Bits Bucket for June 2, 2013
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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U.S. Urges China to Buy Mortgage-Backed Securities (Update2)
By Josephine Lau - July 13, 2007 11:38 EDT
July 13 (Bloomberg) — The Bush administration is urging China’s central bank to buy more government-backed mortgage bonds in an effort to sustain financing for U.S. home loans.
U.S. Department of Housing and Urban Development Secretary Alphonso Jackson is in Beijing to persuade the Chinese central bank to buy more securities from Ginnie Mae, a corporation under HUD that guarantees $417 billion in federally insured, fixed-rate mortgages.
“It’s not a matter of whether they’re going to do more business in mortgage-backed securities,” Jackson told reporters in Beijing. “It’s who they’re going to do business with.”
HUD aims to tap China’s $1.33 trillion of foreign-currency reserves, the world’s largest, after surging defaults on subprime mortgages caused the near-collapse last month of two hedge funds run by Bear Stearns Cos.
Moody’s Investors Service on July 10 cut its ratings on $5.2 billion of bonds backed by subprime mortgages, which are loans taken by borrowers with poor or limited credit histories. Standard & Poor’s yesterday downgraded $6.39 billion of such bonds. Fitch Ratings said it may lower ratings on $7.1 billion.
Ginnie Mae is “in a better position than most” to offer mortgage products because, unlike Fannie Mae and Freddie Mac, it provides the full backing of the U.S. government, Jackson said. Mortgage securities offer China’s central bank better returns than U.S. Treasury bonds at the same level of credit risk, he said. China held $414 billion in U.S. Treasuries as of April, according to data compiled by Bloomberg.
Jackson met with central bank Governor Zhou Xiaochuan and Minister of Construction Wang Guangtao in the nation’s capital this week. Central bank spokesman Li Chao couldn’t be reached for comment.
Commercial Banks
China has approved the creation of a new agency that will manage about $200 billion of its foreign exchange reserves, as the government seeks to boost returns from its holdings.
The nation held $107.5 billion in U.S. mortgage-backed securities as of June 2006, up from $3 billion three years earlier, according to HUD’s Web site. The figures include securities offered by Ginnie Mae, Fannie Mae and Freddie Mac, HUD said, without detailing the holdings in each agency.
“China’s bought some mortgage-backed securities from us, but not in great numbers,” Jackson said, without providing a target for future purchases.
HUD also plans to approach Chinese commercial banks such as China Construction Bank Corp. and ask them to buy government-backed mortgage securities, Jackson said.
The housing department wants to sign a memorandum of understanding with construction minister Wang when he visits the U.S. in August, Jackson said without elaborating. The two nations face similar challenges in providing affordable housing to average citizens, he said.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aE7I.0mnjrSY - 75k - Cached -
I figure it’s a fair trade: worthless crap for worthless crap.
And you know, when you think about it, the two largest national economies on the planet are based on the production of crap, both financial and physical.
Amazing isn’t it?
Rapid fire foreclosure trials clear cases, concern attorneys
Posted: 7:03 p.m. Saturday, June 1, 2013
By Kimberly Miller - Palm Beach Post Staff Writer
WEST PALM BEACH —
A foreclosure case that loitered in Palm Beach County’s courts for more than four years was over in four minutes last week as judges hustle under a new order to clear dockets of aging files.
In less time than it takes to boil an egg, a judgment against borrower Clara Urgelles set a July 15 auction date for the condominium she bought in 2007. Urgelles put up no defense, didn’t attend the trial, and never called the condo home, according to county homestead exemption records.
Why the case lingered since November 2008 is anybody’s guess _ loans are sold, lawyers change, banks close and paperwork is lost, tossed or flawed.
But the delays are done. In February, Palm Beach County Chief Judge Peter Blanc ordered foreclosures filed before July 1, 2010, be inventoried and set for trial.
“A lot of the older cases have just been sitting, the homes are vacant, the process stalled,” Blanc said. “There is improvement in the new cases, but the ones from 2008, 2009, 2010, I think if a defense was filed, the case got slowed down and the lenders just threw up their hands.”
The quickie trials can last mere moments when the homeowner isn’t fighting to keep the property, and most agree those cases should be ushered swiftly through the system.
While homeowner attorneys worry the banks have the upper hand in the rapid trials, that’s not always the case.
In courtroom 10-D last week, Neustein faced off against a bank attorney who showed up without a witness to verify foreclosure documents filed in the 2008 Acreage case.
“They’ve had five years to get a witness to testify. I think this case should be dismissed,” Neustein told Judge Catherine Brunson.
She agreed. Case dismissed. And because the case is butting up against a five-year statute of limitations to try a foreclosure, Neustein said there’s a chance his clients will win the Orange Boulevard home free and clear.
“The average guy knows they didn’t pay the money, and they roll over and die,” Neustein said. “When we get a client, we defend the case vigorously.”
http://www.palmbeachpost.com/news/business/rapid-fire-foreclosure-trials-clear-cases-concern-/nX8rK/ -
“And because the case is butting up against a five-year statute of limitations to try a foreclosure, Neustein said there’s a chance his clients will win the Orange Boulevard home free and clear.”
Whoa. Is this a state thing?
Whoa. Is this a state thing?
I’m sure it is—but it is interesting nonetheless.
Most old debts become uncollectable after enough years (defined under state law) during which no payments have been made, unless they re-file a new judgement to restart the clock.
Does anyone know whether mortgages are any different in this regard?
I’m shocked. If you only have to make it five years… those are good odds with the current backlog.
How about that.
loans are sold, lawyers change, banks close and paperwork is lost, tossed or flawed…
there’s a chance his clients will win the Orange Boulevard home free and clear.”
Ha-HA! I predicted this long ago, and was called a fool. Still, I persevered, rather nobly, I must admit. [gazes mournfully into the distance]
Oh-oh, MERSy, MERSy me…
“The average guy knows they didn’t pay the money, and they roll over and die,”
Separate the chumps from the divers 4 life.
The first inauguration of Barack Obama as the 44th President of the United States took place on Tuesday, January 20, 2009
Carroll National Guard To Conduct Door To Door Gun Confiscation Drills in Arcadia, Iowa
Friday February 20th 2009, 9:01 pm
From the article:
The purpose of the April 2-5 drill will be to gather intelligence, then search for and apprehend a suspected weapons dealer, according to Sgt. Mike Kots, readiness NCO for Alpha Company.
Citizens, law enforcement, media and other supporters will participate.
Troops will spend Thursday, April 2, staging at a forward operations base at Carroll. The next day company leaders will conduct reconnaissance and begin patrolling the streets of Arcadia to identify possible locations of the weapons dealer.
The primary phase will be done Saturday, April 4, when convoys will be deployed from Carroll to Arcadia. Pictures of the arms dealer will be shown in Arcadia, and soldiers will go door to door asking if residents have seen the suspect.
Soldiers will knock only at households that have agreed to participate in the drill, Kots noted.
I’m really curious to know how they’re going about getting permission. Are they asking everyone if they want to or telling them they’re coming and accepting objections? What kind of pressure are they coming?
“Once credible intelligence has been gathered,” said Kots, “portions of the town will be road-blocked and more in-depth searches of homes and vehicles will be conducted in accordance with the residents’ wishes.
In accordance with the residents’ wishes? Because the people or Arcadia actually voted on this and then directed the mayor to invite the national guard to come hang out.
“One of the techniques we use in today’s political environment is cordon and knock,” Kots explained. “We ask for the head of the household, get permission to search, then have them open doors and cupboards. The homeowner maintains control. We peer over their shoulder, and the soldier uses the homeowner’s body language and position to protect him.”
YAY!! You get to help the military search your house for illegal (any) guns. I hate being left out of all the fun.
During this phase of the operation, troops will interact with residents and media while implementing crowd-control measures and possibly treating and evacuating injured persons.
The unit will use a Blackhawk helicopter for overhead command and control, and to simulate medevacs.
The drill will culminate in the apprehension of the suspected arms dealer.
Because that’s what the military is for, chasing down suspected arms dealers in American cities.
In addition to surveillance, searching and apprehension, the exercise will also give the troops valuable experience in stability, support, patrol, traffic control, vehicle searches and other skills needed for deployment in an urban environment.
“This exercise will improve the real-life operational skills of the unit,” said Kots. “And it will hopefully improve the public’s understanding of military operations.”
Wow, you’d think the military is getting ready to spend a lot of time in American cities in the future, I wonder why?
The pre-drill work with residents is as important at the drill itself.
“It will be important for us to gain the trust and confidence of the residents of Arcadia,” said Kots. “We will need to identify individuals that are willing to assist us in training by allowing us to search their homes and vehicles and to participate in role-playing.”
Yes, going in pre-invasion and doing intel/recon is a great military tactic.
“We really want to get as much information out there as possible, because this operation could be pretty intrusive to the people of Arcadia.”
Intrusive? No, not at all.
http://www.fieldandstream.com/forums/backlash-and-blowback/carroll-national-guard-conduct-door-door-gun-confiscation-drills-arcadi - 177k -
They did get busy back in 2009.
Eric Holder perjury, Fast and Furious aka Project Gunrunner, Holder speech April 2 2009, USDOJ website
Posted on July 8, 2011 | 30 Comments
“Did the Attorney General Mislead Congress on Operation ‘Fast and Furious’?”
“Darrell Issa (R-Calif.), Chairman of the House Oversight and Government Reform Committee says he does not believe Attorney General Eric Holder gave accurate testimony under oath to Congress during the House Judiciary Committee on May 3.
Asked in May when he learned of Operation “Fast and Furious” and “Project Gunrunner,” Holder claimed he ‘probably’ learned of it ‘over the last few weeks.’ In the testy exchange that followed, Issa pointed out that two Americans were killed by weapons associated with the botched operation, and that in the end, no major criminals were brought to justice. Issa also implies that the Department of Justice was deliberately slow-rolling the request for documentation about the program. You can watch the exchange between Holder and Issa here.
As for the Attorney General’s timeline of the last few weeks, Operation ‘Fast and Furious’ was reported in major news outlets across the country starting not weeks, but months before the May 3 hearing, including a 4-page article in the Washington Post in February naming the program and explaining how it was supposed to work.”
Eric Holder made the following speech on April 2, 2009.
“Attorney General Eric Holder at the Mexico/United States Arms Trafficking Conference
CUERNAVACA, MEXICO ~ Thursday, April 2, 2009
Remarks as prepared for delivery.
First, let me express my thanks to Attorney General Medina Mora and Secretary of Government Gomez Mont for making this conference possible.
