Bits Bucket for August 30, 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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The elites are just begging for those pitchforks.
WESTFIELD — Westfield State University President Evan Dobelle Thursday night rejected a review that found he violated policies on travel and personal use of credit cards, calling it “defaming” and “illegal” because the full board of trustees did not approve it in advance.
His controversial trip to China, which cost $140,000, led to an increase in international students coming to Westfield State, he said.
But a portion of the report, previously obtained by the Globe, cites scores of questionable expenditures including more than $3,000 for Boston Symphony Orchestra tickets, $975 for tickets to see folk singer Arlo Guthrie, and a $1,000 donation to the Dukakis Center at Northeastern University. It showed that Dobelle mixed personal spending with business in racking up more than $180,000 on a credit card issued to him by the private fund-raising arm of the school, the Westfield State College foundation.
$975 for Arlo Guthrie? he was had..
http://www.boston.com/metrodesk/2013/08/29/westfield-state-president-calls-review-defaming-and-illegal/JRIdPfsv1SaO5ZHYwOZDtN/story.html
It was probably a half dozen tix near the stage, broseph. And Arlo Guthrie is pretty awesome.
“broseph”?
Reading a very good book called With Charity for All. It’s full of stories like the one above.
it is your civic duty to pay interest to the big banks that run the show.
paying 120% of asking price when buying a home demonstrates you are a patriotic american committed to the continuing economic recovery.
Thanks for posting that WSJ article yesterday about Section 8 and investor owned homes. At least, I think it was you. Anyway, I re-posted it in the weekend topics thread.
I knew who America Homes 4 Rent was, but it was enlightening to find out that Invitation Homes is Blackstone’s real estate unit, and that Waypoint is another big playa in the investment home arena.
Many parts of today’s suburbia and exurbia will become tomorrow’s ghetto.
That’s what I’m thinking and that’s why I posted it in the weekend topics. I smell a stinky on the way, as it sort of dovetails with this new proposed HUD rule on “Affirmatively Furthering Fair Housing”.
I think we’re going to see another one of those unholy public-private partnerships here.
France is like that. The rich live in the cities and poor and immigrants live in the ‘urbs.
What a mess this bubble-bust-bubble has been. Breaks my heart to see formerly pleasant but modest neighborhoods turned into near-slums, like the hood where I used to live. These were places that were nothing fancy, just modest little concrete block shacks with nice little lawns and shade trees. The living was cheap, but relatively safe and easy-going.
Of course, Section 8 tenants would turn up their noses at this sort of neighborhood, even before the bubble-bust-bubble. They want those faux-front stucco McMansions. They can have ‘em.
Maybe there’s some advantage to living modestly after all.
Whats wrong with that?
Don’t you want the inner cities safe? people want to move back, maybe eliminate the car so we need the hoodrats to move elsewhere Add a police station and a welfare a medicaid doctors office on site and use up some of the abandoned housing developments and make sure they are at the end of a bus line……a super market outside the gated abandoned community….problem sort of solved.
I’ve been saying this for over a year on this blog and usually get little response. They knew Section 8 was the floor. It is government welfare for property owners and pays more than you’d think.
It is also awful policy to give young single mothers their own pads.
I know some will tell about how it is really so unavailable and the waiting lines are long, etc., etc. From what I’ve seen that’s all BS, th same as when they say “boy credit’s hard to come by, they aren’t making the loans,” meanwhile everyone I know with a pulse who wants a loan can get one.
“France is like that. The rich live in the cities and poor and immigrants live in the ‘urbs.”
Yes, I’ve read about that. Interesting how that comes about. I wonder if we’ll see a similar shift in the US. Kind of doubt it, though.
Well she should get free public housing that’s what it was originally designed for, so people with low income can get a fresh start.
But once the voucher is good elsewhere it’s really is a scam and a rip off to working people..who are careful enough not to have kids or find a responsible partner…
Why do we keep subsidizing irresponsibility?
It is also awful policy to give young single mothers their own pads.
