Bits Bucket for August 27, 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.
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Name:Ben Jones
Location:Northern Arizona, United States
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“Why would pay more than new construction cost ($60 per square foot) for a depreciating 20+ year old resale house?”
Because that’s what dumb borrowed money does?
Why pay $60 per sq ft when I can hire guys in the trades by the pound ( $15 to $20 per hour cash) get the materials from Erie materials, Greybar etc and get the job done for a fraction of $60 per sq.ft. Construction is not rocket science. It is an industry riddled with high school dropouts.
You’ll still spend $40/sq to get to code. Plus you have the hassles of workers comp, etc. CM the project instead.
Do the skilled trades require a rocket science degree? Answer: No.
HA most contractors are not aware of this law in NYS
Locke town officials got an earful tonight: about liability insurance, government over-regulation, freedom of the marketplace and freedom of religion. At the heart of it all were their new neighbors, the Amish.
More than 100 people showed up at a special town meeting about liability insurance. Because the town meeting room was too small, officials moved the meeting to the adjoining fire department garage, after trucks were moved out.
The informational meeting — no decision was made — considered the town’s requirement of liability insurance for contractors seeking building permits. Town officials recently discovered that neither the town nor the state has a law requiring liability insurance for building permits.
http://blog.syracuse.com/news/2007/11/locke_meeting_on_insurance_ami.html
Sure. Worker’s comp is over-regulation. After all, if someone falls off the structure and breaks their neck, it is their own tough luck. No need for you to have to pay for such silly stuff. Just bury them and their family in debt forever, even burden society, so long as you get your cheap product.
While I agree with the concept of workman’s comp, it, like every other program, is rife with fraud, waste and abuse.
I wonder how different the world would be if we stopped focusing on the war on drugs and focused more on financial crimes.
To United States of Moral Hazard
There is a difference
Workers compensation covers lawsuits against employers by their employees who claim employer negligence on the job. It is required in many states.
General liability insurance covers bodily injury and property damage that you or an employee may cause to someone else because of negligence in the product or service you provided.
So why have you extensively discussed (in the not-distant past) that you’ve been considering pay north of $100/ft for a house in a dead area of upstate NY?
Liberace….. As you OK today?
That was for SU Guy.
He’s posted before about his house hunt near Syracuse. He’s talked about considering paying over half a mil for a depreciating shack in a dead area of upstate NY (yes, I know that’s redundant since almost all of upstate NY is dead).
Well its not like its worth any more or less if it was elsewhere.
Your schtick is so overwrought. At least houses that are near jobs & places people want to be are worth _something_. You really can’t tell the difference between a house in MFH, BK, or Bergen County vs a house in central NY? Gas yourself.
Your “you couldn’t sell it for a dollar” thing undermines your general good points. If you want to be an aspie, I really can’t stop you though. Carry on.
Material prices are triple? And labor is double? That’s fits in well with the Big Housing Lie but its not the truth.
Strawman much? Of course the materials don’t cost much more, if more at all. (Maybe a little more to comply with tougher building codes? But IDK, I’m not a builder.)
The point is, if you’re 5 miles from MFH, you are 5 miles from “alot” (sic) of 6-figure income jobs whereas if you are 20 miles outside Syracuse you’re a long ways from any such nexus of stable and high paying employment. Good luck getting a tenured job at Syracuse, for example. Boomers already boomered upstate NY beyond repair.
No that’s not the point.
We’ll build the same thing under the same site conditions for the same price anywhere in the country.
And then sell it for whatever the market will bear which is a lot more in places where there are a lot of good jobs. Your building costs (including some allowable minimum profit) set the minumum price (the cut off where your corporate overlord would stop building them if it couldn’t get that price) not the price at which your corporate overlord will sell them if it can get more.
And then sell it for whatever the market will bear which is a lot more in places where there are a lot of good jobs.
You’re suggesting the buyer is getting ripped off in this circumstance.
Please note, everyone, that HA just conceded that while his employer *could* build and sell for $60 per square foot, they *don’t* sell for $60 per square foot any place they can get more.
So all those places he says you should be buying for $60 per square foot in [where ever]? They don’t actually exist.
Concede? Such a dishonest attorney. They’re your words not mine.
And yes….. we’ll compete at $60/sq ft everywhere in the country.
u get what you pay for.
You certainly didn’t. Just how far underwater are you $hithousePoet? $150k? $200k?
I know you have never seen any equity in your life loser.
“azdude02″ is starting to come unhinged. Now he’s adding “loser” and what not to his posts to vent some of his anger. Since when is “equity” something to be spent anyway? It takes a special brand of stupid to subscribe to that school of thought.
I’ve been living in that empty skull for months now.
Prices at Erie are about to go up, actually. I can’t say why. I’ll link back to this comment once I’m allowed to talk about it.
Along with the housing bubble we got a commodities bubble. Why build new when materials are near all time highs?
materials are near all time highs?
What difference does that make? Cost of materials isn’t that large a proportion of the cost of building new.
Location location location.
“Location” is simply an old worn out realtor marketing technique use to get the target to pay far more than the property is worth.
Are you seriously saying that a house in Topeka, KS is worth the same as a similarly sized beachfront house in Malibu?
Yes.
A 2×6 is worth about the same. In one place the land is measured by the square mile, in the other by the square foot. There are a lot of high paying jobs in Toronto, but if I take my boat there, it isn’t worth more than it is in Syracuse.
If your job is in Toronto, it’s worth more to you as the commute from Syracuse is killer.
Does that mean I should buy a smaller boat if I decide to work in Toronto? I’m on a budget.
Does that mean I should buy a smaller boat if I decide to work in Toronto?
I”m guessing that moorage there is more pricey than at your usual layover spot…
Why pay $60 per square foot for a depreciating asset when you can pitch a tent and buy a portable out house for under $1500.
The fact that you got ripped off hasn’t sunk in yet……… it will….. and it will be painful for you.
25 MILLION excess, empty and defaulted houses CHECK
Housing demand at 14 year lows and falling CHECK
Housing prices inflated by 250% CHECK
Household formation at multi decade lows CHECK
Rampant housing fraud CHECK
Public denial formed and supported by a corrupt media CHECK
Population growth the lowest in US history CHECK
Immigration flat to slightly negative CHECK
Oh my word
“25 MILLION excess, empty and defaulted houses CHECK”
30 million houses built over last 20 years, as population increased by 65 million people. IF (and they do not) that many excess, empty houses exist now, then they have existed for more than 20 years, and have not crashed the price of houses yet.
“Housing demand at 14 year lows and falling CHECK”
So, housing demand is less than the bubble years? I’d consider that a good thing. We’re back at the normal demographic/population historic normal trend.
Falling is not accurate. We’re up from the pit of 3-4 years ago and are back to normal trend line.
“Housing prices inflated by 250% CHECK”
Some markets perhaps. My 1600 sqft house has a current market value of about $130K, or about $80 per sqft. I believe this is near fundamental value as houses in my neighborhood rent for about $1300 a month. It is also less than 3x the median income of the target market, so is at historic norm for price/rent and price income ratio.
For that $130K to be 250% overpriced, my house would have to have a fundamental value of about $52K or about $32.5 per sqft. Half the cost of construction, not including the land, At that price and 20% down, as a rental it would cash flow positive about $800 a month
The 1000 sqft 2/2 I bought a year ago for $48K, if 250% overvalued, would have a fundamental value of $19K, or $19 per sqft.
“Household formation at multi decade lows CHECK”
While true for 2008-2010, since 2011 we’ve been back at historic normal trend of 1 million households a year. Going forward, we’re going to see this slow drastically during the Boomer die off. 300K new households a year will become the norm. HOWEVER, new housing starts has also slowed from 2.1 million houses a year to 700K a year. In effect, we’re slowing construction a decade before household formation will take a demographic drop.
“Population growth the lowest in US history CHECK”
Again, inaccurate.
We’re adding 3 million people a year. From 1900 to 1940 we added 62 million people, or 1.55 million people a year, half our current growth rate.
Again, this will slow dramatically as we see boomer die off in the 2020-2040s, but with expected net migration, we should still maintain close to 1 million new people a year.
“Immigration flat to slightly negative CHECK”
Illegal immigration, perhaps. The 2013 CIA World Fact Book puts USA net migration at 3.64 per 1000 population, 28th highest in the world. Doing the math to 320 million population we find net migration at 1.1 million.
You are just wrong. So far wrong, that it has to be intentional.
Why do you want to be so ridiculously wrong? I mean, it HAS to be intensional, right? You can’t be this wrong, accidentally.
Darryl,
You’re not going to let the truth get in the way of you’re persistent lies, who are we to stop you?
Enjoy your losses .
How many houses were torn down during that period? How many houses were torn down by governments using taxpayer money?
The US currently has a net gain of one person every 13 seconds.
Where are we going to put all those people?
Smell test: 3 million a year = 8K per day = 342 per hour = 5 a minute… so yeah.. one person every 13 seconds is about right.
Where are we going to put them? 3 million people a year divided by 2.5 per household = 1.2 million households a year. We’re building some 700K new houses per year and have several million excess houses left from the boom.
And, of course, about a decade from now, we’re going to start the Great Boomer Die Off. At that time, expect population gains to fall from 3 million a year to about 1 million a year.
With 25 million excess empty houses and growing.
Bear has nothing to offer, so he just cries that Darryl is wrong. Funny Bear.
Darryl has nothing to offer but lies, so he just keeps lying. Funny Darryl.
Bear has nothing to offer, so he borrows from those who do. Funny bear
And he lives in your underwater head, rent free.
And, of course, about a decade from now, we’re going to start the Great Boomer Die Off.
But their kids, the echo-boomers/gen y/millenials, who outnumber the boomers, will be entering their prime household formation years then, too.
“the echo-boomers/gen y/millenials, who outnumber the boomers, will be entering their prime household formation years then, too.”
Lie.
The 25 year boomer demographic cohort dwarfs any other subsequent 25 year cohort.
Nice try though.
Gen X and Y already formed their households. If they get married, then their household number will be cut in half.
Nice try though.
Wkipedia is trying it too:
Gen Y, born about 1985 to 2005, (who outnumber the boomers, btw) are just beginning to form households.
Alpha:
The houses for Gen X and Y are already built. They are living in them now, since they are old enough to be college graduates. The houses currently occupied by Boomers (which, according to you, is approximately equal to the sum total of Gen X and Gen Y), are going to become vacant when the Boomers die. In the meanwhile, Gen X and Y are going to be getting married, which means their household size will increase and the total number of houses they occupy will decrease.
I don’t get this thread….
