
I do the same thing, tresho.
I am going to start doing this as well. I have only been doing it when leaving for several days at a time.
One of my neighbors a few docks down left the water hose connected to his boat and the valve open. He got a leak aboard. When he returned the boat was sunk. Talk about damage!
I want to replace my old gate valve with a ball valve so it will be real easy to shut off water supply.
I took the removed piece of pipe into work and after sanding down the area that looked suspect I looked at it under a microscope.
I used the old electronics trick of sticky tape on the end of a sharpened wood Q-tip and found the hole. It was full of tiny debris which I removed with sticky tape. A irregular tiny tiny hole. On the inside of the pipe near the hole was a buildup of somthing.
I want to replace my old gate valve with a ball valve so it will be real easy to shut off water supply.
Strongly recommend ball valves for any main water shutoff.
“a sharpened Q-tip”
Irony.
Corrosion favors a sharp edge. If the metal had a defect it would likely be the site of more corrosion than the smooth area.
Contractors sloppy?
Shocked I tell you. Just shocked.
*snerk*
http://www.epa.gov/sciencematters/april2011/leaks.htm
pin holes leaks and water supply some cities have it some don’t.
comes down to water chemistry
Don’t use copper. Pretty simple.
“The Housing Market “Recovery” Is A Complete Myth”
http://seekingalpha.com/article/1151771-the-housing-market-recovery-is-a-complete-myth
And with a bubble blown again in a few areas and a burst imminent, DO NOT buy housing now. You’ll incur losses from which you’ll never recover.
“The Housing Market “Recovery” Is A Complete Myth”
or
The Housing Market “Myth” Is A Complete “Recovery”
What if unemployment never drops below 6.5%?
No need to race for the exit door until 2015.
March 20, 2013, 2:01 p.m. EDT
Fed sticks to 6.5% jobless rate forecast by 2015
By Greg Robb
WASHINGTON (MarketWatch) - The Federal Reserve latest forecast still doesn’t expect the unemployment rate to fall below the threshold for a rate hike until 2015, according to a summary of the central bank’s latest projections released Wednesday. The Fed has said it would keep interest rates at ultra-low levels so long as the jobless rate was above 6.5%, unless inflation got in the way. The Fed modestly lowered raised GDP forecasts for 2013 but also said the labor market would be healthier. The Fed sees the jobless rate falling to a range between 7.3% and 7.5% this year, compared to 7.7% in February. The Fed modestly lowered GDP forecasts for 2013 to a range between 2.3% and 2.8% from the prior estimate of 2.3% to 3.0%. The Fed still sees growth north of 3% in 2014 and 2015. The inflation guidance for 2013 was trimmed to 1.3% to 1.7% from the December forecast of 1.3% to 2%. The forecast for the first rate hike barely changed. Thirteen Fed members expect the rate hike in 2015. One Fed official changed his prediction for the first hike from 2013 until 2014.
what kind of economies do older populations have compared to younger populations?
I guess we are finding out right now
If enough discouraged workers permanently exited the workforce, the unemployment rate could drop to 6.5% without any further employment increases.
what kind of economies do older populations have compared to younger populations?
a good economy needs both.
“I guess we are finding out right now”
Except for one wrinkle: Hair-of-the-dog housing market stimulus is creating distorted incentives for the home construction industry to build homes that would be more suitable for a growing cohort of young families trying to lay down roots, not a demographic tidal wave of soon-to-retire Baby Boomers.
The costs of this malinvestment will become increasingly apparent over the next few decades.
Mr Market might sell off if the Fed merely breathes funny.
ft dot com
March 20, 2013 6:32 pm
Fed keeps foot on stimulus pedal
By Robin Harding in Washington
The US Federal Reserve kept its foot on the monetary accelerator but made a slight change to its language on its third round of quantitative easing that puts greater weight on the costs and risks.