Kind of doubt it, though.
I doubt it too. I think a small trend is building that educated and young ‘uns are moving in the US cities from the ‘urbs. But the political machines are so strong in the cities, I doubt they will allow the reliable voting block to disapper just like that.
I know some will tell about how it is really so unavailable and the waiting lines are long, etc., etc. From what I’ve seen that’s all BS
You’re entitled to your opinions. Unfortunately the facts don’t back them up. For instance, In Denver they have a lottery just to APPLY for section 8:
http://www.denverhousing.org/section8/howtoapply/Pages/default.aspx
So yeah, they aren’t just handing out the vouchers like Halloween candy. Ever wonder why so many people sleep in their clunkers in WalMart parking lots? Not to mention homeless shelters?
Just google “section 8 waiting lists”.
Goon - great point re: suburbs are the new poverty.
Our census data shows that as of 2012, there is more poverty and more welfare in Baltimore County than in Baltimore City. Most of this is due to falling prices of housing in the burbs, more lax zoning (townhouses and affordable housing) in the burbs, and growth of McJobs in the burbs.
White Marsh, Middle River, and Essex are the new West Side/East Side.
The young people who are doing well tend to live in the city, NOT the ‘burbs.
You know that house I own that cash flows at 20%? Well, I tried to rent it to some Section 8 people because I wanted the guaranteed rent. I gave up on that because all the Section 8 applicants were so out of it. First of all, there is rarely just one person in a family on Section 8. It’s grandma, single mom, and “disabled” adult son. Secondly, they tend to be on drugs. I would get the same call from the same person asking about the same house like five times in a row. Then the person would realize that they already talked to me and hang up.
They would also want to know if utilities were included in the rent. Ummmmm… no, I’m not giving you free reign to use all the utilities you want at a flat rate, especially when you can’t even remember who you called yesterday.
Mike Whitney nails it in this piece just published today:
http://www.counterpunch.org/2013/08/30/is-the-big-money-exiting-housing/
He quotes two stats:
Goldman Sachs: 57% of purchases in Q1 were all cash; and
Olick (from NAR): 16% of purchases in July were investors.
Are both true? Or just one?
the slumlords are the the same people taxpayers bailed out?
.” …These were places that were nothing fancy, just modest little concrete block shacks with nice little lawns and shade trees. The living was cheap, but relatively safe and easy-going.”
Great description of what we paid cash to live in. Went from “wow” w/ a view to a well kept mostly blue collar neighborhood.
Some things are great, other things not so. Halloweens are like they were when I was growing up. Lots of kids, no helicopter mom mall trick-o-treating.
The glaring difference is you were robbed blind to the tune of $200k.
200k? If so, that’s probably only a small fraction of what they have in the bank. Not saying it was great as an “investment”, but who cares? She decided what she wanted to do at a time in her life where she and her husband had some specific needs and a good understanding of their financial picture. They sold a high price, larger house and bougth something small and simple. Sounds like a shrewd move to take some money off the table. RAL, you pick some strange battles, man.
I also live in a “well kept blue collar” type of neighborhood. I LOL when people act like I should be paying twice as much money to live in some luxury building or buy a new “fancy” townhouse in a slightly better ‘hood. I like not being surrounded by douches.
Joe
I like not being surrounded by douches, either. And don’t get me started on gated community snobbery or HOAs. They can keep both. You nailed our objectives, btw.
HA
$200K? Are you privy to our financial docs or spreadsheets? Jeebus. Just make up #’s out of thin air? You’re smart, apply it.
golden boy
True. Most of my family started collecting commercial properties 30+ years ago. Real Estate was once a great road to riches.
Having to fetch coffee for the boss at 65 years old is all we need to know that you got ripped off on a rapidly depreciating house at a grossly inflated price.
Smarten up.
In an economy with large international and domestic trade imbalances, debt is a not only a bad idea; it as also a necessity.
Total spent = total earned.
Therefore, is one individual is earning more than they spend, someone else MUST be spending more than they earn.