Are people actually trying to imply that there are not ANY children today that will become adults, and move out of their parents houses in the next 20-25 years? Seriously?
What we’ve had for the last 30-40 years is a smaller generation dying than becoming adults. Even 20 years after the bit of the boom, the new adults had been born at 3 million a year and the generation dying off had been born at 1.5 million a year.
As the boomers die off, the generation that will be turning 18-22 and replacing them was born at… yeah, the SAME rate as the boomers.
We’re not going to see massive household deformation. We’re just going to see domestic household formation go flat, while immigration continues to add additional households.
Instead of adding 1 million households a year, we’ll be adding 300K households a year.
We are NOT going to decline 35 million households!
http://www.cdc.gov/nchs/data/nvsr/nvsr62/nvsr62_01.pdf#table01
Number of births in 1950 (turning 75 in 2020): 3.6 million
Number of births in 2000 (turning 20 in 2020): 4 million
Number of births in 1955: 4.1 million
Number of births in 2005: 4.1 million
1960: 4.3 million
2010: 4 million
1962: 4.2 million
2012: 4 million
Yes, this is a significant change from:
1940: 2.5 million
1990: 4.2 million
BUT, it is NOT:
1960: 4.3 million
2010: 0
AS some peoples’ numbers would require!
35 million empty, excess houses? Right, because not a single child has been born, or will be born in the USE for the last 20 or the next 20 years.
What a joke!
“The 25 year boomer demographic cohort dwarfs any other subsequent 25 year cohort.”
Part of the problem with using a 25 year period, is that the babies that will become adults as the last of the people in that age range turn 75 years after will not be born for another 12 years.
I assume you are using the years 1946-1970. Baby born in 1970 will turn 75 in 2045. So, the baby that will be turning 20 that year, won’t be born for another 12 years, in 2025.
Unfortunately, I can’t do an exact count as the CDC only did every 5 years (1940, ‘45, ‘50) prior to 1952. This loses 5 years of the boom (46-49 + 51).
However, if we use the 1950 number for those missing years we get: 97.5 million babies born in the USA. Divide that by 25 years and we get an average of 3.9 million babies a year.
1946 + 75 = 2021. Babies that will be turning 20, the year the first Boomers turn 75 were born in, yes, 2001.
2001-2011 = 45 million. 4.1 million a year year.
So yeah, SO FAR only 45 million have been born to replace the 97.5. BUT, we’re only 12 years into the 25 year period where the replacement people will be born!
Nice try Liars….
There is no other 25 year demographic cohort that outnumbers the boomer cohort.
Unfortunately for you Inflated Housing Price Apologists, this simply means that there are an excess 35 million empty houses that just began hitting the market. This is in addition to the 25 MILLION excess empty houses in inventory.
Darrell:
What are you talking about? Baby Boomers were born after the Boys came back from WWII. They are in their 60s now. Their kids are in their 30s and 40s. We are not waiting for the kids of Boomers to grow up.
“Number of births in 1950 (turning 75 in 2020): 3.6 million…”
Math fail award!
Reread my post, uncle fed, and you will see that Gen Y alone outnumbers the boomers.
Given that Gen Yers are currently about 8 to 28 years old, I find it hard to believe they have already all formed households.
So you may need to rework your numbers.
WRONG again.
Boomer cohort=82 MILLION
Gen X(sub cohort of boomers)=41 MILLION Youngest Genxer? 38 years old
Gen Y cohort-71 MILLION
And the youngest Gen sub-cohort is already 22 years old.
So you see foolish one? A 143 MILLION combined cohort, the youngest of which are 38, are already home-debtors with nobody to take up the slack.
Are you not good at math or are you just dishonest? I wager dishonest as you’ve been caught in so many lies here that even exasperate the owner.
I think some of the commentators here are using weird birth ranges for the different generations. Baby Boomers were born like 1946-1956.
Gen X is their kids.
Gen Y is the kids of the echo Boomers.
There is no Baby Boomer born in 1970, and there is no 8-year-old Gen Y person.
Multi families home?
Roommates?
(darned insomnia…)
Comment by Rental Watch
2013-08-26 08:57:43
Now you’re quoting LPS and listening to Diana Olick?
Go to the source. Read the LPS report. Here are some quotes from the report:
“Delinquencies jumped almost 10% M/M but the quarterly increase was below average vs. prior years” - Page 3, first bullet.
“The trend for serious DQs is still down; rate close to pre-crisis average” - Page 9, Title of page.
Rental Watch, the LPS report was quite interesting, but I feel like you quoted a very misleading title from Page 9.
What it actually says is “Seriously delinquent loans THAT WERE CURRENT 6 MONTHS AGO” (emphasis mine).
Serious DQ’s are not close to pre-crisis levels—only NEW “serious DQs” are close to pre-crisis levels.
In other words, if you don’t count all of the longer-term serious DQs, then the stats look pretty good—the serious DQ bucket is not filling up from the younger DQs bucket. But those longer-term serious DQs are still part of the whole picture, so ignoring them seems very wrong, perhaps intentionally misleading on LPS’s part.
And, of course, the significant up-tick in M/M DQs was interesting—it will be fascinating to see whether this is a blip in the data, or no.
What the heck is happening in CO and UT??
“Now you’re quoting LPS and listening to Diana Olick?”
I don’t follow Diana Olick’s column, but what I’ve read of hers appeared to be accurate and out of step with the usual propaganda.
“Rental Watch, the LPS report was quite interesting, but I feel like you quoted a very misleading title from Page 9.”
As we’ve said about “Rental Watch” all along…… misleading.
The way I look at the foreclosure mess is as a bucket with a hole in it. How much is going INTO the bucket is represented by page 9. How much is going OUT of the bucket is variable depending on the state in which the foreclosure occurs.
THIS is why, as I’ve been saying over and over and over again that the big story in housing should be judicial vs. non-judicial foreclosure states.
When you combine “normal” levels of new serious delinquencies with a non-judicial state, the bucket empties relatively quickly, which is why you end up with states like AZ and CA, which were at 15%+ non-current loan rates, back down to 6.4% and 5.9% (see page 22–this is where LPS shows all the state-by-state data on delinquencies).
If you want historical context to what these states should look like, look at page 4, which shows national delinquent and foreclosure data going back to the mid 90’s.
At the pace non-current have been reduced since the worst in 2010, CA will be back to “normal” levels of delinquencies and foreclosures by the end of 2013. The trouble is increasingly being concentrated in judicial states.
And I don’t know what has been happening in CO/UT…weird.
Now think of that economy as a bucket full of “money in active circulation”.
Now, out of the bottom of the bucket leaks $600B a year in international trade imbalance and another $800B to $1T in widening wealth disparity (people that already have more money than they can spend, accumulating even more).
How do you keep the bucket full despite some $1.5T a year leaking out the hole in the bottom of the bucket?
Hint: Total USA public and private sector debt in 1980 was $4T. Today that total debt is $40T. Even adjusted for inflation and population, debt has been increasing at 3x the sustainable rate.
For the last 32 years, the solution to every economic problem has been the same. Lower interest rates, looser lending standards, get the debt flowing to create new money to refill the bucket.
I think it is past time that we address that hole in the bottom of the bucket.
Rental watch and fellow misleader darryl,
What you conveniently and deliberately exclude is the tens of millions of excess empty houses.
Start the conversation there and then you may develop some credibility.
But builders are currently adding to the inventory, since the shadow inventory doesn’t compete with them. Foreclosures are not the only houses going into that bucket.
We’re talking about inventory of distressed loans. Not housing inventory.
No. We’re talking about your penchant for misleading the reader with your deliberate obfuscation of the truth about housing.
You have zero credibility here.
BTW-
Directly to the question of whether the June delinquency data was a “blip”.
LPS came out with their “First Look” report yesterday, which is the big picture metrics on delinquencies:
http://www.lpsvcs.com/LPSCorporateInformation/NewsRoom/Pages/20130826a.aspx#.Uhzq4pLql8E
The MtM delinquency fell by 4%. Didn’t take back all the increase, but didn’t continue to go up either.
So far (granted, with only 2 months of data), it looks like seasonality as opposed to some change in the overall trend.
With foreclosure moratoriums in all 50 states, of course the numbers are skewed.
Why are you deliberately misrepresenting that Mr. Misleader?
Foreclosure moratoriums in all 50 states?
Why do people take you seriously anymore?
In all 50 states.
Seriously?
Here’s the reality….. you deliberately apologize for massively inflated housing prices…. and you deliberately misrepresent the truth about housing and you have motive; you have a stake in the direction of prices.
Now who has the credibility here and who doesn’t?
We read here that the GSEs are hiding a massive amount of stinky mortgages. This to me is a Federal moratorium on foreclosure.
Let them liquidate. I’d like to see the country get heading back to something honest and sustainable before my kids are looking at their three score and ten.
Let them liquidate.
That would be a nice change.
The thing that I think would be most interesting in an LPS report would be to see the average number of days to foreclosure go down. At the moment, they still seem be trending upwards at a rate of roughly 10 days per month.
PIC:
Are you referring to page 22, where they show the average days to foreclose being approximately 860 days?
Again, this is a byproduct of the judicial foreclosure process. If you want to “let them liquidate”, you need to change the laws in judicial states.
If you want to see more fun data, check out the FNM credit supplement: http://www.fanniemae.com/resources/file/ir/pdf/quarterly-annual-results/2013/q22013_credit_summary.pdf
Have you guys discussed this movement yet?
$500k to get in, in Chile?
http://www.youtube.com/watch?v=AHovLai1cMw
That’s the libertarian galt that only appeals to anarcho capitalists such as myself.
You anarcho-capitalists are going to have a dandy time unclogging your own water systems, defending your own titles, and enforcing your own anarcho-capitalist version of laissez-faire within the construct of a sovereign nation. Heavens help you when one anarcho-capitalist’s concept of anarcho-capitalism steps on the bunions of another anarcho-capitalist’s concept of anarcho-capitalism with only the established courts to adjudicate….
Besides GlennBeckville is 5,000 miles closer to home.
Especially when you are an old man with no kids to defend you, do the work, etc.
Argentina is what he said in the blog.
And what do you use for currency, he’s asked. Oh, we use fiat currency, but after that collapses, THEN we’ll start using gold or silver, or gold or silver backed currency.
HA, HA, HA, HA, HA.
HA!
A point that I believe needs to be made:
If you are an investor in a managed pool of OPM then you should be aware of just how the managers of the pool expect to make money - how they make money for the owners of the OPM and also how they make money for themselves. If the incentives of the two groups are aligned then everyone may end up happy. If the incentives are not aligned then one group may end up extremely happy and it just may turn out that this extreme happiness is at the expense of the other group.