This is my first trip to another country as Attorney General. I wanted to come to Mexico to deliver a single message: We stand shoulder-to-shoulder with you in this fight against the narcotics cartels. The United States shares responsibility for this problem and we will take responsibility by joining our Mexican counterparts in every step of this fight.
And, together, we will win – thanks in large part to the courage of my Mexican colleagues here today, who are on the front lines every day, and with whom I am proud to collaborate.
The topic that has been addressed over the past two days could not be more important – the development of an arms trafficking prosecution and enforcement strategy on both sides of the border.
I would like to thank the Mexican and U.S. experts who have worked so hard on this issue. On our side, Secretary Napolitano and I are committed to putting the resources in place to increase our attack on arms trafficking into Mexico.
Last week, our administration launched a major new effort to break the backs of the cartels. My department is committing 100 new ATF personnel to the Southwest border in the next 100 days to supplement our ongoing Project Gunrunner, DEA is adding 16 new positions on the border, as well as mobile enforcement teams, and the FBI is creating a new intelligence group focusing on kidnapping and extortion. DHS is making similar commitments, as Secretary Napolitano will detail.
http://citizenwells.wordpress.com/2011/07/08/eric-holder-perjury-fast-and-furious-aka-project-gunrunner-holder-speech-april-2-2009-usdoj-website/ - 221k -
American Exceptionalism:
“Whether directly from their wallets or through insurance policies, Americans pay more for almost every interaction with the medical system.
They are typically prescribed more expensive procedures and tests than people in other countries, no matter if those nations operate a private or national health system. A list of drug, scan and procedure prices compiled by the International Federation of Health Plans, a global network of health insurers, found that the United States came out the most costly in all 21 categories — and often by a huge margin.
Americans pay, on average, about four times as much for a hip replacement as patients in Switzerland or France and more than three times as much for a Caesarean section as those in New Zealand or Britain.
The average price for Nasonex, a common nasal spray for allergies, is $108 in the United States compared with $21 in Spain. The costs of hospital stays here are about triple those in other developed countries, even though they last no longer, according to a recent report by the Commonwealth Fund, a foundation that studies health policy.
While the United States medical system is famous for drugs costing hundreds of thousands of dollars and heroic care at the end of life, it turns out that a more significant factor in the nation’s $2.7 trillion annual health care bill might not be the use of extraordinary services, but the high price tag of ordinary ones.
“The U.S. just pays providers of health care much more for everything,” said Tom Sackville, chief executive of the health plans federation and a former British health minister.
Hospitals, drug companies, device makers, physicians and other providers can benefit by charging inflated prices, favoring the most costly treatment options and curbing competition that could give patients more, and cheaper, choices.
Almost every interaction can be an opportunity to send multiple, often opaque bills with long lists of charges: $100 for the ice pack applied for 10 minutes after a physical therapy session, or $30,000 for the artificial joint implanted in surgery.
The United States spends about 18 percent of its gross domestic product on health care, nearly twice as much as most other developed countries.
The Congressional Budget Office has said that if medical costs continue to grow unabated, “total spending on health care would eventually account for all of the country’s economic output.”
http://www.denverpost.com/nationworld/ci_23370857/health-care-costs-more-u-s-than-anywhere
How many lawyers are there in Britain or New Zealand or Switzerland who make tens, even hundreds of millions a year suing doctors?
Please, there are non inflation adjusted caps in place in both Texas & California that make medical malpractice lawsuits worthless.
Healthcare is not any cheaper in California or Texas.
Caps or no caps, there are billions of dollars spent in legal fees every year defending the lawsuits. And billions spent by providers in medical malpractice insurance. And tens/hundreds of billions more spent because every doctor runs every test in the world for fear of getting sued if he doesn’t run every test and the 1/100 test he didn’t run would have caught the diagnosis earlier.
None of this is the case in Britain or New Zealand or Switzerland.
I experienced this first hand when my wife was pregnant. She had some complications but nothing major. Her doctor however went waaaaay overboard. She was going to see him twice a week for tests and monitoring. I can’t say for sure, but I have a pretty good feeling it wasn’t really needed, but the doctor was just covering his ass in case something major did happen. That’s the default mentality for doctors, better to be safe than sued. And with the likes of John Edwards out there who make fortunes suing OB/GYNs, who can blame them?
This is one aspect that contributes to the runaway health costs in America.
How many tests did the doctor run in the course of seeing the patient twice a week?
How many of them were really medically necessary and how many were of the “cover my ass in case this gets into litigation” variety?
How many tests would have been conducted if the patient had to pay for them up front?
Were the costs of these tests published, or were they priced based on how much the insurance carrier would pay?
My guess is that the care probably cost ten times as much as it should have cost once the dysfunctional practices were factored into the mix.
Yeah, it’s all of those frivolous lawsuits.
It couldn’t be because all of the countries named are socialist/commie/government-run/single payer plans.
You don’t understand…in Texas lawyers will not take medical malpractice lawsuits any more against doctors or hospitals.
There has been no flood of cheap medical services as a result.
-Labs, surgicenters, radiologic and pathologic services bill separately from physician services, (by law) so a physician has no financial incentive to run tests that she knows are superfluous.
-Insurance companies will not reimburse for medically un-indicated services, and the insurer can override physician’s orders.
-Patients can, and are encouraged to get second opinions and question whether a particular test is necessary.
-Physicians carry malpractice insurance either privately or through their group practice. Standard of care is…standard, and not subject to litigation.
So maybe that ass she was covering was yours…?
in Texas lawyers will not take medical malpractice lawsuits any more against doctors or hospitals.
——
That’s a ridiculous thing to say.
http://www.jrlawfirm.com/contact.cfm
Try getting one to take a case. They won’t do it unless it evolves a drug or medical device manufacturer.
$250k is the limit for “pain and suffering”.
At 40% pay out, a lawyer would receive only $100k.
$250k is the limit for “pain and suffering”.
At 40% pay out, a lawyer would receive only $100k.
___________________
Punitive damages is where most of the money is made for lawyers. Plus the vast majority of cases are settled out of court. $100K for a few weeks of work drawing up paperwork isn’t a bad gig. You’re nuts if you think CA and TX have somehow outlawed frivolous medical lawsuits.
Caps in states that have them have not, repeat, NOT!, resulted in cheaper medicine.
It is sad that home prices are along with most other assets, controlled by the banks. Doesnt look good for the average person who actually has to work.
Just figure out which form of Rentership* works best for you, and go with it.
* Either rent the house directly, or rent the money needed to finance the high purchase price from the bank.
Ding!
There is nothing wrong about renting. I don’t get why AZdude and millions of others think home ownership is necessary.
Kool-aid drinkers need to surround themselves with other kool-aid drinkers to convince themselves that it tastes good.
“There is nothing wrong about renting. I don’t get why AZdude and millions of others think home ownership is necessary.”
I don’t think anyone would say it’s necessary. Nothing short of eating and drinking is necessary if you get right down to it.
Owning is a better option for most people in most circumstances. I think it’s a lifestyle thing as much as an economics thing. If you’re 25 and single and own nothing but a TV and a bed, then yeah, renting an apartment is probably the way to go and you can move to a new one every few months.
If you have 3 kids and 2 dogs not so much.
“Owning is a better option for most people in most circumstances.”
Another doozy to add to EddieTards Chronicles.
So Eddietard…… paying double current rental rates is a “better option”? Just how much are you paid to post this bull$hit?
stocks and homes will take you to the glory land
u own for a shot at free equity in this modern day casino.
You can’t win if you don’t play.
“u own a shot at free equity in this modern day casino.”
Umm…you cannot dollar cost average into houses unless you are wealthy enough to buy one every month.
With that, home moanership is a much greater gamble than building up shares of mutual funds in stocks.
Buying a home gives you at least a chance of owning an asset free and clear when you’re trying to retire (or are disabled later in life). It enables you to control your housing costs, and also allows you to control when and where you’ll move.
We’ve seen so many people over the past few years who were trying to rent/bubble-sit, but their LLs got foreclosed on, or wanted to move into the rental, or had a friend/family member that they wanted to live in the rental, etc. It’s easy when you’re Bill-in-LA and just have a few things to throw together when you want to move, but for families who have kids, schools, etc. to worry about, it’s much better to own vs. rent, at least when there aren’t any housing bubbles.
I really feel badly for all the people who’ve been trying to do the right thing this past decade, but have had the Fed/govt destroy them at every turn. It’s not right.
I resemble that remark.
First rental (year 1, one year lease), worst house, best landlord.
Second rental (year 2-5, 3 year lease), crazy, arrogant landlord. Announced he was selling 6 weeks after we moved in because he was selling. We begged to differ, three years of strife ensued. Ended up with one year free rent.
Third rental (now, month to month), dealing with prop mgr/quarterly inspections and overly suspicious owner (ugh).
I expect to be given notice any day now that this one wants to sell, given the rapidly rising prices in Las Vegas.
in because he was selling.
sorry, groggy this AM, meant to say “and we had to get out”. I explained to him what “lease” means.
Mortgage delinquencies 600% higher today than at the peak of the housing bubble in 2006.
http://www.europac.net/commentaries/great_reflation
The coming housing price correction will dwarf the previous declines.
The risk associated with buying a house at current grossly inflated prices is massive. Sit tight and buy later for 65% less.
Housing Prices Still Massively Inflated 200% Above Long Term Trend Line.
http://imageshack.us/a/img802/7812/caseshiller.jpg
“The Housing Market Recovery Is ‘A Complete Hoax’”
http://www.truthdig.com/eartotheground/item/the_housing_shell_game_20130503/
Afterall, a “housing recovery” is dramatically lower prices by definition.
“The Housing Market Recovery Is ‘A Complete Hoax’”
True, but you can’t fight the Fed.
Which is really too bad because you would kick Bernanke’s @ss.
In this corner, weighing 165 not very well-proportioned pounds, looking like a scared rabbit without his bodyguard and really pathetic in his green boxing trunks.
Helicopter Ben Bernankeeeee!
And in this corner, looking really pissed about the never ending bailouts and printing of money that has lowered the returns on his savings to nothing and artificially kept house prices unaffordable for he and his family while allowing the banksters to rape and pillage the U.S. tax payers while allowing the serial refinancing Donald Trump wannabes to live for years in their homes while claiming they are victims.
Housing Analyst
Fed Chairman Ben Bernanke - The Brains Behind QE
Ben Bernanke introduced a first round of quantitative easing during the worst of the financial crisis, as global markets tumbled and liquidity was sucked out of the system. Quantitative easing is an unorthodox application of monetary policy by which a central bank, in this case the Federal Reserve, loosens monetary policy further after having dropped the Federal Funds rate to the zero range. This is done by purchasing longer-term assets, such as 10 year Treasury bonds, in order to push down interest rates further down the yield curve.Quantitative easing, or QE, came into prominence after Japan attempted to prop up its economy after a massive financial and economic crash during the 1990s. Japan entered what is commonly referred to as the “Lost Decade,” where not even QE managed to boost output substantially.
