Bits Bucket for April 3, 2013
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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Right on schedule and as gleefully predicted right here on HBB….
In January, CA. Gov. Jerry Brown crowed in his state of the State address that “Two years ago, they were writing our obituary. Well, it didn’t happen. California is back, its budget is balanced and we are on the move.”
At this, HBB readers scoffed en masse — predicting revised reassessments by the end of the fiscal quarter, and sure enough here’s the pesky State Auditor we all predicted telling us we’re NOT “balanced” at all, we’re actually $127B in the hole. And that’s not including the massive State pension liabilities we’ve underfunded. (Tee hee)
http://blogs.sacbee.com/capitolalertlatest/2013/03/state-auditor-california-net-worth-at-negative-127-billion.html
Ah, ye of little faith….
Unless they have received significant oil taxes from the oil shale boom, Texas soon to follow. (the only state whose deficit matched CA, but you didn’t see much in the news about it)
Texas is indeed in the hole. They only do a budget every two years which you have to adjust for, but still in the hole.
B-b-b-b-but Texas is the promised land for those seeking lower taxes and less regulation! People and businesses are moving there from progressive areas like the Northeast and Cali!
Actually Texas does have a budget surplus due to oil: http://news.yahoo.com/texas-legislature-wrestle-over-unexpected-budget-surplus-184800547.html
California does have the oil resources to fund its budget for a while if it exploited those resources but for now it chooses not to drill baby drill. However, both states will be broke no matter what due to the illegals that inhabit both states. However, in CA it will be interesting when the democrats begin to split with the inner city democrats supporting drilling when the only alternative is program cuts and the the rich white environmentalists opposing more drilling for revenue.
There ya go.
Chopping an additional $5 billion from education and millions from planned parenthood will collide to cause plenty of problems in the future.
The irony is probably lost on them.
My motto is don’t trust anything outside of your family and close friends. Everything else is smoke and mirror, especially the numbers & statistics by the governments and businesses. Anything you see in the public is still the best case scenario, imagine what the real scenario is like. The $hit is done….prepare for the $hitstorm.
+1 The only reason the social safety net exists at all is because fire is cheap.
Got that right.
Does this mean the sales tax increase is not temporary ?
While that truly sucks, Jerry Brown gave the state of the state address in January of 2013, while, according to the article you cited, the financial report “covers the fiscal year ending June 30, 2012″. In other words, he wasn’t referring to the fiscal year that this article deals with.
The article goes on to say, “Last November, voters passed an increase in sales and income taxes that Brown says will balance the state’s operating budget and allow the debt wall to be gradually dismantled.”
So, what I gather from this is that in his address, Brown was “crowing”,
either rightly or wrongly, about the coming fiscal year, July 2012-June 2013.
Good catch, Pete. But if anyone can pull it off, JB can.
Let’s hope that four-year, quarter of a cent increase in the State sales tax makes up for the CalPERS/STER pension shortfall and five years worth of (unaccounted for) downward reassessments in property tax! After all, it’s projected to raise SIX billion of those 127B dollars!
here’s the pesky State Auditor we all predicted telling us we’re NOT “balanced” at all, we’re actually $127B in the hole. And that’s not including the massive State pension liabilities we’ve underfunded. (Tee hee)
Socialism works until it runs out of other peoples’ money.
Says the guy who gets his money from federal contracts.
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 have a long way to fall. A very long way to fall.
Agreed. Fundamentally, housing is overpriced, not only in CA, but in many places, such as DC. The difficult thing is to get the timing right.
What is there to time?
Prices are grossly inflated by 75% +.
Wha….?
I thought it was 65%.
175%. I forgot the 1.
And I think you mean price reductions. A 65% decline would put us near the longterm housing price trend line.
A 65% decline would put us near the longterm housing price trend line.
This chart says otherwise. Why? It says we’re not far off trend from 1980. And houses are bigger now then then. Do you have another chart?
http://en.wikipedia.org/wiki/File:Case-Shiller_data_from_1890_to_2012.png
Hows that shanty in the slum holding up?
And houses are bigger now then then.
Since Case-Shiller is based upon “sales-pairs”, which means the _repeat_ sales of the _same_ property, it is relatively unaffected by changes in the size of the houses sold.
And houses are bigger now then then.
…bigger now than then?
…bigger now than then?
thanks fore that
“Prices are grossly inflated by 75% +”
Isn’t your A$$ tired of you pulling random numbers out of it ?
Speaking of lying realtors.
MoLiar…. head back on over to p.net.
No cash? No worries. Home lenders ease up rules
By Diana Olick | CNBC.com – Fri, Mar 29, 2013 3:38 PM EDT
http://homes.yahoo.com/news/no-cash–no-worries–home-lenders-ease-up-rules-193804515.html - 94k -
“It is a noticeable shift from the last four years, when 20 percent down on a home purchase loan was the only game in the neighborhood.”
That is a blatant lie. 0% down loans (usda rural program) and 3% FHA loans have been around for years.
It is all about the payment. With interest rates lower payments are lower.
600k home @ 3% 30 yrs = 2529/month PI
425K home @ 6% 30 yrs= 2548 / month PI
Just by dropping the interest rate you have created a lot of room for monthly payments to shrink and thus room to grow .
You still have 3% to drop too. Look at cars . They got so exspensive that had to give 0% financing to get them off the lots.
Rates for houses are so low right now, that, inflation adjusted (assuming you’re going to keep the house for 30 years), they are almost certainly negative. Who in their right mind thinks that 20 years from now you’ll be able to borrow at/below 3% for 30 years? The next crisis will be when interest rates rise; all those holding the mtg notes will start to go “bang”. A rise from 3% to 6% would be catastrophic for the lenders holding the paper (and the housing market), but, IMHO, it’s a 100% certainty that, over the next 30 years, we’ll see 6%+ interest rates again. The government is doing everything they possible can absent money drops out of a helicopter to try to spark inflation. When they are successful (and they will be, IMHO) interest rates are going to rise quickly and the “paper holders” are going to get creamed. Fortunately (extreme snark), most of the paper is at Fannie/Freddie, so it’s really the taxpayers who take the majority of the losses.
0% financing for 3-5 years is very different than 3% financing for 30. Basically car dealers are buying the rate down for you as part of the purchase price. Think of it as prepaying all the interest up front. On the 30 year 3% mortgage, that’s not at all what they are doing. They are selling long term to buy short term, and using a ton of leverage. We’ve seen this story play out many times in the past (S&L crisis).
“Another factor was the efforts of the Federal Reserve to wring inflation out of the economy, marked by Paul Volcker’s speech of October 6, 1979, with a series of rises in short-term interest rates. This led to a scenario in which increases in the short-term cost of funding were higher than the return on portfolios of mortgage loans, a large proportion of which may have been fixed rate mortgages (a problem that is known as an asset-liability mismatch). Interest rates continued to rise, placing even more pressure on S&Ls as the 1980s dawned and led to increased focus on high interest-rate transactions. Zvi Bodie, professor of finance and economics at Boston University School of Management, writing in the St. Louis Federal Reserve Review wrote, “asset-liability mismatch was a principal cause of the Savings and Loan Crisis”"
“Fortunately (extreme snark), most of the paper is at Fannie/Freddie, so it’s really the taxpayers who take the majority of the losses.”
Government = Housing
Housing = Government
Of course the taxpayers will lose! Rather than fall on its own sword, an expanding government will always opt to stab the citizenry in the back.
The bigger government gets, the more lies it must tell. And it will always be thus, as government is not a producer.
Well I’ve gotten Nothing from those trillions pizzzed away…so maybe a money drop is the RIGHT medicine for those left behind.
The government is doing everything they possible can absent money drops out of a helicopter to try to spark inflation
A rise from 3% to 6% would be catastrophic for the lenders holding the paper (and the housing market), but, IMHO, it’s a 100% certainty that, over the next 30 years, we’ll see 6%+ interest rates again.
Two points:
- The lenders aren’t holding much of the paper. Their model now is to sell as much of it as possible downstream, not hold it. The pension funds are ones that will take a HUGE dump when the value of their MBSes drop.
- What makes you so certain that we aren’t on the same path as Japan followed? If so, they appear to be sustaining long-term ZIRP; though they haven’t reached 30 years of it yet, they are not that far from it.
“0% financing for 3-5 years is very different than 3% financing for 30.”
+1 Agreed. Query: “nominal v. simple cash flow analysis.”
“Look at cars . They got so exspensive that had to give 0% financing to get them off the lots.”
+1 Another fake business model in the command economy.
anything to keep prices high. They might actually sell some cars if they dropped the price. There is nothing price wont fix.
Yet everyone is raising prices. Remember when Korean cars were affordable? Today even a base KIA Rio will set you back 17K.
Amerikkka has to be #1 country in the stupidity as well.
‘#1 country in the stupidity’
Perhaps, but I learned on this blog yesterday that rats only live in rented houses. (And that was a GREAT reason to buy a house). At least we have really smart rats!
Math is hard, but rats can do it.
I interpreted it as an implication that when it’s your own house you can more quickly and easily do something about it, not that it doesn’t happen in owned houses.
I interpreted it as an implication that when it’s your own house you can more quickly and easily do something about it, not that it doesn’t happen in owned houses.
Exactly, Carl.
The other thing I would suggest is that if you DO do something about it in an owned house, no one else’s actions can take away the fruit of your labor; in a rental, someone else is free to make decisions that take away the value of your previous labor/improvement.
Perhaps, but I learned on this blog yesterday that rats only live in rented houses. (And that was a GREAT reason to buy a house). At least we have really smart rats!
Sorry that my emotional outburst struck you that way, Ben.
My late response on yesterday’s thread:
Comment by Prime_Is_Contained
2013-04-03 09:52:33
To be very clear, I _AM_ currently choosing to rent for approximately 50% of what it would cost me to buy.
Everybody knows rats only live in rentals.
I didn’t mean to imply that, Ben.
What I meant to say, but never really got around to saying, was that it is kind of a pain when you have to choose between hassling your LL (with potential reprisals or rent increases), or doing it yourself (which I really don’t feel like doing).
Most stuff I just do myself, since I think I have a sweet deal on sweet digs (to channel Casey), and I want to keep it that way; ideally, my LL almost forgets that I’m there except for the very-reliable rent checks that show up.
But this one sounds like a fair amount of work. And he didn’t really offer to do anything about it when I informed him of the rat incursions.
My other point is that what I invested in rat-proofing would be a LONG-term investment if I owned the property, and I might only reap the benefits short-term if my LL decides to jack the rent. I have to make a decision with no certainty about the future.
I’ve never seen a rat in any house I lived in, rented or not. I do work on many foreclosures, and see signs of mice in most. Once I was asked to trap rats in a foreclosure at Stoneman Lake, AZ. The rats had taken over this place. I had to wear a respirator and spray bleach all over because of the hantavirus. After being inside many houses at Stoneman Lake, I can say the rats are everywhere. My conclusion; they don’t have any cats living there.