If the managers of the pool of OPM get their money with the passage of time via a, say, two-and-twenty, then they have an incentive to:
1. Make the pool of OPM as large as possible so as to extract as much money as possible via two-percent of the pool’s size, and
2. Increase the value of the pool as much as possible so they can extract twenty-percent OF THE INCREASE.
The owners of the OPM do not expect to get their money DURING the run up as the managers do, instead they expect to get their money sometime AFTER the run up. And this is the point where the two incentives differ.
If the managers of the pool happen to find themselves in the position whereby they themselves can control the value of the pool (real value or imagined value) then, AS TIME GOES BY, they will be able to extract a lot of money for themselves via the two-and-twenty rule. If somewhere down the road (after the passage of a much time as possible) the concept falls apart and the reported increase in the value of the pool turns out to be an illusion then it is not the managers of the OPM that take the hit (remember the managers already got their money, their money was extracted during the run up), instead it’s the owners of the OPM that takes the hit.
If you are a manager of a huge pile of OPM in such an arrangement then your job is to pump up the prices by any means necessary, extract your two-and-twenty during the pump up (and extend the pump up for as long as possible), and when the prices can no longer be pumped up then you ignore the idea of extracting twenty percent of the gain that you will no longer get and focus your attention on continuing to extract two percent of the value of the pool.
And if prices collapse and the value of the pool goes into reverse? Hey, remember, it’s not your money.
The managers make their money during bubble inflation, so are focused on the short-term.
The investors, generally, are thinking more long-term, so pay huge fees during the bubble inflation then are left with net losses after the inevitable bust.
Sum it up?
The other big question that you should ask yourself if you invest in funds where there is OPM involved, is how much money do they have invested alongside you? There are always 1% GPs, who borrowed the money to invest–they have little at stake. I’ve seen situations where the GPs are investing 10% (or more) of the capital, with their own, after-tax money. That’s a BIG difference.
FWIW, many times, the 20 doesn’t kick in until after a hurdle rate is achieved. 6% annually is on the low end, 8% is more typical, and I’ve heard as high as 12%.
Yeah, but that ideology unfairly benefits GMs who have a lot of money to begin with. It’s better to choose a fund that is managed by a person who isn’t already rich. That person is MORE incentivized to make a go of it.
What about the rich person who made their money in the very same investment arena, and prefers to keep their money working in that investment arena?
Rich guy who:
1. Made their money through investing in oil/gas;
2. Wants to further diversify their investments going forward, and so brings in outside investors in a 2/20 fund structure;
3. Makes all of their oil/gas investments alongside outside investors through the fund.
Sign me up for that fund.
The person who has no money is incentivised to make the fund as big as possible to earn a bigger base fee, and is going to be willing to make riskier investments to get that money to work (so they can raise the next fund).
Sometimes the best investment strategy is to not invest at all…if the guy has no money in the deal, that will never cross their mind.
You shouldn’t be paying a base fee.
So then, if you want to invest with a group who doesn’t have money, and don’t want to pay a base fee, how do you expect them to make payroll in the years between first investing and actually harvesting the results (you know, the Dodd/Frank mandated compliance officer, CFO, asset managers, guys looking for investments, etc.)?
Contrary to popular belief, the profit share doesn’t get paid every year, it typically gets paid at the end of the fund (7-10 years later).
Rental Watch:
The profit gets shared every quarter.
Low cost index funds or nothing.
2 and twenty sounds terrible for a investor. Like a shell game.
It’s worth it only for the funds that have inside information.
Still relevant today: “Where Are The Customers’ Yachts?”
“The title refers to an ancient story (which the author finds is probably at least 100 years old by now) about a visitor to New York who admired the yachts that the bankers and brokers had in the harbor. Naively, he then asked where the customers’ yachts were. Naturally, there were no customers’ yachts. ” — from the reviews.
Yet, oddly, your average multimillionaire goes in for this type of money-management scheme as a matter of course.
“…Although only a few observers have noted the vested interest in error that accompanies speculative euphoria, it is, nonetheless, an extremely plausible phenomenon. Those involved with the speculation are experiencing an increase in wealth–getting rich or being further enriched. No one wishes to believe that this is fortuitous or undeserved; all wish to think that it is the result of their own superior insight or intuition. The very increase in values thus captures the thoughts and minds of those being rewarded. Speculation buys up, in a very practical way, the intelligence of those involved.
This is particularly true of the first group noted above–those who are convinced that values are going up permanently and indefinitely. But the errors of vanity of those who think they will beat the speculative game are also thus reinforced. As long as they are in, they have a strong pecuniary commitment to belief in the unique personal intelligence that tells them there will be yet more. ..Strongly reinforcing the vested interest in euphoria is the condemnation that the reputable public and financial opinion directs at those who express doubt or dissent. It is said that they are unable, because of defective imagination or other mental inadequacy, to grasp the new and rewarding circumstances that sustain and secure the increase in values…”
-John Kenneth Galbraith
A Short History of Financial Euphoria
http://www.zerohedge.com/news/2013-08-27/bob-shiller-warns-none-real-housing-market-has-become-very-speculative
“…Must see clip as Shiller scoffs at the current sentiment, the resurgence of ‘flipping’, and that the housing market is “driven by irrational exuberance.”
Q: When was the last time there was a “normal” housing market?
Prof Shiller: the 1960’s…
We will get there sooner or later.
What are the conditions needed to get there? It seems like there have been some structural changes that have contributed to the boom-bust cycles of the past 50 years that would need to be undone first.
No Fannie/Freddie? Back to the gold standard? Higher down payment requirements? No freebies on tax-on-sale?
By Jove, it will be sooner.
What are the conditions needed to get there?
Very simple. Take the manipulation out of the equation.
Define “manipulation”.
Fed intervention?
Fannie/Freddie suppressing 30-year rates?
Other?
“Define “manipulation”.”
Liars like you deliberately misleading the public.
In fact you got caught misleading just today and were called out on it.
You’re shameless and without an ounce of credibility here.
Think about Kondratiev’s theory and read ‘The Fourth Turning’.
In the 60’s - before securitization really took off and reached its logical conclusion.
When lenders stopped caring about whether loans were repaid, that put a lot of stress on the system. The first bailouts in 2007-2008 till today is an effort to defend that system.
War for WMDs today?
Will MSNBC be interviewing Cindy Sheehan?
Syria vows to defend itself in case of strikes-’We have defences which will surprise others’
AFP | August 27, 2013
Syrian Foreign Minister Walid Muallem vowed on Tuesday that his country will defend itself in case of any Western military strikes against it.
“We have two options: either to surrender, or to defend ourselves with the means at our disposal. The second choice is the best: we will defend ourselves,” Muallem said in a televised news conference.
Muallem said that his country had defences that would “surprise” the world, and that any such action against it would serve the interests of Israel and Al-Qaeda.
“Syria is not an easy case. We have defences which will surprise others,” he said.
“The war effort lead by the United States and their allies will serve the interests of Israel and secondly Al-Nusra Front,” an Al-Qaeda-linked jihadist group in Syria, said Muallem.
He challenged Western states to present evidence that the regime of Syrian President Bashar al-Assad had used chemical weapons.
“He challenged Western states to present evidence that the regime of Syrian President Bashar al-Assad had used chemical weapons.”
The old file footage from Saddam’s gassing of the Kurds will suffice.
obama lied, children died
obama lied, civilians died
obama lied, soilders died
You are SUCH a partisan.
Don’t you remember Iraq? At least Obama is going the UN route. Tutti-fruitie, you should try to at least appear less biased. That would make people disregard you less.
????????????????????
I do not agree with either US military action.
However, please get your facts straight.
Bush: Several UN mandates and resolutions to use force in Iraq. UN inspectors in Iraq for years. War resolution passed by US House and Senate (to include “yea” votes from Hillary, Biden and Kerry).
obama: Unilaterally bombed Libya. Will unilaterally bomb Syria but did ask some UN inspectors already in Syria to do a “drive by” and see what happened. No UN mandate. No war resolution passed by either House or Senate.
Please step away from the kool-aid.
Your Nobel Peace Prize is showing…
Two Banana:
You don’t remember all the hubub about the unilateral invasion of Iraq by Bush? Undeclared war. UN against it. No weapons of mass destruction in sight. Member?
Straw Man. You haven’t addressed banana’s utter refutation of your claims.
“…You don’t remember all the hubub about the unilateral invasion of Iraq by Bush? Undeclared war. UN against it. No weapons of mass destruction in sight. Member?”
Be careful who you worship, as Obama is NO DIFFERENT. The Nobel Peace Monger has left his stain on the blue dress of history and he is determined to do it over and over, as long as he can get away with it. What does Syria have to do with our security- seriously? Obama authorizes drone strikes against people on a secret hit list with no oversight, in countries who protest but cannot stop it, and endorses the indefinite detention of US citizens without regard for Constitutional rights and you defend this idiot? I’ve got news for you; this guy is just Idi Amin in a nice suit, surrounded by ‘useful idiots’ and sycophants. After this chapter is ended, history will have its way with him. Just you watch.
B and C Guy:
You can stick it in your ear. To insult my intelligence is, in a nutshell, DUMB!
And Crazy Horse:
Banana didn’t refute any claim. If you people want to use up someone’s bandwidth for the purpose of hating me, then please start your own blog entitled “I Hate Uncle Fed, Why Won’t You Love ME”?
This is a blog about the housing bubble, got it? Other related topics include the economy, along with general government interloping in things that are none of their business.
You wanna sit here and act like Republicans are better than Democrats? There are blogs for that too.
“B and C Guy:
You can stick it in your ear. To insult my intelligence is, in a nutshell, DUMB!”
Wow, I guess I really struck a nerve there huh, cupcake? You just insulted your own intelligence. You obviously don’t need my help. Enjoy your blind toadying. Hope and change, smoke and mirrors, I blame it all on Bush…
Learn to read, B and C.
And I dare you to call me a “cupcake” to my face. It’s guys like you that ruin it for everyone.
Uncle Feddy is whining. Charming
How come Barry doesn’t send some UN “investigators”…even Bush tried that with Saddam Barry is worse than Bush.
How come Barry doesn’t send some UN “investigators”
They (the UN at least) did. They got shot at by snipers and turned back on their first attempt to visit the site, but got there later and took samples and photos.
The UN is sending investigators.
Anyone remember Hans Blix, the UN inspector that said Saddam had no WMDs?
Wasn’t Hans Bricks eaten by Kim Jong Ill’s sharks?
