Bits Bucket for October 10, 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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I went out to LeHigh Acres in SW Florida yesterday to look at a house that foreclosed for $15,100 two months ago (HSBC) after selling for $253,000 in 2006. Quite a fall from grace, though the peak was artificially created by some mortgage scammer taking advantage of the 2006 conditions (just like LeHigh Acres was created by a scammer in the 1950s).
LeHigh Acres is the poster child for why you need city planning departments and zoning codes. The original developer laid out 152,000 lots (quarter to half acre) on a grid of narrow paved roads with no curb, gutter or storm drains. There are no collector streets, no signal lights, no bridges over canals, just dead end streets and hundreds of stop signs. Houses are built on raised areas above the lots, or above a utility first floor. Only about 30% of the lots are improved with houses.
The developer who sold lots in the 1950s did not care about anything but selling lots (“retirement dreams”) to unsuspecting out of state buyers. In fact 40% of the lots foreclosed and the developer took them back and just resold them to the next greater fool. The price in the 1950s was $10 down and $10/month (forever?). Today, I saw a homemade sign offering four lots for $12,900. If you put $100 down and paid $100/mon, you too can own a piece of LeHigh Heaven today……
I believe in good planning for all developments and strong participation with the municipal planning departments. LeHigh Acres serves a need for low cost housing, yes, but it could have served that need in a much, much better way. I contrast LeHigh with the location of our vacation condo at Miramar Lakes, which has a strong master plan, beautiful lakes (instead of drainage canals), community centers, all types of housing density (20/acre to 2/acre) and collector streets and residential streets.
My Point Today: It is possible to take the same amount of energy, same amount of land, same amount of sticks and bricks and create something with lasting benefits and much more intrinsic value. Letting a developer run a 10-mile chalk line over 60,000 acres and sell pieces to absentee owners in cold weather climates just creates a mess which has taken 60 years to get to 30% vitality and may take another 100 years to get some sort of real solution to the blight it has wrought on SW Florida.
Post some pictures.
Thank you, oh Buddha, for your perfect wisdom… Here is my point for today:
“…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
How many times do you want to post this? I got your point a month ago. You seem like Housing Analyst now….same comment over and over and over and over……
Repetitio mater studiorum est.
Johnny Ringo: Eventus Stultorum Magister.
Doc Holliday: In Pace Requiescat.
How many times did you lie to us about who you are and what you own?
Why do you deny that these “planned developments” are pieces of junk that will only attract vagrants and passers-through? They will never become vibrant communities with good job/residential balance.
Why do you deny;
a) The effort and cost to build in Lehigh Acres is no more or less than anywhere else?
b) That this is another one of Jingle Balls elaborate but lame effort to suggest “it’s different”?
I’m not denying A. What I’m denying is that the same house with the same materials is worth building in Lehigh Acres (or any other shitty place with no jobs) versus building it near a major metro with jobs.
As for B… that’s exactly what I’m saying. Jingle is nauseating.
Has the California investing market run out of great buys already? (Check out Ben’s other thread today some time when you have the chance!)
“Has the California investing market run out of great buys already?”
Yep. Because when it does, the Californicators look to Florida, I spoke to a couple of them during 1.0. And they were investing in the same general area that Jingle is scoping out. Heads up! This puppy’s about to go down!
I am not buying real estate anywhere today. I bought everything I wanted by early 2010 and I am very happy with the results.
I am in Florida on vacation. I read about LeHigh Acres for many years on this blog and in Alyssa Katz’ book “Our Lot”, so when I saw the sign on the I-75 freeway, I thought I would go take a look. It is fascinating to see it in real life. I just wanted to share the fresh perspective with other HBBers who may have read about Florida and LeHigh and would enjoy an update.
It was the Florida swamp land subdivision scams and it leaking over into California that spurred the current California Subdivision laws in California…Strictest in the Nation…Thats why all those developers in the Central Valley got their butts handed to them…All that infrastructure was installed and or bonded before the map was even recorded…
“I bought everything I wanted by early 2010 and I am very happy with the results.”
Given your repetitive misrepresentations and blathering, do you really expect us to believe you now?
You should buy more RE, since it never goes down in value and you will always make a profit from here on out, right? Because it can’t possibly crash AGAIN- despite the fact that none of the fundamental economic faults were resolved. Because YOU are all-in now and in your mind, that is a real game changer.
You should also change your handle to Captain Obvious and continue your keen, insightful analysis and reports on topics like, ‘South Florida RE is hosed’. Maybe you should go up to Vegas and check out the unsubstantiated rumors that there is some gambling going on in that area. Be sure to let us know what you find.
What you describe is more hideous suburban crap, it’s not suiting any real needs. To get any kind of vitality you need higher density, good jobs, zones with mixed usage, and people who really want to be in the area–not just there to retire or to get cheap housing. Yay, manmade lakes and “gated communities” which have no prestige whatsoever except to the WT Zimmerfans of the world.
What you describe is some place awful, terrible, development with no sense of place, no sense of history, no sense of purpose. So naturally it will be inhabited (if at all) by the typical Flori-duh transplant.
All a consequence of the typical American focusing more on quantity than quality.
“no sense of place”
See also my post below about Terrain at Castle Rock.
One thing I forgot to note in that post is that Castle Rock and Douglas County are very, very fundy. Much more like fundy Colorado Springs and El Paso County than cosmopolitan-cowtown Denver.
One thing I forgot to note in that post is that Castle Rock and Douglas County are very, very fundy.
Which is interesting as they are somewhat prosperous. Colorado as a whole is supposed to be one of the more “unchurched” states in the nation, though I suppose to a European visitor there probably seem to be churches everywhere.
Also important to differentiate between Evangelical and Fundy. There is a bigger difference than you might think.
Please elaborate on the differences between evang and fundy.
Fundies are out of the southern baptist strain and calvanistic. Stoic, legalistic, hypocritical. Culturally irrelevant.
Evanges, though still protestant, a little looser(charismatic, speak in tongues) and slightly more culturally relevant.
Yup, that’s a good description. Also, from what I have heard, most Evang pastors are OK with divorce and remarriage while most fundy pastors are not.
All a consequence of the typical American focusing more on quantity than quality ??
There are millions that cannot afford quality…Where would you go live if your total income amounted to a $1500. per month social security check…
The problem is that Americans have made their cost of living very expensive.
A cheese burger in a neighborhood restaurant in Hicktown Sycacuse cost $10 and if you add a beverage along with tax and tip the bill is $30 for 2 people. No wonder people are eating out less.
‘A cheese burger in a neighborhood restaurant in Hicktown Sycacuse cost $10 and if you add a beverage along with tax and tip the bill is $30 for 2 people. No wonder people are eating out less.’