I’ve never seen a rat in any house I lived in, rented or not.
First time for me as well.
And I’ve lived in places that looked much more like they deserved to have rats than this house does.
Rats are more likely near rivers and grain storage. I had a pretty large one enter the basement of my farmhouse years ago (owned) through a floor drain. That thing might not have been intimidated by a housecat.
And it was my rental after all. At the time I had two kids under 5, and really wasn’t too keen on having rats in the garage…so we tried to rat-proof. Finding the rats then moving INTO the house was the last straw for us to find a new place to live.
The alleys of Beverly Hills are full of rats. (Upper end dumpster pickings.) And Malibu is full of them too (rats love ice plant).
Rodents in the house can be easily dissuaded by adopting a beat-up-looking pound kitty.
‘easily dissuaded by adopting a beat-up-looking pound kitty’
Certainly cheaper than buying a house.
LOL
Rats do not live in houses with cats. The only time I have had rodents in the house is when I was between cats.
In rentals that ban pets, rats would be more likely.
Saw a rat once in a common room of a dorm in NYC. I had mice in a rental that allowed pets. A different place had cockroaches that were large enough to apply for mammal status.
The problem isn’t the one or two that you see. The problem is that for every one you see, there are dozens more you don’t see. Rodents have odd bodies. Not sure if it works for a rabbit since their feet are so big, but mice and rats can go anywhere they can put their entire head. For most rats, a hole the size of a quarter is enough. For most mice, a hole the size of a dime is enough.
The guy from the building with mice put steel wool into the hole we thought was the source of the problem and taped it up. He told me anything in the apartment would find its way out. Not sure if he was right, but I never saw one again.
When I say I don’t have rodents, I mean there are no signs of rodents. No droppings, no holes in bags of flour, etc.
Before we got our latest cats, I did see a mouse go out under the door to the garage through a space that I thought was way too small. So I know what you mean about them being able to squeeze through very small spaces.
“…mice and rats can go anywhere they can put their entire head.”
+1 Their skull and spine are firm, but the rest of the skeleton is like cartilage, which snaps back into shape like your ears. Amazing to watch them spread out and wiggle under a door.
So, the powers that be know the game. Risky loans backed by government guarantees are simply transfer payments to Wall Street.
I heard on DC news radio today that the Obama administration is pushing lenders to loosen lending standards again: http://www.businessinsider.com/obama-home-loans-credit-white-house-2013-4
The Bernank has been complaining for some time that lending standards are too tight: http://abcnews.go.com/blogs/business/2012/11/bernanke-cites-tight-lending-rules-as-drag-on-economy/
As I’ve always said, politicians write the laws. They are the ones ultimately responsible for the financial legal environment which allowed the housing / debt bubble to occur:
“The reason there have been no efforts made to criminally investigate is obvious. Former banking regulator and current securities Professor Bill Black told Bill Moyers in 2009 that “Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong.” In the documentary “Inside Job”, the economist Nouriel Roubini, when asked why there have been no such investigations, replied: “Because then you’d find the culprits.” :
http://www.guardian.co.uk/commentisfree/2013/jan/23/untouchables-wall-street-prosecutions-obama
We blame Wall Street for the financial crisis, but that’s only half the equation. Federal politicians worked with them, in return for hefty contributions - http://www.opensecrets.org/ - and that unholy union resulted in the housing / debt bubble and the resulting financial crisis.
“Risky loans backed by government guarantees are simply transfer payments to Wall Street.”
That is spot on! The banksters have taking a page out of the farmers’ playbook and have their snouts in the pig trough of government-financed insurance!!!
Not just bankers, or farmers, but insurance companies (see my piece on medicare advantage plans yesterday), defense industry, big oil, etc.
Corporations have grown so large and powerful and integrated that they are able to control all arms/ sides of government.
We are no different than China right now. These are in essence state sponsored entities.
I once had a drink with a guy who used to work for Fannie. He said that every so often, a young politician would come to office with guns-a-blazin’ to shut down Fannie.
Their strategy?
Open a local lending office in that guy’s district. After a few photo ops with the politician and new “homeowner”s, the politician’s opposition to Fannie ceased.
We love our free cheese. Too bad it’s not actually free.
“No one will really understand politics until they understand that politicians are not trying to solve our problems. They are trying to solve their own problems — of which getting elected and re-elected are number one and number two. Whatever is number three is far behind.
Many of the things the government does that may seem stupid are not stupid at all, from the standpoint of the elected officials or bureaucrats who do these things.” — Thomas Sowell
And not just in the US either. After watching the US market crash and burn for 7 years, they figure this out just NOW??
—————-
IMF Urges Denmark to Drop Risky Mortgages as Losses Loom
By Frances Schwartzkopff - Apr 2, 2013 7:13 AM ET (bloomibergi)
“The International Monetary Fund is urging Denmark to phase out interest-only mortgages or risk destabilizing its housing market, as lawmakers and lenders debate whether to aid borrowers unable to pay their loans.
The IMF is now adding its voice to a growing body of critics, including the central bank and Standard & Poor’s, arguing the interest-only loans have weakened Denmark’s $500 billion mortgage market. Though the model helped keep mortgages affordable during recessions, failure to amortize has underpinned growth in private debt to a world-beating 322 percent of disposable incomes, S&P estimates.
Danish mortgage banks started offering borrowers a decade- long deferment option on principal payments in 2003. The interest-only loans now make up 56 percent of outstanding mortgage debt, the industry estimates.
——————
The model helped keep mortgages affordable during recessions… And there it is. The mentality is carved in stone. Instead of allowing prices to fall what the Middle Class can afford, they “help” the Middle Class with loans to keep the price the same.
The training is going as planned. Buying houses is for rich people and hedge funds, while J6P must accept being a renter forever. Just like the Gilded Age.
Ironic. This seems obvious to you, yet your own government subsidized gimormous debt makes perfect, yet contrary sense.
Ironic. This seems obvious to you, yet your own government subsidized gimormous debt makes perfect, yet contrary sense.
I took this to mean that oxide _does_ understand how subsidies (such as below-market rates, interest-only, government guarantees, etc) distort markets, and that she just does not expect sanity to return to our markets within a reasonable time-frame.
In other words, she knows she paid too much, and she knows why she had to pay too much, but she thinks that all things considered, it was not worth waiting until sanity returns (if it ever does) in order to buy her own home.
oxy, please correct me if I’m wrong in the above.
Oh I see!
People who paid massively inflated prices for what is always a depreciating asset had to. It was a requirement huh? They HAD to.
Prime is pretty much correct.
Prime is pretty much making it up. Sounds nice, but Oxy never said anything of the sort. Well, until now.
Rents will always go up, remember? We are at the house price bottom, right, bouncing along? You are going to be ahead by hundreds of thousands of dollars in 30 years over renting, please correct me if I am wrong.
Hold your ground Oxy!
I DID say that I would likely pay more in rent waiting for a price drop than the amount of the actual price drop, and that’s if the rent never increased. So Prime was right that it would not be worth waiting for a return to sanity.
And rent was less. Instead you opted to pay more.
Your point?
The point is she doesn’t remember the mania. I believe her. Now the long slog to make the relentless payments and the relentless upgrades. She is young (ish) and can do this. The next 20+ years will be spent focused on this life project. It might enter her thinking decades forward that she went to college and made the commute every day and bowed to the powers with all her time and energy to pay the banks simply for a roost to do so. Maybe not.
You have to live somewhere.
The training is going as planned. Buying houses is for rich people and hedge funds, while J6P must accept being a renter forever. Just like the Gilded Age.
Ah, playing the victim card?
DebtJunkies always play the victim card in advance, knowing they’re going to crash and burn as a result of their own poor decision-making.
I wonder if they will walk away from their new overinflated homes like we in the US are.
Article - Economic Crises hits the Netherlands.
“No nation in the euro zone is as deeply in debt as the Netherlands, where banks have a total of about €650 billion in mortgage loans on their books.”
http://www.spiegel.de/international/europe/economic-crisis-hits-the-netherlands-a-891919.html
From what I have read mortgages in the Eurozone are recourse and it’s much harder to BK your way out of the obligation to repay the loan.
As the economies of the world slow down investment groups have to chase income to stay in Business.
Getting the investment backed by the government is the problem. Everyones problem.
This is the paradox of government intervention. When they intervene in a market, purportedly to make the product more affordable, they wind up driving up prices.
The government however, is simply made up of individuals with a lot of power. Corporate leaders and politicians in a mutual circle jerk.
Government intervention has skyrocketed medical prices, house prices, education costs. It’s surreal. But - it benefits corporate leaders (political contributors) and politicians. The former, with higher profits, courtesy of the government, the latter, with greater kickbacks and the ability to point to programs which are designed to make the product more affordable.
You can guess where the public sits in all this.
With the powers that be crowing that increased “consumer credit” (ie debt) is a positive economic indicator, one can see a slow relapse into indentured servitude.
I don’t think the government and corporate leaders care so much about something so minute as whether J6P owns or rents. They want to keep the population indebted and prices for essentials high, as they perceive this benefits themselves. And it does.
So, I’d amend that statement to read “The PTB are training J6P to be in debt forever.”
Also, keeping J6P in debt makes him easier to control - easier to govern.
Debt vs. rent: either way it provides an income stream for the PTB.
And a loss for the sucker who financed it.
Also, keeping J6P in debt makes him easier to control - easier to govern.”
Makes him have to work.
Makes him have to work.
Right…we make him “have” to work…while at the same time eliminating his job. What’s next?
We send him to shoot brown people.
Neat stuff:
If you are the PTB and you want to promote the price of something such as houses then you should make available to buyers cheap money specific to houses and to houses only. If money is available to finance higher prices then higher prices it will be IF the demand can be stirred up at the same time.
Regarding houses, demand can - and is - being stirred up by the actions of the NAR. The NAR fires up enthusiasm, the lenders hold off on offering inventory of houses which limits the supply of houses for sale which feeds this enthusiasm, and at the same time cheap money is offered to allow the enthusiasm to translate into sales at higher and higher prices.
As a result of these higher prices the inventory of houses held back by the lenders - the comps - have their “values” raised, and these raised values raise the values of the underwater mortgages the lenders hold. And if enough underwater mortgages can have their values raised then lenders that would and should have gone bankrupt can be saved.
Plus rising prices offers hope to those on the margin. People who are underwater and were thinking of walking won’t if they see prices turning around. People who were about to give up the struggle of making thier house payments will keep up the struggle if hope is there, and rising prices will offer this hope.
Love the NAR: They are working their butts off selling ever fewer houses and earning ever fewer commissions and are promoting the rising prices of houses as a result.