“Wasn’t Hans Bricks eaten by Kim Jong Ill’s sharks?”
“Fruck you, Hans Bricks!!”…
One of the greatest movies- EVER- in the history of marionette-based, stop-motion, geo- political satire/documentary.
And who can forget the poignant plea, “Matt Damon…”
Or the defiant command, “Matt Damon!!”
http://www.picpaste.com/IMG_20130826_155810_230-MEMOQv36.jpg
Meanwhile, Reptile Ted Cruz really is a Cannuck.
Somebody’s living rent free on your skull.
There are many of us taking up space in his vast emptiness.
The Cruz thing is really funny. He has Canadian citizenship. He was _born_ in Canada. The “birthers” are hung up on Obama but OK with Cruz? He’s also a few other things that teabillies hate - a lawyer who went to Princeton and Harvard Law. He’s completely faking his populist, gun-loving stances. The reptiles don’t care, they’re just MAF that a half black guy is in the WH. Cruz is a Latino born in Canada, an elitist lawyer, and yet the teabillies love him. For now.
It appears Cruz is actually IN your skull. Get help, buddy.
Downlow Joe’s buttbuddy is Cory Booker.
Ted Cruz is just sloppy seconds.
Being a pastor’s son and a family value guy, I wouldn’t be surprised at all that Cruz is on the down low.
Booker is kind of fat, isn’t he?
Booker’s a 6′4″ former All Pac-10 football player (Stanford). Last year he rescued a kid from a burning building. Dude is alpha as hell. I don’t care if he’s gay, heavy, or what.
Ted Cruz is married but the rumor is he likes to be cuckolded.
Liberace,
WTF is it with with the sex meme with you? Do you have a good link for definitions of all this freakiness you seem to know so well?
Dude is alpha as hell.
Nothing says Alpha like a fat guy grabbing on to another fat guy or piling on to another.
And don’t forget How dumb this Booker dude is. The company he founded had a 8 year old director.
8 year old…Seriously? Are you fooking kidding me?
8 year old kid I mean.
“Ted Cruz is married but the rumor is he likes to be cuckolded.”
Somebody buy this guy a Sony camcorder. Paypal link?
I dunno, but when Kerry uttered the words “moral obscenity”, I wanted to suggest that he look in the mirror.
Way ta go, fedgov. Help manufacture another conflict in the Middle East and then blame the leader of the country where the conflict was manufactured.
Fortunately, both Russia and China are demanding fedgov STFU.
Hmmmmmm….
—————–
How Republicans reversed the runaway spending train
Washington Post | 08/26/2013 | Mark Thiessen
As congressional Republicans prepare for their seventh budget showdown with President Obama, The Post on Sunday reported the cumulative result of the six previous showdowns since 2010: The size of government is largely the same.
In 2010, the government spent $3.457 trillion, while this year it is on track to spend $3.455 trillion.
Wait, that’s less.
Granted, it’s not a lot less. But for decades, government spending has been like a runaway train — rising beginning in the 1960s, accelerating during the 2000s under President George W. Bush and then careening to unprecedented levels during the start of the Obama administration.
Now, finally, that runaway train has been slowed, stopped and put into reverse. In 2013, “spending is projected to be down by about 5 percent from 2010, accounting for inflation,” The Post reported.
That is not an insignificant achievement.
To put it into perspective, consider what might have been: Barack Obama came into office determined to increase federal spending dramatically. His first act was to pass the largest spending bill in the history of our country, the 2009 stimulus. He promised this surge in spending would be temporary, but in truth he intended to follow it up with a second stimulus, fueled by higher taxes. And true to his profligate ways, each year he has proposed more spending than Congress has passed. Had Democrats continued to control both houses of Congress, spending likely would still be rising.
If Obama and Congress don’t meet the act’s caps, a second round of automatic across-the-board cuts will kick in. We will see close to $1.3 trillion in discretionary savings over the next eight years, compared with the baseline before the act’s passage. The default under current law is to cut spending, which means Republicans hold all the cards. All GOP leaders need to do is prevent Obama from watering down the act.
I am no fan of either party, but your post is mostly BS.. the 2009 stimulus bill was bipartisan supported and brought to us courtesy of our masters on Wall Street.. no different that it was w/the 2008 bailouts under GWB.. GWB Admin owns FY2009.. Obama Admin will owe FY2017.. now do your math..
no, your post is mostly bs.
obamaphones are 20 percent of the federal deficit.
food stamps are another 10 percent of the deficit.
the best solution would be to lay off all those overpaid federal government employees and replace them with private-sector, for-profit, government contractors.
Did Obama get a patent for his Obamaphones?
Or is Lincoln still the only president who was issued a patent?
You’re numbers can’t be right. AFDC is 110% of total federal government spending, and food stamps are $48 trillion a year. If not for the massive surplus generated by the military and war on drugs, the government would have been bankrupt 4 years ago.
And the taxpayer owns it all.
Gold above $1400. Broached its trend line. A significant broach following a significant dip in June. The train to $2000 is gathering steam…choo choo!
Have the economic fundamentals changed with QE 1,2,3?
No. Where is the evidence of the high paying jobs coming back to America? More McJobs at $8 per hour won’t cut it. The debt gets higher and now the ten year note rate going up means more interest to pay out of the tax revenue. The nice thing about that is the politicians have to have fewer pet projects to buy votes.
‘more mcjobs at 8 an hour’
who needs jobs when you’ve got equity?
No high paying jobs coming back to Ameica = less money Americans have to buy gold.
More $8 McJobs won’t cut it = Less money available to buy gold.
The debt gets higher and interest rates go up = Less money available to buy gold.
bankruptcy is the only way out for most.
Bankruptcy destroys money. Going bankrupt and destroying the debts you owe means whomever you used to owe the debt to is forced to do without what he was owed.
People who have to do without what they are owed (or what they were promised) aren’t likely to be buyers of gold.
Wait, how does bankruptcy destroy money?
I don’t get it. I mean, it isn’t like money is other people’s debt, right?
New bankruptcy laws do not allow all filers to discharge all debt.
Bankruptcy destroyed the debt side of money, but the money borrowed remained. This, too, helped us run trade deficits longer than otherwise possible. Tightening the bankruptcy laws makes it harder to run them.
2% of Anericans own gold. So there is a lot of upside. Plus more people overseas buying gold competes for metal. Even Europeans buy more gold than Americans. Americans think the gold is in real estate.
“2% of Anericans own gold. So there is a lot of upside.”
Unless 98% of Americans have no interest in owning gold, that is.
Unless 98% of Americans have no interest in owning gold, that is.
Of course not…if they did, they might have come out ahead financially.
“The train to $2000 is gathering steam…choo choo!”
Gold typically spikes on rumors of military conflict, but then drops once markets have digested the news.
Are you suggesting it’s different this time? Why?
Aug. 27, 2013, 9:10 a.m. EDT
Gold driven into new bull market on Syria fears
By Barbara Kollmeyer, Sara Sjolin and Carla Mozee, MarketWatch
MADRID (MarketWatch) — Gold futures surged nearly 2% an ounce Tuesday and moved into a fresh bull market as fears over possible U.S. military action against Syria drew investors into the perceived safety of the precious metal.
Gold for December delivery (GCZ3 +1.91%) jumped $25.90, or 1.9%, to $1,419 an ounce on the Comex division of the New York Mercantile Exchange, erasing a Monday loss of $2.70, or 0.2%, on the New York Mercantile Exchange. It had risen as high as $1,423 an ounce.
…
This seems to me like more of a classic flight-to-quality move than a rebubbling of gold. Investors are dumping risk assets (e.g. stocks) and reallocating to the traditional safe havens of gold and Treasurys.
Aug. 27, 2013, 9:59 a.m. EDT
U.S. stock indexes hit by Syrian worries
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks began sharply lower on Tuesday, extending losses into a second session, as concerns about possible U.S. military action against Syria weighed on sentiment.
After a 120-point drop, the Dow Jones Industrial Average (DJIA -0.66%) was lately off 58.9 points, or 0.4%, to 14,887.56.
The S&P 500 index (SPX -0.95%) lost 11.46 points, or 0.7%, to 1,645.32.
The Nasdaq Composite (COMP -1.17%) declined 30.87 points, or 0.8%, to 3,626.69.
For every stock rising, nearly five fell on the New York Stock Exchange, where 81 million shares traded as of 9:50 a.m. Eastern. Composite volume neared 335 million.
Wall Street erased gains late Monday after Secretary of State John Kerry said the United States would hold Syria accountable for using chemical weapons that opposition groups contend killed more than 1,300 people.
The yield on the 10-year Treasury note (10_YEAR -1.47%) slipped 3 basis points to 2.757%. The dollar (DXY -0.16%) slipped against the currencies of major U.S. trading partners, including the yen (USDJPY -1.25%).
…
Buying a house is the new meal ticket.
meal ticket?
more like an all you can eat buffet of steak, lobster, caviar, purple drank!
If my family wasn’t so rich, I would actually buy a house and use the equity to pay for my meals at McDonalds.
now were talking. pull some of that equity and eat out 3 meals a day?
20 Chicken McNuggets for $4.99. Best chicken ever.
More like Best something-resembling-to-chicken ever.
Now with more beaks!
credit-shy: younger generation is more likely to stick to a cash-only policy
‘data from the fico banking analytics blog shows credit-card use has declined for consumers in all age groups since 2005, but the increase in the percent of consumers with no credit cards has been most dramatic for those ages 18-29.’
instead of praising this as a good thing, the article goes on to pimp hamster wheel debt slavery, with ‘tips’ on how to boost and manage your debt-donkey fico score. because the only path to recovery is with more debt.
http://www.denverpost.com/styleheadlines/ci_23929523/credit-shy-younger-generation-stick-cash-only-policy
To replace the money that leaks out of our economy, we have to generate $1.5T new debt/money per year.
You can’t LOVE the huge profits and widening wealth disparity, while hating the debt that is necessary to generate them.
Far too many people love money and hate debt, but fail to grasp the fact that in the modern economy of fiat money, THEY are two sides of the same coin.
LOL, you really cannot get out of this hole, no matter how hard you dig.
but the increase in the percent of consumers with no credit cards has been most dramatic for those ages 18-29
Because they have the highest unemployment and underemployment rate? Lucky Duckies don’t buy houses or cars and they don’t charge the family vacation to Disneyworld on the “rewards” CC. For most of them, the only “debt” they use is at the payday loan store.
None of the under 25s at work carry any cash. Debt cards only.