It is ignorant to love the widening wealth disparity while hating the debt that makes it possible.
they really have the system rigged where you basically have to borrow to participate in the economy.
Not if you adhere to the principles of Mr. Money Mustache.
Didn’t he borrow to buy his first rental property?
No given individual has to borrow to participate.
However, to maintain the current level of economic activity (or have some weak growth) despite massive imbalances, the total debt has to increase.
Paradox of thrift. What is good for the individual (Save and not borrow), is bad for the whole economy (drains money from active circulation, slowing economic activity).
“Paradox of thrift. What is good for the individual (Save and not borrow), is bad for the whole economy (drains money from active circulation, slowing economic activity).”
+1 This is precisely why the government allowed changes to the automobile loan industry guarantees to increase the loan period to 8-yrs, and reduce the applicant’s allowable credit score to the low 500’s. The federal reserve buys the loans after Wall street securitizes them.
Given that about one third of all cars sold in this country are imported, its a real “win” for our “trading partners”
“…one third of all cars sold in this country are imported…”
That’s a dilemma for me. Having had an import (Volvo) that lasted 18 years so far, is it time to support the US car manufacturer? Is the engineering up to par with the my long in the tooth Volvo?
Is the engineering up to par with the my long in the tooth Volvo?
It is with current Volvos.They don’t make them like they used to.
it’s not easy being lucky ducky:
‘poverty consumes so much mental energy that people struggling to make ends meet often have little brainpower left for anything else, leaving them more susceptible to bad decisions that can perpetuate their situation, according to a new study … previous research often has assumed that poor people are poor because they are somehow less capable than others, whether inherently or because of past trauma or other environmental factors in their lives … what the latest study suggests is that the strain of poverty can tax the cognitive abilities of anyone experiencing it — and that those abilities return when the burden of poverty disappears.’
http://www.washingtonpost.com/national/health-science/poverty-strains-cognitive-abilities-opening-door-for-bad-decision-making-new-study-finds/2013/08/29/89990288-102b-11e3-8cdd-bcdc09410972_story.html
Being poor isn’t about the lack of money.
do you have to have money to be rich?
“do you have to have money to be rich?”
+1 Great question. No.
that’s what I was thinking too. I don’t have a ton of money but I can do a lot of things so I don’t need a lot of those fed reserve notes. I feel blessed to have a lot of skills such as carpentry, mechanical, financial, landscaping and good with people.
People are brainwashed to think they need a lot of money to be successful.
The rich have two important options we don’t have. They can live in cool real estate, and if they get sick, they have more options available. And they don’t have that nagging money concern.
They didn’t become rich by buying an highly overpriced house.
“…what the latest study suggests is that the strain of poverty can tax the cognitive abilities of anyone experiencing it — and that those abilities return when the burden of poverty disappears.”
Look at military enlistees who have equal opportunities; you know the results.
Not sure what you’re getting at here?
In any case, military enlistees (as opposed to maybe officers) certainly aren’t a representation of all social classes. They’re mostly the lower classes and the lower middle class with some middle-middle class mixed in.
“They’re mostly the lower classes and the lower middle class with some middle-middle class mixed in.”
Sounds like a great starting point to see who floats to the top and who sinks or gets discharged.
Not sure what you’re getting at here?
I don’t think the story was comparing the Donald Trumps to the Crack Dealers. It was about average working class opportunities.
rms:
Why do you think that military enlistees have equal opportunities?
“Why do you think that military enlistees have equal opportunities?”
Can you think of a better example of everyone bunched together in the same living quarters and drawing the same pay?
Yeah, and the females don’t get raped, and the white males don’t promote each other disproportionately.
“Yeah, and the females don’t get raped, and the white males don’t promote each other disproportionately.”
Have you ever served in the armed forces?
debt donkeys denied:
‘a surge in borrowing costs to a two-year high is starting to cool demand from homebuyers as higher rates combine with surging prices to reduce affordability, according to data released this week. the biggest pinch is being felt in expensive markets such as seattle and new york, where budgets already were stretched, leading to a more uneven national recovery.