Once again, well stated Jethro.
“Falling housing prices to dramatically lower and more affordable levels is bullish optimism and good for the economy.”
Housing Demand in the State of Maine Collapsed a Whopping 80% Year over Year
http://www.zillow.com/local-info/ME-home-value/r_28?disambig=12517_397575&pri=28#metric=mt%3D30%26dt%3D1%26tp%3D5%26rt%3D14%26r%3D28%252C394997%252C394359%252C394353%26el%3D0
“Housing Sales At Multi Decade Lows”
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/03/20130328_house2.jpg
You do know what happens when prices rise on tiny volume…. right?
So you are actually agreeing that prices are rising currently? I thought you said they were falling everywhere.
Like saying to your buddy on the playground; “You’re ahead; but I am winning”
So you actually are acknowledging that you’re actually lying about “prices rising everywhere”?
Like I said…… there hasn’t been an honest word out of your mouth since the day you started this ruse.
KEEEEEEEEEEEEEYRAAAAAAAAAAAAAAAAAAAAAAAASH!!!
What was that?!
You know that house you made the mistake of buying? Well the value of it just fell through the floor leaving a smoldering moon-crater.
Beware reading public. Don’t be a sucker like the debt-junkies that attempt to rationalize their horrible decision. Beware.
http://farm1.staticflickr.com/31/45883637_4bf23fbe53_z.jpg
“Housing’s Dead Cat Bounce”
Now that it’s self-evident that housing is in dead cat bounce mode, you can now observe the losses of those who were foolish enough to believe the tripe and paid a grossly inflated price for a house even though a house is always a depreciating asset.
I don’t know if I can bear another round of moaning victims.
Oh you know the howling victimhood memes have already been developed.
Perhaps your government leaders will give you the opportunity to calm their moaning by helping to fund household-level bailouts for the victims of falling home prices.
Now that fears of a QE3 exit have taken hold, is there any safe place to invest?
Stocks swoon on interest rate fears
Stocks fall sharply as a persistent rise in rates over the last month threatens to derail the powerful rally this year on Wall Street.
May 31, 2013|By Andrew Tangel, Los Angeles Times
NEW YORK — A sudden jump in interest rates is casting a shadow over the stock market.
Stocks fell sharply Friday as a persistent rise in rates over the last month threatened to derail the powerful rally this year in share prices.
…
Fundamentally
When Interest Rates Rise, Stocks Don’t Have to Fall
By PAUL J. LIM
Published: June 1, 2013
LOW interest rates have helped to fuel the stock market rally, and a climb in rates is eventually expected to snuff it out. At least that’s the theory.
Here’s the reality: In May, rates actually rose quite sharply, as 10-year Treasury yields jumped to 2.16 percent from 1.63 percent. Yet the Dow Jones industrial average still soared more than 400 points, to end the month at 15,115.57.
The stock market’s road did become choppy as rates rose. The Dow lost more than 200 points on Friday, for example, but the overall trend remained upward. It just goes to show that while there is a connection between interest rates and the stock market, it isn’t a simple one. When rates rise, said Jeffrey N. Kleintop, chief market strategist at LPL Financial, “it is not the size of the move itself, but the absolute level of yields reached that matters to the stock market.”
Even with the recent uptick, the 10-year yields are only about half of what they were five years ago, during the global recession. And a climb in rates from such a low level may be a tail wind — not a headwind — for stocks, Mr. Kleintop said.
For starters, he said, “it reflects an improving outlook for economic growth and less risk of deflation.” Both are welcome developments to equity investors. Moreover, “it results in losses for bonds,” he said, which may prompt investors to sell those bonds and move money into stocks.
…
This might be what will happen. Gradual increase in interest rates and stocks going up.
I was betting last December the January capital gains tax increase would cause a big sell off and that the S and P 500 would be down for the month. My criteria was historical data based on the last capital gain tax increase, 1986. Well I was almost right. The last trading day of 2012 it was negative for the month in the morning. But finished up 8 points for the month.
Moreover, the late session Congress kept the capital gain tax breaks for those with incomes below $450,000.
Patterns repeat USUALLY. Sometimes there are near misses. The “sell in May, go away” rule might be just another bear trap this year.
When patterns do not repeat it is rare and more likely to repeat the next cycle. Markets are very punishing when to bears and bulls alike when a cycle is missed and investors count on the cycle to be skipped the next time around.
“This might be what will happen. Gradual increase in interest rates and stocks going up.”
I’m sure that is what the Fed hopes will happen. If you see stocks falling and interest rates going up at the same time, you will know the policy failed.
You know what? The developed world’s finance ministers, including Bernanke, want growth, and yes I despise statism. But even though I want government to go away ( and it eventually will) I will profit by betting with the Fed. I just wont take debt bait by buying a stucco box. What the central banks are doing is good for stocks. And they want it to be good for stocks. They will stop their game when the public realizes they don’t need to become mortgage slaves.
They will stop their game when the public realizes they don’t need to become mortgage slaves.
In other words… never.
Steve Schaefer, Forbes Staff
If you can put the word market after it, I cover it.
Markets | 5/31/2013 @ 5:00PM
Strong May For Stocks Ends With A Rout On Wall Street
Stocks dropped more than 1% Friday as a winning month for the bulls went out like a bear.
The major indexes, which briefly posted gains before noon, fell off the table in the last minutes of trading with losses doubling into the closing bell.
By the end of the session the S&P 500 was down 24 points, 1.4%, to 1,631, the Dow Jones industrial average 209 points, 1.4%, to 15,116, and the Nasdaq 35 points, 1%, to 3,456.
Treasury yields, which hit recent highs earlier Friday, came roaring back with the 10-year note racing back to 2.14% from the 2.2% area.
Losses were widespread, but energy, consumer staples and telecom were in teh (SIC) worst shape, followed by financials and healthcare. All 10 S&P sectors were in the red.
…
Would now be a good time to ‘buy the dip’?
May 31, 2013, 3:46 p.m. ET
U.S. Stocks Sell Off Late in Session
–Stocks extend declines in late trading Friday
–DJIA falls 117, S&P 500 off 13
–All 10 S&P 500 sectors in the red
By Alexandra Scaggs
NEW YORK–U.S. stocks extended their losses to hit session lows in late trading Friday, but benchmarks still looked set to notch another monthly rise.
The Dow Jones Industrial Average declined 117 points, or 0.8%, to 15207. The Dow was headed for a sixth-straight monthly rise, and its best monthly performance since March.
The S&P 500 shed 13 points, or 0.8%, to 1642, with all 10 sectors lower. The Nasdaq Composite Index lost 17 points, or 0.5%, to 3474.
The S&P 500 was set to extend its monthly win streak to seven months, the longest such stretch since the seven-month streak ended September 2009.
Trading was choppy throughout the session. The Dow industrials dropped nearly 61 points in the first minutes of trading, turned higher to climb as much as 68 points, and then extended their losses late in the day.
The benchmarks’ May gains have come with churn among different sectors–the first quarter’s best-performing areas have lagged behind this month. Friday’s declines could be attributed in part to profit-taking from money managers looking to adjust their holdings at month’s end, known as rebalancing, said Michael O’Rourke, chief market strategist with JonesTrading.
“Money managers haven’t been aggressive enough about rebalancing because they’ve been worried about not having enough stock exposure” during the month,” he said.
Alan Gayle, senior investment strategist at RidgeWorth Investments, said the market’s gyrations were a sign that investors have been taking a breather, but without deciding to sell stocks.
“You don’t have to have a significant pullback for the consolidation process to be completed, and that might frustrate a lot of the ‘buy the dip’ investors,” he said.
…
Buy the dip?
You mean HA is for sale?
I would say he, like all things manmade,(and his mommy and daddy roomies made him) is a depreciating asset so be wary.
Quantitative Easing Talk Spurs Caution in Asian Markets, Yet Money Stays
By Vidya Ranganathan on 1:48 pm May 31, 2013.
Category Analysis, Business
Tags: Asian markets, quantitative easing, US monetary policy
Heads we buy Asia, tails we don’t sell.
That is the choice investors in Asian markets are making in the face of what would be the biggest inflection point for markets since the 2008 financial crisis, the prospect of US super-loose monetary policy being reined in soon.
Since it was cheap Fed funds that fuelled the rally of the past four years in emerging stocks, bonds and currencies, most investors had reasonably assumed that a tapering off in the US stimulus program would see funds flow out of emerging markets.
But Asian flow data suggests the contrary. Portfolio money is still pouring into Asia, driven by hope the Fed will tighten policy at a modest pace and only when the US economy is strong enough to lift global growth.
“We’re not really seeing people switching out of Asia,” said Guy Steer, head of research with Society Generale in Hong Kong. “So far, we haven’t seen people switching money even within the region.”
…
Quantitative easing is no longer the answer to the crisis
by Jo Owen
30 May 2013
The £375bn of QE has created an economy addicted to low interest rates where zombies loans are unlikely ever to be repaid - warns think-tank
Quantitative easing in the United Kingdom is past its sell-by date. In the early days of the credit crunch, it was a highly effective way of stabilising the financial system. It flooded the markets with liquidity and drove down interest rates. It was radical and effective surgery. Perhaps inevitably, it has some toxic side effects. The policy challenge is now to deal with the side effects, unwind QE and build some momentum in the economy. Not all of these three goals can be achieved at the same time.
Understanding the current policy options requires understanding QE, which has been widely described as printing money. It certainly was not printing and it was probably the wrong sort of money. All money is ultimately debt and this is true of QE. At the moment, the Bank of England pays 0.5 per cent per annum – the bank rate - on the £375bn of reserves it created to buy gilts. That is a quietly ticking time bomb of debt. When interest rates eventually recover to an historic average of about 5 per cent, the cost of servicing the debt which the bank has created leaps to £18.75bn a year. More QE simply adds to this debt mountain.
…
May 27, 2013, 3:40 PM
Fed Wrestles With Market Expectations About Pace of QE
By Jon Hilsenrath
Managing market expectations is one of the Fed’s most challenging tasks. If market expectations get out of sync with what the Fed plans to deliver, it could be the source of unpleasant volatility.
Fed officials have been struggling of late managing expectations about its plans for the $85-billion-a-month bond-buying program, known as “quantitative easing.”