Burger joints have popped up in metro Portland ME area the past few years. I think recessionary/lackofincome pressures allow a comfort food item like burgers to do better than a steak joint, but looking around too, seems a lot of new cars on the road here.
Lol. You guys yammering about “quality”.
Its another failed excuse for inflated prices. But if youre paying attention, that’s precisely the point of today’s ruse by Jingle Balls. And he’s no more in FL than I’m in Bangladesh.
I see these enticements to buy houses and get rich. But… looking at this through the “follow the cash flow” lens, a different picture emerges.
The buyer of the physical asset takes on maximum debt (guaranteed by government). The debtor’s responsibility here is to keep making payments to the lenders. That’s the actual cash flow in this model - coming out of the debtor’s pocket (or the taxpayer’s pocket if the debtor defaults).
Sure, the debtor might be able to sell the house for future gains, but that’s a gamble. That’s the enticement to have the debtor start making payments to the lenders. Casinos have the same model - the possibility of hitting the jackpot in return for the gambler to give cash to the casino now.
• In a casino, the only consistent winner is the house (casino).
• In a stock brokerage, the only consistent winner is the house (brokerage).
• In a real estate transaction, the only consistent winner is the house (lender and brokers).
Paging Rio…
—————
How Brazil’s Middle Class Dream Became A Debt-Fuelled Nightmare
Tyler Durden - 10/09/2013 - ZeroHedge
Quick: which BRIC nation has the highest consumer loan default rate?
If you said China, India or Russia, you are wrong. Actually, if you said China you are probably right, but since absolutely all economic “data” in China is worthless, manipulated propaganda, only a retrospective post-mortem after the Chinese credit, housing, commodity, consumption bubbles have all burst will we know the answer. So excluding China, which country’s consumers after a multi-year shopping spree funded entirely on credit, are suddenly suffering the epic hangover of soaring non-performing loans as they suddenly find themselves unable to even pay the interest on the debt? Just ask former billionaire Eike Batista whose OGX oil corporation is days away from filing bankruptcy. The answer, with 5.6% of all loans in default, above Russia, South Africa, Mexico, Turkey and India, is Brazil.
It is this same Brazil, where years of credit-driven expansion have resulted in rampant, 6% inflation, which moments ago forced the central bank to once again hike its key policy rate by another 50 bps to 9.50% in an attempt to halt surging prices and contain the flood of liquidity, both foreign and domestic.
And while it is likely that next month the Brazilian COPOM (central bank) will push interest rates into the double digits for the first time since early 2012, it is unknown how the nation, whose consumers are already burdened with more debt than ever at over 25% of of GDP, will thrive when their interest payments jump by 1% every two months.
So how did Brazil, or rather its middle class, which for years had managed to avoid a debt crisis, suddenly find itself on the edge of one? Simple: ultimately every bill has to be paid (or else defaulted upon) and every credit bubble pops.
Sounds like it is going to crack open like a Brazil Nut.
wait…i thought everyone road around on candy crapping unicorns fueled with free energy in Brazil?
Careful now- trolls, sycophants and pseudo-intellectuals have a very low tolerance for reality.
(Brazilian consumer debt) at over 25% of of GDP
You guys are like children. The only one’s razzing me about Brazil’s debt level are posters who’ve I’ve countered regularly with facts and figures. Like Blue Skye yesterday with the preposterous claim that American healthcare does not make millions debt slaves. Jeeze. I’d be embarrassed.
Anyway, you think I’m supposed to be scared of this article or something? Why?
Brazil inflation—–6%
USA inflation ——you tell me
Brazil consumer debt/GDP —–25%
USA consumer debt/GDP——–70%
Brazil total mortgage debt/GDP—-7%
USA total mortgage debt/GDP—–70%
Brazil student loans —– almost non-existant
USA student loan———off the charts
Brazil median age —-30
USA median age——-37
I have no debt, own my house outright and can survive years on savings if I lost my income. I’m blessed, lucky and hungry. Going to eat some sushi…………:)
Cry me a river about Brazil.
Debt.Fueled.Nightmare.
California and Brazil. Two nightmarish sh*tholes.
Rebuked maybe, but not refuted. You will not be trapped in a life of debt slavery here over a medical bill. You might to keep your overpriced house though. That would be voluntary.
You will not be trapped in a life of debt slavery here over a medical bill.
You were totally refuted. You said the USA health-care system did not create debt slaves. You are wrong and just too biased to admit it.
“Medical debt is an especially notable phenomenon in the United States - the US being the world’s only developed country not to offer universal health care. In less developed nations those on low income in need of treatment will often avail themselves of what ever help they can from either the state or NGOs without going into debt, but in the US medical debt has been found by a 2009 study to be the primary cause of personal bankruptcy.[2]
A 2007 survey had found about 70 million Americans either have difficulty paying for medical treatment or have medical debt.[3] Studies have found people are most likely to accumulate large medical debts when they do not have health insurance to cover the costs of necessary medications, treatments, or procedures – in 2009 about 50 million Americans had no health coverage.[2] However, about 60% of those found to have medical debt were insured.[3] Health insurance plans rarely cover any and all health-related expenses; for insured people, the gap between insurance coverage and the affordability of health care manifests as medical debt. As with any type of debt, medical debt can lead to an array of personal and financial problems - including having to go without food and heat plus a reluctance to seek further medical treatment.[3] [4] Aggressive debt collecting has been highlighted as an aggravating factor.[5] A study has found about 63% of adults with medical debt avoided further medical treatment, compared with only 19% of adults who had no such debt.[6]
According to a study conducted in 2012 by Demos that among indebted households 62% cited out-of-pocket medical expenses as a contribution to their debt.[7″ wiki
” having to go without food and heat…”
Here is (one place) where you don’t get it. Google cannot give you insight. Even bankruptcy allows you enough for food and heat.
Big Toya says no.
———————-
Choosing Welfare Benefits Over Marriage
ParaPundit | Randall Parker
Hanna Rosin takes a look at lower class usage of “fiance” to refer to partners in long-time unmarried relationships.
Lavelle asks Big Toya to marry him, but she turns him down flat, because she doesn’t want to lose “her freedom, her food stamps or her subsidized apartment.” But he persuades her to let him call her his fiancée anyway.
That succinctly sums up the impact of the welfare state on lower class marriages. You might guess by their names that they are black. But marriage rates among lower class whites have plummeted as well.
Rosin found that welfare-over-marriage story in a book by Kathryn Edin: Doing The Best I Can: Fatherhood In The Inner City. Edin has written a related book: Promises I Can Keep: Why Poor Women Put Motherhood before Marriage.
We have lost the benefits of the selective pressures of the Malthusian Trap. See Gregory Clark’s book A Farewell to Alms: A Brief Economic History of the World for a pretty good exposition on how those selective pressured worked to create an intelligent and prudent middle class in England. Now selective pressures are running in the opposite direction. This is the most important long term trend in the United States.