They can’t get a credit card because they don’t have a job.
credit-shy: younger generation is more likely to stick to a cash-only policy
Those young-uns are seeming more and more like the “Greatest Generation.” Buddha/Sheba/Isis/Cleopatra/spaghetti monster/whatever, bless those young people.
hope and change in hopeychangeyville:
‘parents, teachers and community activists have warned that forcing children to pass through some of the city’s more impoverished and dangerous neighborhoods — where some already walking in the middle of the street to avoid being ambushed by gang members — to get to school puts them at undue risk.
with the hope of preventing problems, the financially strapped city hired 600 workers at a rate of 10 dollars an hour to supplement a safe passage program that has existed since 2009′
http://www.foxnews.com/us/2013/08/26/as-chicago-public-schools-embark-on-mayor-new-beginning-safe-passage-workers/
When will these “progressives” propose temporary placement/adoption of inner city poor children into rich households? Oh wait. “Progressives” are the rich folks. Barbra Streisand, Warren Beatty/Buffet, Bill Gates, Rio in Brazil, Bono, Springsteen, Oprah, Jesse Jackson, Coward Dean, Lurch Kerry, Sore Loserman, John McSame, Diane “gun grabber nazi” Feinstein and the rest of the criminal gang.
‘more like an all you can eat buffet of steak, lobster, caviar, purple drank!’
And every day too, I’ll add.
“All You Can Eat” by the Fat Boys (1985)
http://m.youtube.com/watch?v=tu-s-SeigWs&desktop_uri=%2Fwatch%3Fv%3Dtu-s-SeigWs
All you can eat for $3.99 at Sbarro’s in NYC.
No inflation there.
the future belongs to lucky ducky:
‘a substantial number of older workers who lost jobs — even those lucky enough to be re-employed — are still suffering. two-thirds in that age group who found work again are making less than they did in their previous job; their median salary loss is 18 percent compared with a 6.7 percent drop for 20- to 24-year olds.’
http://www.nytimes.com/2013/08/27/booming/for-laid-off-older-workers-age-bias-is-pervasive.html?pagewanted=all
I wonder how that median wage loss breaks down when sorted by profession. In other words, I suspect that a Lucky Ducky doesn’t lose all that much because he didn’t have that much to lose to begin with. Contrast that with an oldster laid off from a 100K job in Corporate America:
I wouldn’t be surprised if he was replaced by a 30 year old guy paid $70K who was already in charge of buying other stuff for the chain. Mr. Fugazzie is in trouble: he looks old.
“The re-employment rate for 55- to 64-year-olds is 47 percent”
And we wonder why so many oldsters apply for disability?
what does being in charge of dairy and frozen foods mean ?
He must be managing a supply chain of products. I wonder why he was laid off ? Did he screw up to many times ? replaced by a younger cheaper worker like you said? who knows ?
should have saved some money at 125K per year ?
Layoffs are no longer connected to job performance. Haven’t been in years.
It’s true. Which removes all incentive for job performance.
He must be managing a supply chain of products
That’s what I figured. We obviously don’t know why he was canned, but if the pattern matches what is usually seen in Corporate America, his duties were probably transferred to others (most likely younger and not as well paid).
Could this war thing is a way out for Bernanke and Banksters? I mean how could you taper or trim when a war is raging, no? At war, you must print…I thing that’s the first commandment or something.
Now your’re thinking!
It helps keep a lid on interest rates.
Aug. 27, 2013, 10:48 a.m. EDT
Treasurys rise on Syria fears ahead of auction
By Ben Eisen, MarketWatch
NEW YORK (MarketWatch) — Treasurys rose Tuesday, sending yields lower, as tensions over a conflict in Syria weighed on risk appetite.
…
The potential for U.S. military action against Syria pushed investors into risk-less government debt.
Treasurys moved higher on the news, extending price gains into a third consecutive day. The benchmark 10-year note (10_YEAR -1.07%) yield, which moves inversely to price, fell 4 basis points on the day to 2.751%.
The 30-year bond (30_YEAR -0.50%) yield fell 3 basis points to 3.737% while the 5-year note (5_YEAR -1.76%) yield fell 3.5 basis points to 1.557%.
Gold also gained on Syria fears and oil surged, while U.S. stocks fell.
…
War. Hah.
Against Syria? More like a National Guard weekend training exercise.
Same was said against Iraq and Afghani. Then again, like there’s any benefit to ending wars shortly?
Fools never learn.
The wars were over in days. The occupations are what took all the time. War and occupation are very different things. So far, I’ve heard no talk of a Syrian invasion/occupation. Just strikes. Strikes are pie!
Strikes are pie!
It’s our core competency. Occupations, not so much.
“So far, I’ve heard no talk of a Syrian invasion/occupation.”
When Syria has been crushed the issue of the borders of the Kingdom of David will be addressed — a third occupied territory.
“We’ll be greeted as liberators with candies and flowers”.
-Dick Cheney
(Key omitted modifier: “exploding”.)
Imagine if, you’ll pardon the expression, Rick Santorum won the last election and proceeded to fulfill his fundamentalist mandate by instituting the American version of sharia law in our urban centers and universities. Canada, annoyed that their once-westernized, secular neighbor is reverting to 1950’s Dubuque, and abetted by the oil-needy international ASEAN community, quietly engineers the impeachment of the administration, removes Secretary of State Palin in a judicial coup, and proceeds to marginalize Southern Baptist influence throughout the country. Santorum is arrested on some trumped up pretext.
Southern Baptists of all stripes take to protesting, sitting in, engaging in localized acts of vandalism, joined by a few OWS-types who still believe in the democratic process (after all, Santorum WAS elected, right? And what right does the global community have to try to take away our guns?) Supporters of the more liberalized Obama faction of the US join their Canadian overlords in counter-protest.
Things escalate, tear gas is used on the innocent villagers of Boulder, (some say in a false-flag operation by elements of the Blankfein administration in order to stir up international outrage) and soon all Hades breaks loose in New York and Los Angeles. Saudi Arabia enters the fray on the side of Santorum. The EU threatens action if Hollywood isn’t allowed to show nekkid bosoms in its movies anymore.
Welcome to New Cairo, a Charlie Foxtrot of epic proportion. The MIC must be jigging in delight.
(Key omitted modifier: “exploding”.)
damn you are on a roll
because it’s different in the hamptons:
‘porsche ads clog the local radio here, houses are renting at close to the million-dollar range — for the summer … the hamptons have rebounded, along with the confidence, and the bonuses, of their wealthier summer visitors.
with a customer base composed largely of wall street financiers, mr. farrell has more than 20 new homes under construction, or slated for construction, at a time, making him the biggest builder here by far. he has plans for more, many of them speculative homes built before they have buyers.’
http://www.nytimes.com/2013/08/27/nyregion/hamptons-mcmansions-herald-the-return-of-excess.html
No joke, Hamptons really are booming. I was up there in June, saw it first hand from Quogue all the way over to Southhampton. Our cousins are losing their restaurant site at the end of this season. It’s being turned into $1MM+ townhouses and boat slips by the Rechler group. (see article below)
They’re going to open at another location but it will be impossible to find as good of a location or anything near that size.
They sold their rental house to raise cash to start looking for a new site. Might have to find some more silent partners, too, but that dillutes the profits of the managing partners.
———————–
http://westhampton-hamptonbays.patch.com/groups/politics-and-elections/p/hamptons-bays-residents-speak-out-on-canoe-place-inn-plan
The plan also includes five cottages as part of the inn’s operation, and replacing the site of Tide Runners bar and restaurant on North Road with townhouses and boat slips.
The latest iteration of the redevelopment plan comes in front of the Town Board seven years after the developers first acquired the Canoe Place Inn property.
The Rechlers own the 5.8-acre Canoe Place Inn site, located on the corner of Newtown Road and Montauk Highway on the west side of the Shinnecock Canal, as well as a collection of parcels located on the east side of the canal.
Bulldoze-war truce: Feds say Ohio can divert $60 million to demolish vacant homes
WASHINGTON, D.C. — The Treasury Department will let Ohio divert up to $60 million from a fund created to help homeowners stave off foreclosure, allowing the money to be used to demolish nearly 5,000 vacant homes instead.
The decision is a partial victory for advocates of bulldozing the thousands of eyesore properties, many with plumbing stripped and windows broken or boarded up, that litter Cleveland and other Ohio cities. The Thriving Communities Institute estimates there are 15,000 vacant homes in Cuyahoga County alone and 100,000 statewide, holding down property values and causing a self-perpetuating cycle of blight that ravages neighborhoods.
The Hardest Hit Fund was created by the Obama administration in 2010 to save homes from foreclosure, using proceeds from a pool set aside to bail out banks and auto companies during the financial crisis. While housing counselors preferred to use all of Ohio’s allotment for its intended purpose of counseling, short-term loans and neighborhood preservation, they had indicated that a $60 million diversion for demolition — but no more — might be acceptable.
That’s just great. My taxes are used to reduce the supply of housing, for the sole purposes of ensuring that my housing expenses will be higher than necessary.
Yup. We couldn’t give you a house for $1000, but we can tax you $1000 to bulldoze one now that it’s fallen apart.
The city would have to purchase the house before bulldozing it.
feeding the bottomless maw:
‘it used to be a given that the interests of corporations and communites were closely aligned. but no more. across the united states, as companies continue posting record profits, workers face high unemployment and stagnant wages.
driving this change is a deep-seated belief that took hold in corporate america a few decades ago and has come to define today’s economy — that a company’s primary purpose is to maximize shareholder value.
the belief that shareholders come first is not codified by statute. rather, it was introduced by a handful of free-market academics in the 1970s and then picked up by business leaders and the media until it became an oft-repeated mantra in the corporate world.’
http://www.washingtonpost.com/business/economy/maximizing-shareholder-value-the-goal-that-changed-corporate-america/2013/08/26/26e9ca8e-ed74-11e2-9008-61e94a7ea20d_story.html
The goal of corporations has ALWAYS been to maximize share holder value.
What changed it lower rates with fewer deductions.
Before this change, when there was a 90+% top marginal income tax rate and lots of deductions available, you maximized share holder value by reinvesting profits to get the deductions to lower your tax burden.
With lower rates and fewer deductions available, instead of reinvestment, corporations began to focus on cash extraction. No need to reinvest to avoid taxes, so cut investment, cash flow positive and stockpile cash or pay big dividends.
We need to attack and reverse the trade imbalances. They, and our efforts to keep the economy functioning despite them, are the root of our ills.
Being a good corporate neighbor is still the mantra of many companies.
No, no, it all has to do with “increasing the standard of living for the poor oppressed third-world peoples”. They need us to give them a chance at life. Their countries may have existed for thousands of years without accomplishing much, but they DESERVE to reap the benefits of the jobs created by our system.