At their policy meeting in May, Federal Reserve officials expressed anxiety about shifting market expectations for the Fed’s $85 billion-per-month bond buying program. “A few members expressed concerns that investor expectations of the cumulative size of the asset purchase program appeared to have increased somewhat since it was launched last September despite a notable decline in the unemployment rate and other improvements in the labor market since then,” according to the minutes of the meeting released last week.
As our former college, Greg Ip, now at The Economist notes, “Because markets are forward-looking, bond yields respond to what investors expect the Fed to buy, not just what it does buy. So if the Fed signals QE will continue at a slower pace than investors expected, it will ultimately buy less than expected and yields should go up.” That’s what happened last week.
…
How does “knowing the risks” help investors who are losing their shirts in a QE3 exit?
May 31, 2013, 11:23 a.m. EDT
No such thing as risk-free investment
Commentary: Instead of looking for risk-free returns, know the risks
By Chuck Jaffe, MarketWatch
Ben is a 60-something investor who approached me recently for investing advice: “If your mother came to you and asked where she could get the very best risk-free return right now, what would you tell her to buy, or would you tell her to just keep her money in the mattress?” Ben said, hopeful that I would somehow have an answer for my family that I might not usually give the rest of the world.
He was disappointed with my response.
I’d tell her that there’s no such thing as a “risk-free return,” and that it’s not some “right now” problem based on the level of the market or the lousy returns of bonds, but that it’s about how risk works.
The market has raised the proverbial wall of worry to new heights, but the worriers (like Ben, for instance) would still rather lose nothing than buy in at the wrong time — a time that they feel is now despite the market’s recent gains.
…
Bernanke’s real message to investors
Fed chief Ben Bernanke spoke on the economy this week. For those of you that were listening closely, his message to investors was: “I dare you to buy stocks.”
I post the article below with the month of September 2008 highlighted in bold to call attention to my question for the astute reader: Is it mere coincidence that this month marked the onset of a historically-large U.S. stock market decline over the subsequent six month period?
Pimco’s Total Return Fund headed for worst loss since 2008
May 31, 2013, 11:39 AM
It’s looking like Pimco’s Bill Gross, who runs the investment manager’s Total Return Fund, will have to mark off May as a disappointing month.
The fund had a return of negative 1.9% through May 30, putting its monthly losses at the worst since September 2008, according to a Wall Street Journal report, which cited data from Morningstar and Lipper. By comparison, the Barclays Aggregate Bond Index lost 1.62% so far in May.
It has been a sour month for bond investors as Treasury yields climbed dramatically from their monthly lows, sending prices down on scores of other fixed-income asset classes. The 10-year Treasury note has climbed roughly 50 basis points since the beginning of May as investors speculate over when the Federal Reserve will begin to slow its pace of bond purchases, which have served to artificially hold interest rates down. The 10-year note is currently yielding 2.158%.
For the “Bond King”, as Gross is often called, the picture isn’t pretty. April’s fund disclosures revealed the Total Return Fund increased its Treasury holdings to 39% of the portfolio, from 33% in March. That increase came right as yields began to rise and prices fell on the haven government debt.
The fund has posted a return of negative 0.15% this year through May 30 and has returned 4.88% over the last of year, according to the fund’s website.
Gross doesn’t appeared bothered by the loss. He wrote in a Tweet Friday morning:
PIMCO ✔ @PIMCO
Gross: PIMCO likes 5-10 year Treasuries here. Economy growing at 1.7%, NO tapering for now. Fed funds rate at .25% for long time.
7:06 AM - 31 May 2013
MacroScope
Taper talk: where Fed officials stand on ending QE3
By Ann Saphir
May 30, 2013
In the debate among Federal Reserve policymakers over when and how the U.S. central bank will pull back from its massive bond-buying stimulus, Fed Chairman Ben Bernanke’s voice matters most. But his is far from the only one. Eighteen other policymakers also take part in the Fed’s policy discussions, and Bernanke has a track record of listening to them.
The Fed may offer more clarity on its intentions after its next policy meeting on June 18-19. Until then, what Bernanke and his colleagues say on quantitative easing bears close watching. The following are their views. Voters on the Fed’s policy-setting panel this year are marked with an asterisk (*):
>>Open to cutting back bond buying:
*Fed Chairman Ben Bernanke: The Fed could decide to scale back its monetary stimulus at one of its “next few meetings” if it is confident the economy is poised for continued improvement, he said on May 22. The Fed meets approximately every 6 weeks to decide policy.
…
I actually think it is wise for the Fed to use their jawboning exercises to scare stock market investors off the fence before actually exiting QE3. It is much better from a PR standpoint for talk of a QE3 exit to lead to a stock market correction than the actual event.
Now that fears of a QE3 exit have taken hold ??
I am not quite sure…Unemployment and underemployment are likely more severe than stated…BOJ is embarking on a 1930’s currency experiment…Europe is on its back with trouble as far out at anyone can see…
I still fear stagflation….Can’t raise interest rates because you will plument the country into a depression…Must raise interest rates because inflation is getting out-of-hand…Dammed if you do…Dammed if you don’t dilemma…
Unemployment and underemployment are likely more severe than stated…
Shadowstats still shows unemployment near 23%—and trending gently upwards, not downwards like the government-supplied stats.
The recoveryless recovery:
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/29/chart-median-household-incomes-have-collapsed-during-the-recession/
“I still fear stagflation”
If you are not personally experiencing stagflation, consider yourself very lucky.
Very, very lucky.
For the time being.
There is nothing like central bank reassurances to drive stock prices to new record highs!
Dow ends at record as central banks reassure Wall Street
By Chuck Mikolajczak
NEW YORK | Tue May 28, 2013 4:38pm EDT
(Reuters) - Stocks rose on Tuesday, with the Dow closing at yet another record high, in the wake of Wall Street’s first three-day losing streak of the year, after central banks reassured investors that they will keep policies designed to foster global growth.
Consumer confidence was the strongest in May in over five years, while home prices accelerated in March by the most in nearly seven years. The reports showed the U.S. economy’s resilience despite the pinch of belt-tightening from automatic cuts in federal spending.
Equity investors have been very attuned to monetary policy, with the major U.S. stock indexes last week posting their first negative week since mid-April on lingering concerns that the Federal Reserve may scale back its stimulus measures sooner than expected.
Those concerns were eased after the Bank of Japan and the European Central Bank reaffirmed that their accommodative policies would remain in place, helping indexes recover from last week’s decline.
On Monday, when U.S. markets were closed for the Memorial Day holiday, ECB Executive Board member Joerg Asmussen said the policy would stay as long as necessary. On Tuesday, BOJ board member Ryuzo Miyao said it was vital to keep long- and short-term interest rates stable.
But even with the reassurance, speculation persisted that a tapering of the Fed’s bond-buying plan could be on the horizon, sending U.S. Treasury debt yields to their highest levels in over a year and pulling equities back from their session highs.
“It doesn’t seem that we are in the environment that produces a 35 percent-plus year at this point,” said Bryan Novak, director of trading at Astor Asset Management in Chicago.
“So you have rates starting to jump up at the same point as you have a little bit of concern over some other economic activity at the same time. It makes for a little bit of uneasiness.”
…
Connecticut: “Foreclosure activity was high throughout the state and was up 48 percent in New Haven County”
http://www.ctpost.com/news/article/Fairfield-County-foreclosure-activity-jumps-while-4428213.php
And the money quote from the heart of moneyed blue blood CT;
“Foreclosure activity in Fairfield County jumped 52 percent in a single month in March and was up 40 percent from 2013.”
This is true across the northeast and new england. Massive, growing inventory of excess, empty, defaulted and delinquent properties much like California, Oregon and Washington state.
If you sign up for a mortgage today at these grossly inflated asking prices, you’ll never escape the crushing debt repayment and you’ll never recover the losses when you attempt to sell.
RANCHO PEñASQUITOS: LAND OF LITTLE CLIFFS
By U-T San Diego 12:01 a.m. June 2, 2013 Updated
2:21 p.m. May 31, 2013
Louis Shook
SPECIAL TO U-T SAN DIEGO
Rancho Peñasquitos is often shortened to just Peñasquitos (“little cliffs” in Spanish) or simply RP. Surrounded by an abundance of open space, this quiet neighborhood in North County is part of the city of San Diego. This neighborhood is located to the south of Rancho Bernardo, west of Interstate 15 and north of Los Peñasquitos Canyon Preserve. State Route 56 runs east west in the central portion of the community, which is home to more than 52,000 residents.
“Neighborhoods vary from middle-class to upscale with choices from condos and town homes to custom homes,” said Jen Cowen of Century 21 Award. As a resident of Peñasquitos for more than 25 years, Cowen has been selling real estate in the area for nine years.
“Single-family homes that sold in the last three months ranged from $430,000 to $912,000,” said Cowen. “Currently there is a shortage of homes for sale for the demand of buyers that want to buy them.”
Rancho Peñasquitos is located within the 92129 ZIP code. In 2012 the median price for a single-family home here was $535,000 according to DataQuick. In April the median was $631,000 — a 13.7% increase compared to the same month a year ago. The 2012 median price for a condo was $190,000. In April the median for condos sold was $261,000 — an increase of 20.4% compared the same month a year ago.
“There are many selling points for Peñasquitos,” said Cowen. “It’s an ideal central location to commute to either South or North County for work or for fun. For most of the buyers moving into the general area, they are intrigued how most of the homes in Peñasquitos do not have increased fees from Mello Roos or HOA dues compared to neighboring areas.”
…
Sorry, but I cannot imagine paying north of $500,000 for a home in a 30-year-old tract home development. Not that there is anything wrong with that for others…different strokes for different folks.
So rent it for half the monthly cost of buying it. That’s the way it is in NYC.
When I lived in SD, we called that area Rancho Skinurpenis. I’m sure its a lovely area but yeah, that seems kinda pricey for a condo.
That’s hysterical, ibbots. It’s amazing how developers can romanticize scrub and mesquite.
I can’t imagine paying north of $1M for a 2 bedroom apartment. Yet that’s what I’d have to pay in NYC. I learned a long time ago, just because I think something is expensive doesn’t mean it’s overpriced. It’s a lesson many here have yet to learn.
Survey: Housing shortage hampering business recovery
31 May, 2013 | By Greg Pitcher
Lack of housing is constraining business growth, according to a survey
More than 70 per cent of 1,009 line managers questioned by market research firm ComRes said building more homes would bring them more customers.
Almost six in 10 said greater availability of housing would help them recruit and retain staff.
Gill Payne, director of the National Housing Federation, which commissioned the poll, said: ‘Businesses are finding it tough to attract workers and expand because many people can’t buy a home or would struggle to pay high rents.
‘If things don’t change, employers will simply move – potentially out of the country - taking away desperately needed jobs.