And how exactly will candidates win votes running on a platform to take the free sh*t away from the Free Sh*t Army?
They won’t.
Permanent Democrat Supermajority
The system will eventually seize up and then it will be guns, not votes that changes things.
I have posted the link to a Matt Bracken fiction piece about what would happen if the SNAP/EBT system crashed (a less than remote possibility if the debt default happens). What do you think would happen if it did?
Wal-Mart has 7.62×39 back on the shelves now, am picking up 3 boxes every time I go there
While the results that would happen if the lights went out are usually pretty well done speculations, the causes for the lights going out are usually quite absurd in that brand of speculative fiction. Things like unexplained financial crashes that happen almost instantaneously or EMP weapons, etc. The best one I’ve seen is a massive cyber attack on the grid causing the power to go out.
It’s like that prepper show where they go the whole show rating the preppers different preps, then at the end point out in 15 seconds how xterm sly unlikely any such scenario is.
I think anything that happens, happens pretty slowly over a few decades. Until you can think of bread lines as a realistic possibility in your town, for your neighbors, we aren’t there.
Within my own lifetime, my points of reference for breakdowns of social order are the 1992 Los Angeles riots, the 2000 Cincinnati riots (that libtard CNN referred to as “demonstrations”), and New Orleans after hurricane Katrina.
If EBT/SNAP crashes, this country will devolve into a race war within a week. You’ll see
I’m thinking LA will need to see more rioting and perhaps a magnitude 7.0+ quake before the Housing Bubble finally bottoms out.
Have you read about the Omaha riots of 1919 or the Tulsa riots of 1921?
Also, if you’re on your deathbed at the age of 90 and you’ve never seen one of these race wars, are you going to be disappointed?
Within my own lifetime, my points of reference for breakdowns of social order are the 1992 Los Angeles riots,
I was there. The video store sold out of videos because of the curfew.
Don’t forget Hurricane Sandy… homeowners were fending off looters with baseball bats in the hardest hit areas.
The system will eventually seize up and then it will be guns, not votes that changes things ??
LOL…Particularly coming from someone who has his own personal arsenal…I have my own arsenal too, but I have no interest in seeing a civil war nor, like some, am I preparing or hoping for it…
The system will eventually seize up and then it will be guns, not votes that changes things.
I said yesterday that many tea-party types were good at implicit threats against their fellow-countrymen.
It’s kind of sick. But they’re more of a joke than a fear.
Prudence is not sick. Hope for the best and prepare for anything. Prepare for bad, and prepare for good. What were the jews in germany prepared for? Some of them actually were, and their progeny tell the tale of their parents escape to this day. Lots of other tales go untold due to lack of progeny…
The US constitution is written along much the same lines. Reserve power to states, lay out a document that promotes general welfare, but keep guns in the hands of the people in case some nut balls take control and start spying on everyone and taxing them at 50% rates.
Marginal federal income tax rates were well above 50% for high earners in the ’50s and ’60s. Fortunately, there was no attempt to start a civil war. Those were also the greatest years in the history of the American ecoonomy.
Those were also the greatest years in the history of the American ecoonomy.
Which happened to follow the destruction of the global industrial base during WWII, hence the economic boom in the US (the only industrial nation to survive intact without having to rebuild).
Marginal federal income tax rates were well above 50% for high earners in the ’50s and ’60s.
As to tax rates, define high earner for the 1950’s and 1960’s… they differ dramatically from “high earners” today.
Communism was also seen as the greatest threat to the world back then, and Socialism isn’t too far removed from Communism is it?
I said yesterday that many tea-party types were good at implicit threats against their fellow-countrymen.
Whose threatening? If and when the time comes, I’m as prepared as anyone.
As to threats of force, there was a story about the Prime Minister of Libya being kidnapped by a militia linked with his administration recently. He was released eventually… it seems that’s how politics works over there: to whit, when a party doesn’t get it’s way, it kidnaps a government official at gun point and then works out a deal. Eventually, some sort of compromise is reached. Funny that, compromise at the point of a gun.
Just remember your Jefferson: “The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants”.
Prudence is not sick
I agree. But snarling all the time about the “evil” liberals, bragging about your arsenal and implying that you’re more than happy to use them against your fellow countrymen who think differently than you ….is sick.
Just remember your Jefferson:
“Toby, send Sally Hemings up to my room with 2 bottles of mulberry wine”.
happened to follow the destruction of the global industrial base during WWII, hence the economic boom in the US (the only industrial nation to survive intact without having to rebuild
This does not negate the fact that up until we started offshoring, massively cutting taxes for the rich, and started our sick worshiping of corporate profits for the few above all else, each generation had done better than the prior generation in America. For over 200 years.
America’s current “brand” of “capitalism” is destroying the middle-class. That is new in America.
Which happened to follow the destruction of the global industrial base during WWII, hence the economic boom in the US (the only industrial nation to survive intact without having to rebuild).
There were a few other industrial nations that didn’t have to rebuild after the war, but that’s not important. This business about the rest of the world having to rebuild gets mentioned quite a bit. I don’t think that it had much to do with the strong growth in the US during that period. If the most of the major industrial nations were rebuilding themselves, they couldn’t have purchased much in the way of American exports.
As to tax rates, define high earner for the 1950’s and 1960’s… they differ dramatically from “high earners” today.
Communism was also seen as the greatest threat to the world back then, and Socialism isn’t too far removed from Communism is it?
I’m not sure what income levels had to pay the very high marginal tax rates during the ’50s and ’60s. The point is that some people had to pay them.
Also, regarding communism and socialism, I’m assuming that you must think that high marginal tax rates are some manifestation of socialism, which is similar to communism. As you say, there was a great concern about communism back in the ‘50, but not even Joe McCarthy made the connections that you’re making. He never insisted on cutting taxes in order to make America less like the USSR.
Also, the communism that they were worried about is far removed from socialism.
“…Sally Hemings…”
+1 Didn’t know that ’till now. HBB education!
Another point that just occurred to me about the postwar rebuilding is that it wasn’t going on through the whole period of the ’50s and ’60s. That would be a quarter century of rebuilding. Japan, UK and the six original members of the Common Market were essentially rebuilt by about 1960.
“worked to create an intelligent and prudent middle class in England.”
…and in 1945 this “intelligent and prudent middle class” was left with…
Spam?
In case anybody doesn’t get it, what I said about spam as something that was left with the English in 1945, ask anyone who lived in England during the war years just what it was that they ate.
Monty Python touched on this:
“Spam, spam, spam, spam, spam, spam …”
It was served at my mother’s table in the 50s as well.
fry it and put some bbq sauce on it and it’s quite good!
I have a can of SPAM in my emergency food supply. Oh, I have no intention of actually eating it. But that can is obligatory. No emergency storage is complete without SPAM.