The new corporate fascism: Inverted totalitarianism
“Inverted totalitarianism is a term coined by political philosopher Sheldon Wolin to describe the emerging form of government of the United States.” -Wikipedia
“In inverted totalitarianism, corporations through political contributions and lobbying, dominate the United States, with the government acting as the servant of large corporations. This is considered “normal” rather than corrupt.” -Wikipedia
Is everybody ready for another debt ceiling crisis?
Aug. 26, 2013, 5:05 p.m. EDT
U.S. to hit debt limit in mid-October, Lew says
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — The U.S. government will hit the debt ceiling and be unable to borrow money to pay its bills in the middle of October unless Congress votes to increase the federal debt ceiling, Treasury Secretary Jacob Lew said Monday.
This is a more precise estimate than Lew has provided in the past and is earlier than estimates of many private forecasts.
Some experts had said that the federal government would not hit the limit until mid-November.
Treasurys rose a bit on the news, which was initially broken in a story in The Wall Street Journal.
The revised estimate came in a letter Monday from Lew to Speaker of the House John Boehner.
In his letter, Lew said that in mid-October, Treasury would be left to fund the government with “only the cash we have on hand on any given day,” now estimated to be about $50 billion.
“Operating the government with no borrowing authority, and with only the cash on hand on a given day, would place the U.S. in an unacceptable position,” Lew said.
“A cash balance of approximately $50 billion would be insufficient to cover net expenditures for an extended period of time,” he said, but said it was not possible to precisely estimate when the cash balance would reach zero.
Since May, Treasury has been using extraordinary accounting measures to avoid hitting the debt limit, but these tools will be exhausted around October 15, Lew said.
The revised timeline puts more pressure on lawmakers and the White House to find a way to increase the $16.7 trillion debt ceiling.
If the debt ceiling isn’t raised, the country could face a financial crisis.
‘by 2016, more than a third of the federal workforce will be eligible to retire’
http://www.washingtonpost.com/politics/wave-of-retirements-hitting-federal-workforce/2013/08/26/97adacee-09b8-11e3-8974-f97ab3b3c677_story.html
But can the afford to retire? Will they give up the 100K job if the mortgage and students loans aren’t paid off?
Afford to retire?
Many of the 60-somethings in my office can’t. Most of them are still paying mortgages. And while they don’t have student loans of their own, their 20-30-something kids sure do, and the Bank of Mom and Dad gets to make up the difference for their kids’ overpriced housing and all manner of grandkid related expenses.
It’s quite pathetic how broke many of them are, after decades of earning upper-middle class incomes they have little to show for it.
Mr Money Mustache is the way to live.
And Bill in Los Angeles = WIN.
And while they don’t have student loans of their own
Ever heard of Parent Plus loans? How do you think they pay for those sumptuous residence halls that are popping up on campuses across the country? It can cost $10K per year to live in the “dorms” these days.
they have little to show for it
They do have pensions, right? That’s more than most folks in the private sector have.
polly knows more about federal pensions than I do.
Many of the feds who are eligible for the fat pensions have already retired. There are many people here who put in 20-30 years at Lockheed, Raytheon, etc, if they have been a fed for only 5-10 years they don’t get a fat gravy pension. And if they are a contractor, they have 401k’s.
They may not be able to afford it, but they might be forced into retirement by the health problems that attend old age.
There are still a few people in my office who are on the old pension system (2% per year of service times average of highest three - but remember no bonus or overtime or anything except base and locality pay included). They didn’t pay into SS (that money all went to the pension plan) so don’t get SS unless they had 40 quarters before they started as feds in which case they probably wouldn’t be in the old system at all. Max at 40 years so 80% is highest you can go. Might be able to get to 82% with some kind of credit because of never taking a sick day.
Most people - even the ones that are retirement eligible - are in the new system which gets you 1% per year of service times the average of the top three (see details above). So, they are likely to be in the 25% to 30% of average of top three range for pensions. Plus they paid into SS so they get that if they are old enough. Way better than a kick in the pants, but not enough to live on if you are still paying off big loans whether for a mortgage or your kids college or whatever.
Wait…let me get my popocorn.
Now I am ready….
The truth is it’s a non-crisis crisis. They already know they will pass another CR and kick the can for a yr or two. But they must bloviate while we can on TV. Make me puke honestly….
Continuing resolution doesn’t solve the debt ceiling. CR is only for the budget.
the future’s so bright, i gotta wear shades:
‘the signs of resilience are everywhere: households continue to spend. businesses are investing and hiring. home sales are rebounding, and the automobile industry is surging. banks have healthier balance sheets, and credit is easing. all this coincides with the economy shedding the excesses of the past, such as unmanageable levels of consumer and corporate debt.’
http://www.bloomberg.com/news/2013-08-27/america-resilient-five-years-after-great-recession.html
Wow…dude…it was so bright, it pierced by shades. I think I am going blind…..
It’s not actually based on fat finger clicks. It’s based on FB as a targeted search engine to compete with GOOG. Like if you want to buy a car you could type in Ford or Toyota or Honda and it will show you pictures your friends have tagged (presumably owners), comments they’ve made, etc. Then in the sidebar there are ads to set up a test drive or find a dealer, etc. Same thing for other products.
I’m not saying FB is worth $100B. They might be worth a penny for all I know - I haven’t seen the numbers and neither have very many people.
The other FB advantages are: 1) Free-mium fees and 2) Location based/GPS based advertising. People using FB on smart phones often have GPS turned on, whether it’s for photo tagging/Instagram or to use a site like Tinder or Grindr. (So embarassed I know this stuff, I promise I use like none of it, just like reading TechCrunch and Engadget.)
Speaking of fat fingers, you should have posted this reply under the facebook article post, not here.
Google already has those exact same advantages. Besides, how many people really post product-related content on their FB pages? Like “Hey, look everyone, I’m drinking a Coca-Cola right now”.
I think more than you want to realize. A week ago I purchased a mundane thing online (I forgot the website) and after the payment I had an option if I wanted to share this on FB. I just shook my head…I mean really? There’s a need in this world to tell my friends and families (assuming that’s what FB is for) that I just bought a 10 dollar household item?
Unreal….
I think you misunderstand.
YOU don’t need to share the purchase, but THEY need to you share in hopes SOMEONE, ANYONE will make an additional purchase.
Even if only 1% of people mis-click and post, then that is 1% of sales that resulted in some free advertising for them.
“. all this coincides with the economy shedding the excesses of the past, such as unmanageable levels of consumer and corporate debt.’”
What a bunch of BULL!
Federal Reserve Z1.
Household debt 2007: $13.8T
Household debt 2013: $12.8T
That is a 7% reduction.
EVEN if we inflation and population adjust the 2007 numbers… CPI (233/219) and population (115/112) that would be the adjusted equivalent of $15T.
A 16% reduction in per household, inflation adjusted debt, with more of the reduction coming from inflation and population growth than from actual “pay down” of debt.
Corporate???
Z.1
Business debt 2008: $11.5T
Business debt 2013: $12.9T
We shed the excess corporate debt? SAY WHAT???? An increase of 12% is shedding debt?
Even if we adjust the 2008 number for population and inflation to today we find $12.6. SO, even adjusted for inflation and population, Business debt is UP since 2008.
HOW is this “shedding the excesses of the past, such as unmanageable levels of consumer and corporate debt.”
Lies!
Most household debt reduction is due to foreclosures, bankruptcies and write offs. It is kind of interesting that companies have increased the debt by more or less same amout the houseld debt reduction was.
Correct. The $1T drop in household debt is about a third the amount of debt that was wiped out via default, foreclosure and bankruptcy.
So, households generated about $2T new debt, but walked away from $3T previously existing debt.
And that is what the main stream media calls shedding unimaginable levels of debt.
A monthly home price increase rate of 2.2% translates into an annualized rate of ((1.022)^12-1)*100% = 30%.
Aug. 27, 2013, 9:58 a.m. EDT
Home-price growth slightly moderates in June
By Ruth Mantell, MarketWatch
WASHINGTON (MarketWatch) — U.S. home prices in June posted another month of fast growth, though the data signal some moderation, according to a report released Tuesday morning.
With gains in cities across the country, U.S. home prices increased 2.2% in June, a strong result but down from 2.5% in May, according to the S&P/Case-Shiller gauge.
In six cities prices rose faster in June than they did in May. In May 10 cities had posted faster monthly growth.
…
See the cities were (SIC) home-price growth is cooling the most
August 27, 2013, 10:55 AM
Some cities are seeing moderation in the home prices that have been racing higher for months, according to data released Tuesday morning.
For example, while all 20 cities tracked by the S&P/Case-Shiller gaugeposted higher home prices in June, growth slowed down in most areas.
Nationally, annual growth for Case-Shiller’s 20-city gauge slightly slowed in June to 12.1%, compared with annual growth of 12.2% in May. May’s year-over-year pace was the fastest since 2006.
…
For the last three years since the owner died, this badly-neglected 1960’s 3/2 has been inhabited only by her son’s eight-foot Burmese python — who lives in the back bedroom.
http://www.trulia.com/property/3128215624-4385-Chippewa-Dr-Boulder-CO-80303
Listed just last week, it’s already under contract at slightly over asking price. The first offer came in hours after the listing hit the MLS — at 50K under asking price with 24 hours to accept. The seller countered and the buyer tried the old “Okay, now it’s 75K under asking” tactic in return. Seller passed. Two days later the full-price, all-cash offer came in and he (wisely) jumped on it.
On the basis of this admittedly anecdotal evidence alone I’d have to say that yes, we’re still in another housing bubble.
And when REO and short sales are included, prices fell again.
Imagine that.
I think there is trouble brewing for the rebound… namely the number from Homes 4 Rent showing a 56% occupancy rate on its properties.
If these REITs that have been doing much (most?) of the buying can’t get renters into the units they have been “snapping up”, then the demand is going to go away.
Also, while I believe a few markets had overcorrected and were due to a pop to return to fundamental level, that pop is long over, and we’re back at or above fundamental value in all markets.
In other words, I see the rebound as history.
AMH’s 56% is up from 50% last quarter.
In their S-1, they noted that homes that were available for rent for more than 30 days (ie. done with renovations, etc.) were 90% leased.
Expect that 56% to continue to trend upwards.
Oh yeah. For sure. Great plan. Can’t miss.
I own none of these REITs.
But claiming they are going to fail based on their OVERALL occupancy data during their acquisition phase is faulty logic.
From AMH’s S-1, homes that were available to be rented for more than 90 days are 97% occupied. 30 days or more were 90% occupied.