Love Zillow: Zillow posts rising prices and thus values (real or imaginary) of the comps and these postings offer hope to the otherwise hopeless. Hope will keep them staying and will keep them paying.
http://www.stltoday.com/business/local/white-house-pushes-for-home-loans-to-people-with-weaker/article_9a94f132-cd05-5446-ad91-7ee9c6f2f46e.html
Oh good. This can’t end badly.
get in on the casino action dude. ODDS are in your favor this time around.
May the odds be ever in your favor.
Casinos are more forthright than the nonsense proposed here.
There are no “odds” in a housing market that enables liars and cheats to live mortgage-free, off the backs of the rest of society.
I appreciate the comment above about only trusting family and close friends. I don’t like it one bit, but I do appreciate it. Maybe one day, should there be a return of placing ethics and morals above the law, a handshake will once again mean something.
Maybe one day, should there be a return of placing ethics and morals above the law, a handshake will once again mean something.
————————
This is exactly why we need Mark Sanford to win that South Carolina House seat.
While Sanford is hardly an example of ethics, McBeth is correct. I found it interesting in law school when reading the old cases just how angry the judge could be that someone would violate his duty to a partner. It was expected that someone would honor an agreement without court intervention. America use to be a much more honest place to do business and that made doing business easier. Having to litigate more and create contracts that cover every angle imposes costs and makes us less efficient. We can argue on why we have less ethics and if it has anything to do with a decline in faith but that we are less honest, I think is beyond dispute. 30 years ago there would have been fewer people that would have lied about their income on a loan application. Not all the fraud was committed by the banks. Of course, a fish starts to stink at the head as the old Ottoman saying goes.
IMHO, it’s the law that has made us the way we are today, not the other way around. Everything is illegal, if you run a business, you likely break the law a few times a day without even thinking about it. Same thing personally, my house probably runs afoul at least a dozen different codes in the area. When I climb in my car, a 10 mile drive I’ll wind up breaking at least half a dozen laws. And, I’m a very cautious and careful person, think about a more normal member of society.
We made a terrible mistake when we tried to legislate morality (starting around the time of prohibition). People now think that “legal=moral” which, in a great deal of cases, is certainly NOT the case. As a country, we’re losing (or have lost) our moral underpinnings, which, IMHO, is why we see a lot of the problems that we all talk about today. I’ve encouraged lots of people to walk away from their houses/obligations; and, in most cases, they are initially shocked to hear my advice. However, the thing that I tell them that always brings them around is “What would the bank do if they were in your situation?”. And, then, immediately, they realize they are the “sucker” and that the bank, of course, would walk away if they had a similar obligation.
It starts at the top. If you could expect business to be moral and just with you as a customer, I’d be much more likely to return the sentiment. But, that’s simply not how it works, many businesses today are little better than spammers; they are trying to find the weak/uneducated and take them for as much as humanly possible. The new model is “max profit with minimal effort, no matter the cost or long term consequences”.
Thanks Wall St.
There it is!
Making money available specific to houses will help push up the prices of houses. Pushing up the prices of houses pushes up the values of the mortgages that are backed by these houses. Pushing up the value of mortgages ends up saving the lenders.
It’s as clear as it can be, IMHO.
your exactly right. thats what this is all about. It is creating a market where the banks can off load all the homes on there books.
In a sense they are making you pay more for an asset by manipulating the market place. The same thing is going on in the stock market.
In a sense they are making you pay more for an asset by manipulating the market place.
Yes…and the point I try to make is that because this is an asset that in many cases will take your whole life (if every) to pay for, this is moving toward a very sophisticated form of slavery. The things that keep it from being that yet are that you don’t have to sign up for it AND bankruptcy laws still offer some protection.
If the issue was about offering affordable houses then thousand of houses would be taken out of inventory and placed on the market. But the issue isn’t about affordable houses, the issue is about raising the prices of houses.
Keep houses tucked away as inventory and at the same time flood the housing market with cheap and available money targeted to buying houses and - presto - you get rising prices of houses.
in the meantime you get to pay for the costs associated with just letting all the homes sit and people live in them for free.
in the meantime you get to pay for the costs associated with just letting all the homes sit and people live in them for free.
What costs? There are a lot of paper losses for the same people who are making money hand over fist thanks to the “fix”, but I don’t see much in the way of real costs.
Except of course the lost opportunity for those who were prudent. Now there’s a real cost.
Not unexpected.
Government = Housing
Housing = Government
That the government is creating artifice to justify its existence is nothing new. As government expands, the lies it tells also must expand. Otherwise, government shrinks. As does its power.
Screwing the little guy hardly is the sole domain of corporations.
Spreaking of housing and government, interesting article set in Baltimore, don’t agree with the premise but some interesting housing stock pictured:
http://www.dailymail.co.uk/news/article-2302997/U-S-sees-highest-poverty-spike-1960s-leaving-50-million-Americans-poor-government-cuts-billions-spending.html
If the issue was about offering affordable houses then thousand of houses would be taken out of inventory and placed on the market. But the issue isn’t about affordable houses, the issue is about raising the prices of houses.”
How long they going to keep this up ? Forever ? until we reach peak prices ? Some Black swan event forces thier hand ?
What does it matter?
Here is what we know;
-If you buy a house today, you’re going to lose alot of money. ALOT of money.
-If you bought a house 1998-current, you’ve already lost alot of money, even if you haven’t dumped it for what you can get for it.
any word from our resident obama administration water boys/girls?
If the government interferes and backstops mortgages for J6P, then J6P will be paying 50% of his disposable income for his mortgage.
If the government does not interfere and lets the market work, then Blackstone et al and the Chinese will buy up the inventory and rent it out to J6P, at 50% of his disposable income.
Take your pick.
The market is working quite well my dear DebtJunkie as you are already underwater.
the HBB obamites must be reeling from cognitive dissonance.
But they love him anyways….. talk about hypocrisy.
my rent hasn’t gone up in 5 years.
Rental rates are falling in price/sq ft across the northeast and new england states.
Rental rates are falling in price/sq ft across the northeast and new england states.”
How is the population trending in NE ?
Growth is falling like everywhere else in the country.
My rent went up a bit. Lots of new apartment buildings going up around town, and I’m not sure who can afford them. They’re all “luxury” and asking prices are generally around $1700-1800 for 2bd/2bath. $800-900 for studios.
This is in Norfolk Virginia and Virginia Beach of all places.
I’m kind of eyeballing the DC area (Ashburn / Northern Virginia.)
Lots of new apartment buildings going up around town, and I’m not sure who can afford them. They’re all “luxury”
That is the trend here in “flyover” Loveland and Ft. Collins as well, though the rents are a bit lower (~1300 for a 2 bd/2bath)
It’s the same everywhere.
And yes, I would like to know who can afford them, although I suspect it’s the $50k millionaires.
It’s the people who feel like they have to, because they must maintain a minimum standard of living or they will be out of “the game”. So they get sucked deeper into paying everything they can make…
Same thing, I guess.
my rent hasn’t gone up in 5 years.
My rent has barely budged in 6 years—though three years back, I did choose to move to a MUCH nicer place for only $25/mo more.
Nice. I’ve had to leave rentals 3 times in the last 5 years because the landlord was either in foreclosure, wanted to move in himself, or who knows why with the latest one. We only found out about that yesterday. Time to come up with another $1,000 security deposit and $600-$700 for movers.
Sigh. Owning does have an upside. Nobody could tell me I have to move every year or two.
I’ve had to leave rentals 3 times in the last 5 years because the landlord was either in foreclosure, wanted to move in himself, or who knows why with the latest one. We only found out about that yesterday.
Sorry to hear it, howie.
My last two rentals, I was able to find a LL who had owned the property for on the order of thirty years, and rented it out for most of that time.
Having a no-mortgage LL gives me a much higher probability of being able to live there without the threat of foreclosure…
Hope you find a better situation!
Liberal fascism advocates registration, confiscation, extermination:
“In his first trip to Colorado since his re-election, President Barack Obama on Wednesday will urge Congress to act more like the state’s Democratic-controlled legislature and quickly pass stronger gun-control laws.”
GTFO out of my state, and take Rep. Rhonda Fields with you.
http://www.denverpost.com/news/ci_22929115/obama-praise-colorados-state-lawmakers-wednesday-calls-congress
Obama’s one nasty piece of goods. All smiles and fists full of vaseline. Here he’s talking about $100 mil in funding for “brain” research, while cutting border security in the name of the sequester, and touting “public private partnerships” to shore up crumbling infrastructure.
Public private partnerships = massive toll systems. Just wait and see.
“Public private partnerships = massive toll systems.”
Agree.
We’ll see. Take a drive on the E-470 around Denver. That is one lonely road. And there really isn’t a viable alternative.
I would have totally used it the last two times I was in Denver (on my way to Estes Park) but they took away the actual person-manned toll booths a few years ago and there’s no way I’m paying a rental car company 6-10 bucks a day to use their transponders.
Not sure how many people/tourists get affected from this, but it certainly kept me off that road. Dumb idea, IMHO.
The whole “privatize government” disaster was created to do one thing and one thing only: make money for the “right” business owners.
It was scam from the get go. Much like “trickle down”. (but at least they told you were getting screwed up front on that one.)
I wonder how the planning for the next national Psyop or I mean tragedy is going?
http://www.youtube.com/watch?v=F-t8PngHgWY - 205k -
how about a serial killer that only kills renters?
“how about a serial killer that only kills renters?”
Well maybe, but they’re gonna have to be white renters in a good neighborhood.
“Well maybe, but they’re gonna have to be white renters in a good neighborhood.”
Oh I forgot, they will also have to killed with a legally obtained firearm using at least 30 round magazines.
Liberal fascism advocates
Get your meme right. Obama is a Marxist, not a Fascist!
We actually agree with “Marxist” socialized health care, as advocated by Dennis Kucinich, not the corporate welfare for insurance corporations passed by Obama and the corporatist Congress.
And with the homogays being free to marry.
The Sharia Law and the gun-grabbing, not so much.
Obama is a fascist dressed as a Marxist. A marxist would have pushed for a public option. He pushed for a gift for insurance companies. See recent increase in payments to insurance companies for providing medicare advantage plans (they were supposed to get a cut instead they got a big raise)
“Obama is a fascist dressed as a Marxist.”
Then he would be a Farxcist.
Don’t you low IQ types belong over at Free Republic ?
“Don’t you low IQ types belong over at Free Republic ?”
Ah yes, yet another keyboard tough guy bravely hurling personal insults from the safety of his what, Mommy’s house?
Why don`t you go on out and find a oh I don`t know, how about biker bar. Grab one of them by the shoulder and say….. Don’t you low IQ types belong over at Free Republic? Let me know what happens. What nothing? Of course not, why? Because you would never do it, and why? You are yet another keyboard tough guy.
“Don’t you low IQ types belong over at Free Republic ?”