…
“…..would struggle to pay high rents……”
Far be it from me to suggest that ANY rent is “high” when you are paying $12/hour.
I can see the headline in five years:
“Employers move jobs overseas, can’t understand why college grads not stampeding to apply for $8/hour jobs”
“McDonalds in quandry…….employees finding it more profitable to dumpster-dive than working for regular paycheck”
“Let them eat McNuggets”
Lazy workers. We need to make sure less good stuff goes into the dumpsters before this gets out of hand.
Future headlines? Those are the same headlines from the 30 years.
Hidden gems amid the housing shortage
By U-T San Diego 12:01 a.m. May 25, 2013 Updated6 a.m.
If you’re searching for a new home and are finding it challenging to locate something that’s available now, you’re not alone. Inventory is low throughout San Diego and now that summer is upon us, there are even fewer choices. I can appreciate the frustration and anxiety that some home shoppers must feel when dealing with this situation, so I thought I would do a little research and see what hidden gems we could find that are ready and waiting for that perfect owner.
Sandy Lane by Lennar near Carmel Valley is offering a brand new home featuring a gourmet kitchen, granite countertops, and upgraded cabinetry. This Residence 3 provides four bedrooms, three baths and a loft with approximately 2,409 square feet. It’s located within the highly desirable Del Mar Union Elementary School and the San Dieguito Union High School District, and is priced at $779,990.
…
whats the premium for a north county zip code?
Who could have guessed the Fed’s deliberate efforts to drive up housing prices would lead to a perceived shortage?
Is the U.S. Housing Market Shortage Just a Mirage?
Housing-Market / US Housing May 08, 2013 - 11:58 AM GMT
By: DailyGainsLetter
Housing-Market
John Whitefoot writes:Thanks to the near-record-low interest rates, many Americans are ready to jump back into the housing market. Unfortunately, many are running into one obstacle—there aren’t enough homes for sale. That’s a good sign, though! After all, a leading indicator of economic growth is a healthy housing market, and a lack of housing should mean that builders can’t keep up with demand.
Part of the reason there is a lack of supply is that many people don’t want to sell. Many homeowners lost a lot of equity in 2006 when the housing market collapsed. Today, 21.5% of all residential homes in the U.S. are worth less than their mortgages. (Source: Panchuk, K.A., “CoreLogic: 10.4 million mortgages still in negative equity,”
While housing prices have begun to rebound, they are still down 27.5% from their April 2006 peak. With that much room to grow just for homeowners to break even, you can see why many don’t want to unload their property, and why many first-time buyers are competing for a small number of homes. But homebuilders are stepping in to fill the void.
In 2013, U.S. homebuilders are expected to create one million homes, which will be the fastest pace at which homes were built since 2008. Apartment construction is leading the way, up almost 31% to an annual rate of 417,000, the fastest pace since January 2006. Single-family home building, which makes up nearly two-thirds of the market, fell almost five percent to an annual rate of 619,000. (Source: “New Residential Construction in March 2013,” United States Census Bureau web site, April 16, 2013, last accessed May 7, 2013.)
But much of that construction could be for naught. In late April, the U.S. Census Bureau noted that the number of housing units for sale in the first quarter of 2013 was 1.6 million, up from 1.49 million in the fourth quarter of 2012, but down from 1.65 million one year earlier. (Source: “Residential Vacancies and Homeownership in the First Quarter 2013,” United States Census Bureau web site, April 30, 2013, last accessed May 7, 2013.)
Perhaps most interesting is that the report observed that the number of housing units held off the market in the first quarter was 7.6 million, up from 7.29 million in the fourth quarter and down slightly from 7.63 million a year ago.
What does this mean? That banks are keeping more than seven million homes off the market, letting just enough homes trickle onto the market to make it look as if supply is tight.
…
Remember the rice shortage?
‘Vietnam’s rice exports have met with a lot of difficulties since last year because supply has exceeded demand in the world market. According to the Food and Agriculture Organization, Indonesia’s rice output will continue to hit a second consecutive record this year with 72 million tons, an increase of 4.4 percent over last year.’
‘The Philippines Government is also confident that they can be self-sufficient in food by the end of this year. Meantime, African nations are showing no hurry to import rice as they did in previous years due to an abundant supply and instability in price, which is likely to further decrease.’
‘At present, Thailand has about 17 million tons of rice in stock. This number is likely to further hike when they enter the main harvest of crop in November this year, which will provide another 15 million tons of rice.’
‘Rice inventory in India reached 35.5 million tons at beginning of April. India’s rice output is forecast to touch 110 million tons this year, which is expected to further affect Vietnam’s rice exports.’
http://www.saigon-gpdaily.com.vn/Business/Economy/2013/5/104927/
Increasing the CO2 in the atmosphere results in abundant plant growth and surplus food.
Yeah, it’s the CO2.
I thought it was the free market.
I thought global warming was going to cause famines and such. What’s going on?
“Perhaps most interesting is that the report observed that the number of housing units held off the market in the first quarter was 7.6 million, up from 7.29 million in the fourth quarter and down slightly from 7.63 million a year ago.
What does this mean? That banks are keeping more than seven million homes off the market, letting just enough homes trickle onto the market to make it look as if supply is tight.”
Are you serious with this again?
Of the 7.6MM:
2.3MM are held off the market for occasional use;
1.3MM are held off the market with usual residence elsewhere;
4MM are “Other reasons”.
In Q1 2004, when I think we can all agree that bank holdings were negligible, this total was 6.0MM:
2.0MM occasional use;
1.0MM usual residence elsewhere;
3MM are “Other reasons”.
The swelling in the “Other reasons” is what should be focused on (this also includes people holding vacant homes off the market), not the total, which predominately contains homes owned by individuals, not banks.
Saturday, May 4, 2013 08:00 AM PST
US housing perks up, but too few homes for sale
By Scott Mayerowitz
GRAND RAPIDS, Mich. (AP) — Beth Heinen Bell and her husband, Christian — like a rising number of Americans — are ready to jump into the real estate market and become homeowners. Yet they’re running into an obstacle that’s keeping the national housing recovery in check: There aren’t enough homes for sale.
The housing shortage they face in Grand Rapids, Mich., a city known for its furniture industry and sleek downtown hospital complex, is fairly typical of what the country as a whole is facing this spring.
Some markets along the East and West coasts have grown red-hot. A handful of other cities remain depressed nearly four years after the Great Recession ended. But many more places are like Grand Rapids — a metro area of roughly 1 million that is strengthening slowly but steadily.
Like so many others, this Midwestern city 150 miles west of Detroit never experienced either the buyer frenzy or the price collapse that marked the boom and bust. Yet it, too, was affected. Prices fell. Homeowners lost equity. And now, many remain unable or unwilling to sell.
The shortage of homes is occurring just as ordinary Americans want to buy again. More of them feel confident about their job and retirement account. Mortgage rates are near historic lows. And prices are rising again, easing fears that new buyers might lose their investment in a home.
“The last four years have been rough,” says Christian Bell, a 31-year-old Presbyterian minister who has been renting a cramped apartment for the last decade. “But housing prices are starting to come back up.”
A tight supply isn’t the only factor slowing what is otherwise shaping up as the strongest spring buying season since the housing boom ended nearly seven years ago. Some Americans have grown to prefer renting. Others who would like to buy lack strong enough credit or a large enough down payment to meet the stricter standards banks now impose.
Part of the reason for the supply problem is that when the housing market collapsed in 2006, many people lost so much equity in their home that they were unable or unwilling to sell. Prices have started to rise, but not enough to restore what many lost. Some still owe more on their mortgage than their home is worth.
Even many who have enough equity to sell want to wait for further price increases.
…
Local real estate market shows strength
1322 Gypsy Hill Rd, Gwynedd Valley. The house listed for 1.65 million sold for 1.6 million in 88 days. ( CHARLES FOX / Staff Photographer ) Gallery: Local real estate market shows strength
Alan J. Heavens, Inquirer Staff Writer
Posted: Sunday, June 2, 2013, 3:01 AM
Sell ‘em if you got ‘em.
Six words that sum up today’s newly reinvigorated residential real estate market in the eight-county Philadelphia region.
Sales volume is up, and desirable houses are attracting multiple offers, local brokers and agents report. In many municipalities and certain city neighborhoods, low supply of available homes is driving prices up.
All of which signals a strength, here and across the country, not seen since the U.S. housing market went bust nearly seven years ago, taking the wider economy down with it.
Houses are suddenly selling so quickly, there is a shortage, said Kit Anstey, of Prudential Fox & Roach in West Chester. If homes were to stop going on the market, he said, those available now would be sold in three months.
Over Memorial Day weekend alone, he said, three houses sold for 5 percent to 7 percent over asking price. “I hadn’t seen a multiple offer in six years,” said Anstey, an agent for 31. “I just saw 10 in 10 days.”
New Hope-based broker Lisa James Otto said her boutique company, which handles many higher-end properties, closed on 28 in May, almost unprecedented activity for a small firm.
Said Beth English, of Century 21, Hughes-Riggs in Mullica Hill: “As long as it is priced right and in good condition, it is flying off market.”
…
Thing is sell ‘em and then do what? Your next house will have appreciated just as much. You’re no better off than you were before. Only way to profit is sell and move somewhere else where real estate is cheaper or sell and rent. Which as I said before, works great if you’re 25, single, own 3 things and have no roots. A lot tougher to do when you have a career you can’t just throw away, 3 kids in school and 2 dogs to worry about.
But you forget…..
Nobody gives a crap about your kids and dogs, when there are banksters/underwater home owners/government/realtors needing a bail out.
I’m currently a 55 year old, single, don’t care to own a lot of crap anymore, kids on their own, and can relocate in a nano-second, IF/WHEN the right job opportunity comes along. I’ll never buy a house again, until the “3X income” formula falls back into favor.
As my inflation adjusted REAL income vs. the REAL inflation rate keeps dropping, while home prices are “increasing”, I don’t expect to buy another house soon. Maybe never. You know, that “confidence” thing.
That’s my point. For you renting an apartment and moving constantly is fine. You’re not everyone.
2 dogs to worry about
Aw, Smithers… You worry about your dogs being well and happy?
You just went up two notches in my esteem…
Commie Bernie Sanders op-ed:
“We must not be content with an economic reality in which the middle class of this country continues to disappear, poverty is near an all-time high and the gap between the very rich and everyone else grows wider and wider.
The good news is that instead of losing more than 700,000 jobs a month as we were five years ago, we’ve been gaining almost 200,000 jobs a month since January. The bad news is that, in addition to those job numbers being much too low, nearly 60% of the jobs gained since the “recovery” are low-wage jobs that pay less than $14 an hour, while most of the jobs lost during the recession were decent-paying middle-class jobs.