Is home canned beef bourguignon a suitable substitute? I have a PTSD thing about SPAM.
Just as no housing blog is complete without realtor spam.
It was served to me as a child in the 60s and 70s. Spam casserole…spam cubes, peas, rice, and some condensed soup. We were on a tight budget.
SPAM
Hawaiians love the stuff.
Sorry, cannot substitute with anything halfway healthy and definitely not with anything yuppified. Must be actual SPAM for full culture credit. But I suppose you could get by with another generic potted meat product.
It was due to their intelligence and prudence that there was anything left at all.
Rather, due to America getting involved in the war… without us, Britain would have collapsed.
The Soviet Union also played a very important role. I read somewhere that the Red Army killed at least five times as many German soldiers as the US and UK, etc.
I think you will find that 1945 is when they elected the government that created and implemented the National Health Service.
…middle class in England
For most of the 20th century only about 10% - 20% of people in England were consdired middle class. Their definition of middle class was similar to the American upper middle class. The vast majority of the population were deemed working class. Only in recent decades have they used the term middle class the way that we do in America.
Seems to be a trend…
———————-
PHH slashes mortgage origination department in Jacksonville; 365 jobs lost
The Jacksonville Business Journal | October 3, 2013 | Timothy Gibbons
PHH Mortgage is laying off a third of its Jacksonville work force, cutting 365 positions by December.
The move, of which employees were notified Thursday, leaves about 700 workers left on the First Coast.
Most of those that are being laid off work in the mortgage origination department. They will received 60 days pay in lieu of notice, said Dico Akseraylian, vice president of communications for parent company PHH Corp.
The move comes on the heels of Wells Fargo and Chase announcing layoffs in their mortgage department. PHH’s reason for the cuts are similar to those of other industry players, Akseraylian said: mortgage rates are increasing and demand is dropping. The mortgage refinancing boom of the past several years is quickly ending, industry insiders say.
The mortgage refinancing boom of the past several years is quickly ending, industry insiders say ??
There is the main reason…Volume is way down and I suspect will not return…Everyone who has a mortgage has refinanced “if they could”…The ones that couldn’t probably sold or walked away…Then, the new buyer gets the low interest loan…
I have mentioned this before…Millions & Millions of home owners sitting on 3% 30 year mortgages…As interest rates tick higher, the cost of living continues to move higher what are the chances that any significant amount of those owners are going to choose to sell & move if given a choice ?
My conclusion is they won’t…I speculate on what it may portend…In dense urban area’s with strong job markets will we see low inventory for a long period of time ?? Even in the outlying suburbia, 100 miles from the job centers will people sit tight because they have a mortgage payment of $800. per month ??
I just had a roof replaced…I got several referral bids and one bid was reasonably lower than the others…Licensed, bonded & insured and comes with high recommendations from dependable sources so I went with him..
In scheduling the job, he told me that he wanted to do it the week of the 7th because he had other jobs in the area to complete..Fine by me, I had no emergency situation I faced…
Well, he is commuting in in excess of 100 miles to do the work…Him and his crew stay in a motel for the week while doing these scheduled jobs…Then, return home until they can bundle up another group of jobs..
I don’t know his housing situation but given where he lives (Turlock) it must be pretty inexpensive…Assuming he has a mortgage and lets say its $800. per month, he probably made enough money this week to make 5 mortgage payments or more…I know he made enough on my job to make 3 of them and it took him two days…
As interest rates tick higher, the cost of living continues to move higher what are the chances that any significant amount of those owners are going to choose to sell & move if given a choice ?
You are correct: we will see much lower mobility.
This will be an economic drag for a LONG time, as this results in people not taking jobs that they would be sell suited to (e.g. economic good), but that are too far away from their anchor-house.
With demand collapsing, we’ll see dramatically lower prices. Its already happening . Today’s report stated Manhattan rents are slipping.
It’s also going to be a severe economic drag on the National Association of Realtor®’s key constituents, Realtor®s, as no used homes going on the market tends to put a severe damper on sales — think “Glengary Glen Ross.”
I could have explained this to the Realtor®/nurse who sat by me on the last leg of my flight back to San Diego from Phoenix on Sunday night, but she seemed so despondent, all I could do was to try to cheer her up a bit. Long story short, she has her Realtor®’s license and her nursing degree, but can’t sell enough homes or find a decent enough nursing job in San Diego to make ends meet. It sounded like she might also own an underwater money pit in Phoenix. Judging from her fragile mental state, I opted to not press for details.
Possible silver lining: She said she was looking into nursing opportunities at psyche wards.
LMAO.
That’s beautiful!
“It sounded like she might also own an underwater money pit in Phoenix.”
This was based on some lame remarks she made about her cargo cult faith the PHX market would ‘come back in three years,’ plus some hints she was holding out hope for when she could sell. I couldn’t stand the thought of hearing her elaborate on when she bought or how far underwater she was.
I have no idea why God chooses to always seat me on the airplane next to people with personal tales of housing market woe that they are just dying to share with me. It’s truly uncanny.
Well…. Here’s the reality….
“If you bought a house 1998-current, you’re going sustain large losses….. in addition to the losses you’ve already incurred.”
I just wonder what the effect is on a micro level…
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
Repeat over and over and maybe someone will believe YOUR dribble….CHECK.
Frustrated that the second leg down in the Great Housing Collapse is barreling at you?
Refute it Jingle Balls. You won’t because you can’t. You can’t because it’s the truth.
Found on Facebook:
“When I lived in Orlando, the police came to my job & arrested me because my cat wasn’t on a leash. My boss paid my bail because he thought it ridiculous that they did this but still hadn’t caught the one’s that mugged him & his brother -in-law. My fine was a $100 & it cost me an additional $90 to get my cat back.”
Sounds like the state’s getting desperate. They’re making up reasons to pull more money out of the innocent masses. The thread this comment was found under was a story about a woman walking a crippled cat with a wheelchair being fined $200 because he wasn’t on a leash.
We’re getting to the core of it right here. Good find.
Government is your friend and you need more of it.
My brother in Texas was almost arrested over a “no valid Louisiana fishing license” ticket he didn’t pay.
This was like a year later.
Some type of Louisiana LE came to his JOB!(in Texas) And said either pay the fine or we’re taking you to Louisiana. I started laughing.
Because the fishing is so good in Louisiana, I gotta suspect this is a “system” they put together where the numbers pencil out for them.
In other words, if my brother was “Lamilton Taeshon” livin at his granmah house “smokin wif cigarette”… they ain’t gonna send two officers on a 200 mile trip to track that ____ down for money.
I laugh everytime I think about the look on my brothers face after his boss called him in the office.
How much was the fee?