You are calling me low IQ? LMAO
Listen to this Rocket scientist Diana DeGette (D) explain how her mag ban bill will save us because the magazines that are owned now will have to be thrown out after the bullets have been shot. She doesn`t know WTF she is talking about but she is pushing it through anyway.
CO Democrat Doesn’t Understand High-Capacity Magazines Can Be Reloaded
CO State Rep. Diana DeGette (D) “I will tell you these are ammunition, they’re bullets, so the people who have those now they’re going to shoot them, so if you ban them in the future, the number of these high capacity magazines is going to decrease dramatically over time because the bullets will have been shot and there won’t be any more available.” (April 2, 2013, Denver Post forum)
http://www.realclearpolitics.com/video/2013/04/03/co_democrat_doesnt_understand_high-capacity_magazines_can_be_reloaded.html - -
CO State Rep. Diana DeGette (D) “I will tell you these are ammunition, they’re bullets, so the people who have those now they’re going to shoot them, so if you ban them in the future, the number of these high capacity magazines is going to decrease dramatically over time because the bullets will have been shot and there won’t be any more available.” (April 2, 2013, Denver Post forum)
Funny—not only is she clearly an idiot, but it sounds to me like she may be conflating two subjects, the ban on high-capacity magazines, and the lack of availability of ammunition.
It does make my tin-foily side wonder whether she has been briefed on an effort by the government to reduce the availability of ammunition itself—say for example by purchasing and warehousing it in large quantities.
Perhaps we finally have a reasonable explanation both for the large DHS purchases, as well as the lack of availability at retail.
CO Dem Rep Tells Senior Citizen “You’d Probably Be Dead Anyway”
Posted on April 3, 2013
Rep. Diana DeGette (D-CO) strikes again and insults a senior citizen concerned about how he is supposed to defend himself against criminals who have high-capacity magazines if they are banned. She says to wait for the police and otherwise he’d “probably be dead anyway.”
http://www.realclearpolitics.com/video/2013/04/03/co_democrat_doesnt_understand_high-capacity_magazines_can_be_reloaded.html - -
“There’s never been a better time to Lie”
Speaking of LIARS
Comment by Jingle Male
2013-04-03 06:55:58
Many HBB readers worry about who will buy the houses in the future……
A new survey by PulteGroup shows that the housing market will continue its upward trend. The study interviewed renters between the ages of 18 and 34 (otherwise known as generation Y or millennials) and found that 65% of respondent’s intentions to buy homes had increased over the past year. 52% of millennials indicated a desire to own and build equity.
There are around 90 million millennials living in the United States, making them the largest demographic group in the county’s history - an onslaught of this group into the housing industry could create a boom larger than anything the U.S. has ever seen before.
….Not to worry….
Hello Realtor® LIAR.
Considering the stats on wages, unemployment, under-employment, and student loan debt, most of these kidz will NOT be buying anything anytime soon.
Heard on Bloomberg today that rents barely went up this quarter. I think the housing market will run out of steam prior to it starting up the housing ATM. It may have created limited equity with some people and reduced how much many people are underwater but the fed wanted it to trigger equity extraction to create demand but it has not happened in a major way. What is the Fed to do?
Found story: http://www.bloomberg.com/news/2013-04-03/u-s-apartment-rent-increases-slow-amid-construction-boom.html
If rents are going up 2% per year than houses should not be increasing faster than that.
I heard on NPR this am that home prices were up 10% in FEB
What this really means I don’t know year over year I guess not just up 10% in one month ?
Around here, 93021 used to be really tight on rentals. Now I see more availible as investors play the buy then rent plan.
Nationwide, new home construction is lower than when your grandparents were youths.
Houses only go up, so say the house builders to the realtors, as reported by jingle.
This generation has more unemployment and debt than any before them. They will be saddled with higher taxes than any before them, which they will have to pay from lower real wages. They will have watched their parents financially ruined by mortgage debt and the collapse of the housing bubble. They won’t fuel the next ponzi. Maybe their grandchildren will.
Lying Realtors® lie. That’s what they do. That’s all they can do.
JingleMale told me a few weeks ago that Sacramento was poised for a boom because there was a new call center opening in the Sacramento suburbs.
I could barely contain my laughter upon reading that.
http://www.city-data.com/forum/sacramento/222797-what-level-gang-activity-sac-precisely.html
“…I could barely contain my laughter…
Me too, I’m laughing all the way to the bank…..prices are up 15% in the last few months. Rents are solid, vacancy is down, cash flow is up. My joy is incalculable! Yes, unbridled joy and it is spectacular and incalculable.
‘prices are up 15% in the last few months’
Blog comments are a valuable source of bubble mentality. Why in no time, just one house in Sacramento will be worth more than all the land under the Imperial Palace in Tokyo.
Why in no time, just one house in Sacramento will be worth more than all the land under the Imperial Palace in Tokyo.
LOL…
“A new survey by PulteGroup…”
Gotta stop right there!
Translation: A new survey by foxes says hens enjoy their company.
+1 LOL!
A new survey by PulteGroup..”
Hmmmm
when wall street wins you lose!
‘Considering the stats on wages, unemployment, under-employment, and student loan debt, most of these kidz will NOT be buying anything anytime soon.’
Maybe peer pressure will get college grads to buy? I mean, I see all the money being made on bitcoins and I wish I got in early. But no. People are making money on bitcoins and I want in. I feel left out not scooping up that easy money. Not too late for housing, right, build up equity for sure, even if interest rates go up years down the road? Right? House prices will surely go up in an increasing interest rate environment, right?
Bitcoins, talk about a bubble.
Modern version of a wooden nickel.
Don’t be too sure.
As more countries impose capital restrictions, it may be a convenient way to move your money out.
Yea, out of your hands for sure. To the right person at the right price maybe not.
Continuing yesterday’s bits discussion of wage and education level differences between genders, we picked up this book from the library and started reading it last night:
http://www.amazon.com/The-Richer-Sex-Breadwinners-Transforming/dp/1439197717
Detroit R.E. tax assessments may be investigated:
Detroit — The State Tax Commission may soon launch an investigation into complaints Detroit is overtaxing property owners through inflated assessments.
Doug Roberts, chairman of the three-member panel that oversees the state’s property tax laws, said he was prompted by a February series in The Detroit News that exposed widespread over-assessments, rampant tax delinquencies and dysfunction in the city’s Assessment Division.
The series cited a recent study showing that many houses are assessed at more than 10 times their selling price, and found that city officials discarded 94 percent of the sales in the city last year before valuing Detroit’s residential properties.
Homeowners such as Lee-Ann Curry said the study is overdue. “I’ve been jumping up and screaming looking for help,” said Curry, 49, who is appealing the $2,300 annual tax bill on the east side home she bought for $15,000 in 2009. The city pegged the market value of her 1,000-square-foot brick ranch at nearly $55,500 last year. “I have seriously considered moving out of the city of Detroit,” she said. “I may have no choice but to move. It’s cheaper. All I want for them is to be fair.”
Critics argue Detroit’s taxes are artificially high because assessments don’t include foreclosed properties that depress the values of surrounding parcels. City officials say they are obligated by law to throw out foreclosed properties during assessment calculations. Detroit’s residential property valuations have fallen nearly 46 percent from 2007 to 2012, but many residents and experts argue they should have sunk deeper. Assessments fell more in many suburbs: 57 percent in Southfield and 63 percent in Hazel Park.
The News reported that Mark Skidmore, a professor at Michigan State University, and Gary Sands, a professor at Wayne State University, examined the sales of nearly 8,000 houses in 2009 and compared them to 2010 assessments.
Houses selling for about $2,300 were valued by the city at $42,000, or more than 18 times their selling price, and some that went for $12,500 were pegged at $62,000 by the city, the researchers found. Even homes selling for less than $100 were valued at nearly $46,000.
Critics say the problem has festered unchecked by the state for too long.
“Detroit is one of the few cities where you can buy a house for $10,000 and have $3,000 property taxes,” Jon Werner, who owns Added Value Realty, a company that appeals assessments for property owners, wrote in an email to The News. “Do we need a study to show the property taxes are too high?
— Among the other problems identified by The Detroit News:
47 percent of property owners hadn’t paid their 2011 tax bills as of the end of January, leaving nearly $246.5 million in taxes and fees uncollected.
Wayne County treasury officials are so overwhelmed by tax foreclosures they opted against foreclosing on 40,000 properties last year. They plan to do the same on another 36,000 this year.
The city’s Assessment Division is overseen by two retired city workers, Bade and her deputy Fred Morgan, who returned on contract. Each stands to make more than $100,000 by this summer working two days a week.
I’m shocked, I tell you, SHOCKED!!!
All sales in Detroit are distress sales, so what a house sells for is not considered its “value”.
“Get what you can get for your house today because it’s going to be less tomorrow for many years to come.”
Denver Cops Criticize Obama In Advance Of Denver Speech
April 2, 2013 6:00 PM
DENVER (CBS4) – Some current and former Denver police officers have taken to Facebook to criticize President Barack Obama’s planned use of Denver police officers as a backdrop for a Wednesday speech on gun control.
“This is wrong and it shouldn’t be happening,” said Mike Rossi, a retired Denver police detective who left the department in 2005.
CBS4 has learned that the Denver Police Department has been asking for officers — in uniform — to volunteer to stand behind Obama as he makes his speech Wednesday at the Denver Police Academy.
“Who better to stand behind you when you’re trying to ban guns than police officers. What an awesome prop,” said Rossi. He said DPD officers should not be used as a backdrop to make it appear the Denver Police Department and the City of Denver support stronger gun control measures.
“It’s agenda based and they shouldn’t be there,” said Rossi. “To me if you put Denver police officers behind the President, who is pushing this agenda, then what you are telling the citizens of the city is that the Denver Police Department is for this.”
DPD spokesman Sonny Jackson said the department began seeking volunteers last week who were willing to stand behind the president during his speech. Jackson said numerous officers have volunteered for the assignment.
http://denver.cbslocal.com/category/news/local/ - 104k -
“only a pawn in their game” — Bob Dylan
Obama pimping dead kidz and cops to push his anti-constitutionalist gun-grabber agenda. And remember the same urgency to pass new laws after the Reichstag “accidentally” burned down back in the day. Same method as every other tyrant in modern history since the advent of mass communication.
Some days I don’t if you’re being sarcastic or stupid. But you’re starting look like a duck. One that lives under a bridge.
Quack, quack, turkey lurkey.
(psst, that’s not what a turkey sounds like)
““This is wrong and it shouldn’t be happening,” said Mike Rossi, a retired Denver police detective who left the department in 2005.”
Tempest in a teacup. There is nothing wrong with asking for volunteers.
Rossi needs to get a life.
“Rossi needs to get a life.”
He has one, he is a retired pulic employee.
He’s not a retired public employees. He’s just retired.
Probably driving his wife crazy as well.