The good news is that the official unemployment rate has gone down from 10% in October of 2009 to 7.5% in April. The bad news is that 20 million Americans still are looking for work and the real unemployment rate – counting those who have given up looking for work and those working part time when they need full time jobs – is 13.9% …
from 2009 – 2011, all of the new wealth generated in this country went to the top 7% of American households, while the bottom 93% saw a net reduction in their wealth. Further, the US has more wealth inequality than any major country on earth with the top 1% now owning 38% of the financial wealth, while the bottom 60% owns just 2.3% of the wealth.”
http://www.guardian.co.uk/commentisfree/2013/jun/02/us-economy-recovery-wealth-inequality
And not a word on policies of O admin and Bernanke fed. Chicken…
It’s all Booooooosh’s fault.
Yeah, Republicans are blameless…….
“from 2009 – 2011″
Who had the presidency? 2009-2011? Who had a filibuster proof Senate? Who had the House by a comfortable margin?
Those eeeeevi Republicans of course!!
The margin in the House ended with the Nov 2010 elections.
Of course, we all know it only takes 2 years to undo 9 years worth of damage.
Because we have Obama, we are going to have Bernanke-like policies until 2020…at least.
And that is no joke.
It’s worth clicking this link and scrolling down to the bottom just to see the….
Graceful sculpture in the gardens of the Grove Hotel
Bilderberg 2013
The Grove Hotel, Hertfordshire, June 6th-9th
Press Office and Reception Zone
By admin | Published: May 18, 2013
Press relations
This is the first officially sanctioned Press Office for the Bilderberg conference, and is a considerable step forward in the relations between the conference and the press.
The Bilderberg Group is famously shy of press attention. An article in the Daily Express, February 12, 1957 (a few years after the first official conference) shows how a veil of “secrecy and security” was drawn over the event:
http://bilderberg2013.co.uk/ - 35k -
BILDERBERG MEETING
“Chantilly, Virginia, USA”
5-8 June 2008
In November 2008, the Fed started buying $600 billion in MBS. In less than six months, this aggressive purchasing program had more than doubled the central bank’s holdings of bank debt, MBS, and Treasury notes. The Fed halted purchases in June 2010 because the economy was growing again. Just two months later, the economy started to falter, so the Fed renewed QE1. It bought $30 billion a month in longer-term Treasuries, such as 10-year notes, to keep its holdings at around $2 trillion. For more, see QE1.
http://useconomy.about.com/od/glossary/g/Quantitative-Easing.htm - 26k
List of Bilderberg participants
Ben Bernanke (2008, 2009), Chairman of the Board of Governors of the United States Federal Reserve
Timothy Geithner (2008, 2009), Treasury Secretary
List of Bilderberg participants - Wikipedia, the free encyclopedia
http://en.wikipedia.org/wiki/List_of_Bilderberg_participants - 331k
Official 2008 Bilderberg Participant List - Prison Planet.com
http://www.prisonplanet.com/articles/june2008/060608_b_list.htm - 47k
Why does the wonderful, life-affirming art look like a skeleton crawling away from a nuclear detonation?
“Conference participants generally arrive from Thursday afternoon through to Friday morning and leave on Sunday morning (or late on Saturday).”
“Security is always extremely tight – it’s a huge operation – the hotel and its grounds is cordoned off. No press statement is made.”
“The privacy means that Bilderberg delegates will be able to stroll in peace in the ornamental gardens of the hotel, enjoying the wonderful, life-affirming art on display…”
http://www.guardian.co.uk/commentisfree/2013/jun/02/us-economy-recovery-wealth-inequality
Can’t they just all helicopter onto somebody’s private island for this conference? No security and it stays relatively out of the press.
[and we don't have to look at hideous "art."]
Surely one of these jokers has an island they could volunteer.
“Surely one of these jokers has an island they could volunteer.”
Every land mass on the planet is their private island.
The Rothschilds
“The few who understand the system, will either be so interested from it’s profits or so dependant on it’s favors, that there will be no opposition from that class.” — Rothschild Brothers of London, 1863
“Give me control of a nation’s money and I care not who makes it’s laws” — Mayer Amschel Bauer Rothschild
“We are grateful to the Washington Post, the New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost 40 years……It would have been impossible for us to develop our plan for the world if we had been subjected to the lights of publicity during those years. But, the world is more sophisticated and prepared to march towards a world government. The supernational sovereignty of an intellectual elite and world bankers is surely preferable to the national autodetermination practiced in past centuries.”
― David Rockefeller
“For more than a century ideological extremists at either end of the political spectrum have seized upon well-publicized incidents such as my encounter with Castro to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure–one world, if you will. If that’s the charge, I stand guilty, and I am proud of it.”
― David Rockefeller
Just for y’all to see the bubble mentality in Austin, TX. Prices have reached an all-time high in central Austin.
This little condo sold for $310 in March 2012; it just came on the market for $379.5k… 25% price jump is 14 months!
No flipping necessary! It was built in 2008 with all the bells and whistles.
——-
Beds: 1
Baths: 1
Sq. Ft.: 728
$/Sq. Ft.: $521
HOA Dues: $313/month
Lot Size: 87 Sq. Ft.
Property Type Condo, Residential
View City, Lake/River, Panoramic
Year Built: 2008
MLS#: 1557414
Jun 01 2013 Listed (Active)
ACTRIS #1557414 $379,500
Mar 29
2012 Sold (MLS)
ACTRIS #4727335 $310,000
Yeah but everyone wants to live in Austin.
Joking aside, you can’t just assume it’s a 25% increase. The last sale could have been a foreclosure or another type of sale that for whatever reason was heavily discounted, like relative to relative, that type of thing. Or the previous owner needed to sell ASAP and sold it for below market value. You can’t look at one property and extrapolate a bubble out if it.
No foreclosures in downtown Austin.
Here’s 1100 empty and defaulted properties in Austin.
http://www.realtytrac.com/map/tx/travis-county/austin/#cp=30.27058315277099;-97.74321746826172&lvl=12&sty=r&srange=3&page=1&sort=&tabs=PreForeclosure,Auction,LiveAuction,OnlineAuction,BankOwned,REO,GovernmentOwned
Those are bogus “auctions”.
Of course they are. LOLZ
And so are the bank owned houses too.
I keep an eye on Austin properties; the sales price in 2012 is very typical for that building. $380k is VERY HIGH compared to anything sold in that building
That HOA fee is more than my taxes.
Asia Times Online - Naming a nameless war:
“For well over a decade now the United States has been “a nation at war”. Does that war have a name?
It did at the outset. After 9/11, George W Bush’s administration wasted no time in announcing that the US was engaged in a “Global War on Terrorism”, or GWOT. With few dissenters, the media quickly embraced the term. The GWOT promised to be a gargantuan, transformative enterprise. The conflict begun on 9/11 would define the age. In neoconservative circles, it was known as World War IV.
Upon succeeding to the presidency in 2009, however, Barack Obama without fanfare junked Bush’s formulation (as he did again in a speech at the National Defense University last week). Yet if the appellation went away, the conflict itself, shorn of identifying marks, continued.
http://www.atimes.com/atimes/World/WOR-01-290513.html
Out: War on Terror
In: War on Conservatives
And lives in your skull rent-free
There’s plenty of room for more. Spacious indeed.
Recently I have read articles suggesting that storm chasing is a low-risk activity, as the storm chasers are experts who know how to view a tornado up close while staying clear of the path.
I personally doubt this conferred wisdom; rather I suspect the low number of fatalities reflects the very small community of people who engage in this high-risk activity. I don’t fault the people who do this, but I do think they should understand that they are putting their lives at risk when they engage in such thrill seeking.
A Trio of Storm Chasers Died in Friday’s Oklahoma Tornadoes
AP
Connor Simpson 11:50 AM ET
After Friday’s chaotic tornadoes tore apart Oklahoma, only two weeks after what happened in Moore, Oklahoma, the storm chasing community is mourning the loss of one of their own. Well-respected storm chaser Tim Samaras, his son Paul Samaras, and his chasing partner Carl Young died during Friday’s storms.
The exact details of the trio’s deaths are not known. They are being counted among the nine deaths reported after Friday’s storms. Samaras’ brother Jim broke the news about Tim on his Facebook page:
…
Tim, the 55-year-old storm chaser, was one of the most respected veterans in his field. He founded TWISTEX (Tactical Weather Instrumented Sampling in Tornadoes EXperiment) to measure the strength of tornadoes. Samaras became known for his tornado probes, ground-breaking technology in tornado research, that he would place them directly in front of the tornado’s path to measure the strength of the tornado and the pressure drops at the tornado’s center. Samaras’ work earned him work with National Geographic and he was a contributor to the Discovery Channel’s Storm Chasers program, too.
Friday’s storm ended up putting many storm chasing lives in danger, and caused a few chasers to question the practice amid so many disasters and close calls. The Weather Channel’s tornado-chasing mobile was tossed 200 yards when it got too close to one of the Oklahoma tornadoes. Thankfully no one was hurt there.
…
Believe it or not, there is also an economic principle involved here: The most successful chasers, who do it often enough to reach expert status and to capture sensational stories and footage worthy of National Geographic, are also those who face the riskiest balance between a wealth of experience about how to stay clear of danger, and repeated exposure.
One possible take-home from last Friday night’s experience: Unpredictable tornado movements coupled with heavy traffic flows apparently can lead to tragedy. It might be prudent for tornado chasers to steer their activities clear of rush hour traffic around major metros.
The footage and commentary from the linked video pretty much reinforces my point. I admire these guys for their bravery, and part of me wishes I had the courage and determination to engage in such high risk adrenaline rush activities which also provide great scientific benefits. That said, anyone who suggests such activities can be undertaken without serious risk of death is kidding himself.
Tornadoes: Tornado Samaras
Happens in Kansas too.
(Confession: I’ve been storm chasing on an amateur level since the 70s…..”amateur” meaning that I’m not pretending to do “research”…….I just like the technical challenge.)
If you aren’t in EXACTLY the right position when one appears, you will probably miss it. Like the one about ten years ago, that hit the south side of Lawrence…..we were about 5 miles out of position, too far north and west. Couldn’t catch it, because we it was moving 45 mph cross country, while we were stuck on the roads. Even running 70-80 mph on clear roads, we could never catch it.
One thing I’ve found is that it is kinda pointless to try to chase in/through major metro areas. Way too easy to get stuck in traffic jams. Especially when most tornados start coming out around rush hour.