Asset purchases under QE3 will continue at a pace of $85bn a month and the US central bank expects to keep interest rates low until the unemployment rate falls below 6.5 per cent from the current 7.7 per cent, the Federal Open Market Committee said at the end of a two-day meeting in Washington.
But a tweaked line in Wednesday’s statement says the Fed “will continue to take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives”.
The change did not represent any change in policy but is a nod to concerns among some members of the rate-setting about the costs and benefits of further quantitative easing.
The Fed made slight upgrades to its assessment of current economic conditions even as it cut its growth forecasts for 2013 and 2014.
It said that “labour market conditions have shown signs of improvement in recent months” and that the “housing sector has strengthened further”. The FOMC said that it “continues to see downside risks to its economic forecasts” but dropped a previous reference to “strains in global financial markets” despite the situation in Cyprus.
However, it acknowledged recent across-the-board cuts to public spending by noting that “fiscal policy has become somewhat more restrictive”.
…
We might not have to drive to Colorado to get high!
Bill to legalize recreational marijuana introduced in Nevada assembly
Difficult to imagine this in Nevada.
Many years ago a friend was skiing at Heavenly Valley and smoking a joint, a few tokes at a time. He ventured over to the Nevada side of the facility where a person skied over to him flipping out a badge. Several months in jail, lost job, fouled credit, greedy hick lawyer, personal property stolen, etc., was a disproportionately heavy price to pay for some weekend fun. Yet gambling and prostitution get the green light.
March 20, 2013
10 banks foreclosing on the most homeowners
Close to a million home loans in the U.S. were in some stage of the foreclosure process in early 2011. More than half a decade after the start of the housing crisis, that number has started to decline, but there were still nearly 750,000 homes in the foreclosure process as of February 2013. To determine the 10 banks foreclosing the most home loans, 24/7 Wall St. reviewed data provided by RealtyTrac, an online real estate marketplace and data source on distressed homes properties. All data are as of February 2013 and reflect the amount and value of both homes and mortgages serviced by the nation’s major banks. These are the 10 banks foreclosing the most homes:
…
Bubble and bust.
Default and foreclosure.
Hot money buying up foreclosures to rent out.
Rally in prices and drops in rents.
Rally in prices and foreclosures decline.
Drops in rent and prices take another dive.
Some predicted a sucker’s rally before the next leg down. The fundamentals are worse now than they were before the first pop. I said years ago that there wouldn’t be a straight decline, but rather like a falling down a flight of stairs, so if we’re on the first bounce, if foreclosures have started to decline, buckle up.
http://trends.truliablog.com/2013/03/rent-vs-buy-winter-2013/
This assumes that the economy continues like it is now and also that there aren’t demographic shifts in the future that negatively impact home prices.
Next.
We’ve heard over and over again on this blog that “just wait until mortgage rates tick up”, and it will crush home prices.
All else equal, this analysis completely debunks that view. Rates have to rise a lot more than a “tick”.
Well, say they jump from 3 to 6% (definitely not a “tick”, but very plausible).
On a 200K, 30 year mortgage monthly P&I jump from $843 to $1199. A 43% increase.
That might have an effect.
But I’ll ask the question again…in what economic context would we see an uptick in rates of that magnitude?
AND;
How would that particular economic context affect the buyer pool? Both in terms of ability, but also desire to purchase?
“in what economic context would we see an uptick in rates of that magnitude?”
I would guess it would be in an economy that is not in a slow motion implosion. When deflation stops. When contraction ceases.
and not just in SF Bay.
@Blue Skye:
I think you’re right. And this is especially likely to be the case since the BLS cooks the CPI books, and the Fed has telegraphed keeping low rates (absent higher CPI readings) until we get lower unemployment.
You’ve stooped to new lows Liar…… posting NAR junk makes you… well…. a liar but you knew that already.
If you start putting an “X” through every credible source of data on housing that justifies a positive position on housing, you are going to quickly end up running out of data sources.
When you post something credible, you’ll recover the little credibility you once had.
Carry on liar.
