Bits Bucket for August 13, 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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“Hold onto your cash because high and guaranteed yields in the form of (much)higher interest rates are coming your way.”
You better believe it.
bs
The printing presses wont stop running.
admit you have been wrong for 4 years now. our astute audience doesn’t need your rhetoric.
And your losses will magnify.
You better have cash.
ben has got your back. go out and chase some equity and run with the big boys.
And you know what happens when yields rise to 8%+.
You better be in cash as it happens.
do you think ben will let yields rise to 8% and destroy his banker buddies who have to liquidate all their properties?
Its a big club my friend, and u aint in it!!!!!!!!!!!!!!!!!
And you better not be carrying any debt.
they want you investing in stocks and homes. How long is it going to take for you to get that message?
You need to polish up that crystal ball and look a little harder into it.
The trend is your friend!!!!
And you better not be holding a depreciating asset like a house.
If housing analyst could only see the big picture
fortunes of many would come his way
But like many HA will b pennyless along the way
Readers tried to sway HA but his rhetoric continued day by day
When will HA finally learn to obey
Like we said……. Be in cash or cash equivalents or you’ll regret it for life.
$hithouse Poet 1
Housing Analyst 0
Me- truth
You-untruth
Me- truth
You-untruth
Who’s more beautiful, truth or story?
Him poser.
Dueling cliches. How cute!
Me, truth.
You, happytalk
“Dueling cliches. How cute!”
I’ve actually come to look forward to their daily antics.
The latest, best explanation of where we are headed (or so I have been told):
1) The printing press will stop running, or at least will slow down with the end of QE.
2) This will quite unexpectedly kick off a major rally on Wall Street, as it turns out that QE had far less effect on the stock market than was commonly believed.
A bit later, you’ll probably see my post appear below of the Marketwatch article that explains this.
animal spirits?
i put my faith in the candy crapping unicorn.
This new theme of “modest effect on the economy” is an attempt to talk down the distortions it wrought.
“People were saying it would damage the currency, create massive capital misallocations and mask market signals. It didn’t do any of that, it had merely a ‘modest effect on the economy.’ Not too good, not too bad. Let’s move on.”
They ran a five year experiment. I’m guessing the results were not what they anticipated.
The Fed is playing a game of poker against the American people and the rest of the world. It’s not going to tip its hand. I look forward to further analyses of these results.
The Fed is playing a game of poker against the American people and the rest of the world. It’s not going to tip its hand.
That’s a good way to look at it. I’m not trying to win, I’m just trying to leave the game without losing everything. Problem is you can’t just walk away because when you play the Fed the money in your wallet and your bank account is already on the table when the game begins.
http://seekingalpha.com/article/1369961-what-happens-when-liquidity-disappears
I’m not trying to win, I’m just trying to leave the game without losing everything.
+1. Just don’t want to look around the table, and realize that the sucker is me.
Just don’t want to look around the table, and realize that the sucker is me.
I’ve already accepted that. I’m just trying to figure out how to survive in spite of that.
The problem with higher interest rates is that people can simply not afford to pay it.
If rates go up, defaults return, crashing the economy, bringing rates back down.
Over the last 33 years, we’re increased each household’s share of total debt from 2.5x medium household income to almost 7x medium household income.
With the current debt level, we can’t pay higher interest rates.
With higher interest rates, we sure as heck can’t keep the debt increasing at 10% of GDP as needed to fund the massive imbalances in our economy.
The problem with grossly inflated prices, nobody can afford to pay them without financing it……
See how that works?
Begging the question, which came first?
Free international trade and lower top marginal tax rates that created the unbalanced economy that drains 10% of GDP cash from active circulation every year?
Low interest rates and loose lending standards so that 10+% of GDP new debt/money can be created every year, to allow the economy to function in the face of massive drain of cash from active circulation?
Over priced assets because loose lending and low interest rates allows people to finance… (creating the new money that our trade imbalance plagued economy needs to function)?
Looking at it historically, I think I have the above order correct.
We began “lowering the rates and broadening the base” in 1960.
We became a net import nation in 1976, and have had international balance of payment deficits since 1982.
The low interest rates and loser lending originated in the late 1970s (looser credit card lending) and picked up in the early 1980s (S&Ls, junk bonds).
The asset price bubbles have been happening post the loosening of lending.
We love when some people accumulate more money. We hate when others go into debt.
Well guess what! Money can’t be accumulated until it exists, and it comes into existence by being borrowed into existence, creating an equal and offsetting amount of debt.
Gets grip. Housing detached from fundamentals and historic price trend in the early 90s……. And that’s right where prices are headed.
Yes… Housing detached from fundamentals, after we loosened lending and lowered rates. AND, we lowered rates and loosened lending to create the new money that we need to keep our trade imbalance plagued economy functioning.
And, we have a trade imbalance plagued economy because of bad trade and tax policy.
So again, we see clearly that it was bad trade and tax policies are the root cause, while the asset price bubbles are simply a symptom, caused by loose lending, which is required to keep a trade imbalance plagued economy functioning.
Plug the imbalances (foreign and domestic), then we can tighten lending, then the price bubbles will go away.
As long as we continue to embrace pro-imbalance policies, we’ll need to maintain loose lending and the asset price bubbles that flow from that easy money.
“We”?
So it’s inevitable and eternal huh Darrell?
Ya know….. a smart person would ease into to their schtick. Apparently you don’t know any better.
Darrel..
Nice to see you are back. Do we have to go through the whole long argument again? Debt is borrowed into existence. Money is not debt. Debt is (a form of) money.
Of course debt is not money.
Debt is anti-money… or more accurately, money is anti-debt.
I swipe my credit card in your credit card reader. Money is added to your account and debt is added to my account.
I take out a car loan. Money is added to the car dealer’s account and debt is added to my account.
I walk into the bank and take out a loan. Money is added to my account and debt is added to my account.
The government writes bond on a piece of paper and sells it to the Fed. Money is added to the government’s account and debt is added to government’s account.
I know it is as unpopular as ever, but in the modern fiat money economy money is anti-debt. Taking out a loan creates both money and debt, in equal and offsetting amounts.
What is the fiat that gives money its value? It is printed on each federal reserve note: This note is legal tender for all debts public and private.
Money is created from the process which creates debt, has value because it can be used to repay debt, and the repayment of that debt destroys both money and debt.
If money is created by a process other than being borrowed into existence, please explain that process to me.
“Nice to see you are back.”
+1 I appreciate all opinions.
If money is created by a process other than being borrowed into existence, please explain that process to me.
I’ve said it before, and I’ll say it again: QE.
QE clearly creates money. Since it is created by the process of purchasing debt that already exists in the secondary market, no corresponding new debt is created.
This case does not fit your mental model.
“If money is created by a process other than being borrowed into existence, please explain that process to me.
I’ve said it before, and I’ll say it again: QE.
QE clearly creates money. Since it is created by the process of purchasing debt that already exists in the secondary market, no corresponding new debt is created.
This case does not fit your mental model.”
This is not correct.
The bond is a form of money. Someone writes “bond” on a piece of paper and trades it for money. The piece of paper called a bond is the new money that offsets the debt.
When the central bank buys a bond from the market, it is just exchanging money for money. It is exchanging the bond form of money for the ledger entry type of money.
What QE does is lower the leverage in the economy. That is, total debt / ledger entry money.
By taking the bond off the market and replacing it with ledger entry that counts as reserve, QE brings down leverage by brining up reserve.
Example. A bank has deposits of $1B and holds loans worth $900M, meaning reserves of $100M. It has 9/1 leverage.
Now let’s say the bank sells $100M worth of loans for ledger entry money. Now the bank has $800M loans/$200M ledger entry money = 4/1 leverage.
IF the bank sells that bond to another bank, then the leverage remains in the economy, it is just transferred from one bank to another. HOWEVER, if the FED buys the bond, then the loans held by banks is reduced, while the ledger entry money supply is increased.
QE does not create money. It transfers loan money to the Fed in exchange for ledger entry money.
In 2008 total debt in the economy was $34T and reserves was about $1.2T giving leverage in the economy of about 28/1. 5 years later, we’re at $41T in total debt but thanks to QE non-debt reserves is about $3T meaning about 14/1 leverage.
Lower leverage gives banks the ability and incentive to make more loans, lowering interest rates and loosening lending conditions.
It is that additional lending (that should result from lower interest and looser standards, IF households were not already tapped out) that would actually create the additional money.
This is why some have said that QE is just pushing on a string. It allows banks to lend more, but there are just not enough qualified buyers coming in asking to take out loans.
You’re spamming again.
Darrel,
Just stop trying to define and redefine money and debt and anti-debt, and the creation of money and debt process. We’re all happy to agree that the economy is in a messed up state. The confusion of ideas that you string together doesn’t end up reinforcing any point you may try to make.
Definition of money:
http://en.wikipedia.org/wiki/Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given socio-economic context or country.[1][2][3] The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past, a standard of deferred payment.[4][5] Any kind of object or secure verifiable record that fulfills these functions can be considered money.
Just go with that and you will be good.
The bond is a form of money.
That’s where you stopped making sense. You defined money as anti-debt. A bond is debt, not money. It can’t be both…
When the US government runs deficits, it is spending more money that it takes in. That money needs to come from somewhere. Either:
a) that money comes from the world’s population, who give the money to the government in exchange for an IOU (no new money comes into existence), or
b) the Fed buys that debt from the government and increases it’s balance sheet that is laden with debt. In exchange, the US government gets it’s money to spend into the economy (new money comes into existence). The same thing happens if the Fed buys the debt from a third party, the money just goes directly to the population instead of taking a brief stop in the Federal government.
In the case of “B”, that can be inflationary, if that new money put into the economy by the Fed starts to whiz around the economy. However, if the people who get the money simply put it under the mattress, there is no inflation.
The mattress is getting very lumpy. The big question is whether the Fed can extract the money from under the mattress without it going whizzing around the economy first, and can it do so without crashing the economy?
Most people think the Fed will err on the side of letting the money whiz around the economy a bit faster/longer than they would otherwise prefer, with that being preferable to crashing the economy.
With the current debt level, we can’t pay higher interest rates.
True.
QE _forever_!!!
(And welcome back, Darrell!)
With higher interest rates…
The price of housing comes down.
And favors those who have cash in the bank (earning something with higher interest rates)
Look at the extraordinary effort put into NOT allowing that to happen back in 2007-2008 and the 6, YES… hard to believe it is already 6 years since the air started to leak…
OH how people used to laugh at me when I said “insane” things like “House prices in Phoenix will fall at least 50%” and “It will be 20-30 years before incomes rise enough to return houses to the bubble peak level.
My primary residence dropped from $275K to $120K and is only back to the $150Kish level. 50% proved to be optimistic, and 20-30 years of slow grinding inflation appears to be just as optimistic.
But, since I’m 6+ years into my 15 year mortgage, I’m finally back above water (more from paydown than from price increase from the bottom).
How did your condo purchase pan out?
Going from $120,000 to $150,000 is a 25% increase. It all depends on timing. If you bought at the bottom, you are sitting pretty. Even after 8% selling costs, you clear $18,000. If you paid $120,000 and put 20% down ($24,000) you have a nice return of 75% on your investment. If you bought in 2010 or 2011, you are annual return is 20-30%. Hard to beat that kind of ROI.
And there isn’t a buyer in sight at a fraction of that fantasy price.
“With the current debt level, we can’t pay higher interest rates.”
You can bet for this very reason, the government and the Fed will do everything they can to keep interest rates low. But rates can still rise anyway for two different reasons.
One is that the economy is heating up which puts upward pressure on interest rates. I don’t think that’s likely to happen for the forseeable future.
The other reason rates could go up is lenders demanding a greater risk premium because they are losing confidence. Think Greece. I think this is inevitable, and in the long run desirable as it will force some discipline into the economy. In the short run this would be very difficult and painful for the majority to live through.
Were talking about the long end. Those who have a position are exiting……
Get out now and stay in cash. You’ll be much wealthier if you do.
http://www.ritholtz.com/blog/2013/08/a-generational-selling-opportunity-for-the-u-s-long-bond/
The problems for Greece are:
1) The don’t have their own central bank that can keep the debt flowing.
2) They aren’t big enough to effect global exporters like China and Japan, so are not locked into a currency war like we are. Our trade partners will keep buying our debt, because they have to in order to maintain favorable exchange rates, which they need to keep their own economies functioning. MAD!
Hey Darrell,
It really does become a house of cards, and it does show how crazy the situation is. It would be an interesting experiment to create a fictitious person or business with a similar (but scaled of course) financial situation as the US government, and shop around for a loan.
Those who cannot resist the temptation of ARMs will surely suffer the same angst and self-doubt as the FBs of the last wave.
As well, those who (knowingly or not) engage in “Liar Loans”.
Rinse, Recycle, Repeat.
With higher interest rates, we sure as heck can’t keep the debt increasing at 10% of GDP as needed to fund the massive imbalances in our economy.
We’re turning Japanese!
I really think so…
I agree with that. The system can’t handle higher interest rates. On the other hand, how long can this fake economy go on. The Fed may only be able to put its finger in the dyke so long. We are not the only game in town. What if China, India, Brazil, Iran and Russia teamed up to make the dollar equal to the same caliber that the British pound is now? How would we defend against it? My question is why hasn’t it already started?