‘there is a bigger monthly payment shock in the high-cost areas,’ said lawrence yun, chief economist for the realtors group. ‘higher interest rates may pull demand out.’
http://www.bloomberg.com/news/2013-08-30/new-york-to-seattle-buyers-tap-brakes-after-rates-rise.html
As if there were any demand in the first place.
Remember, housing demand has fallen to 1997 levels as a result of massively inflated asking prices of resale housing.
And demand will continue to crater until prices roll back to the long term trend line or roughly 1996 levels.
demand will continue to crater until prices roll back to the long term trend line or roughly 1996 levels.
Your math is off:
If you are assuming 1996 was the beginning of the bubble, the long term trend line extrapolated from 1996 would be higher now than 1996 because it’s 17 years later than 1996. And, in 1996, houses had not yet risen above their long-term trend line.
For your statement to be accurate, the bubble would have to have started a couple decades earlier than 1996.
There was an overshoot to the last crash, and there will be an overshoot to the next.
There was an overshoot to the last crash, and there will be an overshoot to the next.
I’m not seeing the overshoot through 2010 on this long-term Shiller chart. And if there were an overshoot, it didn’t last too long. I think that’s why all the QE and bank/housing bailouts. Maybe they did not want to see an overshoot.
http://4.bp.blogspot.com/-1rQMFDuT3yU/UL-cLmUQjqI/AAAAAAAAWrk/2g7Rj4GPRGo/s1600/Lawler8.jpg
Rio, what does “Correction Better Inflation” mean?
This graph doesn’t look like it pulls Shiller’s actual inflation adjusted data, which shows a flatter red line.
Both graphs though show the same thing generally, that the trough of the last three housing corrections ended at about the same inflation adjusted line.
One note…this bounce off that line is MUCH faster than prior bounces off that line. Aided in part by low interest rates, and in part by historically low construction. If increases don’t start to slow, we are setting ourselves up for a rebubble and recrash.
Rental Watch tells me that no one has ever in history been able to get 20% returns on real estate. However, during the last crash, all you needed was money, and you could have your 20% return.
No overshoot?
I’ve never said no one in history has ever purchased at a 20% cap rate.
Real estate is inefficient, so you can occasionally purchase at much higher cap rates than are typically available in the market. However, you shouldn’t expect to be able to buy a lot of property at those kind of prices. They are the anomalies.
We acquired a 100% leased asset at a 14% cap once, but we don’t expect to find them frequently…they are the needle in the haystack. A 20% cap home is a similar needle.
By the way, you said that profits are distributed quarterly for private equity funds?
Not for funds that invest in illiquid strategies (like real estate, private equity, or venture capital). First off, it is hard to actually value the real estate to determine what the profit should be, and secondly, there frequently isn’t the liquidity to pay the profit out to the managers.
Hedge funds, where the $ is in fully liquid strategies are a completely different story.
The anomoly is the bubble. All the houses in the crash are available at phenomenal prices.
I know a gal who did some research with respect to rental rates (as measured by cap rates) going back for some Southern Cal markets. It was very interesting. From the mid-80’s until about 2000, cap rates for single family homes went up and down between about a 4% cap and about a 5.5% cap. The bubble brought the cap rate down to about a 2% level. After the crash, the cap rates went to about 7%.
So, there were two anomalies, the 2% at the height of the bubble, and the 7% after the crash. “Normal” is probably right around 5%.
Hunh? I just looked back at the sale of a house from 1990. 40% annual gain over 2 1/2 years. Cost basis 9500, sale after expenses 22,500. you do the math.
The 9500 included fix up expenses but not a summer’s worth of part time sweat equity. It was a very small house, HUD forclosure and I bid 1100 over asking price. The ad said “hazardous lot” but that really meant amazing view.
Yes 20% is high on a long term rental but it was not unusual for a quick flip during the bubble.