As of 2011, “Angling without basic and saltwater fishing licenses carries a maximum fine of $250 for each offense.”
http://www.wlf.louisiana.gov/category/newsletter/ldwf-enforcement-region-6-news
It depends on how many fish he caught.
How much was the fee ??
Bet you 10 dollars to a donut the fine was greater than the fee…
They go after the easy money…No risk high reward….
Sounds more like a couple of LEs getting their turn for the “free trip” to Texas. Day or two on the road with a work buddy. Night in a motel away from the house. Chance to check out a bar or two on their expense money (they probably get a set amount per day, so buying alcohol of the tab isn’t a problem) with a steak on the side. If they get to take their own car, the reimbursement for mileage greatly exceeds the cost of gas. And an almost guaranteed non-dangerous target on the far end who will write a check, take his receipt, and not bother them.
Better than directing traffic or following up on domestic abuse calls any day of the week.
Since when are there leash laws for cats? I’ve never seen a cat on a leash. And since when do people “walk” their cats?
I tried googling “Orlando Cat Lease Law”. I found nothing. I think the facebook poster was spinning a tall tale.
Did you check that the dog leash law actually has the word dog in it? If it is drafted as “uncontrolled domestic animal” (or words to that effect) then you could have a requirement that any animal you own that is off your property and you aren’t carrying in your arms or a carrier/cage/tank has to be on a leash.
Upon further searching I found this at the Animal Control website:
9. Is there a “leash law” in Orange County?
The Orange County Code Chapter 5 defines “at large” as: “A dog off the owner’s premises, not under a person’s control by means of leash, cord or chain, and upon public or private property without the consent of the property owner or tenant.”
OR
“A cat which does not exhibit identification by collar and a current rabies license tag.” Interesting, if it has a collar and a tag, no leash is required. Weird.
So I guess it is possible to get fined for taking an uncollared cat for a walk without a leash. But this goes back to my original question: Who walks cats?
More than once I have seen dogs and their owners walking, with a cat following them close behind. Whether the dogwalker owns the cat though is anyone’s guess.
I had a cat that liked to follow me while walking the dog. Felt like a Disney movie.
Our local news station posted the story.
http://www.wesh.com/news/central-florida/brevard-county/owner-ticketed-for-walking-wheelchairbound-cat-without-leash/-/11788124/22358780/-/64uoogz/-/index.html?absolute=true
I posted the link. It will probably take a while to come up though.
Can we blame Bush for this?
——————-
Obamacare’s Troubles are Only Beginning
reason.com | October 8,2013 | Peter Suderman
For example: Just because someone has completed the online enrollment process doesn’t mean that they’ve actually gotten coverage. Reports indicate that many of the applications that are making it through the system don’t actually have enough data for insurers to process the enrollee.
As few as 1 in 100 applications on the federal exchange contains enough information to enroll the applicant in a plan, several insurance industry sources told CNBC on Friday. Some of the problems involve how the exchange’s software collects and verifies an applicant’s data.
“It is extraordinary that these systems weren’t ready,” said Sumit Nijhawan, CEO of Infogix, which handles data integrity issues for major insurers including WellPoint and Cigna, as well as multiple Blue Cross Blue Shield affiliates.
Experts said that if Healthcare.gov’s success rate doesn’t improve within the next month or so, federal officials could face a situation in January in which relatively large numbers of people believe they have coverage starting that month, but whose enrollment applications are have not been processed.
“It could be public relations nightmare,” said Nijhawan. Insurers have told his company that just “1 in 100″ enrollment applicants being sent from the federal marketplace have provided sufficient, verified informatio
Is the housing market recovery in the bag?
Read This Story and Your Opinion of Where Housing Is Headed Will Change
Tuesday, October 8th, 2013
By Michael Lombardi, MBA for Profit Confidential
Let’s face it: the U.S. housing market is still under severe stress. No matter how the bulls may spin their argument, it’s far from a real recovery. The historical fundamental factors behind a typical housing market recovery are still missing.
According to real estate information company Zillow, in the second quarter of this year, almost 24% of all homes with a mortgage in the U.S. housing market had negative equity (the homes were worth less than the mortgage issued on them). More than 12 million home owners in the U.S. economy remain “underwater.” And in some geographical pockets, the spread between the mortgages and the values of the homes is very wide; in the Las Vegas area, almost 13% of home owners with a mortgage owe two times the amount of their home’s current value! (Source: Zillow, August 28, 2013.)
Sadly, the misery in the U.S. housing market doesn’t just end there.
The delinquency rate on single-family residential mortgages at all commercial banks stood at 9.41% in the second quarter of 2013. Yes, it has declined a little from 9.7% in the first quarter of this year, but it still remains very high compared to the historical average. (Source: Federal Reserve Bank of St. Louis web site, last accessed October 7, 2013.) The average delinquency rate on single-family residential mortgages from 1991 to 2006 was only 2.2%.
These negative factors working against the housing recovery are just a few of many.
Since 2012, the majority of activity in the housing market has been the result of investors buying up homes, renovating them, and renting them out. We didn’t really see the average American Joe buying a house to live in, as the activity in one indicator of the housing market I follow—first-time home buyers—has been lagging.
Since U.S. homebuilder stocks reached their peak earlier this year, they have declined almost 25%. The chart below shows their demise.
…
If we’ve passed peak renovate to rent, what is there to prevent us from slipping onto the next step down in this bubble unwinding flight of stairs?
In a happy anecdote to offset the grim information in the article I just posted, this weekend my wife and I will help a military family in her circle move into the home they just bought.
My wife opined to me that it seems questionable for a military family who might need to move at any time to buy a home for a price tag north of $500K.
When my wife asked the military wife why they were buying, the inevitable answer was, “It will be a good investment.”
When my wife asked the military wife why they were buying, the inevitable answer was, “It will be a good investment.”
Eventually goes the security clearance. Poof!
u betcha partner. sounds like u need to book a one way ticket to florida.
I will tell you what. If you pay my airfare and exspenses of 300/ day I will do some bird dogging for you.
Lets get in on this action.
I wouldn’t want to steal away any of Jingle Male’s Florida investing opportunities from him.
Has the U.S. ever before defaulted on its debt?
Fact Check
The most often repeated fact about US debt is wrong
By Matt Phillips
October 4, 2013
Alexander Hamilton has a dark secret. AP Photo/Evan Vucci
As the US debt ceiling looms as the next crisis on the horizon, you’re going to hear it a lot of this.
“The government has never defaulted on its obligations…”
-The Associated Press
“The nation has never defaulted.”
-USA Today
“We’ve never defaulted in our history.”
-White House Press Secretary Jay Carney
“It is not acceptable for one faction of one party in one chamber to say, ‘Either we get what we want or we’ll shut down the government,’ or even worse, we will not allow the U.S. Treasury to pay its bills and put the United States in default for the first time in history.”