The housing bubble, collapse, and reinflation we’ve seen from 2003-2013 is only a symptom of a greater world disease that will bring all ships down with the ebbing tide. The ebbing tide is comprised of overpopulation, declining crucial resources (including oxygen and clean water), superpower hubris, human genetic decline due to affluence, ineffective, immoral, and ignorant government leadership worldwide, and finally most people are just too brain-dead to care for anything more than their stomach and pleasures associated with their genitalia.
‘most people are just too brain-dead to care for anything more than their stomach and pleasures associated with their genitalia’
I think you have summed up the history of mankind.
HA,
While you’ve been lamenting the “coming” housing crash, I bought at the bottom, sold and have made 100% on my investments. Cash in the bank. In fact I dropped $1,000 into Ben’s PayPal because this blog has been so helpful. You are not very helpful. Get real.
You’ve made nothing, holding cash. Put your money to work, or at least don’t bother those of us who do put it to work.
HA, HA, HA, Hahahahahahaha……a great name for you. You are laughable…..
Not only are you the $hitHouse Poet but you’re a liar too.
What a phony..
Why would pay more than new construction cost ($60 per square foot) for a depreciation 20+ year old resale house?
Let me guess…… Because realtors tell you that the cost of a house cannot be evaluated using math?
Because the house sits on land that is more valuable than $60/sq ft.
Change that “house” to “f-in floating box of air condo” and I would agree with you. Condos make you pay HOA fees for the priviledge of not having land.
With a globe full of land 95% of which goes undeveloped and acreage at $500/acre in all 48 states, clearly you’re flailing.
Try again…… And really….. How much longer are you going to continue your schtick before you come clean……. Or will you require some help?
Haven’t people valued different plots of land differently since the beginning of recorded history?
Hasnt dumb borrowed money been around for a long time?
Hence the reason they and you don’t have any.
So you’re expecting mankind to wake up from its eternal mistake of valuing different plots of land differently?
So your expecting to change reality from a globe full of undeveloped worthless dirt into a debt driven empty pocket fantasy?
Thats the world you live in and its a lonely one for you.
Haven’t people been fighting wars over that worthless dirt throughout history?
What were they thinking?
And its still worthless. Your point Sucker?
My point is I think it’s unlikely that mankind will suddenly quit valuing different plots of land differently, since we’ve been doing it forever, and quite often for logical reasons.
So your ‘land is everywhere, plentiful and cheap’ point is as worthless as you think land is. People value different plots of land differently. Always have, always will.
Raw land is raw land irrespective of location. Get over it.
Raw land is raw land irrespective of location.
So you’re saying that I should value the raw land that lies in a flood-plain the same as raw land that does not.
Hmm, which one should I build my house on? What to do, what to do.
You can build a wood structure under water? Show me how.
You can build a wood structure under water?
Land in a flood plain, located below the 100-yr flood line, is in theory under water only once every hundred years. How is that hard to build on again?
Tell me again how it all has equal value…
Parsing again?
Raw land underwater is worth what?
Raw land underwater is worth what?
Let me guess: $500/acre?
Guess again.
Raw land that is underwater makes the adjoining land waterfront property. Which is more valuable is it not?
Actually int the next 20 years the presence of water - even the stuff that falls from the sky - will be more and more valuable.
The land underwater is worthless.
Not worthless if you can build a boat dock on it.
I’m still waiting for my acre in rye ny for $500.
You couldn’t find Rye if I gave you a GPS, map and 6 months to do it.
oxide
I’ve always though buying air space as a condo owner was dumb as well. I have a friend who buys condos as rentals. SFHs don’t cash flow as well for him.
When the lot your cottage is built on is worth $2.5 million per acre, sell. You’re set for life!
Blue
Good Morning. Bet your boat life is a kick. Sounds like fun.
We discussed selling at $600K, depending on what we do w/ the yard/pool. Then we decided,if we can’t drastically change our environment (think lottery kind of $), we are here for life.
Although, playing on a houseboat on a lake sounds like a nice escape for a month. Always wanted to fish, and I do have nautical clothing.lol
You couldn’t find a buyer for half of what you got in it.
Why?
Because you paid a grossly inflated price.
Why did you do that?
“nautical clothing”
I don’t either…
Blue
Do you take your boat out? Do you fish?
Are you docked on the ocean or a lake?
Do you have neighbors living on their boats as well?
It must be great to enjoy the moon from your vantage point. I’m a little green.
I’m not allowed to mention what Blue does in the winter.
I take the boat out all summer, and the neighbors change from day to day.
In the winter I enjoy the debt free life on dry ground, waiting for spring.
I’m not allowed to mention what Blue does in the winter.
Lives in a rental house doesn’t he? But also owns one too, IIRC- but it’s ‘just a shop’ or something. So he’s the proud owner of two rapidly depreciating assets, a house and a boat. The latter being notorious for high-cost maintenance.
I guess when he’s on his boat, his house counts as part of the shadow inventory? Vacation homes are hard to classify.
You can’t even get those facts right.
The latter being notorious for high-cost maintenance.
Blue, this has been suggested several times, and I’ve disagreed with it in the past; would you care to share your true maintenance costs on your live-a-board, say for the past 5yrs? I’d be quite interested, and maybe we could finally get alpha to stop saying that.
I don’t mind if Alpha thinks I’ve got expenses, as long as I don’t actually have them.
The largest expense is yearly dock fee about $600 and winter storage $300, but those are not depreciation. Maintenance is a fraction of that. Toys I add is another story. I fried an inverter this year, and broke a coffee mug. Other than a tune up, that’s about it. Over five years, probably a couple grand all told in maintenance.
I guess I dreamed up the expression “a boat is a hole in the water in which you throw money”. Pretty clever, eh?
I bet a horse for your teenage daughter would be cheap, too. They just eat grass, right?
A horse isn’t nearly as costly as 12 months depreciation on a house. As you know, houses depreciate rapidly.
Flat Roover, you have obviously never owned a horse!
You don’t need to make up such an expression, rather you need to use some perspective. One can waste themselves on a possession or one can use things in a modest way.
Braindead,
You’ve obviously never owned a house.
How do you make a small fortune? Start with a large fortune and buy some horses.
“Why would you pay more than new construction cost ($60 per square foot) for a depreciated 20+ year old resale house?”
1) People don’t buy things at cost, they buy them at a large markup over cost. Do you sell for your cost?
2) Too many new neighborhoods mow all the trees down and build houses on barren lots. A 20-year old neighborhood, at least around here, always looks better than a new neighborhood. If you’re a robot, this reason doesn’t matter, but if you’re a person, it does.
3) If you buy into a neighborhood that’s still being built, and then you have to resell before all the new houses are finished, you are screwed.
4) A lot of people learned from 1.0 that sometimes neighborhoods never get finished at all, and if you buy into one of those, you’re doubly screwed.
$60/sq ft includes margin Krusty……… Just because you got ripped off 3x doesn’t mean everyone is as clueless as you.
“Why would you pay more than new construction cost ($60 per square foot) for a depreciation 20+ year old resale house?”
“$60/sq ft includes margin Krusty”
So your costs include your margins? Have you ever wondered why your company is always breaking even to the penny? Hopefully you’re not the bookkeeper at HA’s Australian Bridge Builders, Inc.
I didn’t know Bechtel “just breaks even”.
Anything else Krusty The RealTard?
Bechtel? Now it all comes together, thank you for finally being honest. $60/sq ft is for the emergency trailers you put up after Katrina, and $5,000 per acre is FEMA land in the middle of nowhere that you put the trailers on whenever a disaster strikes. Geez, why didn’t you just say this a couple years ago instead of always speaking in riddles?
You’re flagellating yourself again Krusty.
Harder….
We’ve already determined $60 / sf is garbage . Why can’t you admit it?
Considering you couldnt’ build a doghouse, you wouldn’t know.
Got a frog in your pocket?
‘We’ve already determined $60 / sf is garbage’
The company I manage was given a lot with a foreclosure on the same note. That’s right, they gave it to us; please take it. So I looked into building something to rent out on it. The contractor came back at $48/square foot. I decided not to do it because I can buy foreclosures at much less than that.
The mark ups on stuff can be pretty major, and have little to do with cost. Look at anything by Apple for example.
+1 And the NIKE logo.
You meme from 1988 needs to be retired.
No one else can sell an iPad or iPhone like device cheaper than Apple.
Even Microsoft had to price the Surface hundreds more than the iPad.
perkonkrusts
The mature landscaping thing was a big deal to us, after owning in new PUDs. The trees around our yard are 40+ years old. A pain, but lots of privacy. Gotta love driving down tree tunnel streets.Not to mention, the homes have curb appeal personality due to no HOA group think. New has its advantages, and so does “established”.
$250k for “mature landscaping”…….
You go Junkie!
Tom Vu. Ahh the good old days of the original 2am infomercials.
“location, location, location”
“terms, terms, terms”
“Don’t listen to your friends. They’re losers!”
“Do you think these girls like me? No! They like my money.”
“At first I got lots of discouragement from friends and strangers who are losers…I had to keep telling these people every time, ‘You are losers! Get out of my way!’”
“At first I got lots of discouragement from friends and strangers who are losers…I had to keep telling these people every time, ‘You are losers! Get out of my way!’”
A guy at work got let go because he told another worker he is a dirtbag. I wonder if this jobless guy is getting into real estate now.
Another coworker told me that she is having some trouble selling her house for $250K in NH. However, a realtor friend of hers told her to hold off selling now because next year she could get $270K for it. You wonder if this is a shoeshine boy comment or if the realtor pretty much has figured out the game.
“Do you think these girls like me? No! They like my money.”
Hah hah…maybe he’s not so stupid after all :-).
Plus the new neighborhoods are out in the boonies, while the old established ones tend to be near jobs and entertainment.
Having to drive an extra hour every day in rush hour traffic makes a cheaper new house a lot more expensive in terms of time and lifestyle, something smarter people pencil in to their calculations.
Home builders, of course, want you to forget about it.
A distinction without a difference Sucker.
alpha
We actually lucked out with underground utilities, and our home was built in 1967. Rare find!
Yeah, quality of life and commutes is an issue for me as well. So Ca fwys and streets are parking lots, and our time on earth is not infinite. Long commutes (even in this economy) unless train friendly (almost train to door) are out. L A has a pretty decent subway system, believe it or not.
Yeah. …..u “lucked out”. If lucking out is defined as losing $250k.LOLZ
If lucking out is defined as losing $250k
If they never sell, isn’t it really their heirs who are losing $250K? In which case, maybe they don’t care in the least.
Parsing again?
A loss is a loss.
A loss is a loss.
Some losses are realized more than others.
More petty distinctions without a difference?
alpha, homebuilders are making up for the commute with stuff like fireplaces and jacuzzi tubs. After your hard commute to your stressful job, you “deserve” such amenities…
And have you noticed that cars are starting to look like op centers, with hands-free phone or music hookups and commercial-free satellite radio, and even high-tech cup holders for gourmet coffee? It’s so commuters can multitask. If they included an onboard loo, no guy would care about commuting in from the boonies. He can get his news and music without being harangued by the wife.
Thanks for that $hithouse analysis.
Does it sooth the fact that you overpaid by 75%?
Housing:
Thanks for the message. No matter how right you are, you’re still being an irritating person. Isn’t there a way you can be right and not be so low class about it? The expletive name calling especially. We all let an F-bomb or s-word drop occasionally, but you don’t SEEM to be right if you give off a purely unrefined message.
The worst part is, I agree with your message. You just make everyone with the same message sound like a total ass by being associated with your opinion. Despite thinking you are doing the lords work getting the message out there, in fact, I think you are doing more harm than good.
Name the lies you see. Good job pointing it out. Just dial it back on the neener neener.
Agree with mathguy 100%+
“Just dial it back on the neener neener.”
I’d like to offer HA a vote of thanks for routinely poking in the eye on a daily basis the real estate pimps and other sundry REIC liars and scumbags who post lies here. I used to try my best to counter the troll brigade, but finally decided it was an exercise in futility and gave up. I’m glad HA maintains the passion and perseverance to fight the good fight without fail.
“I’d like to offer HA a vote of thanks for routinely poking in the eye on a daily basis the real estate pimps and other sundry REIC liars and scumbags who post lies here. I used to try my best to counter the troll brigade, but finally decided it was an exercise in futility and gave up. I’m glad HA maintains the passion and perseverance to fight the good fight without fail.”
I agree 100%. HA should change his name to Trollslayer.
after going to the tom vu seminar i started flipping houses and my atlanta real estate empire is now worth millions
is that u casey?
“tom vu seminar”
You a-makea money with weawestate
“after going to the tom vu seminar i started flipping houses and my atlanta real estate empire is now worth millions”
+1 And you have more fine a** than a donkey.
http://www.youtube.com/watch?v=iQNdi-fRExc
HA
There are no homes (unfortunately) under $100/sq ft in So Ca I’d live in. Buying new has its draw backs as well. 18 months of hell trying to get things fixed wasn’t fun when we bought our former residence. The quality of construction between our 1984 newly built and 1998 newly built was amazing. 1984 was a punch list of maybe 3 items and done in a week or two. 1998 was a Lawyer interaction. Both times were national builders, but the 1984 home was built my skilled Americans.