Sounds like southern California is a really bad place to buy rentals then. Ben has been very proficient at locating areas that are good deals, not necessarily just the city where he happens to live.
And when prices finally hit the long term trend line or 1996 levels, how many of you will be here boo hooing?
Your lies are off.
Resale housing prices are 40% higher than materials, labor and profit.
linked from drudge: loosers are fatties
‘a study published monday in psychological science found that after a sports team loses, fans of that team eat 16 percent more saturated fats than they usually do.
fans have such a deep attachment to their nfl teams that losing can trigger a food binge, the study said.
http://minnesota.cbslocal.com/2013/08/28/study-link-found-between-losing-sports-teams-heavier-fans/
Even the players are fat in some sports. That would be a better study IMO.
When I was a student at Football Factory State University and they lost a game, the stoodents didn’t binge on food (having been bingeing on alcohol all day since starting the day with kegs’n'eggs), they took to the streets and set couches and mattresses on fire, flipped cars over, threw bottles and rocks at the police.
Last year that “sportz factory” had an undefeated team but couldn’t play in the title game bc some of the playerz sold their uniforms and signatures to get tatoos. The students must have been MAF, yet grateful that it was one of their rivals getting pwned for the Sandusky child rape thing. At least no one walking the sidelines at the horseshoe ever raped a kid (that we know of).
i made a a lot (alot) of money selling my stoodent tickets every year, many concert tickets at newport music hall and recreational pharmaceuticals were purchased with the proceeds, enhancing the overall undergraduate experience.
Speaking of rec pharma… painkillers kill more people in the US than marijuana, even though more people use marijuana.
http://america.aljazeera.com/articles/2013/8/29/painkiller-kill-morepeoplethanmarijuanause.html
LOL
That’s not LOL.
I went to high school with someone who OD’d and died on Oxycontin at age 26.
I mean LOL @ the “war on drugs”
Even the players are fat in some sports. That would be a better study IMO.
In uniquely American sports. I’ve never seen a fat, world class soccer player.
In uniquely American sports.
Greco-roman and sumo wrestling are both uniquely American??
Agreed on world-class soccer players, though.
OK, I didn’t think of wrestling or weight lifting. But in most, non American sports, athletes are not fat.
“In uniquely American sports. I’ve never seen a fat, world class soccer player.”
But you have seen a world class soccer player on the ground writhing in pain like a little girl who just fell off her bike after the world class soccer player had been barely or nearly touched haven’t you.
If not, you haven’t watched much world class soccer.
You mean they take dives? Sure they do, but what has that got to do with being fat?
Taking a dive is one thing, rolling around like a little girl is another. But what does that have to do with being fat? Nothing. I assume you are talking about lineman (probably offensive lineman and nose tackles) in football. Certainly not wide recievers (usually tall, thin and fast) or defensive backs (ripped and super quick) or linebackers and tight ends (big, fast not much body fat).
Well I don’t have the time to explain it, but there is a reason for that. There is also a reason why good big fat athletes that can play offensive line and nose tackle are so hard to find and why the good ones get paid so much.
But I will tell you this, if you ever get the pads on a world class soccer player and line him up aginst a high level fat offensive lineman or nose tackle, you had better have an ambulance close by to transport the world class soccer player to the hospital.
PS
When a DB (athlete like a good soccer player) shies away from making a tackle on a big fullback or tight end rambling down the field, Dione Sanders says… “He made a business decission.” Then everyone on the set laughs.
here’s the hope and change you voted for kidz:
‘for the fourth consecutive summer, teen employment has stayed anchored around record lows, prompting experts to fear that a generation of youth is likely to be economically stunted with lower earnings and opportunities in years ahead.
http://www.mcclatchydc.com/2013/08/29/200769/teen-employment-hits-record-lows.html
“One of the more surprising findings of Sum’s research is that teens whose parents were wealthy were more likely to have a job than those whose parents had less income. Some 46 percent of white male teens whose parents earned between $100,000 and $149,000 held a job this summer, compared with just 9.1 percent of black male teens whose family income was below $20,000 and 15.2 percent for Hispanic teen males with that same low family income.”