They have not had problems attracting tenants to their homes–once they completed the eviction/renovation process.
Misleader,
A 56% vacancy rates is reality. You? You’r misrepresentations border on fraud.
‘claiming they are going to fail’
These geniuses are buying new houses to rent out.
“These geniuses are buying new houses to rent out.”
If the homes were built on finished lots that were acquired by builders below replacement cost (lots of land traded at such prices post crash), this might very well be a genius move. New home (lower maintenance costs, more desirable for tenants) at below future reproduction costs doesn’t sound dumb.
Didn’t you “snap up” a home for your kids in Phoenix last year?
Yes, I spent $48K for a condo and my lender covered the closing costs. My mortgage is $297 a month, plus $120 a month LOA. NO WAY could I rent a 1000 sqft 2/2 for $450 a month.
BUT, I would not have bought it to rent it out. I’m a computer programmer, not a landlord, and I have NO desire to become a landlord.
I agree with Darrell. Snapping up rental units in markets where there’s a limited number of tenants was always a bad idea.
There are plenty of cities where prices never stopped falling.
a revenue model based on accidental ‘fat-finger’ clicks on smartphone ads:
‘facebook inc’s market value passed 100 billion amid optimism that the world’s largest social network can bolster sales from mobile advertising … facebook shares are now trading at about 180 times earnings.’
http://www.bloomberg.com/news/2013-08-26/facebook-market-value-tops-100-billion-amid-mobile-ad-push.html
180 times earnings. LOL.
I guess the answer to “where would you invest your money” is “shorting Facebook”… assuming you have a long-term investment horizon.
According to my teenage daughter, none of her friends use Facebook anymore. It’s getting too ad heavy and commercial so driving people away. Once upon a time, you were uncool if you were not on Facebook. Now you are uncool if you are on Facebook.
Sure… they’re going to be able to increase profits 10 fold to justify that price… no problem.
BTW, at one point I thought that Path might replace FB. But the Path team is unhinged (on a personal level), IMO, so I doubt that’s going to happen.
All of these companies willingly sharing info with NSA should really be worrisome to everyone. Just run a search for “LOVEINT Ft. Meade NSA” and tell me that doens’t disturb you.
Have you ever been to the National Cryptographic Museum (NSA museum)? I think it is on 395 between DC and Baltimore.
That doesn’t disturb me.
I’m not afraid of the government collecting massive amounts of data. The more data they gather, the less important each piece becomes, UNTIL you are raised out of the noise to the status of suspect.
In fact, the more information the government gathers, the better!
Or there is a database crash and your records get mixed up with Mohammed the terrorist.
Facebook is lame. I love being invisible (except for to the NSA!) online, searching on the goon’s real name returns mostly links to college/amateur athletes with the same name.
I really could not care if I’m visible or not. I’ve used my real name Darrell, and even dshimel (first initial and last name) on line for a couple decades.
I’ve never had a Facebook account. I do not intend to.
My wife has an account and she keeps me informed on what my relatives are posting, though it seems fewer and fewer are actively posting as time passes.
Besides, all my 30-something coworkers have Facebook pages now, so no, it ain’t cool.
I think FB is cool for 60’s and older crowd.
And 3rd world kids.
Aug. 26, 2013, 7:02 p.m. EDT
Larry Summers to be next Fed chair, CNBC says
By Michael Kitchen
LOS ANGELES (MarketWatch) — President Obama will likely name his former economic adviser Larry Summers as the next Federal Reserve chairman, though Summers is “still being vetted” for the job, CNBC reported Monday, citing an unnamed source from “Team Obama.” Summers, who along with current Fed Vice Chair Janet Yellen is seen as a frontrunner to replace Ben Benrnanke, has faced some opposition from Democratic members of Congress over his role in easing Wall Street regulation when he served as Treasury secretary late in the Clinton administration.
I didn’t realize the President was in charge of giving his former economic advisors a new name. Don’t their moms get mad?
“President Obama will likely name his former economic adviser Larry Summers”
Summers is no slam dunk for the Fed chair job. Quoth the Truthdig:
Why is this obscure deal made 16 years ago important? Because Summers, the man directly involved in destroying the financial protections previously held by all these countries—to the effect of “26.3% unemployment in Spain, desperation and hunger in Greece [and] riots in Indonesia”—is the man President Obama wants to appoint as chairman of the Federal Reserve.
Link: Larry Summers and the ‘End-Game’ Memo
the liberals on my FB page are lighting it up….they’re read for war baby!
the power of political partisanship is mind boggling.
U S A!
U S A!
U S A!
but will obama have to share his second nobel peace prize with prime minister cameron or will he get all the credit for himself?
http://www.counterpunch.org/2013/08/27/another-western-war-crime-in-the-making/
Apparently killing an innocent child with gas is much more sinister to the liberal mind than killing them with a drone strike.
Or invading a country on false pretenses and killing hundreds of thousands. Hey, let’s open a presidential library!
Notice these guys always shoot at countries that can’t fight back?
‘HANERIK, China — The blood has long since been hosed away, but weeks after Chinese security forces opened fire on a crowd of Muslim protesters, killing what local residents said were scores of young men, there is a palpable fear on the streets of this dusty farming township in Xinjiang, the restive borderland region in China’s far west. ‘Those not detained in the police sweep that followed the violence say they have been threatened with labor camp if they speak about what happened on the afternoon of June 28…“We’re all too afraid to talk about it,” said one elderly man near Hanerik’s outdoor market just after sunrise one recent morning. Another man drew a finger across his throat and apologized for his silence before speeding away on a scooter.’
http://www.nytimes.com/2013/08/27/world/asia/over-news-of-clash-a-shroud-of-silence-in-xinjiang.html?_r=0
Then there’s this small detail in Syria:
‘Those rollicking jihadists, the Syrian rebels, love a joke: although they can be deadly serious – such as when they’re eating the internal organs of their enemies – what they enjoy more than anything is a really good prank. There was the time they claimed the Assad regime was killing babies in incubators – not very original, but hey, it worked for the Kuwaitis! Then there was the “massacre” at Houla, which was alleged to have killed 32 children and over 60 adults: a photo started appearing in the mainstream media, documenting the slaughter. The state-supported BBC was first to run with it – until it was discovered the supposedly incriminating photo was taken in Iraq during the recent war. The photographer was justifiably furious, the story was withdrawn, and the Syrian rebels went back to the drawing board.’
‘I could go on for quite a while about the various Syrian hoaxes we’ve been subjected to, but let’s get down to the latest one – a claim Syrian government forces used nerve gas at the Syrian village known as Ghouta. Videos posted by the rebels show rows of people killed or incapacitated without any dramatic indications of physical trauma: instead, the victims display convulsions and other signs of exposure to asphyxiating gases. Yet, as Ha’aretz reports:
“Western experts on chemical warfare who have examined at least part of the footage are skeptical that weapons-grade chemical substances were used, although they all emphasize that serious conclusions cannot be reached without thorough on-site examination.
“Dan Kaszeta, a former officer of the U.S. Army’s Chemical Corps and a leading private consultant, pointed out a number of details absent from the footage so far: ‘None of the people treating the casualties or photographing them are wearing any sort of chemical-warfare protective gear,’ he says, ‘and despite that, none of them seem to be harmed.’”
Perhaps Allah is protecting these caregivers and others attending to the sick: or maybe the aid we’re shipping the rebels includes some really neat stuff from Marvel Comics. On the other hand, maybe the whole thing is yet another put up job. You tell me. If the “massacre” at Ghouta involved military-grade nerve gas, all those doctors and others milling around the fallen victims would be dead or in serious trouble.’
http://original.antiwar.com/justin/2013/08/25/transparent-hoax-could-lead-to-war/
‘A Clean Break: A New Strategy for Securing the Realm (commonly known as the “Clean Break” report) is a policy document that was prepared in 1996 by a study group led by Richard Perle for Benjamin Netanyahu, the then Prime Minister of Israel.[1] The report explained a new approach to solving Israel’s security problems in the Middle East with an emphasis on “Western values”. It has since been criticized for advocating an aggressive new policy including the removal of Saddam Hussein from power in Iraq, and the containment of Syria by engaging in proxy warfare and highlighting their possession of “weapons of mass destruction”.
http://en.wikipedia.org/wiki/A_Clean_Break:_A_New_Strategy_for_Securing_the_Realm
Notice these guys always shoot at countries that can’t fight back?
Exactly! Hence the name Chicken $hit, Chcken Hawks.
“Or invading a country on false pretenses and killing hundreds of thousands. Hey, let’s open a presidential library!”
i was against that one too…but i did say…they better find those WMDs…whether they are there…or not.
maybe this time we can plant evidence that Assad actually ordered the chemical attacks.
Perhaps Obama can announce its still “Bush’s fault”. Just sayin’…
restated:
Apparently killing an innocent child with gas is much more sinister to the liberal mind than killing them with an abortionist’s scalpel.
Your point is not taken, as a fetus is not a child (or did you not get that far in your biology training?)…
“Your point is not taken, as a fetus is not a child (or did you not get that far in your biology training?)…”
You have the rapier wit of an over-educated ivory tower idiot.
“Your point is not taken, as a fetus is not a child (or did you not get that far in your biology training?)…”
Apparently not.
What a serial misrepresenter.
I’m a red hot flamin’ liberal and question this latest march to war.
WAY OVERPRICED
Listing #13009642
$464,900 (LP)
Price/SqFt: 407.45
4559 N Canyonlands Rd, Moorpark, CA 93021 Back On Market 08/26/2013 Active
Beds: 3* Baths: 2 (2 0 0 0) (FTHQ) Sq Ft: 1141* Lot Sz: 4792sqft*
Area: SMP Yr: 1983
Remarks
Huge Reduction! Highly updated 3 + 2 turnkey Charmer! The kitchen has been opened up and upgraded to give the home a unique flow and open feel. The freshly painted exterior along with the custom vinyl gates give the house a fresh look. Thick Italian tile and hard wood-like flooring throughout. Central heating and A/C, fresh landscaping and a large back yard make this home ready for a new family!
What is a custom vinyl gate? Does that mean the sellers picked the color when they bought it?
They probably bought it at the same time as the “wood-like” flooring.
Summers is the pick.
Summers is the pick.
He always was. The fix was in by 2007.
Summers is a prick.
That’s what she said.
“That’s what she said.”
Brooksley Born?
A couple of interesting op eds in today’s NYT.