I have lived it…oops,java time.
And your losses are in the $250k range……… and rising.
Your realtor is proud of you.
HA
Glad your crystal ball sees my future. You’re wrong. I can pull numbers out of my a** too. But Good Morning sage. lol
Two words-So Ca!
You paid a massively inflated price for what is always a depreciating asset and admit it.
Realtors saw you coming from miles away……
HA
We live in a desirable nice area in demand. This isn’t a temporary home, it’s our life home. The dare thing is paid in full. How cool is that!
We penciled out the decision before buying. We’re not naïve.
We can agree to disagree, but have a great day.
You got suckered and your losses are in the $250k range and growing like you already admitted here.
The thing about using the retailer’s premium to justify overpaying for a house is that once the toilet has been flushed by the retail mark, it is a used house just like all the others.
Poof!
There are but two kinds of SoCal households who located to the area since Y2K: Those who pay too much in rent, and those who got suckered into overpaying for the privilege of joining the SoCal Ownership Society.
P.S. I’d still rather be overpaying our rent than to have bought at the price our landlords payed and have forked out much more (including all components of PITI plus HOS, Mello Roos, repairs to garage door opener and sprinkler system, yard work, etc etc etc) plus still be 10% underwater before even considering the corrosive effect of eight years of inflation on what the home would sell for today compared to when they bought.
From yesterday:
“Comment by Housing Analyst
2013-08-12 17:30:41
Architects (me) design rooves? And trusses? And open web steel joists? And perform calcs for q-deck roof?
I bet we design beams and and specify column sizes too? And how about reinforcing? We perform all the calculations on temperature reinforcing?”
I gotta agree with the Pimp here. When I was in college I visited an architorture major in her studio. She showed me the farmers’ market building she was designing, a big round two floor barnish thing. I asked her what was holding up the upper floor — seemed like too wide of a span without a column or beam somewhere. She replied airily “Oh we don’t think about that. It’s about the artistic value of the design. I could put a toilet in the middle of the second floor without a sewer pipe and not get points taken off.”
Now granted, I think this was a 200 or 300 level class. Maybe they take Statics later on? But it was clear that their grounding is in the art.
Pimp, maybe you know this, if Wright designed such awful roofs, how did the construction firm allow his houses the be built as designed? Wouldn’t they have at least added reinforcement on the sly? Are the regulations are stricter now?
Whether you agree or not doesn’t matter. We don’t do design. Its why we have a dept full of structural guys.
And once again, “MidCoaster” got her empty skull handed it her.
Is that another one of your names as a art of your ongoing ruse?
Hint……. Tell the truth.
Which begets the question..
When are you housing pretentious know nothings going to come clean and just admit you don’t know what the f_kk you’re talking about……
Awww, Flat Roover, how touching that you mention me. My skull is filled with useful as well as interesting things, TYVM. If you would take a break from your own crude and rude repetitive drivel to actually listen to anyone else, you might enjoy some of the positive aspects of posters on this board. It would be a stretch, for sure. Step out of your self constructed box and live a little.
…open web steel joists…q-deck roof
So these are the “houses” you’re building?
http://en.wikipedia.org/wiki/File:Open_web_steel_joists_q_deck.jpg
No wonder they’re $60 sq ft. Not a bad place to store some tractors. What do you call that style, post-retro-industrial-modern-hipster?
Still flagellating yourself Krusty?
I would be too if I overpaid by 250% for 3 houses.
Oxide, maybe there are different definitions of “design “. What does an architect do? Besides our resident troll, who seems not to work at all.
From what I gather from HGTV, the architect is the one who finds the closet which is ALWAYS conveniently located next to the bath, and finds that said closet had nothing in it, and thus architecies a double sink vanity.
That said, I think the architect is in the middle. They know to not put a toilet in the middle of the room, but probably don’t calculate how much roof truss. It appears that Wright wasn’t much of an engineer.
Comment by MiddleCoaster
______________.
And you still don’t have a clue.
At least Detroit city workers with pension promises in hand can console themselves knowing they have savings to fall back on in retirement.
Revision of Commerce Department metrics alters personal savings rate
By Jim Tankersley, July 31, 2013
Americans aren’t suddenly saving a lot more of their incomes. But it looks that way, thanks to a change in how the federal government accounts for pension plans — a change that, if you’re not careful, could lead you to think the nation is better set for retirement than it actually is.
Until Wednesday morning, the Commerce Department pegged America’s personal savings rate at 4.1 percent for 2012. A revision made every five years to how the department measures the components of the economy pushed that savings rate up; now it’s 5.6 percent for 2012. The same change makes savings look much stronger before the Great Recession, too: The rate for 2002 was revised up from 3.5 percent to 5 percent. For 2005, it rose from 1.5 percent to 2.6 percent.
That money isn’t necessarily real. The Bureau of Economic Analysis didn’t find hundreds of billions of dollars stuffed in Americans’ mattresses. It decided to start counting all pension promises as savings in the bank.
…
Lots of people think their retirement benefits are just sitting in a bank account wait to be withdrawn. They can’t make the connection between today’s unemployed youth and their dwindling retirement promises.
‘Lots of people think their retirement benefits are just sitting in a bank account wait to be withdrawn. They can’t make the connection between today’s unemployed youth and their dwindling retirement promises.’
Kind of makes you rethink about being 100% in stocks if you are a few decades away from retirement age. The turnaround time to recoup losses may take decades if things truly do sour. We are maybe just getting back to comparable return on the market index vs. having been in cash/bond holding. Compare the historic adjusted prices of SPY vs. TLT. The bond ETF has nearly doubled since 2002 inception whereas the S&P 500 has gained maybe 70% since early 2000. This includes reinvested dividends.
Age 61. House paid off 8 years ago when I retired early.
Was close to 100% in stocks after CD rates dropped, but now am 50/50 cash and stocks.
What’s a boomer to do?
Dump that rapidly depreciating shack for starts.
Buy long-term care insurance?
Keep working until the caped dude with the scythe comes a calling.
‘Was close to 100% in stocks after CD rates dropped, but now am 50/50 cash and stocks. What’s a boomer to do?’
Tom Vu knows.
Pension problems are due to the youths??
It’s not due to forgetting to put aside the money 40 years ago?
“It’s not due to forgetting to put aside the money 40 years ago?”
FWIW, many cubicle jobs don’t pay enough to stuff a 401k account. The trade-off is a pension at retirement. I have a 401k plan, but it hasn’t been very successful the past five years, but I haven’t lot ground either.
Well with pensions, the workers agreed to put the money away. Problem is, they foolishly agreed to leave it in the hands of their employers who then robbed them blind. Seems like people are doing the same with gov’t. Who in the world thinks it’s a good idea to leave YOUR assets and results of hard work in someone else’s hands ? How so many people all think social security is a good idea as a general means of retirement I will never know. IMHO it should exist purely to keep disabled, sick, or orphaned from starving. For everyone else, if they were so bad at managing money until they retired that they couldn’t save any, Social Security’s “safety net” should be public housing at “Social Security” old folks homes with a soup kitchen. Don’t leave em to starve, but don’t let em continue to mismanage “public” money either…
As an added benefit, for extra spending cash, old folks in the “social security retirement home” could provide care for the other disabled and sick in their facility…
Reminds me of something an economist said:
The most efficient spending is you, spending your own money, on something. You get exactly what you want, and know your budget.
The least efficient spending is using someone else’s money to purchase something for someone else. You don’t really know what they need/want, and you don’t care as much about the budget–this is government.
In the middle is gift giving…spending your money on someone else, you don’t really know what they want/need, but at least you don’t overspend.
The other category is spending someone else’s money on something for yourself. The best approximation of this is health insurance. If someone else is picking up the tab, you aren’t as frugal on healthcare spending as you would be otherwise.
His conclusion was that if you MUST have government spending, then leaving the spending in the hands of local governments is far better than giving the money to Washington DC. At least in local government, you have a fighting chance of having person-to-person contact with some of the people responsible for spending your money.
His conclusion was that if you MUST have government spending, then leaving the spending in the hands of local governments is far better than giving the money to Washington DC.
Taking it to the logical conclusion, the best form of government spending would not be to have it in the hands of local government, but rather to have government spending on your behalf to be in your OWN hands—e.g. via an individual grant.
Posted: 9:30 a.m. Monday, July 22, 2013
Detroit: The canary in the American coal mine
By Kyle Wingfield
The biggest story from last week, probably one of the biggest stories of this year, was Detroit’s $18.5 billion bankruptcy filing. It is an important story on its face, but it is also an important story for what it portends about looming fiscal failures at all levels of American government — various failings of local governments were the subject of my Sunday column, which subscribers can read on MyAJC.com — and particularly those that have adopted liberal policy prescriptions whole-hog.
The problems for the city of Detroit (let’s clarify that we’re talking about the city itself, since “Detroit” is used so commonly as shorthand for the three biggest U.S. automakers, which have had their own financial woes and bankruptcies) are manifold. But the breaking point came over the city’s inability to honor its pension obligations to former workers. Walter Russell Mead offers a succinct summary:
The city’s choice, to honor its obligations to past workers or the needs of current citizens, is much like the one Atlanta faced a few years ago. Increasingly, it is shaping up as the choice the entire U.S. faces with our promises to retirees competing for tax dollars with present needs such as infrastructure, education, defense, etc. There are small changes we can make now, such as adjusting the inflation formula for Social Security benefits and reducing pension and health benefits for wealthier retirees, to stave off harsher choices later. But these are considered anathema by anti-reformers who say all we have to do is raise taxes.
…
The public union goons want everything they were promised.
No matter they ran and supported their own goons for political office with the sole mission of increasing their salaries, benefits and pensions.
No matter if it bankrupts the city and leaves NO money for any city services.
No matter if taxes need to raised to the moon.
They WANT EVERYTHING. No one step back.
Public union have totally corrupted the political process and the educational system.
Until they are banned nothing with change.
What the goons want, the goons get.
And you will not “ban” the goons.
Can you say Permanent Democrat Supermajority?
Average retire pay for sanitation engineers in Detroit is $18k per year. Greedy freeking b4stards. No way they deserve that much after 40 years on the job.
In fact, they deserve nothing. It’s not like they work on Wall Street or any where important.
http://money.cnn.com/2013/07/23/retirement/detroit-pensions/index.html
CNN (the Communist News Network) is cherry-picking those numbers.
Those janitors and garbagemen all get to retire at age 37 with $250,000 annual pensions and free healthcare for life.
1. I have corrected you several times on this. So you are basically a liar now.
On average Detroit’s firefighters, police officers and other city employees receive pension checks that are similar or slightly smaller in size than the national average of $30,000 a year, according to pension experts.
http://money.cnn.com/2013/07/23/retirement/detroit-pensions/index.html
2. This does not include lifetime free medical for the pensioner and family. This is a $30,000 benefit ALONE.
3. Add in that you can get this after 25 years on the job where the non union goon would have to work 45 years for the same. On a job it is nearly impossible to get fired no matter how incompetent you are.
4. So we are up to $80,000/year total cost for each pensioner without even trying.
5. The union goons have bankrupted their city with their union goon politicians and promises.
6. The retired union goons will get what the city they left in ruins can afford to pay them.
1) You don’t mention that the Detroit workers don’t get Social Security because their retirement was considered a replacement, not augmentation to Social Security.
Private sector, if you have a job that gives a pension (more and more rare every day), you’d get the pension AND Social Security. These former city of Detroit employees get pension, BUT no Social Security.
3) You don’t mention that the 30K a year is average, and average yeas worked at retirement is 35 years. Sure, they can get a pension as early as 25 years, but on average, would net far below the $30K average pension.
4) You fail the smell test. 21,000 retirees. At $80K each would be $1.6B a year total outlays. The entire budget for the city of Detroit is about $1.1B a year. No way could they be spending $.16B a year on pensions and health care to retirees, if total spending is less than that.
I’ve long said that a pension is a sucker’s bet. In general, you’re taking lower pay now in return for a promise of a pension later. However, that pension is based on a lot of assumptions, like continued growth.
In reality, Detroit began to shrink. THAT, not unions, is what doomed the city. It would doom pretty much any business.
People paying in, say 10% of their income to a pension will pay in the equivalent of 5 years of income over a 50 year working career. If you then take a pension that is half your working income, the funds would be depleted in 10 years.
Oh, but interest. For interest to beat inflation, someone has to be paying that interest, meaning more people paying than collecting.
In reality, pension funds have a hard time beating inflation by a significant amount. As a result, they rely on a growing employee base. 2X current workers paying X prior workers pensions, then 4x as many workers in the future, paying the 2x current workers…
Pensions were just another Ponzi, built on the assumption that there will be more people paying in the future, then are paying in today.
In reality, Detroit began to shrink. THAT, not unions, is what doomed the city. It would doom pretty much any business.
But *why* did it shrink?
“This does not include lifetime free medical for the pensioner and family. This is a $30,000 benefit ALONE.”
$30K per year? $2500 per month? For 2 people? I pay less than half that for medical and dental. It’s a group plan, but the retirees are a big enough group to qualify for group rates.