-President Barack Obama
When it comes to history, never say never. If you go back far enough, almost everything has happened at least once—and sometimes several times. And that’s how it is with US defaults.
Original sin
The prevailing narrative of US government debt goes something like this. After the US won its independence from Britain in the late 18th century, the country was deeply in debt, owing about $79 million to creditors. Many politicians argued that the nascent country should repudiate its debts altogether and start fresh. Into the breach stepped Alexander Hamilton, who convinced policymakers that the wiser move was to consolidate state debts into a federal pile and then pay debts in full. Hamilton won the day, laying the foundation for the untarnished full-faith-and-credit that serves as the basis for the US’s prized position in global finance to this day.
But what is often glossed over is that the US didn’t just pluckily pay off its wartime debts with a good, old-fashioned dollop of American elbow grease. No, it took the path of modern Greece.
It restructured its debts, with decidedly harsh terms from creditors. In fact, the terms were so tough that an important paper on the topic notes that “a large part of the face value of the debt was effectively written off.” In other words, it wasn’t paid. So was this a default?
Well, as we’ve seen during the ongoing European debt crisis, the word “default” is quite malleable. Technically, Hamilton’s restructuring of the US debt was a voluntary bond swap. And voluntary conversions aren’t always viewed as defaults. But sometimes they are. Just look at Greece, which arranged for a series of “voluntary” conversions of its preposterously large debt over the past few years. Did that constitute default?
S&P says yes, citing two criteria that equate to a default: 1) that investors will receive less than they were promised in the original securities, which was definitely true in the case of Hamilton’s debt swap, and 2) the swap was “distressed” rather than “purely opportunistic.” (It’s not like Hamilton was just taking advantage of a decline in interest rates, for instance.) In his excellent, all-encompassing history of public finance, James Macdonald notes “Hamilton struck a very hard bargain with creditors—one that stretched the terms voluntary conversion and sanctity of contract beyond their true limits.” (Emphasis original.)
…
It appears to me that Team Obama started this nonsense that the US will default on its debt if we don’t agree to let the borrowing go unchecked. It tracks back to a comment from the Secretary of the Treasury. We are one gullible people.
I say stop buying crap that you cannot pay for. Debt is slavery.
Sad thing is we talked about this in 2011 and nothing happened in 2.5 years. And nothing will happen until the collapse.
Collapse is a certainty.
Certainty may take a century or two to reach its conclusion.
Don’t buy things you cannot afford.
“Has the U.S. ever before defaulted on its debt?”
Bueller?
Current ad on HBB is for Terrain at Castle Rock, priced from the low $400s.
Castle Rock is about 15-20 miles from jobs in the Denver Tech Center (more of a corridor than a “center”. Commutes could take from 15 minutes to an hour depending on traffic. Commuting into downtown Denver would be at least an hour in traffic, but there is also the light-rail option for half of the commute. I went to a dinner party at a friend’s in the Terrain development this summer, the houses there are very cookie-cutter, everybody in Castle Rock is white. Very Pleasant Valley Sunday…
I’ve known some people who live in places like that, literally one house after the other are exactly the same and most are furnished nearly the same as well. 50% of the space is unneeded or unused. And to get anywhere to do anything, you absolutely 100% need a car and need to make a trip out of it.
The WalkScore there is terrible, as MMM would say it means lots of clowncar driving.
It’s nice living in a neighborhood that is part of Denver’s former streetcar grid (my WalkScore is 87). I can ride my bike downtown in less than 20 minutes, and both the Platte River and Bear Creek bike trails are not far away. And in 2016, I’ll be able to take the light-rail directly to the airport.
I’ve known some people who live in places like that, literally one house after the other are exactly the same and most are furnished nearly the same as well.
While I’ve seen developments like that, after taking a look at the website I see that they have 21 different models. Still, they will all have a similar look and feel, of that there is no doubt. Lots of 3 car garages.
And yes, they will need a car to get anywhere. That’s pretty much how most of the west is. I imagine that the commutes to the “Tech Center” will be grueling.
Goon, I think ‘American Beauty’ has cinematic-ally captured this atmosphere. We are in an era of over-production and idle genius.
Mr. Market thinks the Republicans are about to cave.
Bulletin U.S. stocks set to surge as budget optimism rises; Dow futures up triple digits »
New York Markets Open in: 0:13:03
Pre-Market Indications
Futures: S&P 500 +1.1% DOW +0.9% NASDAQ +1.2%
Senate testimony — live video and blog
Treasury chief Lew blasts ‘prioritization’ of payments
• Obama to meet with House Republicans over budget standoff
• Rex Nutting says Pelosi can save Boehner’s job — and the republic
…
I have this image stuck in my mind now of John Boehner groveling on his knees at Nancy Pelosi’s feet. Can you imagine the humiliation the Republicans must be feeling about now?
It wouldn’t be the first time a powerful Republican found himself kneeling on the floor in front of Nancy Pelosi.
The Inside Job
Hank Paulson: Kneeling Before Pelosi
By Liz Wolgemuth
September 26, 2008 RSS Feed Print
Oh, how the mighty have fallen: Treasury Secretary Hank Paulson reportedly kneeled before House Speaker Nancy Pelosi last night in a bid to keep her party on board with the bailout package—while the GOP chafes and grimaces—so it can get through Congress and onto the president’s desk before the credit markets seize up.
Actually, the Wall Street Journal’s report said that it was really “a moment of levity in a rough day,” rather than a display of humility.
…
Why would he grovel at Representative Pelosi’s feet? She could deliver 190 or so votes to pass the bill that already went through the Senate without breaking a sweat. If Boehner could come up with something that 90% of his caucus could agree with, he doesn’t need any help from her. Oddly enough, she is pretty much irrelevant in this party.
If any grovelling is to be had, it is with his own members (to pass something that isn’t a non-starter with Harry Reid and the President), or with Harry Reid and the President (to agree to something that they already have said is a non-starter with them).
On the other hand, I am pretty sure this whole thing will be over by next Thursday. Why? Because of the debt ceiling? Well, no, not because of that. I found a really interesting free colloquium to attend on Wednesday evening, Thursday and Friday. Signed right up. I’d love to go, but I am not that lucky.
“I found a really interesting free colloquium to attend on Wednesday evening, Thursday and Friday. Signed right up. I’d love to go, but I am not that lucky.”
Have a little faith. The 1995-1996 shutdown lasted three weeks, and an agreement to raise the debt ceiling would take the pressure off for a near-term end to the shutdown.
I’m starting to think that a short term agreement on the debt ceiling might put *more* pressure on a near term solution to the shut down. When we first were looking at the shut down, I told some co-workers I was worried that if we actually did shut down we might not get it settled until the debt ceiling was hit. Now the need for a debt ceiling compromise might cause us to be out longer.