I have personally seen summer job corps kids feigning workplace injury; their porch monkey parents must be coaching ‘em. Already? You haven’t even held a real job yet.
The quote you pasted is comparing apples to oranges. Besides, don’t you think the owners and managers of companies are probably hiring their own kids?
he quote you pasted is comparing apples to oranges. Besides, don’t you think the owners and managers of companies are probably hiring their own kids?
Eeyore’s Personal Rain Cloud
http://littlesundog.files.wordpress.com/2012/05/eeyore.jpg?w=294&h=300
Your .jpg does not respond to my comment.
“The quote you pasted is comparing apples to oranges. Besides, don’t you think the owners and managers of companies are probably hiring their own kids?”
Most high paid parents work in a professional capacity in an employer’s office, hospital, etc., so their kids don’t work there. The difference is in the parenting, IMHO. Of course bright eyed kids get hired before the dull slackers. Did you expect anything different?
That is NOT the Hope and Change I voted for.
I hoped Obama would turn our economic policies around, instead of just giving us more of the same old Republican economic policies that have brought us to the brink of disaster.
Securing the permanent democrat supermajority:
http://m.theatlantic.com/politics/archive/2013/08/obamas-immigration-nuclear-option-stopping-deportations-unilaterally/279138/
In case you are feeling down over your stock market losses today, with anticipation of further losses in September, this article may cheer you.
Go away, bears. 7 reasons to stay overweight equities now
August 30, 2013, 8:18 AM
As the door shuts on August, the Dow Jones Industrials Average (DJIA -0.25%) is on track for its worst month since May 2012 and the S&P 500 index (SPX -0.24%) is looking at its worst August in two years. And September may not get much better, as that’s traditionally the worst month of the year for those indices.
But where there’s a bear — like the great grizzly himself, Societe Generale’s Albert Edwards — a bull is usually just a stone’s throw away.
…
Clearly the market can only go up from here!
Aug. 30, 2013, 4:16 p.m. EDT
U.S. stocks fall as case against Syria made
Federated analyst: Syria is ‘the only variable that really matters’
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By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks declined on Friday, with the Dow industrials and S&P 500 recording their worst month since May 2012, as Wall Street considered a possible U.S. strike against Syria.
…
Ben,
Have any recommendations on restaurants in Flagstaff? Breweries and something with chiles would be good but anything noteworthy would be appreciated. Hoping to climb Kachina Peaks today, weather permitting.
If Late for the Train is still around, it’s a good one.
I guess if you are a genius and take alot of acid you can figure out climate change… wasn’t there a movie like this?
“In 1984, Owsley appeared at Phil Lesh’s house with a map of the world showing the mean temperatures at the height of the last ice age. Long before global warming became an international hot-button issue, he delivered what writer David Gans described as “a ninety-minute lecture on a thermal cataclysm that he said would begin with a six-week rainstorm and leave the entire Northern Hemisphere uninhabitable.” Passing around Australian visa applications, Owsley then urged all those present to join him in the Southern Hemisphere.
Much like his theory that human beings are meant to eat only meat, Owsley’s concept of climate change is at odds with most current scientific thought on global warming. In highly abridged form, what Owsley believes is that the phenomenon is real but that it comes from “the steadily increasing movement of large amounts of heat from the tropics across the temperate zones to the poles. ‘Global warming: the panic,’ is based exclusively on temperate-zone land measurements and ignores the fact that the planet is seventy percent ocean. The Arctic and Antarctic are soaking up the moving heat and the ice caps are melting, but the cause of the heat’s movement is a buildup of energy as the prelude to a massive, planetary-scale cyclonic storm, which will build the new ice age glaciers.”
Because this is a natural cycle, Owsley believes that carbon and methane emissions from human activity have little effect on the process and do not cause the greenhouse effect. “Our planet’s heat balance and temperature are buffered and controlled by water and water vapor, which also washes CO2 out of the air and not minuscule fractions of a couple of gases, one of which is very soluble and the other unstable. Not a single atmospheric scientist subscribes to the concept of greenhouse gases or global warming — they all know the truth.”