Op-Ed Contributor
Come See Detroit, America’s Future
By CHARLIE LeDUFF
Published: July 25, 2013
DETROIT — I KNOW an old woman who hasn’t opened her windows in a decade, afraid that what’s outside will climb inside. Inside, there is the stale odor of dead air.
…
So we went broke, bust, bankrupt. We’ve known that in Detroit for years. Only now it is official with a Chapter 9 filing last week. The biggest municipal default in United States history — at least $18 billion. Suddenly, America gives a rip.
How did it get this way, I’m asked? After all, it was just 99 years ago that Henry Ford offered the workingman $5 a day and profit-sharing. How, in less than a century, did it come to this?
The short answers: municipal mismanagement, race riots, white flight, black flight, dead flight (people routinely disinter their deceased and relocate them to the suburbs). There were the overreaching unions and management that couldn’t balance a ball. Proof? The multibillion-dollar bailout of the auto industry. Thank you, American taxpayers!
Then there is our spectacular civic corruption: A former mayor, Kwame M. Kilpatrick, waits for a bed in federal prison, convicted of extortion, racketeering and bribery. He looted the city of millions of dollars and stole the future of thousands of children. They can send him to hell for all I care. I don’t want to pay for his upkeep. But thank you, taxpayers! You will pay for it. And the ex-mayor’s team of super lawyers will also be paid with the public dime.
So Detroit files for bankruptcy. What does this mean? Pay close attention because it may be coming to you soon, Los Angeles, Baltimore, Chicago, Philadelphia. In 2011, Moody’s calculated the unfunded liabilities for Illinois’s three largest state-run pension plans to be $133 billion. (It is expected to be even larger this year.) That’s the size of six Detroit bankruptcies — give or take a few hundred million.
Of Detroit’s debt of at least $18 billion, about $7 billion is secured by collateral like casino revenues and utility taxes. That means creditors — read: big banks — will get paid. Of the remaining $11 billion dollars or so in unsecured debt, about $9 billion is owed to retirees and current municipal workers, people like firefighters and police officers. These debts come in the form of promised pension checks and health care benefits, all backed by a false, unsecured promise. These are the people who are likely to lose out.
In simple math, do we sacrifice 30,000 former and current workers to save a city of 700,000 people and their progeny? Most Detroiters will tell you yes. Don’t judge. We feel bad about it. But we’re simply Americans. We are a gaunt dog. We are desperate. And you are watching and studying us.
Pension checks will be much smaller than planned and health care benefits will get foisted off on Medicaid and Obamacare. Thanks again, taxpayers!
There is hope up here on the Great Lakes. We have fresh water, profitable auto companies, more than $130 billion a year in trade with Canada crossing through our city, a world-class research university and, eventually, a clean balance sheet. Hey, it helps to be first. What do you have, Atlanta?
So come visit Detroit, my fellow Americans. Come take a look at your future. Come give the tires a kick. And if you want your money back, come strip copper pipes and wiring from the abandoned buildings — if you can find any copper. Chances are, someone beat you to it.
Charlie LeDuff, a reporter at the TV station WJBK and a former New York Times correspondent, is the author of “Detroit: An American Autopsy.”
Sacrifice? Even if the Detroit public union goon pensions were cut in half and they had to pay something for health care - they would STILL be head and shoulders above the average taxpayer.
In simple math, do we sacrifice 30,000 former and current workers to save a city of 700,000 people and their progeny?
A right to work state? Socialist Democrats not in charge for the last 60 years? Some flicker of a work ethic? Low taxes? Less regulations? Public union goon not demonstrating in the street? A whole lot less corruption?
Hey, it helps to be first. What do you have, Atlanta?
The Detroit union members that didn’t pay into Social Security will not be eligible for Medicare.
BTW- ever time you say “goon” you come off as a comple douchebag. Can you retire that phrase?
http://en.wikipedia.org/wiki/Goon_squad
What do you have, Atlanta?
Prosperous Applebees.
you’re just jealous i can afford to eat at applebee’s every day.
after your incalculable losses, you’re lucky to afford a white castle slider.
What do you have, Atlanta?
Compared to Detroit, they have short, mild winters, a bigger transportation hub, profitable companies like Coca-Cola, Home Depot, UPS, a way more educated population. And they don’t have endless miles of industrial ruins.
Less water, though.
Compared to Detroit, they have short, mild winters,
And hot, humid summers. They call the place “Hotlanta” for a reason.
I thought is was for the southern women!
I just recently visited the South. If you’re looking for hot southern women I strongly advise staying out of Wal-Mart.
Eddie’s investment properties.
So did the jury conclude that Fabrice Tourre was a rogue trader, packaging toxic mortgages all on his own and foisting them onto unwitting buyers?
he sounds better than yellen or summers.
Investment Banking
August 12, 2013, 6:06 pm
In One Bundle of Mortgages, the Subprime Crisis Reverberates
By PETER EAVIS
A subprime deal came back to haunt Fabrice Tourre, a former Goldman Sachs trader, when a federal jury in Manhattan found him liable for civil securities fraud.
He is not the only one feeling the pain of a subprime transaction six years on.
Hundreds of thousands of subprime borrowers are still struggling. Some of their mortgages ended up in another Goldman deal that was done at the same time as Mr. Tourre was working on his own financial alchemy.
In February 2007, just before everything fell apart, Goldman Sachs bundled thousands of subprime mortgages from across the country and sold them to investors. This bond became toxic as soon as it was completed. The mortgages slid into default at a speed that was staggering even for that era.
Despite those losses, that bond still lives. It has undoubtedly left its mark on ordinary borrowers. But the impact of the deal spread ever further. It touched the bankers who sold the deal. It even landed on taxpayers, who ended up owning a large slice of the Goldman bond.
Much has changed over the last six years. Big banks like Goldman are reporting strong profits and regulators are wrapping up cases stemming from Wall Street’s recklessness. House prices are on the rise, providing relief and encouragement for many homeowners. Indeed, subprime securities like the Goldman bond can now even be found in some mom-and-pop mutual funds — which bought them at a discount of as much as half of their original face value.
Yet the financial crisis still reverberates for many others, in large part because of the insidious reach of the financial products that Wall Street created. Subprime securities still pose a significant legal risk to the firms that packaged them, and they use up capital that could be deployed elsewhere in the economy.
This is the story of one of those bonds, GSAMP Trust 2007 NC1.
The name is the sort of gobbledygook that is common in the bond market, but it tells a story. The “GS” is derived from Goldman Sachs. The Wall Street firm didn’t actually make mortgages to subprime borrowers that were in the deal. Instead, Goldman bought them from a lender called New Century, the “NC” in the title.
It was New Century that lent to Wendy Fillmore, when she and her husband wanted to buy their house in Las Vegas in 2006. The home cost $276,000. New Century provided two loans, one for a $221,000 loan and a second mortgage for $53,000. Data for the Goldman deal shows that it contains the Fillmores’ larger loan.
Ms. Fillmore’s husband was, and still is, an information technology specialist, and at the time she was working as a transcriber. She recalls the surprise she felt when New Century agreed to the make the mortgages.
“I was wondering how we managed to get approved for as much as we did,” she said.
The reason had a lot to do with the appetite for mortgages by Goldman and other Wall Street firms that had a booming business in slicing and dicing and repackaging the loans in securities.
A month before Ms. Fillmore got her mortgage, Daniel L. Sparks, Goldman’s head of mortgages, wrote in an e-mail that he was a “bit scared” of New Century and had reservations about Goldman taking more loans from the lender. The e-mail was contained in materials released by Congress as part of an investigation of Wall Street.
Mr. Sparks gained prominence in 2010 when he testified in Congress about Goldman’s mortgage dealings, including a deal that resulted in a $550 million fine for the firm. He is one of the four bankers who signed off on the 2007 bond, according to a lawsuit filed by a federal regulator that is litigating the deal and other transactions. Mr. Sparks, who left Goldman in 2008, is named as a defendant in the federal action. He declined to say what he is doing now.
Ms. Fillmore is still in her Las Vegas home. She estimates that the market value of the house is around half the combined value of her two mortgages.
“It is frustrating to be so far underwater,” she said. “It’s horrible. We can’t move. We just try not to think about it.”
…
Published: August 12, 2013
The Mortgages in One Bond
A bond made up of subprime mortgages was created by Goldman Sachs in 2007 as an investment vehicle. But many of those loans went into default right away and the bond has been toxic ever since. Many of the mortgages have been modified, refinanced to pull them out of trouble, or went into foreclosure. Still, 10 percent of the loans are actually larger than they started out, an indication that the loan is stressed, while the other 90 percent have shrunk as they have been modified and/or paid down.
Why bother liquidating your holdings in fear of a 1987-style crash which is highly unlikely to ever again occur, thanks to all the financial safeguards subsequently put in place?
Aug. 13, 2013, 6:01 a.m. EDT
Quit worrying about a 1987-style crash
By L.A. Little
More and more I am hearing and reading about the coming of a 1987-style crash. There are interviews in which the subject chats about how we have to prepare for it. Articles are being published telling us that this year’s percentage gains rival those of 1987 with the clear implication being that another crash is coming.
Fear sells, and it is always a hot topic as a result. As you know, I am no fan of the methods that the central bankers have taken to force asset prices higher despite a plethora of continuing issues, but that’s a subject for another day. These hotbed topics can be argued from here till yonder and personally I don’t care to engage in such a time sink. My interest is in making money, not bickering about Uncle Ben and Abe. I care about finding ways to profit in the equity markets without taking significant risks. That’s what I get paid to do.
With this idea in mind, if there is a possibility of a 1987-style crash, how does one truly prepare? Well, in my humble opinion, you don’t do it by worrying excessively before it’s time. You also don’t accomplish anything by liquidating your holdings, or worse, getting short in anticipation of the crash before there is any real evidence that a crash possibility is near.
…
I’d be happy with a 2008-2009 crash that’s actually allowed to run its course. Doesn’t have to happen all in one day.
The end of quantitative easing is just what the stock market needs to kick off the next rally…or so I have been told.
End of QE could mean liftoff for stocks: Wells Capital
August 13, 2013, 4:58 AM
Much debate has been devoted to what will happen to the stock market as the Fed begins to finally start tapering — largely expected this autumn. Investors are understandably anxious to see how the economy and stocks will perform once the big cookie jar is finally taken away, especially heading into 2014.
However, Jim Paulsen, chief investment strategist at Wells Capital Management, says we may all be worrying-warting for nothing and the “Great Fed Myth” could get debunked, making 2014 an even better year for stocks.
In the Grim-Reaper scenario, as tapering begins and QE fades away, the economy finds uh-oh, it can’t stand on its own two feet, confidence gets a knock everywhere and renewed economic worries rattle the stock market. It’s basic dogs-and-cats stuff.
But then there’s the brighter-side “animal spirits” scenario from Paulsen:
He believes monetary policy and QE have played a much smaller role in the economy and financial markets than most believe. If a Fed tapering in September doesn’t prove disastrous, then markets could drive higher on confidence gained by the fact the economy indeed can get along on its own. In fact, it could turn out to be more stimulating than the Fed’s own stimulus. Price-earnings ratios would be among the beneficiaries, as multiples have largely fallen since 2000 in line with a slow and steady erosion in confidence.
…
it seems like they have basically committed to back stopping all the markets. sets up a dangerous situation of excessive risk. but as long as taxpayers go along with it why stop?
but as long as taxpayers go along with it why stop?
Do they have a say in this?
they do but I dont think they even care. too busy with gadgets.
too busy with gadgets.
The iPhone 6 is coming!
“back stopping all markets”
Each time the Fed offers the slightest hint that QE3 will eventually end, they inadvertently trigger a selloff on Wall Street. Afterwards they backpeddle on the suggestion. By now, I imagine the Wall Street bulls salivate every time the Fed makes another announcement of plans to end QE3, in anticipation of a ‘we didn’t really mean it’ relief rally.
In the unfortunate case that the Fed finally does follow through on announced plans to begin to end QE3 through tapering and accidentally triggers a Wall Street crash in the process, they could either suspend the taper or invoke QE4 as needed.
or the bull could get eaten by the bear…i meant the boy eaten by the wolf.
“…boy eaten by the wolf…”
Perfect!
Perfect… until you realize that the “boy” is the W-2 401K earners whose elder years are being held hostage by these shenanigans. As Margaret Thatcher (should have) said, crony capitalism works well until you run out of other people’s money.
Crony capitalism works great until you run out of government money.
No, you can’t “have it all”
“In a paper published in the late 1990’s, Columbia University professor of social work and public affairs Jane Waldfogel showed that having children has a negative impact on a woman’s wages, while it has no or even a positive effect on a man’s wages. The fact that the pay gap between women without children and women with children is larger than the pay gap between men and women highlights the negative impact of kids on earnings.”
http://www.washingtonpost.com/blogs/she-the-people/wp/2013/08/13/why-women-still-earn-less-than-men-its-the-kids-fault/
Most moms WANT to stay home with their kids (if it is possible).
That usually means a few years out of the career ladder.
The pay gap is VOLUNTARY.
They should stay home. Breeders in the workplace are an unproductive waste of space. Every stupid kid issue is a ‘get out of jail free’ card to come in late, leave early, and dump their workload on the non-breeders. Want to get paid more? Try showing up every day.