“every credible source of data…”
Just wait on that… The Realtor’s article is not a source of data, rather conclusions based on hidden assumptions. The key assumptions would of course be the future trajectory of rents and prices. I personally do not accept wishing prices compared to wishing rents advertised in the multilist even being “data”. You really shouldn’t get a pass on calling this credible data.
What kind of person gets their daily read at “truliablog” anyway.
Here is the more detailed methodology:
http://info.trulia.com/rentvsbuy
They show their assumptions and methodology with some significant detail, with an example of how they did the math on one particular market.
More realtard links from the liar.
“90 Percent of REO’s Are Withheld From Sale”
http://www.counterpunch.org/2013/02/19/theres-still-a-foreclosure-crisis/
If you’re looking to buy a house, sit tight as there are an estimated 25 MILLION foreclosures coming to the market. If you buy now you’ll lose alot of money. ALOT of money.
Beware.
Is it legal for banks to collude in order to hold inventory off the market?
if they own the property cant they do what they want?
Who is taking the losses of carrying these properties?
“if they own the property cant they do what they want?”
I believe collusion to fix prices is illegal under the Sherman Antitrust Act.
Any other business selling something presumably owns the inventory of items for sale, but that doesn’t give them the legal right to cooperate with other sellers of the same product to reduce the amount for sale in order to drive up prices.
8. Identifying Sherman Act Violations
The most common violations of the Sherman Act—and the violations most likely to be prosecuted criminally—are price fixing, bid rigging, and territorial or customer allocation among competitors (commonly described as “horizontal agreements”). This section will identify and describe the various types of horizontal price-fixing, bid-rigging and market-allocation agreements, as well as describe the methods of detecting these violations. These descriptions should be useful for investigative planning by U.S. Attorneys, Special Agents of the Federal Bureau of Investigation, and other federal investigators. For further guidance, see An Antitrust Primer for Federal Prosecutors, Antitrust Division, September 1994. Vertical resale price maintenance, which is an agreement on price between a manufacturer and its distributors (or a distributor and its retailers), may not be prosecuted criminally, although such agreements are per se unlawful, because of the difficulty of distinguishing between vertical price agreements and other vertical restraints, such as exclusive territories, that are judged under the Rule of Reason.
Identifying Price-Fixing Activities: Price fixing generally involves any agreement between competitors to tamper with prices or price levels, or terms and conditions of sale (e.g., interest rates for consumer credit), for commodities or services. Generally speaking, price fixing involves an agreement by two or more competing producers of a specific commodity, or competing providers of a particular service, in a defined geographic area, to raise, set or maintain prices for their goods or services. It may take place at either the wholesale or retail level and, although it need not involve every competitor in a particular market, it usually involves most of the competitors in the particular market.
…
You’ve said this many times, and I approve, but collusion isn’t required if all players have huge incentives to hold foreclosures off the market. The incentives are there thanks to the Fed. It is the Fed who isn’t following the rules. They are making up the rules as they go.
the FED will never take away the punch bowl. Get on board the stock and home gravy train before your priced out!
“…collusion isn’t required if all players have huge incentives to hold foreclosures off the market.”
It depends on local market power. For instance, if there are many local banks with R.E.O. to sell, the last one to sell catches a falling knife, and the first ones to sell get the highest sale prices. This provides incentives for all banks to clear R.E.O. inventory off their books or get priced in forever, and I believe there are also (unenforced) laws which limit the time lenders have to unload R.E.O. Perhaps this is less of a concern for banks or GSEs holding R.E.O. backed by mortgages with federal principle guarantees.
By contrast, if either many local banks cooperatively withhold inventory to prop up prices, or only a few banks with R.E.O. completely dominate a local market, then price fixing through inventory manipulation is possible. But either of these scenarios would violate the Sherman Antitrust Act, right?
are the banks holding back the inventory or is it trustees of mbs pools and freddie/ fannie?
In a fairly level market REOs cannot be anything but a loser. I still think the banks can hide their losses until the time they sell a property, AKA Mark to Fantasy. The incentive is to keep the corpse standing and keep the bonus and salary flowing.