Stiglitz has a piece on Technology vs the Middle Class, how we can respond to it, etc. (”How Technology Wrecks the Middle Class”)
Krugman has a piece on rise and fall of big tech companies (”The Decline of E-Empires”)
Everyone wants to blame technology and trade, which increase living standards.
The problem is debt. Without debt neither the machines or the foreigners can sell ordinary Americans more than they are paid.
Stiglitz isn’t really “blaming” technology, he’s summarizing what we know to this point and hypothesizing ways for people to stay relevant, keep their jobs, create new jobs.
Similarly Krugman isn’t writing so much about MSFT as he is about any big monopoly/trust:
“Anyway, the funny thing is that Apple’s position in mobile devices now bears a strong resemblance to Microsoft’s former position in operating systems. True, Apple produces high-quality products. But they are, by most accounts, little if any better than those of rivals, while selling at premium prices.
So why do people buy them? Network externalities: lots of other people use iWhatevers, there are more apps for iOS than for other systems, so Apple becomes the safe and easy choice. Meet the new boss, same as the old boss.
Is there a policy moral here? Let me make at least a negative case: Even though Microsoft did not, in fact, end up taking over the world, those antitrust concerns weren’t misplaced. Microsoft was a monopolist, it did extract a lot of monopoly rents, and it did inhibit innovation. Creative destruction means that monopolies aren’t forever, but it doesn’t mean that they’re harmless while they last. This was true for Microsoft yesterday; it may be true for Apple, or Google, or someone not yet on our radar, tomorrow. “
The squad has never spent a cent on an Apple product.
No you have. The government has donated some money on your behalf for Apple’s cooperation.
WT Economist:
I think you meant to say “free trade”. Free trade (unlike the unrelated “technology”) has always been terrible for rich countries. It is terrible for the United States.
It wouldn’t be so bad if it really was free trade. You want to sell cars in China, pilgrim? Then you have to build them there (and I’m sure there is a minimum domestic content requirement too)
But if you are not selling people more stuff than you are paying them, how do you profit?
Low pay and high sales based on debt is an EXCELLENT way to generate profit. And, the economy exists so that profit can make the rich ever richer, right?
Richer in terms of “assets” that are other people’s debts, until they decline to pay them back.
“The problem is debt.”
+1 Exactly.
I’m trying to make this impression on my two children, but I’m not sure I’ll be successful although we are surrounded by terrific examples in local acquaintances. Fingers crossed.
http://www.cnbc.com/id/100988740
The interesting piece of data here is that investors represented 16% of the market in July, down from 25% at the beginning of ‘09.
This is consistent with AMH firing a bunch of people and slowing down acquisitions, and consistent with what you would expect if there were more cash flow investors than speculators. With cash flow investors, the higher prices go, the lower the cash flow, and thus the harder it is to meet the metrics of a disciplined cash flow investor.
I’d be interested in seeing the percent of investor buyers during the run-up in 2005/2006. I seem to recall the the percent of investor buyers increased for quite a while.
In any event, fewer investors is a good sign.
In any event, fewer investors is a good sign.
Agreed. It can only bode well for nabes like mine own.
Syria — the excuse for everyone to get out of the overpriced stock market. Nothing more than a dog whistle everyone hears.
Remember in 1987 there was a statement by some minor government official about trade in Europe, and everyone initially pointed to that as the cause of Black Monday. Not stocks being overpriced to begin with.
I know. It’s like there are a bunch of big gray clouds in the sky, and then the mail comes, and then it starts raining, so I figure the mail causes rain.
The Huffington Post is now banning anonymous comments. People will have to use their real names to comment. LOL!
Best of all, they cite “freedom of speech” as a reason to BAN anonymous comments.
http://www.cnn.com/2013/08/22/tech/web/huffington-post-anonymous-comments/index.html?hpt=hp_t3
“Are country” is so done.
Our local fish wrap did the same thing. Now you have to comment with Facebook. And the comments are just as venomous as they were before.
The only explanation for the current red color of the stock market must be the fact that the United States is (as usual) discussing the possibility of having another run-in with a Middle Eastern country. It is NOT due to the lack of any fundamental support for today’s stock prices. It is NOT because the Federal Reserve is going to start tapering QE3. It is also NOT because of the reckless risk-taking in virtually every financial “instrument” available to random investors everywhere.
It’s just because of Kerry.
http://www.rushlimbaugh.com/daily/2004/10/22/kerry_thinks_midwesterners_are_idiots_can_i_get_me_a_hunting_license_here
Goon:
You somehow managed to post a comment that is nothing but a horizontal slide.
This one is for RAL:
http://www.nytimes.com/2013/08/25/realestate/surprise-no-rent-increases.html?adxnnl=1&src=recg&adxnnlx=1377623042-XLVQL5m1j2Rd43cdd6BhpQ
“Surprise - No Rent Increases”
My rent just went up 8%, the management said the amount is not negotiable, but I was able to score a 2nd off-street parking spot.
Wholly crap!
$3300 a month, for an alcove studio? A Pilates instructor? $40K a year just to rent? How much can a Pilates instructor earn?
I’d sooo rather live in Phoenix than New York City.
And yet, MFH (the 3rd most populous NYC borough behind Queens and BK and just ahead of the Bronx) has 100x the population density and 1000x the high paying jobs of PHX.
LOL, just LOL, at the suburban dessert sprawl that is PHX. Once fresh water and electricity prices go up, you’re done here.
mmmmmm ….. dessert sprawl
Not for long. As soon as the Bernanke bucks stop, puff go the jobs.
No wonder I’m a communist. Watching Mr. Rogers was my first media experience. And it turns out he was pretty much an open communist by today’s standards. From the wiki:
“Rogers had an apartment in New York City and a summer home on Nantucket island in Massachusetts.[11][12] Rogers was red–green color blind,[13] swam nude every morning, was a vegetarian, and neither smoked nor drank.[14]“
Hmmm. I’m color blind, have a swimming pool in the back yard, and neither smoke nor drink.
I guess I’m just a Socialist.
And I have it on good authority that he was just as nice of a guy off-camera as he was on-camera. A real class act.
He was a Pittsburgher. Or, as some say, a ‘Yinzer.
I’m not a brony or anything, but sometimes I watch that Daniel Tiger show on my 2nd screen while I’m at work. It’s pretty relaxing. http://pbskids.org/daniel/games/trolley/
Really? I thought he wore sweaters because he was tattooed all over. He was a sniper in Nam and a real bad a$$ in real life.
I read that he was a Presbyterian minister and never served in the military.
Snopes says no!
http://www.snopes.com/radiotv/tv/mrrogers.asp
Perhaps you are thinking Bozo the Clown.
http://en.wikipedia.org/wiki/Bob_Bell_(actor)
who served in the Marines and the Navy during WWII, and I believe, did have tattoos.
So, I was reading this article:
http://www.cnbc.com/id/100990929
About how interest rates are about to spike as foreigners are about to dump trillions of dollars worth of bonds.
1) Good, that means that the dollar will weaken, imports will cost more, and our exports will get cheaper for foreigners to buy (or more accurately the price in foreign currency will be the same, but our companies will make more US dollar profit off the goods when the conversion is done.
2) Why would the Fed not just resume, or expand QE should interest rates begin to rise too quickly?
3) Inflation requires there be too much money chasing too few goods. This means money in the hands of people that will actually spend it. I’ve seen no hint that money is going to flow into the hands of people that will spend it.
Even if the uber rich that control 90% of the money decide to poor the money into commodities, creating an asset price bubble, that inflation will be short-lived. We’ve seen what happens as price of commodities goes up. Supply increases and demand falls, and the bubble will collapse under its own weight.
Yes, we’re pouring trillions into the economy, but it is all ending up in the hands of people who already have more money than they can/will spend, and THAT does not cause inflation.
Rising interest rates will make a stronger dollar, not weaker.
The point of the article, why they expected foreigners to pull out, is a weak dollar. The article claims that foreigners are/will pull out fro fear of a weak dollar, and them getting out of dollars would further weaken the dollar.
It is true that higher interest rates will cause them/other, to get back in, but that then defeats the articles WHOLE reason for asserting that foreigners are about to dump all their bonds and get out of dollars in the first place.
SO, for the article’s point, that foreigners are about to dump US bonds and get out of dollars, the flight from the dollar would have to weaken the dollar faster than higher interest rates would strengthen it.
• Louis Rukeyser used to call bond market participants “bond ghouls” because they would do better when the economy did poorly.
• The bond market drives economic policy today.
Implications?
The bond market is driving economic policy, because the economy still sucks, so the adage still holds true.
http://finance.yahoo.com/blogs/the-exchange/bond-traders-smell-blood-could-own-190943760.html
John Bolton is running for President in 2016: http://www.nationalreview.com/node/356423/print
LOL!!!
Mark Twain called he wants his mustache back.
If you curse his mustache, you will be drone-zapped.
“John Bolton is running for President in 2016″
I really want to give him a fair shake, but then I read this:
“On domestic issues, he says, he’s a self-proclaimed “libertarian”…..
“On abortion, I’m about the same as Reagan; I’m against it except in the cases of rape, incest, or the life of the mother.”
That wouldn’t necessarily lose him my vote, as I don’t think Roe v Wade is in danger. But to call himself libertarian while taking this abortion stance isn’t a good start. And his support for gay marriage is great, but he qualifies it with, “I concluded, a couple years ago, that I think it should be permissible”. In other words, pulling an Obama on the issue. Can’t blame him I suppose, it is politics, but Bolton is someone I’d expect to be above the nonsense, at least until his back is to the wall.
Well, well… looks like I can plan on moving when my lease expires.
“Current property owners in the A zone now paying about $2,000 a year for flood insurance will see their premiums jump 25 percent in October and rise to about $11,000 over the next eight years, Holehouse said”
http://www.tampabay.com/news/localgovernment/flood-insurance-crisis-may-pummel-st-pete-beach-real-estate-market/2138582
A little ray of sunshine?
“A U.S. government lawsuit accusing Bank of America of fraud in the sale of billions of dollars of toxic mortgage loans to Fannie Mae and Freddie Mac is on track to go to trial next month after a judge rejected the bank’s bid to dismiss the case.”
“(The) lawsuit… alleged that Countrywide, acquired by Bank of America in July 2008, caused more than $1 billion of taxpayer losses by selling defective home loans to Fannie Mae and Freddie Mac, the mortgage financiers seized by the government in September 2008.
http://www.reuters.com/article/2013/08/27/us-bankofamerica-fraud-lawsuit-idUSBRE97Q0OV20130827
A little ray of sunshine?
I doubt it. Likely more democracy theater where the proletariat are presented with a play that simulates law and order, but the lobbyists have already bought and paid for the outcome.