And who said Goon Squad wasn’t a sexist?
Nope. Just anti-breeder. Women without child creatures are effective managers and productive employees.
Lotta H8
Bite me. I am far more productive than most of the childless men or women in my company. So many of them are too busy socializing all day to do any actual work.
Have not read the blog for a week or so….I see the moronic banter is not only still present but is getting worse…
Lets see how this is received…Seems like they are only at 50% occupancy..I wonder what the turn-over rate is…
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&sqi=2&ved=0CDsQFjAD&url=http%3A%2F%2Fwww.bloomberg.com%2Fnews%2F2013-07-31%2Famerican-homes-4-rent-tests-housing-reit-market-with-ipo.html&ei=VTMKUu_tI678yAGgi4GADw&usg=AFQjCNGk021LjPls2s_IUeyl4Nwk9pvIew&sig2=5a9lnjJCRTtUUihCI14nzw
Today’s “investment” = tomorrow’s Section 8 ghetto.
The “homeowners” in those neighborhoods can look forward to more crime, garbage, multiple cars parked on the lawn, 20 people living in a 3BR house, and encountering the “family values” of the products of low-investment parenting filling up their kidz’ schools.
Section 8 funding is not expanding and decreased in 2013. Lot of people were unhappy with Obama for that.
Waiting lists are getting longer. In some parts of SoCal they are 5 years long.
Funny.. 5 year waiting list for section 8 in Calif, and empty abandonded houses in Detroit. Hmm, maybe We should export section 8 to Detroit.. so they can get off the backlog…
Seems like they are only at 50% occupancy..I
And losing ~$6000/yr per house in their portfolio. Nice. Even the company that was 86% rented was taking massive losses.
“The headline occupancy numbers for this space, roughly 50 percent, is not yet enough to give evidence that this business model works,” Jade Rahmani, an analyst with Keefe Bruyette & Woods Inc. who rates Silver Bay outperform, said in a telephone interview from New York.
The business model works just fine: they pay themselves excessive fees up-front, and they continue to pay themselves excessive fees all down the line.
Oh, you meant for the eventual REIT investor?? Not so much.
I did some digging around on this yesterday, thinking that the business model was clearly doomed. Revenues way too low and expenses way too high. Revenue could sort itself out easily if they get their occupancy rate up, but the expense side still seemed out of hand. The I realised they have front loaded costs as they rehab new purchases, so expenses could taper off as they quit buying new houses.
Making some optimistic assumptions (90% occupancy and expenses at 50% of revenue) I figured the EPS could be around 60 cents a share for a return of close to 4% at $16 per share. I wouldn’t put any money into it that I wouldn’t take to a casino, but I wouldn’t risk shorting it either.
The I realised they have front loaded costs as they rehab new purchases, so expenses could taper off as they quit buying new houses.
Yeah, I was being somewhat tongue-in-cheek. There wasn’t enough details in the article to distinguish front-end costs from continuing costs. When they start having to make public filings, then we’ll see what they disclose.
I did find some financial statements. Less debt / more equity than the average REIT, I’ll give them that. But the revenue compared to assets is abysmal.
Look at their related party management contract. They are using a lot of money to build the portfolio larger. If you take out the costs related to the acquisition teams, the real estate is cash flow positive.
You need to dissect the financials to understand what costs are related to the building of the portfolio, and what costs are related to managing the homes that they’ve already purchased.
As quarters pass, their financials will look better and better.
‘the real estate is cash flow positive’
How could it not be if they are paying cash?
‘They are using a lot of money to build the portfolio larger’
Yes, over paying and building rental competition against themselves with each and every house.
‘As quarters pass, their financials will look better and better’
They’ll be gone in 3 years or less, and people like me will carve up their carcass for pennies on the dollar.
I find it interesting that you expect a REIT that is cash flow positive to fail in a world that is starved for yield.
BTW, we don’t need to wait very long to see the next bit of financial information to dissect from AH4R. We will see second quarter’s financial information for American Homes 4 Rent next week.
I predict a higher than 50% occupancy rate. And I don’t think I’m going out on a limb.
It’s always interesting to me when people think the current circumstance will never end. Besides, these guys are stupid. It will fail no matter what happens. All of them are “dumb money” as the Carrington CEO said.
‘ I don’t think I’m going out on a limb’
Click!
“It’s always interesting to me when people think the current circumstance will never end.”
Just like the assumptions in that home prices would continue to fall and never go back up?
That foreclosure rates would continue to rise and never fall?
That vacancy rates would keep going up and up and up?
This boom will end (and end horribly if the current rapid prices increases don’t slow down), but just like many of us thought that it couldn’t go on any longer in 2004/2005, the boom went on before for FAR longer than we all thought. Current predictions of imminent collapse are premature.
Now if these prices rises (20%+ annually) spread throughout all markets, and they go on for another 2+ years? Then assume crash positions.
‘assumptions in that home prices would continue to fall and never go back up’
Opposite happening in China, Australia, New Zealand, Dubai, the UK, etc. Not a very isolated event.
‘That foreclosure rates would continue to rise and never fall’
Doesn’t make much difference if they never sold the foreclosures in the first place. Oh, didn’t you read the latest report from FHFA?
I’m detecting a little fear on your part. If your “investments” were so solid you wouldn’t even bother to go back and forth on this stuff. Maybe, just maybe, I’ll be picking apart your carcass too when the SHTF.
Oh, didn’t you read the latest report from FHFA?
What were you referencing, Ben—the recent Property Managers/Foreclosure Prevention Report issued 8/8/13?
Did I miss an important detail?
scdave, you need to read the small print:
If you restrict the universe of their homes to those available for rent (ie. done with evictions and rehab) for 90 days or more, those homes are 97% occupied.
If you restrict the universe to homes available to be rented for more than 30 days, they are 90% occupied.
The 50% occupancy is purely a byproduct of rapid acquisition of homes that have yet to be made available to be rented.
Of course. It has nothing to do with 25 MILLION excess empty houses in the US today.
Opposing the shamnesty:
“Representative Steve King has carved out a niche in Congress as an unrelenting foe of legalizing undocumented immigrants in the U.S., and last night the Iowa Republican was the star attraction at a rally where he pressed his case in the hometown of one of his party’s leaders.
“Lets restore the rule of law, let’s restore the dignity of the American citizen, and let’s restore the destiny of the American nation,” King said, his voice booming from a Richmond, Virginia, hillside park that overlooks House Majority Leader Eric Cantor’s district.
King spoke to about 50 people at a gathering called the “Stop Amnesty Tour” that featured more than two hours of speeches and drew a mix of activists focused on the immigration issue … While advocacy groups on both sides try to grab headlines with rallies and forums featuring high-profile speakers, lawmakers key to the legislative effort are largely steering clear of immigration-centric events and keeping their comments to a minimum (because they are cowards and traitors).
Senator Marco Rubio, a Florida Republican and one of the lead authors of an immigration bill the Senate passed in late June, breezed through the topic in 90 seconds during a 35-minute speech yesterday to the Rotary Club of Jacksonville.”
http://www.bloomberg.com/news/2013-08-13/anti-immigration-rally-kicks-off-push-to-block-law-change.html
We stopped enforcing immigration laws as a way to combat the post 1960s baby bust.
Without illegal immigration, we’d already be at flat population, slated to be falling like a rock over the next 20 years as the boomers die off.
I used to be a big “What part of illegal do you not understand”. Calling them “undocumented” still irks me to no end. There isn’t like a law that offers documented or undocumented immigration.
THEY BROKE the law… but we consciously stopped enforcing the laws, because the powers that be decided they needed more people to keep population increasing once citizens dropped from 3 babies per family to only 1.5 babies per.
The powers that be (cough - democrats) see millions of new democrat voters, bigger and bigger government and more and more power.
It is the only reason.
Don’t kid yourself, the GOP and the Chamber of Commerce, love cheap, illegal labor.
Both parties love illegals, for different reasons.
EXACTLY!
BOTH parties had a vested interest in not enforcing immigration laws, which is why we got amnesty in 1986 when Republicans held the White House and the Senate.
My own VERY Republican Senators from AZ have been 2 of the loudest promoting amnesty 2.0.
banana, I see a lot of poor people trying to escape terrible conditions in their home countries who are willing to work hard for a better life. Any law that makes that illegal has no standing to be a law in my books. I am as fiscally conservative as they come. IMHO what makes this country great is our ideal of freedom. When we try to say that is our’s and not yours because of where we were geographically born, we become petty and low.
If you want to argue against giving money, welfare, healthcare, etc.. away to people who want to come and freeload, I am all for solving that problem. If you want to say a person, a human being, shouldn’t be able to try to come here and make a better life for themselves…. I fault you for that.
because the powers that be decided they needed more people to keep population increasing
So what happens when we eventually reach 1 billion people in the USA. Or 2 billion? Or 10 billion? At what point do we stop insisting that we need population growth to make the economy work? And when that happens, what do we do?
Infinite growth in a finite ecosystem (or economy) is unsustainable.
And any “productivity” gains will only line the pockets of the 0.1%.
But you knew that already…
King is a big proponent of the NSA spying on Americans.
“King is a big proponent of the NSA spying on Americans.”
+1 And so is Oracle’s Larry Ellison.
“Today’s San Francisco is tomorrows Detroit…… It’s the way the world works.”
You can say that again.
Sour grapes.
The value of my FB stock has almost doubled since I bought last year.
Average rent for a studio apartment in SF is $2,300/month.
The future’s so bright, I gotta wear shades!
‘Average rent for a studio apartment in SF is $2,300/month.’
Bet Tom Vu owns that apartment you pay rent to. Sum ting wong with lazy a$$ Americans.
I believe it is New York City, not SF, that has become reliant on an overpaid, oligopolistic industry with an handful of much hated major firms where there were once dozens.
Thank heavens for home equity wealth gains, as otherwise consumer spending would be toast.
AHEAD OF THE TAPE
August 12, 2013, 7:57 p.m. ET
Consumer Spending Belies Dire Forecasts
It is increasingly clear that American consumers are looking past the headlines from Washington as they rush to the mall.
By SPENCER JAKAB
CONNECT
Sequester, shmequester.
The automatic federal-spending cuts that took effect this spring were supposed to compound the economic damage to Americans’ pocketbooks caused a few months earlier by the expired payroll-tax holiday and a slew of tax increases.
Instead, retail sales passed their prerecession high this spring in real terms and continue to expand. Tuesday’s retail-sales data for July are the fifth since sequestration took effect and are expected to show a fourth consecutive month of gains, excluding inflation. Economists polled by Dow Jones Newswires see an increase of 0.3% over June after a 0.4% rise the previous month.
What explains the gap between scary predictions and benign outcomes? In short, larger forces are at work. Much is written about the wealth effect from recovering home prices. Now the cash-flow impact of the housing bust may be turning from a vicious cycle to a virtuous one. A big reason it has taken so long for retail sales to reach their precrisis peak is that they were boosted artificially during the boom. Consumers used their homes as virtual cash machines in the years before the crisis.
They borrowed against the value of their homes to the tune of around 7% of disposable income. Today, they are reducing those borrowings by an amount equal to about 3% of income. That 10% swing means there are fewer dollars to be spent elsewhere, but they are building equity in the process.
…
dude the sequester furloughs are over this week for d.o.d. employees.
the gravy train rolls on
Realtors / developers are back to their old tricks in Austin.
Selling a home for price X and listing them almost immediately for a higher price to make a quick buck.
MLS 2324851
Sold, July 19 2013, $172,500
Listed, August 10 2013, $229,500
Older condo conversion built in 1985 (2b/2br in 900sq ft).
I wonder if anyone will be stupid enough not to notice the last sale 30 days ago and actually buy it.
With demand for housing at 17 year lows and falling, they’re going to be selling for a very long time.
But they probably spent $10K putting in granite and stainless, not to mention a new coat of paint.
That’s unlikely. The origbka developer rehabbed all the units a kills of years ago right before the housing market crashed and they sat empty with no one buying them. If I’m not mistaken, all units had granite and hardwood floors already.
“But they probably spent $10K putting in granite and stainless, not to mention a new coat of paint.”
The cost of which is never recoverable.
Darrell, how is that rowhouse/condo you bought for cash? Were you able to rehab it?
I didn’t buy for cash. Put 30% down and financed $30K for 15 years.
It was remodeled just before I bought it, so really didn’t need any work.
My daughter, SIL and grand-baby are living in it, as planned.
IT WAS NOT AN INVESTMENT. It was purchased as a “cheaper than rent” place for my daughter to live. If I ignore BS sites like Zillow, I’m losing money on it every month… just less than if I were paying someone else rent on something similar.
My monthly cost is about $600 ($300 mortgage, insurance, tax; $120 HOA; $150ish I set aside for repairs and maintenance). Renting something similar would be about $700.
You’d be surprised how many people don’t bother to look up previous sale history on houses. I feel like I’m forever enlightening people that this is something they can (and should!) do.
Aw shucks…just when the news on consumer spending was looking up!
Aug. 13, 2013, 10:16 a.m. EDT
U.S. stocks fall after mixed retail report
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks turned lower on Tuesday, with the S&P 500 extending losses into a third session, after retail sales rose less than estimated in July.