“There is nothing wrong with asking for volunteers.”
Sequestration drama queens
February 26, 2013 - Orange County Register
By Ron Hart
Obama parades out kids, firemen, teachers and the like as props to evoke a maudlin response. In reality, a 2 percent cut means one fewer bureaucrat in the Education Department’s Jungle Gym Safety and Green Sustainability Bureau. They would go from 50 to 49 administrators, which is still probably 40 too many.
http://www.ronaldhart.com/display_column.php?column_ID=564 - 21k -
It is an interesting psychological staging, a line of armed government employees in uniform.
The Third Reich was really big on uniforms and symbolism too.
And that didn’t work out so well for a lot of folks, now did it?
Actually, I think Obama’s mannerisms are a lot closer to Mussolini. Particularly, the raised chin. Interestingly, they both became involved in Libya.
The model used by Mussolini was to have big business, big labor and big government sit down together and decide how things would work. The average person’s views did not matter. You know the same way we are doing “immigration reform”. Fascism is back on the rise, oppose it and and DHS has the hollow point for you.
Mussolini was a big soccer fan. Obama is a big basketball fan. Coincidence?
Fascism:
http://fascism-archive.org/books/ItalianTradeUnions.html
Where Obama would take us, if he had the power.
I think Mussolini was better at soccer than Obama is at basketball, so probably not.
We couldn’t stand the GWB administration, the post 9/11 jingoism, lying us into the Iraq war, the anti-constitutional PATRIOT Act and NSA wiretapping, and we were vocal in our objection.
Now that Dear Leader is in the White House, the koolaid libs give him a pass on his direct assault against U.S. citizens’ Constitutional rights (and he’s still spying on all of us), with nary a peep of objection.
And the allegedly righteous indignation of the bedwetter liberals at any criticism of The One is just sickening.
Fear not… when the conservatives are back in power, their special brand of ass kissing and cognitive dissonance will return, probably with a couple more wars in tow.
Now that Dear Leader is in the White House, the koolaid libs give him a pass on his direct assault against U.S. citizens’ Constitutional rights (and he’s still spying on all of us), with nary a peep of objection.
I suggest you read some of Matt Bors editorial comics. They guy is as liberal as they come, and he HATES Obama.
http://www.mattbors.com/blog/2013/02/15/judge-prez/
Fascism?
That happened back in the 1980s. Only they called it “deregulation”.
We don’t hate Obama (he can’t help it that he was born in Kenya or that his father is Frank Marshall Davis), but we certainly hate the hypocrisy of his supporters.
2banana may sound like a tool in many regards, but his statement of “when R’s are in office, they are evil, and must be voted out. But when D’s are in office, both parties are equally bad, so may as well keep the D’s in office” is sadly a correct summary of the current libtard ideology.
I agree but where was Banana pre-Obama?
where was Banana pre-Obama?
Hating on Pelosi and Reid.
He christened our HBB name, if you remember.
Exactly, Blue. Armed and highly insular government employees who have a personal in interest in seeing the citizenry disarmed and its remaining weaponry accounted for.
I have grave concerns about good old boy police forces (is there any other kind?) who are better armed than the citizenry they allegedly “protect and serve”.
But it’s for the children. Won’t you think of the children?
Waco was “for the children” too.
Except those children ended up getting gassed and burned alive
…while the militia “observers” just stood around and did nothing.
The baby that Vicki Weaver was holding when the ATF shot her face off * looked more like she was holding a gun than holding a baby, right?
Any other statist apologists care to chime in?
* and George Bush Sr. was prez then so can’t say the jackbooted thugs are only Democrats
CRAAAAAAAAAAAAAAAAAAAAAAAAAAAASH!
Did you hear that?
It the sound resulting from collapsing housing prices blowing through the floor in your neighborhood leaving a smoldering moon crater and an empty bank account with your name on it.
Financialtimes.com
”
By SEAN REILLY
The Defense Department and at least a handful of other agencies are rolling back or rethinking plans for civilian employee furloughs in the wake of a newly passed spending bill for the rest of fiscal 2013.
DoD, for example, is cutting the number of furlough days for hundreds of thousands of workers from 22 days to 14 days through September, Defense Secretary Chuck Hagel announced last week.
At the Justice Department, which had begun telling employees in February that they could face up to 14 days of unpaid time off, Attorney General Eric Holder said last week that a final decision will be postponed until mid-April.
And the Border Patrol has decided not to pursue furloughs, said Shawn Moran, vice president of the National Border Patrol Council, the union that represents agents.
All of those steps came after President Obama signed the fiscal 2013 spending measure approved by Congress late last month. The legislation, which replaced a continuing resolution that expired March 27, locks in $85 billion in across-the-board spending cuts but also gives select agencies more flexibility in how they can spend the money they have left.
Chief among those agencies is DoD, which gets a transfer of more than $10 billion into the operations and maintenance account that pays civilian salaries. Furlough notices had been set to go out April 5. Now, civilian employees will be told in May that they must take “up to 112 hours or 14 days” off during the final 14 weeks of the fiscal year from June through September, according to a senior DoD official speaking on condition of anonymity.
“It’s good news from where we were two weeks ago,” Hagel said at a Pentagon news briefing.
But some union leaders question why any furloughs are still needed. By Hagel’s count, furloughs will save about $2.5 billion, or roughly one-quarter of the money moved into the O&M account.
Pentagon leaders “have always had the flexibility to impose budget cuts from sequestration in any way they chose,” J. David Cox, president of the American Federation of Government Employees, said in a statement. While cutting the number of days off “shows that they’re listening,” he added, “they still haven’t gotten the whole message.”
Although the reduction is a good start, the furloughs will still impose a significant financial hit, especially for workers in lower pay grades who make $30,000 to $40,000 a year, said William Dougan, president of the National Federation of Federal Employees.
“There are a lot of employees in the federal government that live paycheck to paycheck,” he said.
Although some 750,000 DoD civilians are potentially subject to furloughs, senior leaders are still debating how many to exempt. “This is a difficult and complicated decision, and the leadership wants to consider all of the primary and secondary effects,” the Defense official said.
Some unofficial estimates suggest that at least 10 percent of the overall workforce will be spared, including about 5 percent of Navy and Marine Corps civilians and 24 percent of their Army counterparts. When furloughs start in June, local managers will likely decide whether individual workers should either take one day off per week or be allowed to cluster their required time off into larger blocks, the official said.” read rest online
Last post was Federaltimes.com
“Housing prices falling to dramatically lower and more affordable levels is bullish optimism and a boost to the economy.
Every business wants to be a bank.
PayPal Tests Merchant Financing……
Well they’re holding excess cash, they have to do something with it, why not make loans?
This is why I respect Birdman, at least he knows to spend his money, not try to become a bank. For example, http://www.youtube.com/watch?v=OBmFNdNjnfs
Well duh!
It’s GOOD to be the Banksta!
I would never trust them. They lock accounts for unknown reasons.
That’s the problem these days: who can you trust?
No one.
That’s why this is will not end well.
When I was in school I used ebay extensively. Mostly books but also DVDs, CDs, electronics, etc. My account was locked for several weeks once despite having something like 500 positive feedbacks and 99%+ satisfaction rating. For me, it is hard to imagine being a business that sells through ebay. It was one thing to have my account locked as someone who sold a handful of things a month, but what if you’re selling a dozen things a day?
Can the Fed Burst the Next Bubble Before It’s Too Late?
Photo: iStockphoto/Reuters/The Fiscal Times
By MARK THOMA, The Fiscal Times
March 12, 2013
Federal Reserve Bank of St. Louis president Jim Bullard recently noted an important debate within the Fed about how to respond to financial bubbles. Reacting to a speech by Federal Reserve governor Jeremy Stein, President Bullard said “My main takeaway … was that he pushed back against the Bernanke doctrine … that we’re going to use monetary policy to deal with normal macroeconomic concerns, and … regulatory policies to try to contain financial excess.” Stein argues that regulatory policy will not always work to curb financial excess, and that interest rate increases may be needed instead. As Bullard says, “raising interest rates is a way to get into all the corners of the financial markets that you might not be able to see, or you might not be able to attack with the regulatory approach.”
The Federal Reserve has evolved quite a bit on this issue since the pre-bubble days of the Greenspan doctrine. Chairman Greenspan believed that bubbles are hard to detect, and that there was little need to respond to bubbles in any case since the Fed can always limit the damage after a bubble pops. Why take the chance of falsely identifying a bubble and slowing the economy unnecessarily when there is little cost to allowing bubbles to run their course?
…
Uhm, why would they?
Uhm, why would they?
Precisely—considering that every bubble seems to increase their power, they are incented to continue doing exactly what they have been doing.
Look who’s first?
That should answer a few questions for you all….
http://bit.ly/10yMxfA
Much of what I see from Europe and the US seems to be geared towards two things:
1) Keeping J6P from building wealth.
2) Keeping J6P in debt.
This is not a new model.
See:
1) Serfdom
2) Indentured servitude
It amazes me that the PTB speak of consumer credit as being a good thing. I can understand business debt, which builds economic surplus, being good for a society. But this attempt to continually put the citizenry into debt is bad for J6P’s quality of life.
This is the result of a bank-centric view of the world. And since central banks are driving a great deal of world economic policy, this push towards an ever more indebted populace makes sense.
Congress is utterly derelict in its duty, out fund-raising, building monuments to itself, and getting into foreign wars, instead of trying to improve the situation of their constituents.
And of course, that is not a new model either.
I suppose the more things change, the more they stay the same. Monarchy and oligarchy may well be the natural state of humanity.
“Much of what I see from Europe and the US seems to be geared towards two things:
1) Keeping J6P from building wealth.
2) Keeping J6P in debt.”
Given that central bankers are the architects of these policies, what do you expect?
Nominated for post of the Month.
When you live in an affordable rental in a neighborhood that you like, “throwing money away on rent” is rather enjoyable.
Welcome to the last 30 years.
The “frog in a slowly warming pot” model.
“I suppose the more things change, the more they stay the same. Monarchy and oligarchy may well be the natural state of humanity.”
It’s actually much worse in the Information Age, as electronic balance sheet expansion is costless.
From yesterday’s discussion of inflation:
Comment by Pimp Watch
2013-04-02 16:21:14
Again with quoting BS?
The .dxy today is right where it was in 1991. Go look for yourself.
And unless wages are rising, there is no “inflation”.
Are wages rising? No.
When have the risen? Not since 1980.
Anything else?
PW, you appear to have completely misunderstood what the “Dollar Index” represents. It represents the value of the dollar as measured against a basket of other fiat currencies.
In other words, it is definitely possible for the DXY to look stable, while prices for commodities, goods and services are going up at a significant rate (e.g. high inflation) as priced by ALL fiat currencies.
A flat DXY does NOT suggest there is no inflation. It merely suggests that our currency is not weakening with respect to other currencies.