In honor of Nanners:
“Five former elected officials of the small, blue-collar California city of Bell were convicted Wednesday of multiple counts of misappropriating public funds by paying themselves huge salaries while raising taxes on residents.“
off to club med? you know these commies wont serve any real time.
“Nanners”
He seems to be M.I.A.
“Reflections: After the attempted tolls on bank savings in Cyprus for saving the Euro, a new kind of tolls can be heard in the distance for the currency. The fundamental trust in the currency as a store of value has been broken, according to multiple signs across Europe. Even with the Cypriot parliament backpedaling frantically, the situation appears snowballing – there could be a bank run in two weeks.”
-Falkvinge
The beatings will continue until morale improves.
Is there any theoretical or empirical evidence to support the notion that QE reduces unemployment?
March 20, 2013, 4:49 p.m. EDT
Bernanke still unconvinced of job-market healing
Bernanke stresses he remains open to adjusting size
By Greg Robb, MarketWatch
Federal Reserve Board Chairman Ben Bernanke speaks during a news conference at the Federal Reserve headquarters March 20, 2013 in Washington, DC.
WASHINGTON (MarketWatch) — Federal Reserve Chairman Ben Bernanke said Wednesday that the labor market is healing but the central bank will keep its aggressive easing stance until it is shown that the gains are durable.
“We are seeing improvements. I think one thing we would need is to make sure that this is not a temporary improvement,” Bernanke said at a press conference following a two-day meeting of Fed policy makers.
…
get in line for the jobs at walmart and mcdonalds. Become part of the working poor that support wall street!
“get in line for the jobs at walmart and mcdonalds. Become part of the working poor that support wall street!”
I hope Julio kept his McDonald’s gig so he can pay back dem studrnt loans.
Julio Osegueda, Florida College Student, Rules Obama Town Hall (VIDEO)
Danny Shea First Posted: 03/13/09 06:12 AM ET
College student Julio Osegueda stole the show at President Obama’s Fort Myers town hall Tuesday afternoon, just one day after attempting to sell tickets to the event on Facebook.
Osegueda enthusiastically asked Obama the final question of the event.
“It’s such a blessing to see you Mr. President, thank you for taking time out of your day!” Osegueda shouted. “Oh, gracious God, thank you so much!”
Osegueda, a 19-year-old student at Edison State College and a four-year employee at McDonald’s, asked Obama a question about employee benefits.
Obama graciously answered the question while many in the crowd laughed and some onlookers even took photos of Osegueda as he asked his question.
“You sound like you’ve got good communication skills,” Obama told the aspiring broadcaster/DJ, who is majoring in communications at Edison State College.
http://www.huffingtonpost.com/2009/02/10/julio-osegueda-florida-co_n_165673.html - 230k -
Indeed.
peter schiff says this govt bubble is the last bubble before sh@t hits the fan and were all in soup lines. He is talkn a real doomsday scenario.
http://www.youtube.com/watch?v=ZIn7eCnqBzQ
Isn’t he pretty much a stopped-clock doomster who wants us all to buy his gold at a premium?
pretty sharp guy but all his doom and gloom is a little over the top. I guess if you have a lot of money you can scare everyone into a panic and pick up there assets cheap.
Say what you want but the dude walks the walk.
PETER SCHIFF - On Renting Over Buying a Home - YouTube
http://www.youtube.com/watch?v=hccJlcd69FI - 135k - Cached - Similar pages
Jan 8, 2013 …
pretty sharp guy but all his doom and gloom is a little over the top.
you’re right, he is very sharp guy. but here’s the thing about schiff. he thinks the euro will fail, but it could be saved. he thinks the dollar will fail, and can’t be saved.
the fact is that the euro can’t be saved and the dollar can. and he thinks each currency will fail for the same reason.. too much printing. but the euro and the dollar have very different problems and they won’t fail for the same reasons.
the dollar is going to fail because of crushing debt and a strangling economy. in theory we could still save the dollar, but i don’t think we will. the euro will fail because it’s a flawed concept right from the beginning.