It’s relatively easy to avoid a tornado if you are in open country, with clear roads…..and you aren’t trying to get close enough to get spectacular footage for your website. Forget about trying to approach one from the northeast……any storm strong enough to create a tornado is also going to be kicking out heavy rain and large hail. I’ve tried a couple of times, but it’s stupid. Can’t see squat, get the crap beat out of your car, get the car blown off the road with high winds, and you can’t see a tornado coming. Sometimes you have to try, to get in position south of it, but the second I run into heavy rain/visibility less than 1/2 mile, I turn around and haul azz north/east to clear the storm…….yeah, I miss a few tornados, but what the hell. It’s a hobby.
“If you aren’t in EXACTLY the right position when one appears, you will probably miss it.”
That right there likely explains why storm chasing is actually a much riskier activity than acknowledged. Chasers need to get close to have a good vantage point, but if there are lots of chasers out on the road angling for a good vantage point, they can potentially create a traffic jam. If the path of the twister unexpectedly veers in their direction, good luck!
“Even running 70-80 mph on clear roads, we could never catch it.”
Unless the road perchance goes in exactly the same direction as the tornado, your car needs to travel faster than the tornado in order to catch it (or avoid it). A principle from multivariate calculus explains this (the Cauchy–Schwarz inequality).
Actually, after posting, I realized my comment about Cauchy-Schwarz (or Bunykowski, if you are Russian) only applies to catching up to a twister, not to avoiding it. (The best way to get clear is to move orthogonal to the path if possible, but if the road you are on happens to run parallel to the path, hopefully your car can move faster than the tornado’s path velocity!)
People on the highway stop underneath the overpasses, blocking the entire road. It’s craaazy there.
To make matters worse, it seems like the conferred advice has recently shifted from “shelter in place” to “get out of the path.” Obviously the more people who try to escape the trajectory of an EF5 twister, the more likely it is that the line of traffic will move to slowly for everyone to get out of the way.
It is also quite obvious that ignoring costs, the best solution would be for everyone to have an underground bunker nearby where they could shelter in place without much chance that even a direct hit by an EF5 would hurt them. But this could be quite expensive to implement.
Tim Samaras, R.I.P. And thanks for all the spectacular tornado footage.
Our Haunting Last Interview With Storm Chaser Samaras
Tim Samaras and his son died in Friday’s El Reno, Oklahoma tornado.
Future Darwin award winner? In a more just universe, Tim Samaras would have outlived this guy.
Tornado 5/31/13 8pm at 94&hwy D at Frances Howell High School
Tim H.
This could have doubled as an Onion story. Rich well educated urban peeps buying bunkers in N. Idaho to prepare for the end of the world. And this is helping the N. Idaho real estate market. I’m sure this does exist, but as a “trend”? Laughable. There were probably 3 people from LA who bought a bunker and this turned into a “trend” according to NPR.
http://www.marketplace.org/topics/economy/survivalists-drive-housing-market-idaho
They have profiled several on Doomsday Preppers.
It’s a growth industry.
Home Values: 5 Worst Markets For Q1 2013 | Bankrate.com
http://www.bankrate.com/finance/real-estate/home-values-worst-markets.aspx - 61k - Cached - Similar pages
May 9, 2013
RIP Edith Bunker.
You made me laugh when I was a kid.
Biggest lobbying spenders, number two is lying liar NAR:
http://www.nytimes.com/interactive/2013/06/01/business/Biggest-Lobbying-Spenders.html?_r=0
A flat tax would get rid of most lobbyists. Lobbyists exist because the govt can dictate behavior through the tax code. Get rid of every deduction and tax credit related to real estate and the NAR lobbying goes away. Same goes for every industry.
But that would shrink the size, scope and power of government.
And that will never happen when those in power believe that only a bigger government can solve all of our problems.
Sadly it’s not just those in power. Most people have been brainwashed to think that govt is the savior. Look no further than the push for “FREE” health care. The govt loses $5B a year running the postal service. The govt has lost money every single year Amtrak has been in operation. The govt has banrupted Medicare and SS. But when it’s in charge of running 100% of health care it will do a grrrrreat job.
Yet nothing else would unleash as much entrepreneurial activity. Quite the conundrum.
Yeah - because we never had entrepreneurs before government run health care..
Funny, the BIGGER government gets the LESS entrepreneurs seem to be created.
Neither statement refutes the truth of my statement. The fact is lots of people would try other things if they weren’t dependent on their employer for health insurance. Even if it’s just to get the group pricing and pay out of pocket for everything non-catastrophic.
All of those things listed got dropped into the federal governments hands, because the “free market” couldn’t make enough money off of them to satisfy Wall Street.
Why invest in something risky like building/growing/producing anything, and maybe getting a 3% ROI, when playing Wall Street money games get you 8-10-15%, and you have essentially no risk?
Government tax and spending policies have always influenced investment. Until there are fewer incentives to the Wall Street/financial pigmen, and a lot more incentives for building/making stuff in the USA, I expect the country to keep circling the drain.
“The fact is lots of people would try other things if they weren’t dependent on their employer for health insurance.”
Truth.
And if you don’t believe it, ask any NY state employee.
What would be exempt from the flat tax?
Only the lobbyist can help us decide.
At what tax rate would slavery disappear? Zero.
Obama could really fix our economy if he could just nationalize our bank accounts, IRAs, 401K funds and stock funds.
Get Ready To Be “CYPRUSED” At A Bank Near You
The Market Oracle | 6-2-2013 | Christopher Quigley
The banking situation in Europe continues to deteriorate rapidly. As a measure of the ongoing crisis the “ Bail In” option used in Cyprus is actually being made European Commission policy. The following is a recent report from the much respected Irish Times:
“Proposals under Irish presidency to deal with European bank collapses likely to ‘bail-in’ large depositors.
Deposits of over €100,000 are likely to be hit in the event of future European bank collapses, according to a proposal put forward by the Irish presidency of the European Council ahead of a key meeting of finance ministers next week.
Discussions on the controversial bank resolution regime, which is likely to see savers with deposits over €100,000 “bailed in” as part of future bank wind-downs, are due to intensify this week in Brussels, ahead of Tuesday’s meeting, which will be chaired by Minister for Finance, Michael Noonan.
“We will try to get some guidance from Ministers about the possible design of the bailout tool,” one EU official said yesterday.
Under a compromise text proposed by the Irish presidency, uninsured deposits of over €100,000 would be bailed in in the event that a bank is resolved, but depositors would rank higher than other creditors in the event of a wind-down.
However, some member states have not ruled out the possibility that insured deposits, i.e. deposits under €100,000, would be forced to bear losses in the event of a bank collapse even though these deposits would be likely to be protected
Step 1 for Obama is complete:
He has proposed a lifetime limit on retirement contributions. There will be a combined maximum dollar amount (NOT ADJUSTED for inflation) that people can put aside in 401ks/IRAs. God forbid someone saving money for retirement on their own. It means that person won’t have to rely on the govt for day to day living. And we just cannot have that kind of craziness.
Of course union pension plans will be exempt from this law. The 55 year old retired teacher will still get $70K a year for life.
I’m still mad Obama took my guns away.
“I’m still mad Obama took my guns away.”
Why, did you have 9 rounds instead of 7 in a 10 round mag? Or did your kid chew his pop-tart into the shape of a gun at school thus making you an unfit parent and a danger to society?
“I’m still mad Obama took my guns away.”
Translation: I can’t defend what Obama’s doing with retirement accounts so I will mumble something incoherent about guns instead.
Physical precious metals. Movable and hidable alternative to electronic accounts registered with the IRS - 401ks and IRAs.
“However, some member states have not ruled out the possibility that insured deposits, i.e. deposits under €100,000, would be forced to bear losses in the event of a bank collapse even though these deposits would be likely to be protected”
They will let you know if the deposits under €100,000 are protected or not after their meeting at The Grove Hotel, Hertfordshire, June 6th-9th.
What happens when democrats take control.
You think the rest of America would learn a lesson.
Lemme guess. The list will be approved/disapproved by the IRS.
—————————
Ammo purchasers in California must submit to background check, pay $50
American Thinker | June 1, 2013 | Rick Moran
Californians who want to buy ammunition would have to submit personal information and a $50 fee for a background check by the state, under a bill passed by the Senate. The state Department of Justice would determine whether buyers have a criminal record, severe mental illness or a restraining order that would disqualify them from owning guns.
Ammo shops would check the name on buyers’ driver’s licenses against a state list of qualified purchasers.
The vote was 22-14, with a few Democrats joining the Republican minority in opposition.
The Senate also OK’d a bill that would outlaw the sale, purchase and manufacture in California of semiautomatic rifles that can accommodate detachable magazines. The measure, SB 374 by Steinberg, also would require those who own such weapons to register them with the state.
Stories like these make me happy. The sooner all sane people leave California the sooner the whole damn thing will implode in on itself.
California is driving out aerospace employees to places like Texas and Virginia.
obama housing bubble v2.0 alert.
ORANGE COUNTY REGISTER | 6/2/2013 | By MARILYN KALFUS/
As home prices soar in Orange County and elsewhere, the chief economist for Trulia has launched a “Bubble watch” feature on the national real estate website, to explore whether various markets around the U.S. are experiencing overblown home prices.
Orange County home prices have soared by double digits this year. Experts disagree on whether the price gains simply represent a rebound, or whether prices and other factors mark the beginnings of another housing bubble.
AMID BUYER PRESSURE, TINY HOUSING BUBBLE MAY BE FORMING HERE
By Dan McSwain 12:01 a.m. June 2, 2013 Updated
8:57 p.m. May 31, 2013
Is the San Diego housing market blowing another bubble?
It quite probably is, but it’s still a great time to buy a home. In a market that is unusually prone to boom and bust, we are very early in the process, judging by market fundamentals.
Indeed, our latest bubble is minuscule compared to the global bank-wrecker that triggered the Great Recession. Yet it’s still worth taking seriously. The questions now are how big it will get, when it will eventually pop, and what — if anything — you should do about it.
For families who dream of buying a home for the long run, bubble risk should be way down on the list of considerations. Except for last year, now is the best time to buy since 1997. Mortgages rates are near historic lows, but rising, while prices are climbing fast from their lowest levels in a decade.
Still, investors and speculators should be wary, and do plenty of homework. Buying a home is vastly easier than making money on a rental house or timing the market.
The best evidence for a nascent bubble in San Diego County is behavioral: Buyers are showing signs of growing impatience. As detailed in a slew of stories by Lily Leung, the U-T’s housing reporter, homebuyers returning to the market over the past two years have encountered tight inventories and stiff competition from investors.
Meanwhile, prices have rebounded strongly. The value of the overall market was 12 percent higher in March than a year earlier, according to the S&P/Case-Shiller Home Price Index, which is the gold standard because it tracks recurring sales of the same homes.