At least I have something to do next week if it does last that long.
“Now the need for a debt ceiling compromise might cause us to be out longer.”
That’s another angle on the point I was trying to make, which is a side agreement on the debt ceiling reduces the pressure to end the shutdown.
Watch for the VIX to plummet and stocks to soar at the moment today when agreement is reached.
The trades to make now as market fear builds
October 9, 2013, 12:15 PM
Commentary By Cody Willard
Tensions are rising again today, and the bulls are, for the first time, in a very long time, actually feeling some fear. Let’s run through some recent trades and investments I’ve outlined and make sure we’re all up to date on the latest for each.
The fear from the bulls is reflected in the CBOE Volatility Index VIX , which is a measure of volatility in the market and is often called a “Fear Index.” You’ll recall that I bought VIX calls back when the $VIX was flatlining around 12-13 and I’ve mentioned a couple times since then that I’ve taken some small profits along the way as the VIX has spiked on occasion. Well, with the VIX now done gone parabolic and up above 20, I’ve sold the last of my VIX calls for some very nice gains which did their job very well of helping me hedge my gains and net long positioning overall in the portfolio.
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And if so, then it’s game over for that party, lol. And don’t let the door hit ‘em where the good lord split ‘em. Goon keeps posting about a Democrat super-majority. Ain’t gonna happen. The minute the Republican party goes the way of the buggy whip, the dems will fall to squabbling amongst themselves and break down into factions. The dem party only exists because of its opposition. Wanna get rid of the dems? Get rid of the pubs.
Even if the Democrat party splits into factions, it will be the Free Sh*t Army versus the More Free Sh*t Army, you’ll see…
Without presidency, democratic party would be in much worse shape than Republican. That’s why “winning” is so important.
Opinion: Face it GOP, You’re Losing the Shutdown Showdown
Political Diary editor Jason Riley on shutdown politics and why Republicans are voting for government programs they don’t support.
Up Next
Opinion: It’s Okay to Be Cynical About Washington
10/9/2013 2:04:34 PM3:41
Mr. Market shook out weak holders yesterday and the day before so now it is time to suck them back in again.
Churn ‘em and burn ‘em. Instill in them the mentality that Price equals Value and then you will have them where you want them.
Republicans are about to cave.
Did anyone doubt?
Yeah, let’s not forget that the pubes ARE the reason we have Obamacare. Obamacare was the brainchild of Mitt Romney, pube weasel extraordinaire. And another weasel, John Roberts, appointed by Bush, ruled in favor of it. Although I did read somewhere (perhaps a link posted on this blog) that he was blackmailed into doing so. Even so, he shouldn’t have given in.
But we can thank the pubes for Obamacare and that’s a fact. It’s the weasel party. The only thing I like about Karl Rove is he bled them for every dime.
So, you think the Obamacare law was written and passed into law by Republican Congressmen? Was Mitney a congressman at the time?
They would have under Bush or any other Repub president.
“So, you think the Obamacare law was written and passed into law by Republican Congressmen? Was Mitney a congressman at the time?”
Think of all that stuff in the middle as a bunch of books, with Mitty being one bookend and John Roberts the other. It started with a pube and ended with a pube. The dems just provided all the crap in the middle.
Full disclosure: I am a registered pube. Just too lazy to change to an independent. But I now vote as independent, if I vote at all. I think I just keep the registration to be-devil the poor weenies who call up from time to time looking for a contribution.
I suppose that explains why my Ex cheated on me.
“I suppose that explains why my Ex cheated on me.”
With a democrat?
“I think I just keep the registration to be-devil the poor weenies who call up from time to time looking for a contribution.”
Keeping yourself registered under what you consider to be a former affiliation is as good a reason to be registered under that party as any other. It allows you to state your displeasure with the choices the party leadership is making. You may not think they pay any attention at all, but there is some bottom up influence. Not much, but some.
It is a party registration. Not a declaration of undying devotion.
“It allows you to state your displeasure with the choices the party leadership is making.”
I try, but I suppose that makes me just as vindictive as the Barrycade bunch. Oh, well, I never said I was a perfect human being.
Obamacare passed the House on March 21st, 2010 with 219 democrat votes and ZERO republican votes
Obamacare passed the Senate on December 24, 2009 with 60 democrat (and independents who caucused democrat) votes and ZERO republican votes
Obamacare was signed into law by President obama on March 23, 2010.
So - who OWNS obamacare?
“So - who OWNS obamacare?”
Mitty’s brainchild, John Roberts’ edict as the law of the land.
The pubes SOOOOOOOO own it.
Obamacare passed the House on March 21st, 2010 with 219 democrat votes and ZERO republican votes ??
Interesting…Even 34 democrats voted against the bill but not 1 friggen republican could justify voting for it…Tells you something now doesn’t it…
“not 1 friggen republican could justify voting for it…Tells you something now doesn’t it…”
Yep. They didn’t want to eat their own vomit.
“Interesting…Even 34 democrats voted against the bill but not 1 friggen republican could justify voting for it…Tells you something now doesn’t it…”
Tells me that the legislation is far left of center.
Which is probably why Obama lost the House.
Which is definitely why the government has been shut down.
Which all stemmed from the attitude from the current administration on day one (starting with the very first stimulus discussion) coming from Rahm: “We have the votes. F’em”.
If you read Woodward’s book (Price of Politics) only to the part about the discussion about the first stimulus, you will know enough about how this ultra-partisanship started.
In short, Obama opened the door to Republican ideas for the stimulus in January 2009. The Republicans put forth a one-page memo with 5 major points they would like to see as part of the stimulus:
–reduction in the LOWEST individual income tax rates (not the highest marginal rates, mind you, but the lowest to help the broadest part of the tax paying base)
–a tax deduction for small businesses
–no tax increases to pay for stimulus spending
–make unemployment benefits tax free
–homebuyer tax credit for those who use at least a 5% down payment
Obama’s response according to Woodward: “Eric (Cantor), there’s nothing too crazy in here.”
Obama put exactly ZERO of those tax cuts into the bill. But DID include other tax cuts–so he didn’t ignore the Republicans because of ideology, but because Obama determined that the Republicans should just be happy with whatever tax cuts he decided should be included. As a result, and even after being warned by Cantor that Obama would get no support from his caucus given the bill had NO Republican input, Obama made no changes, and as a result, got ZERO House Republican votes for that stimulus. None.
The unwillingness to work across the aisle started within 1 month of Obama’s first term, for reasons other than ideology. Hope and change my *ss.
And it continued with Obamacare…and Dodd Frank…and as a reaction to all this, the House went to Republicans.
I hate to say this, but Clinton knew how to build a working relationship…you do so by not exerting your power on little things, when it is abundantly clear to the other side that you COULD exert such power. Anyone with any experience in business or negotiation understands how to do this. By pushing to the extreme end of your power just because you can risks the massive backlash in the relationship if roles are ever reversed.