“scare everyone into a panic and pick up there assets cheap.”
Hey pimp….the “assets” go cheap because that’s all they’re worth.
Houses are still priced at the grossly inflated levels of 2004.
Yawn…I continue to buy a couple thousand fiat dollars worth of gold per month…
Disabled Vet Dies… Fighting… Foreclosure.
http://blog.usnavyseals.com/2013/03/disabled-navy-veteran-died-in-court-fighting-foreclosure.html
Sooooo if this was a cult, Ben would be like Jesus right?
relax and enjoy the winds of change:
https://www.youtube.com/watch?v=n4RjJKxsamQ
Hey, leave me out of this.
Easy now… Ben just works here.
How the government will steal your savings under Dodd-Frank
By Robert Romano — We are all Cypriots now.
The parliament of Cyprus has — for now — overwhelmingly rejected a €5.8 billion ($7.5 billion) tax on savings deposits that was being imposed by the European Union (EU) and the International Monetary Fund (IMF) to bail out banks that bet badly on Greek debt.
The decision leaves the bailout in doubt and if no other resolution can be found, could compel Cyprus to even drop the euro, sparking the start of a wider breakup of the Eurozone monetary union.
The tax itself would have totaled 32.4 percent of the country’s €17.88 billion ($23.15 billion) Gross Domestic Product (GDP). So it was hardly surprising that it was rejected.
The people of Cyprus care more about their life savings than propping up financial institutions that lost billions on poor investments in socialist governments’ debts. The idea that somehow they, and not the banks that made those decisions, should bear the brunt of those losses was always disconnected from reality.
Yet that is precisely the presumption the establishment has made — that rather than banks raising substantially more capital to address systemic risk, you and I should pay for bank bailouts — in response to the ongoing financial crisis that began in 2007, and has actually become the basis for such proposals considered all over the world, including the U.S.
In 2009, the G20 asked the International Monetary Fund (IMF) to come up with ways the financial sector might supposedly contribute to its own bailouts.
The IMF study released in 2010 essentially proposed two types of taxes: a levy on financial institutions to create a pool of bailout funds, and a financial transaction tax.
Interestingly, what the IMF came up with as a suggestion had already been implemented a few months earlier by the U.S. Congress in passing the Dodd-Frank so-called financial reform legislation.
Under Dodd-Frank, the Federal Deposit Insurance Corporation (FDIC) is allowed to charge assessments to about 60 bank-holding and insurance companies with $50 billion or more in assets to fund what is called an “orderly liquidation fund.” Really, it’s just a bailout fund allowing the government to take over systemicly risky institutions, recapitalize them, and allow them to reenter the market under new management.
The law, as well as the IMF study, presumes that the financial sector will bear these costs. But as a Congressional Budget Office (CBO) analysis of a similar bank tax proposal by the Obama Administration at the time noted, “the ultimate cost of a tax or fee is not necessarily borne by the entity that writes the check to the government. The cost of the proposed fee would ultimately be borne to varying degrees by an institution’s customers, employees, and investors, but the precise incidence among those groups is uncertain.”
Meaning, the assessments would actually be passed on to and paid for by savers and consumers of financial products through the indirect taxation of higher bank fees and other financial transaction costs. Americans for Limited Government warned lawmakers about just such an outcome prior to the legislation’s passage as an affront to private property rights.
Under Dodd-Frank, that can come in the form of fees for merely holding a checking or savings account. Such account fees are already being charged by many financial institutions and have in fact been increasing since the passage of Dodd-Frank, reports ABC News.
These fees are allowable and one might say encouraged under Dodd-Frank. In fact, the law grants the Federal Reserve broad rulemaking authority over fees imposed by financial institutions.
While on one hand this gives the central bank the power to limit the size of those fees, the same power could be used to lift limits on the fees and gouge depositors in the event of another major financial crisis.