A report released by the Commerce Department ahead of the open had retail sales rising 0.2% last month after a 0.6% gain in June that was larger than initially estimated.
“Consumers are still spending, although limited income growth appears to also be holding spending increases in check,” Jim Baird, chief investment officer at Plante Moran Financial Advisors, wrote in emailed research.
…
Anecdote: chatted with an architect neighbor last week at the Block Party. He said things were going gang-busters at their Seattle office—as in the phone is ringing off the hook, and they are trying to decide how aggressively to hire to fulfill the demand.
I don’t think he was blowing smoke, either; I mentioned that was quite a turnaround from the depths of the downturn, and that I watch the Architectural Billings Index, and he was more than happy to talk about how unbelievably ugly it had been as well.
Just one small data-point… The ABI is only showing a small bit over 50, but of course that isn’t uniformly distributed.
Houses are chump change and anyone worthwhile does anything but houses.
Report from the waterways: I finally saw one house going up at mile 500. There are lots of for sale signs on relatively recent construction. I have never seen so few cruisers on the water, and such a high % of them wearing for sale signs.
There is a commercial flip going on in the tiny post industrial town of Phoenix. An old two story block (multiple store front building) on Main is being converted to “luxury apartments”. The old bank across the street tried to make it as a night club last year, now closed and for sale again. The best thing this town has is a produce market.
Fresh local sweet corn with a grilled Delmonico steak. Life is good!
Jeez blue….. No wine and lobsters? LOLz
No ATM aboard.
Update: One new monster house, must be over 5,000 ft2. Nestled in among houses 1/4 the size. Unfinished and no sign of the crews. Still, the Bubble lives!
Where are these apartment dwellers going to work?
Probably in Syracuse. There aren’t a lot of other choices.
Next Fed Chair Will Lead Us to ‘Economic Ruin’
http://www.youtube.com/watch?v=4J08QN3u7NA
You can lead a donkey to ruin, but you can’t make him drink.
Someone please explain the Canada housing bubble to me.
I’ve been hearing for years how there are some cities where the cheapest house is over $1 million. How has that not popped? Who are the krill? Where do the non-$300K+ a year income people live?
It is coming.
Canadian housing sales have slowed dramatically.
Exports to China (raw materials) are slowing.
Canadian Banks already have a built-in TARP.
I’ll do what I can.
There’s only one city, Vancouver, where most of the single detached houses are over a million. There’s no rational explanation how it got so expensive, although the most popular irrational explanation is Hot Asian Money (HAM). It’s an easy myth to perpetrate since there are a lot of asians in Vancouver, so marketers can pretend they all came from overseas with bags full of cash instead of the truth which is they’re locals with CMHC insured mortgages. If you’d like a laugh, there’s a game call Crack Shack or Mansion. VREAA is a good source of info if you’re interested. If you want to get an idea how Vancouver has held it together, google “laneway house vancouver”.
Toronto is an interesting story too. Over priced, but also way overbuilt for condos. Stories are starting to hit the MSM about new condos not selling.
Generalizing for the country, the tendancy is towards being overpriced. Demographia 2013 shows 8 affordable markets, 17 moderately unaffordable, 4 seriously unaffordable and 6 severely unaffordable.
Why hasn’t the Canadian bubble popped? Bit of a mystery. I really thought when the US markets when down Canada would follow closely behind. There were a lot of talking heads emphasizing the differences between the two countries, such as Canada not having subprime (not really true) and our conservative banks (not true either.) The key similarities such as rapid price appreciation and record debt to income levels were ignored of course.
The best explanation I can come up with is that the bad lending practices in Canada were less bad than the ones in the US. It’s served to delay the pop.
But, once prices stop going up, it collapses under it’s own weight.
The only reason people were buying was because prices were going up. So, if prices stop going up, everyone starts trying to sell, and no one is buying… POP.
I ask, because we still have a lot of Canadian money flowing into Phoenix. People in Canada cash-out refi their overpriced Canadian house, then use it as a down payment on a place here in Phoenix.
When Canada finally pops, I can only believe that Phoenix will double dip soon after. The Canadians will need to dump their Phoenix unit to make the payments on that bloated Canadian mortgage.
Is that so?
Is that why housing transactions collapse 28% in Phoenix?
Same old a pimping. Same old Darrell.
It seems that your definition of “pimp” is anyone not predicting an immediate crash.
I say that I think a double dip is coming, and you label me a pimp… Whatever.
It is clear that some people are interested in having a discussion, and it is clear that others just want to ram their opinion down everyone throat with one helping of ad hominem and 2 helpings of simply overwhelming the board with the number of posts.
No Dramaqueen…. You said “alot of canadian money pouring into phoenix”. You know that’s a distortion so why are you hear saying it?
House prices are too high everywhere in Canada. A modest house just a cross the US border costs more than 2x the one in the US, and we know US houses are still in bubble territory.
There is no logical explanation for mania, though many will always be offered. It will end though, as always.
It’s not everywhere that’s overpriced, just almost everywhere. For instance, the cheapest major markets on a price to income basis are Moncton and Fredericton (both New Brunswick) at 2.3. Vancouver is on the other end of the spectrum at 9.5. Demograhia 2013 data.
The help stays in the rental cottages.
Buncha thin–skinned clownists.
Missouri fair bans rodeo clown wearing Obama mask
AP/ August 12, 2013, 8:24 PM
JEFFERSON CITY, Mo. The Missouri State Fair on Monday imposed a lifetime ban on a rodeo clown whose depiction of President Barack Obama getting charged by a bull was widely criticized by Democratic and Republican officials alike.
The rodeo clown won’t be allowed to participate or perform at the fair again. Fair officials say they’re also reviewing whether to take any action against the Missouri Rodeo Cowboy Association, the contractor responsible for Saturday’s event.
The entertainment during the bull riding contest featured a clown wearing a mask of Obama with an upside down broomstick attached to his backside. Spectators were asked if they wanted to see “Obama run down by a bull.” Many in the audience responded enthusiastically.
http://www.cbsnews.com/8301-201_162-57598222/missouri-fair-bans-rodeo-clown-wearing-obama-mask/ - 112k -
“To learn who rules over you, simply find out who you are not allowed to criticize.”
– Voltaire or François-Marie Arouet (November 21, 1694 – May 30, 1778)
A state fair, subsidized with tax payer money, is not the place for political statements.
Yeah - that should be left up to the public schools…
mmmmmm……mmmmmmmm……..mmmmmmm
“A state fair, subsidized with tax payer money, is not the place for political statements.”
Doesn’t Norah O’Donnell deliver the CBS Morning Propoganda with Bilderberg Charlie Rose and Oprah’s best friend Gale What’s her name now?
MSNBC’s Norah O’Donnell Aggressively Defends Video of Kids Singing to Obama
By Scott Whitlock | September 24, 2009 | 17:36
MSNBC’s Norah O’Donnell on Thursday appeared mystified as to why anyone would have a problem with New Jersey school children being led in a song praising Barack Obama. The February 2009 video contained these lyrics: “He said we must be fair today! Equal work means equal pay! Barack Hussein Obama! He said, red yellow, black or white, all are equal in his sight! Barack Hussein Obama!”
MSNBC’s Norah O’Donnell Aggressively Defends Video of Kids …
http://newsbusters.org/blogs/scott-whitlock/2009/09/24/msnbc-s-norah-o-donnell-aggressively-defends-video-kids-singing-obam - 85k - Cached - Similar pages
Sep 24, 2009
Which is why all those politicans in suits were photographed “having fun” with corn dogs in Iowa..
If Obama had a clown……..
“If Obama had a clown…..”
He would be arriving in the idyllic coastal retreat of Martha’s Vineyard in Massachusetts on one of two MV-22 Ospreys, a hybrid aircraft which takes off like a helicopter but flies like a plane.
Of course Bo, the first dog, was flown to join the Obama family on Martha’s Vineyard in his own MV-22 Osprey helicopter on Monday. So if Obama did have a clown, perhaps they would have needed three MV-22 Ospreys to make the Martha’s Vineyard run.
Como se dice “credible fear”?
Border Agents Overwhelmed by Mexicans Using ‘Fear’ Scam to Gain Entry
Monday, 12 Aug 2013 10:25 AM
By Audrey Hudson
A flood of new immigrants crossing the Mexican border are using what some officials believe is a coordinated scam which has forced the closure of at least one overwhelmed federal processing center.
The local ABC News affiliate in San Diego reports that nearly 200 immigrants inundated the Otay crossing on Monday, and that all are using the phrase “credible fear” of drug cartels in Mexico as their reason for fleeing Mexico.
“They are being told if they come across, when they come up to the border and they say certain words, they will be allowed into the country,” said a border agent who wanted to remain anonymous.
“We are being overwhelmed,” the agent said.
Unnamed sources told the News Team 10 reporters that for $300, immigrants can buy a video in Mexico that instructs them on how to beat the system by learning key phrases to gain immediate entry into the U.S.
“There has to be a policy change, something implemented, an emergency implication that will stop this, or otherwise we will have thousands coming in, into the United States,” the agent said.
Pete Nunez, a former U.S. attorney who specializes in immigration issues, told the ABC station said the sudden surge appears to be well orchestrated and “makes our system even more ridiculous than it has been in the past.”
The claim also guarantees special treatment for the immigrants.
Families cannot be split up in detention, and with groups of relatives numbering as high as 30 making the claim, the only option for federal officials is to release the immigrants into the U.S. on a bond system until a scheduled court hearing to prove their claim is legitimate.
But sources told the San Diego TV station that under this system, the immigrants never return and instead disappear into the U.S.
“It’s a huge loophole. If the government doesn’t figure out some way to combat it, they are going to be deluged,” said Nunez.
Christoper Bentley, of the Citizenship and Immigration Services, described to News Team 10 the lengthy process of gaining asylum by pleading “credible fear.”
“Any individual who asserts a fear of persecution or torture … is referred to an USCIS asylum officer for an interview to determine if the individual has a credible fear of persecution or torture. Credible fear determinations are dictated by long standing statute, not an issuance of discretion,” Bentley said.
© 2013 Newsmax. All rights reserved.
http://www.newsmax.com/US/mexico-border-credible-fear/2013/08/11/id/519807 - 70k -
The chickens of bad socio-economic policies of the 1970s and 1980s are coming home to roost.
The war on drugs has not made the slightest dent in illegal drug usage rates. All it has done in increased prices, creating ever more crime amongst the addicts forced to commit more crime to get the money needed to buy the drugs and amongst the producers and distributors looking to grab the profits.
Combine this with an immigration police that amounts to little more than “stop enforcing the laws, and they will come”.
We’ve made a lot of really bad decisions with our socio-economic policies.
You mean like Amensty Part I (1986)?
Yep - a total disaster.
Agreed.
We went from 200K new illegals a year pre-1986 to about 1 million a year for a few years post. Within 4 years of the amnesty, there were more illegals here than before the amnesty.
BUT that was because we still did not lock down jobs and housing. We continued to ignore our immigration laws.
It is almost as if “someone” wanted those millions of new people to keep the population growing despite a crashing birth rate well below ZPG that put us on a course for declining population.
Wouldn’t it have been better to get the new people we need to maintain 1% population growth in a way other than just choosing to not enforce our laws?
Or have your indigenous population breed?
Where do people have lots of kids? What do they require?
Low taxes
Religion
Small government
There is a reason why huge government, high tax countries that have practically banned God have fertility rates below replaces levels.
In America - the state with the highest fertility rate is Wyoming. The states with the lowest indigenous fertility rates (not including recent immigrants) are left wing democrat socialist hell holes.
lots of kids? What do they require?
Federal tax dollars from the “left wing democrat socialist hell holes” to pay for their WIC, SNAP, Medicaid, EITC because their Right-To-Work (for less) McJobs don’t pay enough to live on.
Correlation does not equate to causation.
You say Wyoming has the highest birth rates and least government.
I could then point out that education level is a significant factor in fertility rate (the less educated, the more kids), and Wyoming ranks 40th in % of population with a bachelor’s degree.
You want the natives to have more kids? So what is the plan? Turn everyone into a farmer and rancher like Wyoming?
Lower tax rates… Because we’ve been going in the right direction for the last 40 years. Today’s economy is SOOO much better than the economy of the 1950s… right?
Remember, there are 2 ways to achieve lower total taxes. 1) lower rates. 2) more deductions.
1) Encourages trade imbalances, rich get richer and we’re forced to find ways for everyone else to go into debt to generate the money that the few are accumulating.
2) Encourages a balanced economy as high income individuals will spend their money to avoid handing it over to the government in the form of taxes. Keeps the existing money in active circulation so that we’re not dependent on unsustainable debt growth to generate enough money to replace that which leaks out of active circulation.
I’m a huge fan of HIGHER rates and WAY more deductions, reducing total taxes by creating a stronger economy and removing the need for unsustainable debt growth… but hey, I’m just crazy… right?
Total debt in 1980: $4T.
Total debt today: $44T.
I guess lower marginal rates, fewer deductions, and mass trade imbalances are a good thing after all…. Debt to the moon is the goal, right?