Owsley contends there is nothing people can do to prevent the coming of an ice age storm that he describes as “a kind of a gigantic hurricane, a cyclone thousands of miles in diameter, turning with winds of ultrasonic speeds that is one-half the planet in size.” This is the Biblical ‘flood of Noah,’ and the entire portion of the planet underneath the storm will be blown flat and buried under water. “Based on past evidence, the sea will rise 300 meters, and life in some places will be entirely destroyed. I don’t see how anyone in the Northern Hemisphere could survive the storm. But there are areas on the planet that are safe, and I hope I’m in one of them.”
Read more: http://www.rollingstone.com/culture/news/owsley-stanley-the-king-of-lsd-20110314#ixzz2dT37jUnB
Follow us: @rollingstone on Twitter | RollingStone on Facebook
People make all kinds of assertions. There has been one historically tested method that yields good results in trying to identify the reality. And that is looking at evidence.
People often make the mistake of thinking that a good newspaper always gives equal press to all opinions on a certain topic. That’s not true. A good newspaper should be able to ferret out the opinions that have literally no credibility whatsoever.
Paaaahlllease.
Journalistic integrity has gone the way of the Dodo and the Dinos.
Now the news just ferrets out the stuff that is too bland and boring to bring eyes and profits. Shock, awe, scandal, sex, celebrity, THESE are the stories they are looking for.
I saw this 57 second video and it reminded me of the government and the central bank’s market manipulations. They’re pushing it and pushing it, don’t want to accept their medicine, and eventually, they’re going to get spanked by the economic tidal forces: (”Family Guy”, 00:57, Safe For Work) http://www.youtube.com/watch?v=l_232OsC4gE
Fed fights back against ‘feral hogs’
By Claire Jones, Robin Wigglesworth, James Politi
Last updated: June 24, 2013 7:24 pm
Financial Times
A top US central banker on Monday warned the “feral hogs” of financial markets against trying to force the Federal Reserve to shelve plans to slow its bond buying, as yields on US Treasuries climbed to their highest level since August 2011.
“Markets tend to test things,” Mr Fisher told the FT. “We haven’t forgotten what happened to the Bank of England [on Black Wednesday]. I don’t think anyone can break the Fed . . . But I do believe that big money does organise itself somewhat like feral hogs. If they detect a weakness or a bad scent, they’ll go after it.”
Mr Fisher, who is among the more hawkish Fed policy makers, emphasised that all the Fed had announced last week was that it would begin “tapering” when conditions were right and had not even started reducing its purchases.
“I don’t want to go from Wild Turkey to ‘cold turkey’ overnight,” Mr Fisher said.
http://www.ft.com/intl/cms/s/0/9d8fa63e-dce6-11e2-b52b-00144feab7de.html
Morning laugh time an article that says absolutely nothing
finance.yahoo.com/blogs/daily-ticker/fed-tapering-economy-without-qe-may-not-look-164726618.html
Best quote
Bhide doesn’t “think anyone has the foggiest idea” of what the impact will be when the Fed starts to taper, least of all him. It could go smoothly or there could be chaos in the markets, he tells The Daily Ticker. But for the broader economy, which has been backed by trillions of dollars in QE stimulus since the financial crisis, Bhide says the impact will be limited.
“I don’t think QE has had a huge impact on the real economy except in a few sectors and places,” Bhide says. That’s is why he doesn’t think the withdrawal of QE will have a huge negative impact on the economy
Now who can argue with this kind of logic??? And maybe that’s the point, it’s a don’t worry message with no logic or reasoning so no one can argue against it?
Obfuscation is a great way to facilitate blame-deflection.
I want to own ten houses without a mortgage, and they should all cash-flow at 20% annually.
http://en.wikipedia.org/wiki/Tom_Vu
Wouldn’t that require someone else be willing to pay 20% more for rent than just buying a house?