Either way, to fund bank bailouts via the FDIC’s “orderly liquidation fund,” you and I are already paying taxes on our savings.
One might quibble with the notion that a fee imposed by a privately owned bank could ever be considered to be a tax. But if the purpose of the fee is to enable the financial institution to pay a government levy and to fulfill a regulatory requirement to bail out those same banks from their own poor investment choices, then what’s the difference?
In reality, the assessments imposed by Dodd-Frank on financial institutions to fund bailouts are even more sinister than an overt tax on savings to do the same. Such legislation if proposed would likely spark outrage in the public and easily be defeated in Congress. That is what makes this back-door approach to raising revenue preferable for all parties involved — except for the American people, that is.
It guarantees the banks will have sufficient ability to raise funds from their customers with government consent in order to bail themselves out. Meanwhile, the politicians get to avoid unpopular votes to stick taxpayers with the bill for those bailouts, and they can pretend they had nothing to do with the higher fees.
That is the difference between the U.S. experience and that of Cyprus. At least in Cyprus the people’s representatives there actually had an opportunity to vote against such a levy. Whereas here, those fees are and will continue to be imposed by the banks with the blessing of government agencies — all without any vote in Congress.
It may happen sooner than anyone realizes. U.S. financial institutions are said to have as much $641 billion of exposure to financial institutions in Portugal, Ireland, Italy, Greece and Spain (PIIGS) according to the Congressional Research Service.
Should the Eurozone really break apart, and U.S. banks are caught in the crossfire, with the American people suddenly paying exorbitant fees for the “privilege” of conducting business electronically, they can decide for themselves whether this was a good idea.
That is, for Congress to outsource and give unlimited grant of its taxing authority to faceless bureaucrats acting in concert with an international banking cartel with the goal of bailing itself out of its own foolishness.
Robert Romano is the Senior Editor of Americans for Limited Government.
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Read more at NetRightDaily.com: http://netrightdaily.com/2013/03/how-the-government-will-steal-your-savings-under-dodd-frank/#ixzz2O8HQodj4
“the ultimate cost of a tax or fee is not necessarily borne by the entity that writes the check to the government. The cost of the proposed fee would ultimately be borne to varying degrees by an institution’s customers, employees, and investors, but the precise incidence among those groups is uncertain.”
“It may happen sooner than anyone realizes.”
Maybe that`s why DHS is loading up and the blackhawks are flying low.
So the Fed IS going to eventually exit its QE positions?
Will Bernanke stay or will he go?
March 20, 2013, 6:52 PM
Fed chief Ben Bernanke prides himself on how transparent the Fed has become during the seven years that he has been at the helm of the central bank.
But Bernanke channeled the evasiveness of his predecessor, Alan Greenspan, at his press conference Wednesday on one topic: Will he stay or will he go?
Greenspan once famously quipped to a congressional panel that if they understood him, he was not expressing himself right.
Bernanke was asked several times about his future.
At times, he sounded like he was headed back to the friendly confines of Princeton University. But at others, he sounded like he might stick around.
Bernanke’s second term as Fed chairman expires next January. It has been conventional wisdom among Fed watchers and reporters that after the constant struggle to repair the economy in the wake of the 2008 financial crisis, Bernanke was looking forward to greener pastures. But there wasn’t any solid evidence for this theory.
Many Fed watchers are uneasy about whether it has the smarts to transition away from its aggressive easing stance without triggering a sharp spike in interest rates.
“There are some serious questions about whether the Fed will successfully implement an exit strategy. We don’t even know if Bernanke is going to be around,” Bernard Baumohl, chief economist at the Economic Outlook Group, said recently.
In response, Bernanke said: “I don’t think that I’m the only person in the world who can mange the exit.”