And you completely misrepresent the indicator.
There is no inflation and there hasn’t been in 30 years and the .dxy demonstrates that.
Nice try though.
And you completely misrepresent the indicator.
If you seriously suggest that the DXY is a measure of inflation, and that its lack of change since 1991 shows that there is no inflation, then it is you who is seriously misrepresenting the index.
You seem to miss the obvious point that all fiat currencies can be lessening in value at the same rate.
From wikipedia:
The US Dollar Index (USDX) is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies.[1]
It is a weighted geometric mean of the dollar’s value compared only with “basket” of 6 other major currencies which are:
Euro (EUR), 57.6% weight
Japanese yen (JPY) 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight and
Swiss franc (CHF) 3.6% weight
inflation
It occurs to me that you might just be using a very different definition of inflation than I am.
Would you say that the purchasing power of a dollar, in terms of a its ability to buy a basket of commodities, goods, and services, is the same from 1991 to today?
You need to learn what inflation is.
Thanks for ignoring the question, and avoiding any actual useful exchange of ideas or discussion.
You win—I give up.
Have wages risen?
in·fla·tion
/inˈflāSHən/
Noun
The action of inflating something or the condition of being inflated.
A general increase in prices and fall in the purchasing value of money.
Comment by Ben Jones
2013-04-02 18:19:15
‘The Fed is bound, determined, and apparently quite capable of producing inflation’
Oh, but I thought they were supposed to prevent inflation. This is probably the most misunderstood problem we face:
[...]
I agree, Ben. But I should point out that there is nothing in their mandate that says “prevent inflation”—instead, it was phrased as “price stability.”
And though it might seem pretty obvious to your average 8th-grader that “price stability” should suggest that they prevent inflation, somehow the Fed has instead chosen to interpret that as meaning roughly 2% inflation per year. They are so terrified of the evil forces of deflation, that they apparently prefer a margin of safety away from that danger zero-inflation line.
Is it already too late to “sell in May and go away”?
ADP, other disappointing data raise specter of spring U.S. slowdown
April 3, 2013, 10:44 AM
The ADP jobs report for March is the fifth economic indicator in the past week to disappoint investors with a lower-than-expected reading. Is it a sign the U.S. economy is going to slow down in the spring and early summer for the third year in a row? Maybe, but it’s too soon to tell.
The payroll-processing firm ADP on Wednesday said the private sector generated 158,000 jobs in March, well below the MarketWatch forecast of a 215,000 gain. The pace of hiring was revised up sharply in February, but that tells us little about where the economy is headed in the second quarter of the year.
Three other economic signposts have also suggested some potential trouble ahead. The consumer confidence index for March fell to 59.7% in March from 68.0% in February. Jobless claims shot up above the 350,000 mark last week for the first time in a month and a half. The ISM manufacturing index softened to 51.3% last month from a nearly two-year high of 54.2% in February. The ISM services index of 54.4% certainly wasn’t bad, but it was worse than consensus and the lowest reading since August.
…
It was lower than expected? Hmm….you could have completely missed that on Morning Edition this morning. They said 158K was quite a respectable showing.
Morning Edition
There you go.
Not sure how good MarketWatch forecasts are, but the expectation statement was in reference to this:
“…, well below the MarketWatch forecast of a 215,000 gain.”
From yesterday Ben Jones comment
‘I would be locked out again if I wanted to buy now’
But you can’t see that if ordinary people are “locked out”, there is nowhere for prices to go but down? Jeebus, you people are repeating all the statements we laughed at because they were so absurd just a few years ago.”
Yea you’re right and when it gets to 10% affordablity based on median wages as being the only ones who can afford to buy RE around here I will sell and rent again. I don’t know what it is right now but I should get a handle on this. It’s the wealthy all cash foriegn buyers that have me wondering. Who knows what their income is ?
Hell of a way to run an economy if you ask me.
But you can’t see that if ordinary people are “locked out”, there is nowhere for prices to go but down?
Totally true, except in the face of credit standards becoming more and more lax. That can go on for quite some time as well.
Same song, second verse!
Worthy of a repost: Ben sums it all up beautifully yesterday.
Comment by Ben Jones
2013-04-02 18:19:15
[...]
The problem IS the central banks. They should be audited, broken up and stripped of their power. They don’t work for you and me. And instead of sitting around saying stuff like, “don’t fight the Fed”, we should be lining these bastards up in orange jumpsuits.
Ding! Ding! Ding!
We have a winner, ladies and gentlemen!
We’re in violent agreement, Ben.
quit yer pandering.
Fine. Now elect a Congress that will make what they do illegal.
Fine. Now elect a Congress that will make what they do illegal.
I would love to do so.
But first, such a slate of candidates would have to stand for election. Our choices on the ballot today do not include such an option.
Try to avoid buying a house that eats your family alive!
Sinkhole eating family out of house and home
By CNN Staff
updated 1:12 PM EDT, Wed April 3, 2013
STORY HIGHLIGHTS
* A sinkhole slowly grows under Florida home
* The couple awaits a resolution from insurance company as the hole grows
* It comes as new video is available of another sinkhole that killed a man
(CNN) — The sinkhole first opened up in August of 2011, a relatively small thing, 2 feet wide and 5 feet deep.
But in the 15 months since then, Florida couple John and Tina Furlow have watched helplessly as the sinkhole expands, threatening to swallow their bedroom.
“Now it’s approximately 8, 9 feet long,” John Furlow told CNN affiliate WFLA last month at their home in Hernando County on Florida’s west coast.
“Every day, in our bedroom, we lay down and look up and there’s more and more cracks. We’re just, ‘hey look, there’s another one,’” said his wife.
…
2013 Darwin Award candidates for staying there?
The market is booming,
but where are the buyers,
inventory is looming,
realtors are liars.
!
Wha…happened?
Markets are nose diving…..
Most likely profit taking.
Oh (gold) bugger…
Bulletin » Gold ends at lowest level in more than 9 months
April 3, 2013, 12:53 p.m. EDT
Gold drops as demand for ‘paper’ form shrinks
Gold ETFs decline; platinum, palladium extend pullback
By Myra P. Saefong and Carla Mozee, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures dropped Wednesday as signs of weakening demand for the so-called paper form of the metal offset safe-haven support from a slowdown in growth among U.S. private payrolls in March.
Gold for June delivery GCM3 -1.37% fell $10, or 0.6%, to $1,565.90 an ounce on the Comex division of the New York Mercantile Exchange.
“There is a clear disconnect between the paper and physical market,” said Jan Skoyles, head of research at The Real Asset Co., a precious-metals investment platform provider.
…
I hope with gold dropping in price that it doesn’t put the Bearing Sea Gold and the Gold Rush programs on the chopping block!!
Hey.
Given that the price of physical is denominated in paper, how disconnected can the two markets possibly get?
Are Bitcoins Killing Gold’s Price?
Mar 31 2013, 06:01
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in ABX, NEM over the next 72 hours. (More…)
(Note: This article assumes some knowledge of the Cyprus Crisis, for more on that issue see my recent article here.)
By now everyone has heard about Cyprus, Italy, and the EU’s continuing battle to hold itself together (which frankly reminds me a lot of Sisyphus and his perpetual struggle to roll a boulder up a hill, but that’s another story). However, one surprising result of the increased attention to the EU has been the relatively muted response in gold (GLD) and gold miners like Goldcorp (GG), Newmont Mining (NEM), Barrick Gold (ABX), Yamana Gold (AUY), Kingross Gold (KGC), and a herd of other smaller miners.
Historically, gold and to a lesser extent silver and the gold miners have displayed a strong negative correlation with the rest of the market. On some of the worst days in 2008, virtually the only S&P 500 companies in the green were the gold miners. This negative correlation between gold/gold miners and the rest of the market was extremely valuable for investors because it enabled them to easily hedge their portfolio without having to take on short positions. The correlation coefficient between the gold miners and the broader stock market over the last 5 years is -0.68. (See my blog for a further discussion of correlation coefficients over time and using correlations in market hedging). Essentially this just reinforces the casual observation that when the markets are down, gold and the miners are up. OK, so chaos is good for safe haven assets like gold, so what’s the problem?
…
Sub-prime Auto Loans
http://www.reuters.com/article/2013/04/03/us-usa-qe3-subprimeauto-special-report-idUSBRE9320ES20130403
“But Loveless, working as a cook at the local O’Charley’s restaurant, had trouble keeping up with the $329 monthly payment. In February last year, the family got a title loan secured by a 2001 Ford Windstar van. In May, subprime lender World Finance gave them a $1,500 loan, secured by a television, a PlayStation and a DVD player.”
You just can’t make-up this stuff.
What is the advantage of holding your savings in Bitcoin over fiatscos?
Bitcoins: bubble or breakthrough?
April 3, 2013, 12:22 PM
Prices for bitcoins have soared in recent hours, building on gains during March that were fueled by the Cyprus crisis.
In recent activity on Mt. Gox, an online exchange that is home to much of the activity in bitcoins, the digital currency was quoted around $140, up from below $100 earlier this month, and below $50 in mid March.
For those just beginning to explore the concept of bitcoins, Nicholas Colas, chief market strategist, at ConvergEx, offered a cogent definition in a recent note: “bitcoin is a very new, very complex online currency, managed by a decentralized group of computer experts and beholden to (and regulated by) no one.”
Colas noted that the value of bitcoins in circulation two weeks ago (which was then $800 million) had already exceed the GDPs of a dozen “World Bank recognized countries.”
Bitcoins are appealing for several reasons.
…
“bitcoin is a very new, very complex online currency, managed by a decentralized group of computer experts and beholden to (and regulated by) no one.”
complex .. computer experts.. is this like tranches of mortgages where they all, through complex computer expert maniplulation, get rated AAA ?
“What is the advantage of holding your savings in Bitcoin over fiatscos? ”
fiatscos are backed up by Nuclear Bombs
Would you trust a decentralized network of computer geeks more or less than a centralized network of banksters?
Would you trust a decentralized network of computer geeks more or less than a centralized network of banksters?
Yes.
Would you trust a decentralized network of computer geeks more or less than a centralized network of banksters?
Maybe not,
Sure enough, by late Wednesday afternoon bitcoin appeared to be in the middle of a crash. The circumstances of the crash are worth noting, albeit mysterious. Mt. Gox, a Japan-based exchange that is by far the largest bitcoin clearinghouse, was knocked offline for at least an hour Wednesday. Whether this was because of high demand for bitcoins, or the result of a denial-of-service attack masterminded by mischievous hackers, or simply Felix Salmon’s fault (the noted financial blogger published a 5,000-word critique of bitcoin on Wednesday), is impossible to say at this point. What we do know is that in the aftermath of Mt. Gox’s difficulties, the trading value of a bitcoin dropped by at least $30.
Salon.com
“… is this like tranches of mortgages where they all, through complex computer expert maniplulation, get rated AAA ?”