Why would someone rent for 20% more than they can buy for?
Actually, if he is assuming 20% net of ownership costs (meaning that the tenant’s rent is an amount that pays all expenses PLUS an amount that gives the property owner a 20% return on their investment), then it means the 20% represents a market where people are willing to pay all the carry costs, and for the amount above the expenses, they are willing to pay approximately 4x as much renting than to rent their money from the bank (at 5% interest rates).
In other words, getting that kind of deal is a unique situation (that can happen from time to time in an inefficient market), not something that you can expect to replicate over and over.
When mortgage rates are 5%, the rough equivalent “neutral” cap rate is 5%, not 20%.
In other words, an occupant can pay all the way up to a 5% return for the landlord and still be neutral on an apples to apples basis. And frequently, because of the joys of the 30-year fixed rate mortgage, people are willing to pay even a bit more, since their mortgage payment won’t go up with even weak inflation…but their rent likely will.
In short Darrell, your 20% more is actually 300% more (4x) the cost of renting the money.
Because they have no down payment, can’t get a mortgage, and didn’t buy when the time was right.
People frequently rent when it is cheaper to buy. Students, for example, and people whose careers might require relocation. Young people just starting out. It’s not always the economics.
Renting is half the cost of buying at current grossly inflated askiing prices irrespective of location.
Why pay double when you can rent for half?
I just want to tell everyone about the two things that annoyed me today:
1) My cubicle neighbor whipsers when she’s not yelling. I want to punch her.
2) I ordered a couple packets of secret sauce, and ended up with five packets of taco sauce.
Whew, sure am glad I got that off my chest.
You must be that gal from first world problems meme?
Wish I would have bought me some of that OGX Petróleo a couple years ago when it was hot!
http://www.cnbc.com/id/100999661
“How a Brazilian billionaire lost $25 billion in 18 months”
Ron Paul: Syria Chemical Attack A ‘False Flag’
Mikael Thalen
Infowars.com
August 30, 2013
During an interview on Fox Business’ Cavuto Wednesday, former Texas Rep. Ron Paul (R-Texas) commented on the unfolding situation in Syria, specifically calling the recent chemical attack a ‘false flag’ likely carried out by the US backed Al Qaeda filled rebels.
“I think it’s a false flag…” said Paul. “Why don’t we ask about the Al Qaeda? Why are we on the side of the Al Qaeda right now?”
Despite the Obama administration’s attempt to immediately blame Assad’s forces for the chemical attack, multiple U.S. officials have said that the administration’s evidence is “not a slam dunk.” Officials also mentioned that the administration had no “smoking gun.” In fact, the rebels have now even claimed responsibility for the attacks, and Anthony Gucciardi has revealed that mounting evidence lends to the reality that the Syrian rebels carried out the attacks.
Even with Syrian Deputy Foreign Minister Fayssal Mekdad presenting evidence to the UN that strongly points to a rebel led chemical attack, the Obama administration has continued to ignore any evidence that can’t be used to justify military action against Assad, including multiple YouTube videos showing rebels launching chemical weapons on civilian targets.
Paul also exposed the history of lies and propaganda used by the US government to justify military intervention, pointing specifically to the Iraq war.
“Look at how many lies were told to us about Saddam Hussein prior to that buildup, war propaganda. It’s endless, it happens all the time,” said Paul, also pointing to Donald Rumsfeld’s role in supplying chemical weapons to Saddam in the 1980′s.
Mounting evidence forced out by the alternative media has destroyed the government’s credibility, with now only 9 percent of Americans supporting military intervention in Syria. The international backlash also caused UK Prime Minister David Cameron to momentarily back down after the British parliament voted against authorizing military action. Cameron later decided to send military jets to Cyprus, claiming the move was purely “defensive.”
Last April during a speech in Austin, Texas, Paul warned of the system’s increasing war propaganda and predicted that a false flag incident would likely accelerate the US deeper into the Middle Eastern conflict.
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