I’m a huge fan of HIGHER rates and WAY more deductions,
Translation: you’re in favor of punishing savers, and rewarding profligate spenders.
Right?
You must be a big fan of the current Fed policy, then, as you seem to share their goals.
Wyoming ranks 40th in % of population with a bachelor’s degree.
One problem Wyoming has is that they send the kids off to get a college education and they frequently don’t come back due to lack of jobs that will use and reward them for that education. I’m pretty sure that skews the number quite a bit.
I’ve thought about what it would take to move a high tech company up there and I think you’d have to grow it from scratch rather than move it. If I tried to move a group of Colorado techies up there they’d all quit. Educated people with money generally only want to live around other educated people with money even though their money doesn’t go as far.
Incorrect translation.
The confiscatory income tax rates I’m in favor of are patterned after those that worked in the 1940s and 1950s. That is, the truly ugly rates, like 50% plus, do not begin until you have an income above 10x the national median household income.
Compare that to what we have today. My wife and I make about 3.5x the national median income, but we’re both just under the SS cap. When both halves of SS+MC are added to our 28% marginal rate, we’re at 43%.
A 1950s style tax code would lower my SS and MC to 5% while dropping my income tax to 15% and reduce my marginal rate to 20% from the current 43%.
Meanwhile, those making more than $500K a year would get hit with a 50% marginal rate, 75% above $1.5 million, and 95% above $3 million BUT only on the money they do not spend.
Remember, that is per year, not your total nest egg. You could set aside a cool $300-400K a year cash in the bank, allowing you to accumulate $12-16 million over a 40 year working career, without hitting a confiscatory tax rate.
AND, remember, that is only on money not spent, and Yes, investing in a business, buying stocks, and other forms of non-debt based investments would count as spending and be fully deductible.
When does “saving” become “hoarding”?
I’d say “saving” becomes hoarding when it creates a significant drain of money from active circulation that threatens the economy unless that money is replaced by unsustainable debt growth.
$4T total debt in 1980. $42T total debt today. I’d say MANY, MANY individuals in this economy are way, way past “savings” and way into the realm of “hoarding”. Each dollar of debt is a dollar of money somewhere. Or turn it around. Each dollar of money is a dollar of debt somewhere.
“Educated people with money generally only want to live around other educated people with money even though their money doesn’t go as far.”
And they don’t want to have a pack of kids preventing them from taking their fancy vacations and eating out at the finest restaurants.
When your idea of a fancy vacation is pitching a tent at the lake, more kids is not a problem. When your idea of fine dining is fast food or round steak, a letter is fine.
When you think an “okay” vacation is a week at your Waikiki tie share, and an average meal is rib eye at the steak house, then a pack of kids is a real dent in the lifestyle.
Where do people have lots of kids? What do they require?
…
Religion
Will any religion do? How about Islam? Those dudes have lots of kids.
I ask, because I’m pretty sure that your usage of the word “religion” is code for “Protestant Fundamentalist”
As for what do people require to have kids, it’s really simple: It’s called a steady job that pays well.
Banana, you’re crap.
Tax rates were pretty high in the 1950’s and we had a baby boom.
What do you need for kids?
Well paying careers (tarriffs, unions).
Public option/single payer health care.
Lower college costs both for the parents who went and the kiddies who will go. (or jobs that don’t need college.)
Lower housing costs.
In short, disposable income, preferably enough where one parent can stay home. I don’t think we’re going back.
In the 1950s –.
Fed taxes were low due to marginal low rates and huge deductions for about 96% of America.
Most states had no state income tax and low sales taxes
No Medicare tax
Social Security at a 1%
NO Public unions
The Federal Government HALF as big as it is today (adjusted for population and percent of GDP it takes)
The Federal Government guaranteed almost NO MORTGAGES
The Federal Government guaranteed almost NO STUDENT loans
The Federal Government had NOT socialized medicine
And what did we have?
Good paying jobs
Low college costs
Low housing costs
Low health care costs
Bigger and bigger government, which takes more and more, of GDP has destroyed America.
No one can afford children unless they are on the government dole. Government has made everything they touch (in the name of “fairness”) more and more expensive.
That is the America big government progressives have given us.
You are correct in one thing, we are not going back. Once government grows it never shrinks.
“As for what do people require to have kids, it’s really simple: It’s called a steady job that pays well.”
Oh if that were true.
Quite the opposite is the reality.
“Educational attainment is a very critical factor in accounting for lifetime fertility differentials. Women with 1 or more years of college have sharply lower lifetime fertility than less educated women, regardless of race or Hispanic origin. Women with college degrees can be expected to complete their childbearing with 1.6-2.0 children each; 1.7 for non-Hispanic white, 1.6 for non-Hispanic black, and 2.0 for Hispanic women. For women with less education the total expected number of children are: 3.2 children for those with 0-8 years of education; 2.3 children for those with 9-11 years of education and 2.7 for high school graduates.”
http://www.cdc.gov/nchs/pressroom/97facts/edu2birt.htm
The more educated and the higher the income, the fewer number of children.
I should have been clearer, I was talking about blue collar workers. I do agree that well educated yuppies aren’t interested in having kids.
Incorrect translation.
The confiscatory income tax rates I’m in favor of are patterned after those that worked in the 1940s and 1950s.
Ok, those don’t sound too bad to me, then.
Sorry for the incorrect translation.
I like the idea of defining them in terms of multiples of the median, so that the brackets are self-adjusting over time.
A credible fear that amnesty is coming and they are not on the right side of the border.
LOL… Good one, Dale.
Banana Boy, this one’s for you!
http://www.gocomics.com/matt-bors/2013/08/13
And, yes, you will like it.
From yesterday.
Comment by eastcoaster: Houses in the $225 - $275,000 range in my neighborhood sell within days. That’ll get you a 35-50 yo house with 3BR, 1.5-2BA, ~1500 sq. ft., on 1/4 - 1/3 acre.
Comment by rms: How far away are the “family supporting” jobs?
Family supporting jobs start locally (I work <5 miles from my house). I’m in a suburb of Philadelphia.
sounds like Philly is inflated by 200%….. Even as it continues to depopulate.
Don’t worry - property taxes up 300% make up for it
I think what helps my neighborhood is that it’s a fairly small school district where, if you really want your kids to attend that school, there are fewer housing options than some of the massive school districts surrounding us. (And taxes aren’t outrageous, although higher than in those massive districts.)
Somewhat surprisingly, my neighboring school district town just showed up on Money Magazine’s 50 best places to live (#34):
http://money.cnn.com/magazines/moneymag/best-places/2013/snapshots/PL4235800.html?iid=BPL_fl_list
Oh boy, it’s the “school district” excuse again.
Eastcoaster, were house prices in that school district unaffordable before the bubble started, or have the prices merely increased and decreased and increased again with the rolling bubble? Think about it.
Goldman: “Without The Boost From Housing, Real GDP Growth Would Fall Below 1% This Year”
Wonder why the Fed and the banks are so desperate to reflate the second housing bubble, to the delight of flippers and taxpayer consequences (deja vu) be damned? Simple: as Goldman points out in a note released last night, “without the boost from housing, real GDP growth would fall below 1% this year.”
http://www.zerohedge.com/news/2013-08-13/goldman-without-boost-housing-real-gdp-growth-would-fall-below-1-year
We need $1.5T a year new debt/money flowing into the economy to replace that which leaks out due to foreign and domestic trade imbalances.
With house prices down, the household sector is not contributing ANY of that new money that our imbalance plagued economy needs to function.
This has forced the federal government to step up with $1.5T a year deficits to create the new debt/money we need.
If we ever want the government to cut deficits,then we must figure out a way for households to resume borrowing and spending. Money can’t be accumulated by the few, until it exists. Since money is borrowed into existence, SOMEONE, SOMEHOW, must be doing the massive borrowing. Asset price bubble is a tried and true method of getting debt flowing.
California housing affordability declines as home prices rise
“Deja vu”
You”ll be priced out of the market foreveeeeeeeeeeeer!
http://www.latimes.com/business/la-fi-housing-affordability-20130813,0,1509728.story
For the majority of people, the amount of evidence needed to convince them of a truth is inversely proportionate to how much they want it to be true.
If someone wants house prices to go up (my sister for example, who already owns half-a-dozen so-cal rental units), ANY shred of evidence is sufficient to prove we’re on the cusp of another massive real estate bull market.
On the flip side, someone that really wants another crash, can grasp to any shred of evidence as proof that the next collapse is imminent.
The rare person is the one that can detach personal interest and desire from what the data shows.
While all around me were losing their heads over 30% annual real estate gains, I could clearly see the bubble formation.
On the flip side, when houses were selling for 30% below rent equivalent, I suspected we may be nearing the bottom (for one particular market, not nationally).
Now, as house prices have returned to historic norm price/income and price/rent ratios, we have some people screaming “Prices will keep going up 20-30% a year forever” and others screaming “Volume is gone. It’s all a lie and prices are in freefall”.
I suspect both screamers are incorrect. I suspect the Phoenix housing market gains will flatten, but not return to full crash.
Let’s take a condo that could rent for $700 a month as an example. Buying such a place for about $70K would mean that mortgage, insurance, tax, maintenance, etc. would cost about, yes, $700 a month.
At the peak of the bubble, a condo like that was selling for $150K, meaning it would cost you about $1500 a month to buy a place you could rent for $700 a month. DO NOT BUY!
At the pit of the crash a couple years ago, that same condo would be selling for $40K. This means you could have bought for $500 a month something that would cost you $700 to rent. BUY!
Now, prices are back to about the point where buying and renting are cost equivalent.
I had suspected that with all the units clearing foreclosure and becoming rentals that rents would have dropped significantly, however, I’ve seen no evidence of that.
So, short of a return of crashing national economy, I just don’t see how a market at price/rent equivalence is going to make a huge move up or down from here.
BUT, since flat prices are in NO ONE’s best interest, it is pretty hard to convince people that prices are probably going to be flat.
Considering prices are falling when defaulted property is included, why attempt to persuade anyone of anything? Let the prices fall.
Couldn’t agree more, thanks Darrell
Kevin Robinson thanks you.
You forgot to include the associate dues on top of that mortgage. Phoenix rentals haven’t penciled out for months now. Inventory is haywire.
“association” dues
To be more specific:
Housing inventory in Phoenix has been increasing at an average rate of 3.5% per month, for the past six months. It shows no sign of slowing. This tells us that supply outstrips demand. A rational person would not believe that prices will be flat in the near future.
Depends on if the listings are “maybe want to sell” or “have to sell”.
If it doesn’t sell at the current price, will the owner pull it off the market, or lower the price until it does sell? THAT is what will determine if prices drop or not.
Knowing that todays price is your best price, then there is no choice to sell.
rubbish put down your ipad and make an offer!
On the flip side, if you can rent for the same price as buying, there is no great driver of demand.
IF house prices start to fall, as you seem to imply, then buying would become cheaper than rent again, bringing back the demand, limiting any downside move.
It depends. If the inventory is withdrawn from being offered, prices could stay flat. And if sellers would be underwater if they discounted, then they will withdraw and not fire sale (though some might default)
Inventory is increasing. It is irrational to think that sellers will suddenly pull their houses off the market, in the face of this ongoing trend of increasing inventory. The fact is that supply is greater than demand. Irrational exuberance may be causing higher prices for now, but that only goes so far. Between the builders, the foreclosures, and the regular sellers, there are simply more houses for sale than people who want to buy in Phoenix.
It was in the “etc.”
Agree. You can no longer buy for a price that will rent cash-flow positive. At best, you are break even with rent.
Which is why I think prices will stop going up.
“Which is why I think prices will stop going up.”
And…. and…. and?
PS- you’re spamming again.
“Now, prices are back to about the point where buying and renting are cost equivalent.”
Ownership usually includes a 20% immediate investment and a monthly payment obligation that is difficult to stray from, property taxes, insurance, and the ever present depreciation and maintenance expense, so unless you can buy near the bottom…RENT.
Irish Banks Chasing Defaulters Who Sleep Well at Night
By Joe Brennan & Finbarr Flynn - Aug 13, 2013 - Bloomberg
Strategic defaulters, homeowners who can pay but won’t, account for 20 percent of Allied Irish’s home-loan arrears, the nation’s biggest mortgage lender said on Aug. 1. The bank is fighting back after the government, responding to surging loan delinquencies in the wake of Western Europe’s worst real-estate collapse, made home repossessions easier.
“The best way to describe it is a creeping default,” said Ross Maguire, a Dublin-based attorney who represents debtors facing home repossession. “The most difficult repayment to miss is your first mortgage repayment; if there isn’t a response to that, it’s easier to miss the second time or make a reduced payment.”
The fact that banks are often reluctant to repossess homes may be encouraging mortgage borrowers to pay off other debts first. At the end of March, the banks held almost 1,400 foreclosed homes in a country where there are about 916,000 mortgages. In part, that’s because of a legal loophole which meant that banks couldn’t seize homes unless demand for full repayment had been made before December 2009.
“People naturally default to paying where they were getting most pressure,” said Duffy, 51. “And with that being a lease or car, they tended to believe that those were the priorities and that it was OK, or discretionary, not to pay your mortgage.”
Ah, the beauty of a non-recourse state.
In AZ, we can strategic default on a deed of trust and there is nothing the lender can do about it.