DataQuick figures show the median price rising a scorching 21.4 percent in April, with price inflation accelerating over the past year. The homes were flying off the shelves: In March, there were 3,762 sales and only about 4,200 active listings, yielding a sales velocity that’s probably a record high.
Coupled with fears that mortgage rates will rise, this has buyers in a tizzy. In scenes reminiscent of pre-crash 2005, they are joining waiting lists for new construction, writing offers on the hoods of cars, and sending “love letters” to persuade sellers to pick them.
The sense of urgency is increasing along with prices. It’s the classic sign of early bubble formation.
“In a normal market, higher prices mean that sellers sell less. But the market becomes pathological when higher prices cause more buying,” said Ed Leamer, an economist at the UCLA Anderson Forecast who in 2003 warned of the last bubble. “People are starting to think, ‘I’ve got to buy a house before it is too late.’ That’s a bubble.”
…
Blacks voted Obama 95-5
Hispanics voted Obama 70-30
The yuuts voted for Obama 65-35
Good job guys!
ROCHESTER, N.Y., June 1 (UPI) –
Only a third of U.S. adults say they are very happy — minorities show particularly pronounced declines in the past two years, a U.S. survey indicates. A Harris Poll of 2,345 U.S. adults surveyed online April 10-15 by Harris Interactive found certain groups, such as minorities, recent graduates and the disabled, trended downward in the last couple of years. Since last measured two years ago, the Happiness Index was especially low among the Hispanic-American population.
Is there anything Obama can’t ruin?
My faith in honest banks?
There’s no such thing and never was, as an honest bank.
But sarcasm is a longstanding HBB tradition (with or without tags)!
Now that May is over, will stock traders regain their sea legs?
Asian shares cautious on overseas stock slips, Fed concerns
Traders work on the floor at the New York Stock Exchange, May 16, 2013. REUTERS-Brendan McDermid
Traders work at their screens in front of the DAX board at the Frankfurt stock exchange May 7, 2013. REUTERS-Remote-Lizza David
Office workers are reflected on a screen displaying share prices as they walk past the Australian Securities Exchange building in central Sydney September 23, 2011. REUTERS-Daniel Munoz
By Chikako Mogi
TOKYO | Sun Jun 2, 2013 8:28pm EDT
(Reuters) - Asian shares began the new month with a cautious tone on Monday as uncertainty over how much longer the current U.S. stimulus would continue prompted investors to book profits from recent highs and pulled global equities lower.
Speculation over whether and when the U.S. Federal Reserve would start scaling back its current massive bond-buying program emerged following a string of positive U.S. data and was the catalyst for corrections across markets which had drawn strong support from the Fed’s largesse.
Investors will be cautious ahead of more data this week from the United States as well as from China, both of which would offer clues to growth and demand prospects in the world’s largest economies.
“The Federal Reserve’s willingness to alter the pace of purchases sooner than markets had previously expected has meant that markets remain attuned to the incoming data flow in the U.S.,” Barclays Capital said in a research note.
“This week brings the potential for more market-moving data in the U.S.,” it said, referring to the May ISM manufacturing index due later in the session and the more important monthly nonfarm payrolls data due on Friday. The Fed has said it would keep up the stimulus campaign until the employment situation improved.
…
June 2, 2013, 8:18 p.m. EDT
Japan stocks begin June trade with steep losses
By V. Phani Kumar
HONG KONG (MarketWatch) — Japanese stocks were beaten down early Monday as Friday’s steep sell-off on Wall Street and a further rise in the yen USDJPY +0.1679% prompted heavy losses in the shares of exporters. The Nikkei Stock Average tumbled 2.1% on the first trading day of June after ending May with a mild loss, thanks to a near 14% decline from December 2007 highs hit last month.
…
June 2, 2013, 3:00 p.m. EDT
Markets under a monetary easing ‘spell’: BIS
By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — Markets are under a “spell” of global monetary easing that leaves valuations vulnerable to changes in sentiment, the Bank for International Settlements warned Sunday.
The Bank for International Settlements, effectively a central bank for central banks, has long sounded the alarm over dovish policies pursued by the Federal Reserve, the Bank of England, the Bank of Japan and other central banks.
Let the good times roll — in some places.
The Fed has been buying $85 billion a month of mortgage-backed and Treasury securities, though officials have suggested they may slow the purchase rate in the autumn.
The Bank of Japan is targeting a 2% inflation rate through doubling the monetary base and buying bonds and exchange-traded funds.
The BIS says markets are rising mostly because of these efforts, because expansionary monetary policy lowers the discount rate at which future profits are valued.
…
June 2, 2013, 10:12 p.m. EDT
Taiwan manufacturing swings to contraction
By Michael Kitchen
LOS ANGELES (MarketWatch) — Taiwan’s manufacting activity swung to a solid contraction in May, according to data out Monday from HSBC and Markit. The HSBC Taiwan manufacturing Purchasing Managers’ Index dropped to 47.1 from April’s 50.7, falling below the 50 mark which divides expansion from contraction. The drop was the first since November, with the sub-index for new orders showing the first decrease in five months and new export orders falling for the first time in six months. HSBC economist Donna Kwok said: “Taiwan manufacturers’ descent into contraction mirrors what took place last summer, although client demand is deteriorating at a faster pace this time, both at home and abroad.” Taiwan’s benchmark Taiex stock index was down 0.8% after the data.
June 2, 2013, 10:54 a.m. EDT
Why dividend yield stocks are getting dumped
As rally stretches into June, investors buy financials, industrials
By Wallace Witkowski, MarketWatch
SAN FRANCISCO (MarketWatch) — Dividend-rich defensive stocks have lost their luster as Treasury yields have jumped, leaving cyclical sectors like banks and tech to do the bull market’s heavy lifting.
With 10-year Treasury yields rising to their highest level in more than a year from last summer’s historical lows, it should come as no surprise that stocks which benefitted from a search for yield bonds are now tanking.
The past week was tough for equities in general with the Dow Jones Industrial Average (DJIA -1.36%) down 1.2%, the S&P 500 Index (SPX -1.43%) falling 1.1%, and the Nasdaq Composite Index (COMP -1.01%) slipping 0.1% for the holiday-shortened period. All three benchmarks, however, finished up for the month of May, with the Dow industrials up 1.9%, the S&P 500 up 2.1%, and most notably, the tech-heavy Nasdaq rising 3.8%.
…
June 3, 2013, 12:14 a.m. EDT · CORRECTED
Japan stocks sink as Asia digests China data
By V. Phani Kumar, MarketWatch
An earlier version of this report misquoted Royal Bank of Scotland economist Louis Kuijs. The report has been corrected.
HONG KONG (MarketWatch) — Chinese stocks rose modestly in choppy trade Monday as separate data from the government and HSBC painted a contrasting picture of manufacturing activity in the country, while Japanese shares tumbled as a firm yen prompted selling in exporters.
…
Asian Stocks Fall as U.S. Data Stokes Fed Exit Concern
By Yoshiaki Nohara - Jun 2, 2013 9:24 PM PT
Asian stocks fell, with the regional benchmark index heading for a third-day of losses, after improving U.S. economic reports added to concern the Federal Reserve will scale back its stimulus and data painted a mixed picture about China’s manufacturing.
Nissan Motor Co. (7201), a Japanese carmaker that gets 34 percent of its sales in North America, slid 3.3 percent. Nomura Holdings Inc. paced losses among Japanese brokerages. Cochlear Ltd. (COH) slumped 15 percent after the maker of implant systems for the hearing impaired said sales were weaker in the second half. China Foods Ltd., a maker of products including beverages, snacks and instant food, slumped 8.7 percent after saying it expects its operating profit will fall.
The MSCI Asia Pacific Index fell 0.8 percent to 133.76 as of 1:22 p.m. in Tokyo. All but one of the 10 industry groups dropped on the gauge, which declined 5.1 percent in May, the first monthly loss since October.
“It’s not that we’ve seen a dramatic shift in the Fed’s exit discussion, but investors are using it as an excuse to sell,” said Masahiko Ejiri, a Tokyo-based senior fund manager at Mizuho Asset Management Co., which oversees about 3.4 trillion yen ($34 billion) in assets. “Some long positions are being unwound after the market rallied so fast.”
…
June 2, 2013, 9:50 p.m. EDT
Fed’s Yellen open to doing more on too-big-to-fail
By Greg Robb
WASHINGTON (MarketWatch) - There could be scope for more action from Washington address the too-big-to-fail problem, said Federal Reserve Vice Chairman Janet Yellen on Sunday. “I am not convinced that the existing systemically important financial institution regulatory work plan, which moves in the right direction, goes far enough,” Yellen said in remarks at an international central bank conference in Shanghai. Yellen, considered a leading candidate to replace Fed Chief Ben Bernanke if he leaves at the end of his term next January, said she did not support “blunt approaches” like imposing bank size limits or the resurrection of Glass-Steagall-style separation of commercial banking from investment banking. Instead, she backed suggestions from other Fed officials, including Fed governor Daniel Tarullo, that steeper capital surcharges could be placed on firms that pose the greatest risk to financial stability. Yellen also called on policymakers around the world to find solutions to the “thorny” cross-border obstacles that have slowed plans to handle the failure of a globally systemic financial firm.
Has the U.S. echo housing bubble peaked? I am having a hard time imagining the impetus for the next leg up from here.
Thoughts?
I’m speaking for CA only.
Coastal communities are crazy, and I agree, moves up from here are bordering on an insane frenzy.
That said, prices farther inland are still substantially below peak. I just looked at a townhouse farther inland in CA, where the estimated mortgage payment was under $500 (P&I), but the estimated rent was over $1k. This was a townhome selling for close to $125k.
I think we’ll see the wave of madness radiate outward from the coasts (other rebubble areas). Whether those other areas reach crazy rebubble levels is an open question. I doubt it. I think that the free money that was the juice for the prior bubble won’t be available, and once the cash buyers either a) no longer like the rental yield, b) stop seeing flip profits, or c) have bought the house they want to live in, people will need to buy based on income on more traditional leverage…and that will bring in more constraints on the supply side.
At the same time higher prices will gradually increase the number of sellers.
My hope (and view for some time) is that after the initial burst upwards, the slope will flatten out far before we get to prior bubble levels.
Phoenix is a bit of the canary in the coalmine…I’m watching those prices, but so far haven’t seen any tapering off.
The Zillow price index peaked at $280k in Phoenix, the number is now at $170k. My hope is that by the time the number gets to $200k, we start seeing a significant slowdown in price increases. However, it looks like we’ll get there by year-end 2013, and I’m not sure that the Fed will have dialed back interest rates by then…
should be “constraints on the demand side”. Late night.