…
what im kind of interested in is how long the FED holds all the bonds they have bought. If they need to sell them before maturity then they have to worry about rising rates and thus lower prices. If they plan on holding till maturity then they dont need to worry about price fluctuations. schiff seemed to think they might need the cash to buy more debt (rollover). Couldnt they just print more cash to buy more debt as those bonds on their books go to maturity?
Bottom line is the FED has the bonds and they are collecting some interest every month that is handed over to treasury. They gave someone (primary dealers) some cash for those bonds. at some point they are suppose to give the cash back to the FED.
I guess in principal the primary dealers are suppose to have there own cash to buy from the US treasury before they flip to the FED.
Somehow I feel like it is not their money they are using.
Peter Schiff elaborates even more on the the massive losses you’ll never recover from if you buy a house now.
Watch it. Beware of the losses associated with housing at current inflated asking prices.
http://www.youtube.com/watch?v=s3fw_ors6K4
This story is greatly overblown, as the Fed clearly has this crisis contained. One need look no farther than the rally in global share prices to recognize the central banker cartel has already extinguished the threat.
The Post’s View
Cyprus triggers another euro-zone crisis
By Editorial Board, Wednesday, March 20, 2:03 PM
COULD A full-blown European financial crisis begin in tiny Cyprus, with a population of just more than 1 million and a gross domestic product of only $23.6 billion? The idea is only slightly stranger than the notion that this Mediterranean offshore-banking center, partially occupied by Turkey since 1974, belonged in a currency union with Germany in the first place. But Europe’s leaders, in their wisdom, let Cyprus join the euro zone in 2008, and now the future of a continent hinges on bailing out the island and its insolvent banks.
European policymakers, led by Chancellor Angela Merkel’s German government, have made a hash of things so far. Cyprus needs to recapitalize its financial system, which is badly damaged by exposure to the sovereign debt of neighboring Greece. The International Monetary Fund (IMF) and E.U. governments agreed to lend $13 billion of the necessary funds, in return for the usual austerity and a contribution of $7.5 billion from the Cypriot government.
The only way Cyprus could get its hands on that much cash, however, was to “tax” the $88.4 billion on deposit in its banks. Though basically a polite confiscation, it was defensible under Cyprus’s special circumstances, which include the fact that there was relatively little money to be had by soaking the banks’ bondholders. Forty percent of the deposits belong to foreigners, wealthy Russians especially, who are relatively well-positioned to share in their tax haven’s risks; a bailout that didn’t hit the Russians would have been politically impossible in Germany.
For the Cypriot government, however, taxing fat cats risked alienating Russian Prime Minister Vladimir Putin, whose government Cyprus already owes $3.3 billion for a previous bailout. So President Nicos Anastasiades — with the inexplicable acquiescence of Berlin — tried to shift some of the burden onto small accounts, those with less than 100,000 euros, which is the upper limit for deposit insurance. Cyprus’s parliament rejected the plan in the face of an entirely foreseeable middle-class uprising. And it’s a good thing, too — violating the deposit guarantee for Cypriot savers would have set a dangerous precedent, possibly destabilizing banks across Europe.
That bad idea may be dead, for now, though the mere fact that it was proposed could haunt savers in Italy, Spain and Greece. Meanwhile, only other difficult options remain: Cyprus could ask Mr. Putin for more aid, in return, perhaps, for a stake in its offshore natural gas deposits; the island could default and, probably, exit the euro zone; or it could yet cobble together a deal with the IMF and the Germans under which it limited the deposit “tax” to large, uninsured deposits.
The third seems like the least bad option, but given the nationalist backlash in Cyprus against Germany over the original scheme, it’s anyone’s guess what Cyprus will do; at last check, its finance and energy ministers were visiting Moscow.
How ironic if the end result of euro-zone overstretch into Cyprus turned out to be an expansion of Russian influence over European Union turf. Apparently the creators of the euro zone underestimated geopolitical risk — along with the difficulties of establishing a common currency among self-interested nations that had no true central bank, joint bank regulation or common fiscal policy. After three years of crisis, those design flaws remain largely uncorrected. The Cyprus mess, though still unlikely to trigger a European collapse, is a warning that the time remaining to repair those flaws is not unlimited.