I eagerly anticipate the day when this scheme blows up and we enjoy posting documentary articles here as a platform for mocking the fools who put faith into it.
Sounds like a pump and dump going on to me….
Bitcoin bubble.
My best explanation for this bitcoin phenomenon is that it represents a desperation response to the utter destruction of trust in the international banking system due to recent events, such as the Cyprus episode.
Bitcoin plummets amid slowdowns and hacking of service sites
April 3, 2013, 6:11 PM
Instawallet, a site that offered a service to allow people to store bitcoins, said Wednesday its site had been hacked. Instawallet said it will suspend its service until it can “develop an alternative architecture.”
The company plans to open a claim process for Instawallet balance holders to claim funds “in the next few days.”
Problems with the site were disclosed last week in an open letter to Instawallet that appeared on the Adaptive Glass blog. The letter described a security flaw on the site that affected 3,000 people. The problems affected accounts with fractional amounts of bitcoins up to about 100 bitcoins in them. The security flaw also affected Paymimum, Paytunia, Instawire, and Bitcoin Central, according to the post.
Subsequently, Instawallet posted a notice on its site on April 1, saying it was down for maintenance, prompting Adaptive Glass to ask in a headline: Did Instawallet just have $4.3 million dollar bank heist?
…
If people had faith in fiatscos, they would be less willing to “diversify” into crazy schemes like this one.
ft dot com
April 3, 2013 7:13 pm
Bitcoin bubble grows and grows
By Stephen Foley in New York and Alice Ross in London
This time, Wall St is innocent.
To the long list of asset bubbles – from tulips to the South Sea Company, from dotcom stocks to US housing – economic historians may soon be adding a virtual “currency” called Bitcoin. But while it is bankers who are most often blamed for blowing up bubbles, the rise and rise in the Bitcoin price has taken place without any such intervention.
A buying frenzy has sent the value of the total Bitcoin stock past $1.5bn and the price of a single Bitcoin has doubled in less than two weeks. Having passed $100 on April 1, it peaked at $147 in the small hours of Wednesday morning.
Untethered to any real asset, the Bitcoin’s price is determined only by speculation on exchanges around the world, the largest of which, Mt Gox, reported technical difficulties on Wednesday as interest rocketed.
“Trading tulips in real time,” declared the veteran UBS stockbroker Art Cashin in a note to clients. “It is rare that we get to see a bubble-like phenomenon trade tick for tick, but all that may be changing before our very eyes.”
The currency was created four years ago by an unknown computer scientist and the limited stock of “coins” grows according to a predetermined algorithm. A small number of online services accept Bitcoins as payment but the value appears correlated less to their use than to talk on Twitter, blogs and in the media.
But the Bitcoin is nothing if not volatile. For example, a 2011 spike took the price of a single Bitcoin from $2 to over $30 – and back again.
The latest, biggest burst of interest coincided with the bail-in of depositors in Cyprus, after which Bitcoin’s advocates pitched it as an alternative to fiat currencies that can be devalued or confiscated. “It’s gold for computer nerds,” said Nicholas Colas, chief market strategist at ConvergeX.
…
What is the advantage of holding your savings in Bitcoin over fiatscos?
The advantage would be that no central bank has a digital printing press that prints Bitcoin, at least not at this time; that is the primary feature of Bitcoin.
Of course, they could still manipulate the exchange rates in either direction at will, so Bitcoin is still not risk-free w.r.t. central banks.
is it just me or does this whole North Korea thing seem contrived?
I guess it’s gonna suck if you own a house in cali if IT ever happens.
Here is a friendly kick in the groin for stock market bulls after the closing bell on a skittish trading day:
April 3, 2013, 3:42 p.m. EDT
Fed could start tapering QE3 this summer: Williams
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — The Federal Reserve could start tapering its $85 billion-a-month asset-purchase plan by the summer, said John Williams, president of the Federal Reserve Bank of San Francisco on Wednesday.
When the Fed might begin tapering off quantitative easing has been a key question for markets since the Fed’s policy meeting in March, after Fed Chairman Ben Bernanke indicated that was the likeliest course of action.
The Fed has said it would continue the purchase program until it sees “substantial” improvement in the labor market.
“Assuming my economic forecast holds true, I expect we will meet the test for substantial improvement in the outlook for the labor market by this summer. If that happens we could start tapering our purchases then,” Williams said in a speech to a business group in Los Angeles.
“If all goes as hoped, we could end the purchase program sometime late this year,” Williams added.
…
WASHINGTON (MarketWatch) — The Federal Reserve could start tapering its $85 billion-a-month asset-purchase plan by the summer, said John Williams, president of the Federal Reserve Bank of San Francisco on Wednesday.
My personal forecast is that the Fed board-members will “talk down” inflation expectations by floating the idea of ending QE-infinity early with some regularity—and yet will actually continue to ease regardless until the absolute-last-minute bitter end, when the inflation gun is up to their heads and they have no choice.
In other words, business as usual…
The trouble with that Prime, is the inflation gun is up to our heads, not theirs. The Fed is the banker’s bank, not the peoples treasury. They fund the banks and the banks speculate and pay bonuses rather than strengthen their books. So gas and food are “inflated”. This doesn’t put pressure on the bankers. People want to buy houses at any cost to “save” something. This is good for the bankers. Where is the suposed pressure to come from?
IMO, it comes when we stop borrowing from them. Second step is when we stop our political cronies from borrowing in our name.
The trouble with that Prime, is the inflation gun is up to our heads, not theirs. [...] Where is the suposed pressure to come from?
My belief is that if inflation actually goes up, that will result in political pressure—as obviously they caused it on purpose this time, with too much intentional QE/stimulating.
I might be wrong, but I believe there is an eventual political limit on their power to ease.
IMO, it comes when we stop borrowing from them. Second step is when we stop our political cronies from borrowing in our name.
You have more faith in the intelligence of people than I do. Both of those steps seem highly unlikely to me.
How long from now until when bitcoins replace the dollar as the principle virtual currency?
Bitcoin price goes on wild ride
By Chris Isidore @CNNMoneyInvest April 3, 2013: 2:11 PM ET
Bitcoin prices were volatile in overnight trading.
NEW YORK (CNNMoney)
The price of the virtual currency bitcoin, already volatile in recent weeks, went through wild swings in overnight trading Tuesday and Wednesday.
According to prices quoted on Mt.Gox, the main trading exchange for bitcoins, the value of one bitcoin ricocheted from $106 to as high as $147, then back down to $125, then to $141. They were trading around $139 per bitcoin in afternoon trading Wednesday.
Two weeks ago, a bitcoin was worth only $47. When Mt.Gox started tracking prices in mid-2010 the price stood at only 5 cents per bitcoin.
Investors have been pouring into bitcoins and gold in recent weeks, as authorities in Cyprus imposed a tax on top bank depositors and placed limits on bank withdrawals in order to pay for a European bailout of the banking system there.
Related: Bitcoin prices surge following Cyprus bailout
Bitcoin is a four-year-old digital currency developed by a hacker who still remains anonymous. It’s designed to allow worldwide payments with extremely low processing costs.
Societe Generale currency analyst Sebastien Galy said the market for bitcoins is likely to remain volatile. New investors are flooding into the market to try to cash in on the wild price swings.
…
It would be more comforting if bitcoins were at least fractionaly backed by tulips or swampland or something.
Haha, noone knows who controls bitcoins. Perfect mania.
It would be more comforting if bitcoins were at least fractionaly backed by tulips or swampland or something.
LOL!!! That was awesome, Blue!
CO Democrat Doesn’t Understand High-Capacity Magazines Can Be Reloaded
CO State Rep. Diana DeGette (D) “I will tell you these are ammunition, they’re bullets, so the people who have those now they’re going to shoot them, so if you ban them in the future, the number of these high capacity magazines is going to decrease dramatically over time because the bullets will have been shot and there won’t be any more available.” (April 2, 2013, Denver Post forum)
http://www.realclearpolitics.com/video/2013/04/03/co_democrat_doesnt_understand_high-capacity_magazines_can_be_reloaded.html - -
Telling an old man to wait for the police and when he rsponds… What if they don`t get their in time? She says “You’d Probably Be Dead Anyway” ….to laughter of the big hearted liberal supporters of Rep. Diana DeGette (D-CO)
CO Dem Rep Tells Senior Citizen “You’d Probably Be Dead Anyway”
Posted on April 3, 2013
Rep. Diana DeGette (D-CO) strikes again and insults a senior citizen concerned about how he is supposed to defend himself against criminals who have high-capacity magazines if they are banned. She says to wait for the police and otherwise he’d “probably be dead anyway.” (telling an old man to wait for the police and when he rsponds… what if they don`t get their in time? She says you would “probably be dead anyway.” ….to laughter of the big hearted liberal supporters of Rep. Diana DeGette (D-CO)
http://www.realclearpolitics.com/video/2013/04/03/co_democrat_doesnt_understand_high-capacity_magazines_can_be_reloaded.html - -
It gets worse. According to Wikipedia, she’s reproduced.
Erich66 on April 3, 2013 at 4:29 PM
i’m really sick of all the gun talk, since none of the proposals will ever deal with who has and uses all the illegal guns…
April 3, 2013
Does “Congress” Deserve a Pay Cut?
Posted by Hendrik Hertzberg
Over at SignOn.org, the do-it-yourself petition-generating subsidiary of MoveOn.org, an impressive 362,614 people have affixed their e-signatures to the following:
Almost all the petitions at SignOn.org are as well-intentioned and intelligent as, for example, the one asking the Senate to confirm Rich Cordray as head of the Consumer Financial Protection Bureau. Or the one imploring the Tribune Company not to sell the Los Angeles Times, the Chicago Tribune, and other papers to the Koch brothers.
…
NAGE Asks Congress to Take 20 Percent Pay Cut
by Ian Smith | March 8, 2013
The National Association of Government Employees (NAGE/SEIU) has called upon Congress to donate 20 percent of their net pay for the next 22 weeks to the federal government to help reduce the national deficit.
The union is making the plea go Congress in response to furlough notices that are starting to go out to the federal workforce. Over the next few weeks, federal agencies will issue furlough notices to their employees, and beginning April 26, impacted employees will have to take one unpaid furlough day per week for the rest of the fiscal year.
NAGE estimates that 22 furlough days between April 26 and September 30 will result in a 20 percent pay cut for these employees.
“Congress should help shoulder the burden of deficit reduction and be forced to feel the same pain in their household budgets as these federal workers,” said NAGE national president David J. Holway. “For months, Washington has failed to put aside partisan differences to find a balanced solution to deficit reduction. It is time we hold Congress’ feet to the fire and force them to act.”
…
“…make it easier for banks to seize a person’s home…”
Maybe they ought to try this financial remedy in California.