“Ah, the beauty of a non-recourse state.”
+1 This usually means a 20% down payment and/or a slightly higher interest rate. Beauty ain’t free.
Some people think it’s discretionary whether or not to pay the rent too, which I find odd. All my landlords think I’m great because I always pay the rent. To me, that would be the basic requirment. I can’t imagine keeping a tenant who didn’t always pay the rent. Of course landlords have a lot more influence than banks.
This person went to the Tom Vu seminar on making money in collectibles: http://maine.craigslist.org/clt/3997287665.html
Is shipping included?
Hi all.
I can’t work right now because the loud-talker is having a phone conversation on her cubicle speaker phone, so I thought I’d log in and tell you about a “professional” flipper who frequents my nabe. He lives in Phoenix, but travels a lot. Has a second home near me. He tells me he can’t even get a house to flip in Phoenix. Too much competition among buyers. Prices too high. In the meanwhile, I happen to know that inventory in Phoenix is rising. Does this make any sense to any one? I think it will crash by next summer.
I think the disconnect between “can’t get a house to flip” and “rising inventory” is that the flippers were buying houses from trustee sales where you have to pay cash at the auction, no loans, no inspections, etc.
The number of houses being auctioned off on the courthouse steps has dropped significantly, and because of low volume, they are selling for closer to retail market value.
On the flip side, with prices back up 20-30% from the pit of the crash, people looking to get out but that have been trapped underwater are now dipping a toe in the market to see if they can sell.
Put another way, there are fewer $50K, gutted, squatter hell holes being auctioned off on the courthouse steps, and a lot more $150K owner occupied being listed in ARMLS.
The prices you just mentioned are way too high for Phoenix. If you bought a $50k, gutted, squatter hole, then you lost about $40k on the deal. $150k in Phoenix? Get outta town.
“If you bought a $50k, gutted, squatter hole, then you lost about $40k on the deal.”
+1 A couple of years ago I looked around Phoenix metro at the typical 3/2 ranch housing market while attending a business conference. I discovered that I have Scottsdale taste and an Avondale budget.
phoeinix real estate will make u a rich man.
Phoenix is huge. Can flippers even soak up all the potential properties? This is getting interesting. I view Phoenix as a niche city but it is so freaking huge I wonder why these kind of places go critical mass for price. Hope the jobs and/or stock market keeps up with the housing demand.
It’s huge and you’d wonder why anyone would want to live in that heat for six months out of the year. My sister lives there and they have to cover all their windows with 3 inches of insulation, and then run the air conditioner all day. Without the prices being extraordinarily cheap, or job necessity, surely you could find someplace else you prefer.
Also, AZ is not creating anymore free sun:
http://www.treehugger.com/renewable-energy/no-more-free-sun-arizona-if-solar-power-fee-approved.html
A lifetime ban?
What, was he using performance enhancing drugs? What was that clown on? Anabolic Steroids? Human Growth Hormones? How did they get the lab work back so fast?
Missouri State Fair imposes lifetime ban on Obama mask-wearing rodeo clown
By Jessica Chasmar
The Washington Times
Tuesday, August 13, 2013
The Missouri State Fair has imposed a lifetime ban on a rodeo clown who donned a mask resembling President Obama during Saturday’s bull-riding competition.
Social media exploded over the clown’s stunt, with some people calling it racist, even likening it to a KKK rally.
But as the Washington Examiner points out, this isn’t the first time a rodeo clown has worn a presidential mask.
But in 1994, Douglas A. Campbell, a writer for the Philadelphia Inquirer chronicled a rodeo clown featuring George H.W. Bush.
From the report:
The big white gate flew open. The bull came out bucking. The rider flopped from side to side and the bullfighters held back, letting the bull make his moves until the rider dropped off. Licciardello crouched in a heavily padded barrel, a human target should the bull decide to charge. Hawkins waited near the barrel, holding his big inner tube. A dummy with a George Bush mask stood beside the clown, propped up by a broomstick.
T.J. Hawkins rolled out the big inner tube, and the bull lowered his head, shot forward and launched into the tube, sending it bounding down the center of the arena. The crowd cheered. Then the bull saw the George Bush dummy. He tore into it, sending the rubber mask flying halfway across the sand as he turned toward the fence, sending cowboys scrambling up the fence rails, hooking one with his horn and tossing him off the fence.
http://www.washingtontimes.com/news/2013/aug/13/missouri-state-fair-imposes-lifetime-ban-obama-mas/ - -
Remember to bend thy knee when the chariot rolls past.
My position on the current state of the Economy???
http://consultingbyrpm.com/blog/2013/08/my-position-on-the-current-state-of-the-economy.html
More clown fallout
All clowns must prove they have undergone sensitivity training before theey can return to the fair.
Missouri fair bans mask-wearing clown who mocked Obama
Posted: Aug 12, 2013 8:09 AM EDT
By Chris Oberholtz, Multimedia Producer - email
By Alice Barr, News Reporter - email
By DeAnn Smith, Digital Content Manager - email
SEDALIA, MO (KCTV/AP) - The ramifications were swift after a rodeo clown wore a President Barack Obama mask and mocked the nation’s leader.
On Monday, the Missouri State Fair announced that the board had permanently banned the rodeo clown. This came the same day that the clown apologized. Tuffy Gessling wrote on Facebook, “I am sorry. I never meant to offend anyone. I meant no disrespect to anyone for the joke or jokes I may have said at the rodeo. Once again, I never meant to offend or hurt anyone’s feelings.”
The announcer, who is superintendent of a central Missouri school district, is also trying to distance himself from the uproar.
The incident occurred Saturday night at the fairgrounds in Sedalia during the The Missouri Rodeo Cowboy Association finals. Someone asked the enthusiastic spectators if they wanted to see “Obama run down by a bull.” The crowd was also told, “We’re gonna stomp Obama.”
The rodeo announcer, Boonville School District Superintendent Mark Ficken, said, “Obama watch out for those bulls.”
Some had accused Ficken of making off-color commentary, but that did not prove to be the case, his attorney says. His school board will discuss Ficken’s role in the brouhaha in a special meeting Tuesday night.
The state fair is reviewing the actions by the Missouri Rodeo Cowboy Association, who hired the workers, as well as reviewing the current contract. State fair officials say before the rodeo association can return to the fair that it will have to prove that all officials and workers have undergone sensitivity training.
After video recorded by an outraged fairgoer was posted to the internet, it quickly went viral and made its way to the national morning news programs and even the halls of Congress.
http://www.kpho.com/story/23108679/missouri-fair-clown-draws-criticism-for-obama-mask - -
According to a Forbes August 2nd article that focuses on the housing and automotive recovery, they begin by praising the dramatic year over year rise in home prices. However, they caution enthusiasm by reminding readers that much of the buying was from individual investors and Reits who have begun to dial back on their investments due to the lack of opportunities caused by the lack of good deals to be found now that prices are near stratospheric.
I think that portends a drop in home prices that could lead to a mild recession in the near future. Add to that that stocks have been begging for a correction lately.
Some good investing opportunities in precious metals, stocks, commodities, and housing could be coming soon.
I’m salivating.
Yeah, me too.
Report: Michael Hastings Was Investigating CIA Director John Brennan
Brennan named as being “behind the witch hunts of investigative journalists”
Paul Joseph Watson
Infowars.com
August 13, 2013
Journalist Michael Hastings was investigating CIA director John Brennan before his untimely death in a suspicious car accident it has been revealed, with the report set to be published posthumously by Rolling Stone Magazine within the next two weeks.
Dvorak-Hastings
view on site
According to San Diego 6 News reporter Kimberly Dvorak, “John Brennan was Hastings next exposé project.” Dvorak says she received an email from the CIA, “acknowledging Hastings was working on a CIA story,” although the text of that email was not displayed.
Dvorak also cites a Stratfor email hacked by Wikileaks and first published last year which names Brennan as being, “behind the witch hunts of investigative journalists learning information from inside the beltway sources.”
“There is specific tasker from the WH to go after anyone printing materials negative to the Obama agenda (oh my.) Even the FBI is shocked,” states the email.
Before being sworn in as CIA director in March this year, Brennan was a counterterrorism advisor for the Obama administration and helped compile the “kill lists” for the White House’s drone assassination program.
A separate email Dvorak received from CIA media spokesman Todd Ebitz states, “Any suggestion that Director Brennan has ever attempted to infringe on constitutionally-protected press freedoms is offensive and baseless.”
Was Hastings about to reveal that Brennan had been tasked with targeting independent reporters who were in the business of releasing sensitive information?
Dvorak claims that Hastings’ posthumous exposé of Brennan will be published by Rolling Stone Magazine within the next two weeks, although this has yet to be confirmed by the publication itself.
Infowars first reported that Hastings was likely investigating the CIA prior to his death following the comments of Hastings’ close friend Sgt. Joe Biggs, who revealed that the journalist was working on “the biggest story yet” about the CIA.
Hastings sent an email hours before his death stating he was “onto a big story” and needed “to go off the rada[r] for a bit.” A separate close friend of Hastings also told Infowars that the journalist’s home was visited by agents from an unnamed federal agency the day before his death.
Analysis of the recently released surveillance footage of Hastings’ vehicle in the moments before the crash, which was carried out by SDSU professor Morteza M. Mehrabadi, Professor and Interim Chair Areas of Specialization: Mechanics of Materials, also suggests that Hastings was not speeding before his Mercedes hit a tree.
The footage appears to confirm eyewitness reports that the car suffered an “explosion” before it hit the tree, suggesting some kind of incendiary device was planted on the vehicle.
By measuring the distance traveled by the car on the surveillance clip and the time that elapsed before the explosion, Professor Mehrabadi was able to calculate that the car was only traveling at a speed of 35 MPH, and not speeding as some reports claimed.
“The pre-explosion and slower speed could also explain the minimal damage to the palm tree and the facts the rear tires rested against the curb. It also provides an explanation for the location of the engine and drive train at more than 100 feet from the tree impact area,” writes Dvorak.
The moral hazard for CIA brass under investigation to use a secret death squad to knock off their investigator must be overwhelming.
But an SDSU professor already cracked the mystery. HA. Don’t go messin with SDSU.
U.S. Army Conducts Military Occupation Drill in Small Town Wisconsin
Operation Tiger emulates military control of local, elected officials.
Kit Daniels
Infowars.com
August 13, 2013
A U.S. Army Civil Affairs and Psychological Operations (CA & PSYOP) Command battalion recently practiced joint control of a small town with local authorities in a “realistic training exercise.”
Credit: puroticorico via Flickr
According to an article released by the army, 22 soldiers of the 432nd Battalion unloaded their Humvees in Gillett, Wisconsin and set up a forward operating base at the Oconto County Fairgrounds in order to “conduct assessments” on some of the surrounding cities and to meet with “local key leaders.”
For the drill, the battalion apparently found it necessary to find a small, rural community with complete, working infrastructure such as:
- Garbage and recycling pickup
- Police and fire departments
- Parks
- Schools
- Doctors
- A dentist
- A chiropractor and
- An optometrist
All of which would be difficult to find in a war-torn city in Iraq or Afghanistan.
“We chose the city of Gillett for the first time this year because of the size, demographics and municipalities offered within the city and surrounding area,” said Sgt. 1st Class Patrick Leon, the noncommissioned officer in charge of the civil-military operations center. “It replicates what we may find in an overseas environment.”
The article later admits, however, that there are no future plans to deploy these soldiers overseas.
The soldiers also gathered information on community leaders “from hobbies, interests and religion” as well as “daily activities,” thus honing behavior profiling skills that could be useful to PSYOP teams in identifying “political dissidents.”
The operation allowed the soldiers to “sharpen their skills” in advising the police chief on how to increase local law enforcement capabilities.
The article also suggests that the experience gained in the exercise can be applied to civil-military operations in larger cities.
The military typically establishes a civil-military operations center in areas of combat in order to coordinate population control with local entities.
Perpetual wars fueled by fiat currency have led to the development of military weapons, tools and tactics which are now being used domestically.
As reported recently by Steve Watson, small town police departments are being militarized with elite war equipment.
Cities no larger than Gillett are receiving M14s, Humvees and even armored personnel carriers.
The police chief of Morven, Georgia, a town of 835 people, told the Associated Press that he could take his officers with their equipment and training and “shut this town down” and “completely control everything.”
As we reported last month, Predator drones owned by Customs and Border Patrol are now being used by the FBI and state law enforcement for domestic surveillance in a “layered security strategy.”
In the wake of small town SWAT teams and domestic drone use, it appears that joint civil-military operations are also coming to America.
Be sure to check out the Police State Collection to see how far our constitutional republic has fallen.
This article was posted: Tuesday, August 13, 2013 at 5:50 am
How many folks out there in HBB land have thrown in the towel on savings this year (aside from home equity and stock market wealth gains) in the face of the 2% payroll tax hike?
Speaking for ourselves, we are trying to decide whether to work more, spend less or save less. The latter sure does seem tempting!
Can’t you start eating those rabbits that are always in your yard?
If savings is something that is hard for people to accumulate then this makes savings all the more valuable.
FYI:
Gary Johnson is doing an AMA on reddit right now if anyone is interested in asking him a question.