…
It’s all contained. ‘Tis a mere flesh wound, really.
In Debt
March 20, 2013, 4:06 pm
Cyprus Shows How Not to Do a Bailout
By STEPHEN J. LUBBEN
Cyprus can’t really be about Cyprus, can it? After all, the banking sector in that country pales in comparison to things like the London Whale trade and the amount of capital the big banks have to raise to meet Basel III.
Some will say it is about depositor insurance. Fair enough.
But by now, I’d think investors would be smart enough to know that when you start chasing yield in small countries with outsize banking sectors, bad things will happen. And deposit insurance is only as good as the sovereign standing behind the insurance.
In Debt
Cyprus does show that, for all the faults with the financial crisis rescues in the United States, the European Union still finds ways to show us how poorly a bailout can be handled. Why exactly did we restrict the Federal Reserve’s powers under Section 13(3), which used to allow the Fed to lend to all kinds of financial firms?
Cyprus also shows that even an allegedly “safe” bankruptcy system can be too big and quite dangerous. After all, the banks in Cyprus were noted for their reliance on deposits rather than other forms of dodgy short-term finance like repo and conduits and what not.
Cyprus also shows the difficulty of imposing rigor on an ex post basis. I get the desire to impose the cost of the bailout on the outsiders with allegedly shady connections to quasi-democratic countries. But it seems a bit late in the day to suddenly become concerned about money laundering and tax evasion. Nobody noticed this before March 2013?
The really big issue with Cyprus, that is so often lost in the articles about bank runs and Russian bad guys, is what Cyprus means for the euro zone and the European Union generally.
Surely, Cyprus has to be high on the list of countries that maybe should not have been let into the euro. But if Cyprus can leave, what about Greece, and Spain, and …
…
1-0-0% contained…
Cyprus facing capital flight
Doubt over Cyprus’ financial future shows no sign of lifting, with officials reportedly set to introduce new legislation to try to prevent capital exiting the country amid negotiations with the Troika.
March 20, 2013, 11:18 p.m. EDT
Cyprus mulls plan to stem capital flight
By Sarah Turner, MarketWatch
Reuters
Protesters shout slogans during an anti-bailout rally outside Cyprus’s parliament in Nicosia.
SYDNEY (MarketWatch) —Doubt over Cyprus’ financial future showed no sign of lifting Thursday, with officials reportedly set to introduce new legislation to try to prevent capital exiting the country, amid negotiations to shore up the country’s finances.
Laws to impose capital restrictions to stem deposit flight from the country and to set out new rules for insolvent banks will likely be put before the country’s parliament on Thursday, The Wall Street Journal reported.
The laws would be needed before the banks reopen their doors to customers — an event now reportedly to take place next Tuesday.
…
Does it feel to others like something big is about to blow up — kind of like when Lehman Brothers collapsed in Fall 2008? And the parabolic price blowout in the stock market feels more like panic buying than economic recovery. If financial stability is the Fed’s aim, it seems very questionable whether they are achieving it.
To me it feels like we went off the cliff in 2008 and got hung up on a branch just below the edge. Now the branch is making funny popping noises…
Missing definition in 1982 Fed glossary: quantitative easing
By Pedro da Costa
March 19, 2013
It’s not difficult to see why quantitative easing was not high on the Federal Reserve’s list of priorities in 1982. The term was nowhere to be found in the handy booklet pictured above, which I found while perusing the shelves of Reuters’ two-desk bureau inside the U.S. Treasury. Paul Volcker’s Fed was still battling runaway inflation, so policy options designed for a zero interest rate environment were nowhere near the horizon.
…
“90% of Foreclosed Properties Held Off the Market”
http://realestate.aol.com/blog/2012/07/13/shadow-reo-as-much-as-90-percent-of-foreclosed-properties-are-h/
If you’re looking to by a house, beware. Sit tight and let prices continue to fall.