EUROPE NEWS
Updated April 3, 2013, 11:02 p.m. ET
Cyprus Promises New Measures to Secure Rescue
By ALKMAN GRANITSAS, MATINA STEVIS and PHILIP PANGALOS
Cyprus will limit first-class travel for senior officials, make it easier for banks to seize a person’s home, and cut Easter bonuses to pensioners in exchange for a multibillion-euro bailout from its euro-zone peers and the International Monetary Fund.
The country has promised spending cuts and tax increases equal to more than a tenth of its €17 billion ($21.8 billion) a year economy through 2018 in order to meet budget targets its creditors set.
Other measures include raising retirement ages for public and private-sector workers, cuts to health-care spending and raising €1.4 billion from privatizations over the next five years, according to a draft document outlining parts of the deal.
On Wednesday, the IMF said it had reached a staff level, or initial, agreement with Cyprus to unlock its portion—about €1 billion—of a €10 billion bailout for the country, with formal approval expected in early May. A final deal still needs the approval of other euro-zone members, who are footing 90% of the rescue, and are set to review its terms over the next two weeks.
Cyprus and the International Monetary Fund reached an agreement for a €1 billion ($1.28 billion) lifeline on top of the €9 billion bailout the island will get from its euro-zone peers. Charles Forelle reports.
“Significant challenges lie ahead for Cyprus. The European Commission and the International Monetary Fund stand by Cyprus and the Cypriot people in helping to restore financial stability, fiscal sustainability and growth to the country and its people,” European Commission monetary-affairs chief Olli Rehn and IMF head Christine Lagarde said.
After two attempts at securing a bailout deal in March that pushed Cyprus to the brink of exiting the euro, the country faces major obstacles. To secure the aid, it agreed to wind down its second-largest lender, Cyprus Popular Bank PCL, and radically restructure the largest, Bank of Cyprus PCL.
In the process, Cyprus became the first country in the three-year-long euro-zone crisis to hit depositors to fund its survival: Cyprus Popular’s uninsured depositors will probably take losses of as much as 80% of their holdings over the guaranteed limit of €100,000; Bank of Cyprus depositors stand to incur losses of as much as 60% of their uninsured deposits, according to initial government estimates.
…
‘Greece-Like Risk’ for Financials: McDonald
Published: Wednesday, 3 Apr 2013 | 12:37 PM ET
By: Bruno J. Navarro
There’s good reason to short bank stocks, Newedge Senior Director Larry McDonald said Wednesday.
“What’s disturbed me the last two or three days is the short interest on the XLF has broken out to multi-month highs, its highest level since last spring,” he said on CNBC’s “Fast Money.”
McDonald said that he was shorting the financials and had been recommending the trade to clients.
“The main reason why is: What we’ve seen since Lehman is credit leads equities, and the CDS of the big banks the last two weeks is consistently wider with the XLF flat,” he said. “We saw this in 2011. We saw this just before Lehman. We saw this in 2012.
“It’s a problem because a lot of players in the credit side maybe are seeing something over in Europe.”
Credit default swap spreads signaled what was ahead, McDonald said.
“I’m going to follow credit, and equities’ll follow.”
McDonald also looked to Portugal.
The Iberian nation’s banks, he added, “have no room for error.”
“If deposits leave the top five banks and then the government has to fill that capital hole, that’s a substantial risk,” he said. “It’s a Greece-like risk facing us in the coming months.”
…
CREDIT MARKETS
April 3, 2013, 1:23 p.m. ET
IMF: Banks Quickly Passed Italy’s Debt Woes to Private Sector
By CHRISTOPHER EMSDEN
ROME—Rising and volatile Italian government bond spreads caught domestic banks off guard and caused a credit crunch in the euro-zone’s third-largest economy in late 2011, the International Monetary Fund concludes in a new study.
Banks with lower capital levels and higher rates of nonperforming loans suffered the most, while Italy’s sovereign borrowing costs reacted significantly to the scale of foreign ownership, said the technical working paper from Edda Zoli, a senior economist in the IMF’s European department.
The sudden jump in both yields and volatility led to a sharp contraction in lending, according to the IMF’s research.
Italian bankers have long insisted that the reason loan volumes have collapsed in Italy is lack of demand. But according to Ms. Zoli, it was a supply shock at first that evolved into anemic demand as Italy entered a prolonged recession.
“Continued efforts to strengthen banks’ capital buffer and reduce impaired assets” would benefit Italy’s economy, she said.
…
EUROPE NEWS
Updated April 3, 2013, 3:02 p.m. ET
Princess Named Suspect in Spain
By DAVID ROMÁN and ILAN BRAT
MADRID—An investigative judge named the youngest daughter of King Juan Carlos as a suspect in a criminal case, a move unprecedented in modern history against a member of Spain’s royal family and the latest embarrassment for the country’s political and economic elite.
Princess Cristina and her husband, Iñaki Urdangarin, at a Swedish royal wedding in 2010. A Spanish judge has called her to testify.
The princess’s husband, Iñaki Urdangarin, is already under investigation on suspicion of having diverted millions of euros in public funds destined for his not-for-profit sports-events consultancy, Instituto Nóos, to for-profit companies controlled by him and his associates. In court documents released Wednesday, Judge José Castro said that Princess Cristina de Borbón, a Nóos board member, will be called to testify on April 27 as a suspected accomplice.
Spain’s chief anti-corruption prosecutor, Antonio Salinas Casado, said he would appeal the decision, the state-owned news agency EFE reported, a reflection of the government’s desire to insulate the royal family from the case.
The judge, who sits in the Balearic Islands, named the princess as a suspect after Manos Limpias, a civil servants’ union, asked him do so. Manos Limpias, or Clean Hands, is acting as a private plaintiff in the case, a status permitted by Spanish law. The judge is expected to decide by summer whether to press criminal charges or drop the case against the couple.
A spokesman for the monarchy said the royal family was surprised by the judge’s decision and lauded the anti-corruption prosecutor’s announcement about appealing it.
An attorney for Mr. Urdangarin has said his client is innocent.
The 47-year-old princess’s involvement in the case is the latest twist in a scandal that has depressed the king’s standing. Calls are growing for Juan Carlos—the long-popular monarch who steered Spain to democracy in the late 1970s after four decades of dictatorship—to abdicate in favor of his son, Felipe, Cristina’s younger brother. In Spain the case has shared headlines with investigations into alleged corrupt practices by the country’s two largest poltical parties.
“Naming the princess as a suspect … will give her the chance to explain herself,” said Virginia López-Negrete, a lawyer for Manos Limpias. She said the case helps show Spanish society that no one is above the law.
…
Bank of Portugal says economy to contract 2.3% in 2013
People protest against the Portuguese government’s new austerity measures outside the parliament building in Lisbon. (File photo)
Sun Mar 31, 2013
The Bank of Portugal says the country’s gross domestic product (GDP) will contract more rapidly this year than previously estimated.
The bank recently stated that Portugal’s GDP would contract 2.3 percent in 2013. The figure was initially estimated to be 1.9 percent.
The disappointing contraction is being blamed on a sharp drop in the domestic demand and an unsatisfactory growth in exports.
The new forecast of 2.3 percent is in line with that of the European Union (EU) and the International Monetary Fund (IMF).
Battered by the global financial downturn, the Portuguese economy fell into a recession, which compelled the country to negotiate with the ‘troika’ of the IMF, EU, and the European Central Bank for a bailout loan in 2011.
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Irish manufacturing contracts for first time in a year
Euro zone crisis leads to sharpest contraction in exports since August 2009 - PMI
Irish manufacturing contracted for the first time in over a year in March according to the NCB Manufacturing Purchasing Managers’ Index.
Tue, Apr 2, 2013, 09:25
First published: Tue, Apr 2, 2013, 07:25
Irish manufacturing contracted for the first time in over a year in March, and the euro zone’s problems led to the sharpest contraction in new export orders since August 2009.
The economy has expanded for the last two years, raising the prospect of a successful bailout exit, but it contracted in the third quarter of 2012 and was flat in the fourth as weak external demand weighed on exports.
The NCB Manufacturing Purchasing Managers’ Index fell to 48.6 in March from 51.5 in February, below the 50 line dividing growth from contraction for the first time since February last year.
“This is a disappointing release, with declines observed on the output, new orders and employment fronts,” said Philip O’Sullivan, chief economist at NCB Stockbrokers.
“We will closely watch April’s release to see if any of these trends have persisted into Q2, paying particular attention to see if the elevated macroeconomic uncertainty of recent days and weeks weigh on survey findings.”
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Latest Survey Shows More Signs of Pessimism among Canada Home Buyers, Expert from Syndicate Mortgages Announces
As Royal Bank Publishes the Result of Their Prospective Housing Market Research, CTO of Syndicate Mortgages Explains Why Young Canadians Must Still Have Faith in the Market
Toronto, Ontario (PRWEB) April 04, 2013
According to the latest survey report published by the Royal Bank of Canada on 26th March 2013, the number of prospective home buyers in Canada has dropped to 15% in one year. Marcus Arkan, CTO of Syndicate Mortgages stated that the survey rightfully represents the pessimism among young buyers. However, he encouraged Canadians to have faith in the housing market that is clearly steering away from the bubble.
According to the report, this is the biggest drop in home buying intention ever reported in Canada. Last year, 27 percent of the people who took the RBC survey showed intentions of buying a home in the future. The news of RBC’s latest survey report was covered by all of the major tabloids, including the Huffington Post and the Financial Post.
However, Mr. Arkan stated that the most noteworthy point in the report was not the declining number of prospective home buyers but the level of confidence in the housing market. He said, “The reason people are reluctant about their future buying plan is the mortgage rule change introduced last year. Affordability has become a major threat for buyers. Yet, the confidence in the market is still strong.”
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Asia-pacific
New tax alarms China housing market
New government policy to impose capital gains tax driving China’s real estate market into frenzy.
Last Modified: 31 Mar 2013 06:41
Thousands of people in China are rushing to either buy or sell their properties.
They are trying to avoid a new capital gains tax, which is expected to go into effect next month.
It is part of government measures to cool down China’s booming property market.
Al Jazeera’s Rob McBride reports from Hong Kong.
Source: Al Jazeera
“Fox News tells striking workers to get two jobs and ‘expect to get paid the minimum wage’”
http://www.rawstory.com/rs/2013/04/05/fox-news-tells-striking-workers-to-get-two-jobs-and-expect-to-get-paid-the-minimum-wage/
Now I frankly don’t give a fawk about this retarded stuff but to me, this TV “journalism” event should be all the evidence you need to come to the obvious conclusion that all of it is a NY schtick.
Now if our few blog retards think I’m taking sides, take Al Sharpton and his schtick on MSNBC. If you’re you from NY or understand NY, you intuitively know Al has always been about schtick.
If you’re moved or swayed by this stuff, you need to suck on a shotgun barrel.