That is exactly what Obama is seeing now.
Tells me that the legislation is far left of center.
ACA left of center? Not at all. At that time, the vast majority of Americans wanted some form of universal coverage. ACA comes very close if Ahole Repub govs would expand Medicaid.
So providing near universal coverage was and is not left of center. It is just “unpopular” now because people realize it’s not “free” and some people’s oxen are being gored. There is no free lunch.
“just “unpopular” now”
It was unpopular then, which is why Obama didn’t get any Republican votes, lost some Democrat votes, and lost the House over it.
Also, Rio, are you saying that the “vast majority of Americans” wanted universal coverage, but wanted it to be “free”, and they are only upset now because they are now realizing that it’s not “free”?
lol
Then people really don’t want universal coverage, because that would be no more “free” than the ACA.
And another weasel, John Roberts, appointed by Bush, ruled in favor of it.
Of course he was blackmailed…even Kennedy didn’t vote for it.
One thing though even the so called “staunch conservatives” like Scalia, Thomas and Alito have nothing but help the Government coalesce more power in recent years.
“Of course he was blackmailed”
So? The principled thing to do would have been to reveal the blackmail and take the consquences of the act that brought about the blackmail. But oh, no, he’s got a sinecure and can play pocket pool under his black robes the rest of his days. He’s a disgrace and makes a complete joke out of the rule of law.
Maybe they threatened to Michael Hastings him or one of his family members.
“John Roberts, appointed by Bush, ruled in favor of it. Although I did read somewhere (perhaps a link posted on this blog) that he was blackmailed into doing so. Even so, he shouldn’t have given in.”
My preferred conspiracy theory is that he ruled that way because if Obamacare got tossed, we’d be that much closer to enacting single payer (assuming the health care industry continued on the same path it was on). In other words, he took one for the team.
Among the 254 counties where food stamp recipients doubled between 2007 and 2011, Republican Mitt Romney won 213 of them in last year’s presidential election, according to U.S. Department of Agriculture data compiled by Bloomberg. Kentucky’s Owsley County, which backed Romney with 81 percent of its vote, has the largest proportion of food stamp recipients among those that he carried.
I think the key operating word here is Doubled, isn’t it? Doubled from 20 people to 40 people or doubled from 30% to 60%? Outside of Owsley, does anyone know the list of the counties and how they voted? Nowhere it says the top 200 or so SNAP receiving counties voted for RMoney. I don’t discount that all race, gender and political stripe will use and abuse the system if it’s available for them to use and abuse, but if this is the proof, this is very flimsy and absurd. The meme falls apart if you look carefully although I admit I haven’t had a chance to do some research on my own.
Here’s just one.
WaPo has it that “Nine of the top 10 agriculture subsidy counties voted for Republican presidential nominee Mitt Romney and nine of the top 10 SNAP participation counties voted with President Barack Obama.” http://blogs.wsj.com/washwire/2013/07/19/politics-counts-the-complicated-farm-bill-math/
I’ve done the research before — I’ll link later if I have time.
Spoiler: Whites receive the most EBT and SSDI by a large margin. Remember, blacks are still only like 10 or 12% of the country by population. And also remember, poor whites are also strongly Republican and hold the strongest religious views.
If you include the fact that SS and Medicare are welfare/entitlements as well, whites are dominating the handout scene. People over 55 are the _only_ age demographic that John McCain and Mittens Romney carried in both 08 and 12. Luckily for McCain & Romney, older people vote at much higher rates than younger people or the elections would’ve been more onesided than they already were.
The hardworking young educated white people who used to lean GOP? That is a pipe dream at this point, especially among women.
Let’s not confound the issue and just focus on EBT or SNAP recipients.
Of course, whites will dominate every statistics as total #’s.
I think the meme was, based on Bloomberg study, RMoney won more than 200 of the top counties (out of ~250) that received SNAP or EBT, wasn’t it? Also the population of the said counties matter, too, right? What about the racial make up, party registration and what percentage actually turns up to vote?
Do we know the majority of working class whites vote republicans or they just stay home? Doesn’t seem that smart to me if you are receiving SNAP and you vote for the party that’s going to cut it?
And also remember, poor whites are also strongly Republican and hold the strongest religious views.
…
The hardworking young educated white people who used to lean GOP? That is a pipe dream at this point, especially among women.
I think that you’re making some assumptions here, Joe. To begin with, what’s a strong religious view? Secondly, have you actually read surveys of the opinions of poor white people? From what I’ve read, when it comes to actually getting up on Sunday morning and getting the family to church, the poor are less likely to participate than the working class and the middle class.
Also, regarding your remark about young educated white people who used to lean Republican, if they’re leaning a bit less in that direction that than they did 10 or 20 years ago, it doesn’t matter much, because young people don’t turn out to vote much.
I did a little further research. This CNN page shows that Romney beat Obama among whites between the ages of 18-29 by a margin of 51%-44%. Among all voters there was essentially no difference between college graduates and those without a college education. So it’s quite likely that Romney beat Obama among young, white, educated voters.
http://www.cnn.com/election/2012/results/race/president
Jo lies and obfuscates at best. He had been caught before…,,.
He just makes a lot of assumptions, based on prejudices and thoughts floating around in his head. But then a lot of people do that on this blog.
SNAP:
The USDA keeps a record of SNAP participation, but the gov websites are down. The only county data I could find the NYT data from 2009. There are both a map and a chart of the total population, and the percentage of SNAP recipients.
http://www.nytimes.com/interactive/2009/11/28/us/20091128-foodstamps.html
Romney counties:
The 2012 Presidential election by county is available here in chart form: http://www.theguardian.com/news/datablog/2012/nov/07/us-2012-election-county-results-download#data (Scroll down to “Download the Data” and you will get a sortable chart in Excel.)
and here as a map: http://www.princeton.edu/~rvdb/JAVA/election2012/Election2012RedWhiteBlue.png
At the moment, we can’t compare the Romney counties with the counties which doubled SNAP. The most we can do is to compare the Romney counties with the top 200 SNAP counties in 2009. In 2009, Owsley County was second.
Comparing the election map with the 2009 SNAP map … there doesn’t seem to be an exact match between Romney and SNAP, maybe a trend.
Of course there isn’t an exact match between Romney votes & poor whites. But just overlay those EBT and Romney/Obama maps.
Places that have very high incomes and very low EBT (food stamps) are in the (so-called) liberal northeast and northwest.
The top counties for receiving EBT/food stamps are overwhelmingly RURAL. Look at the list - Alaska, West Virginia, South Dakota, Missouri, Kentucky, Alabama, Mississippi, etc.
I’m not suggesting there is a 1:1 relationship between red/blue and EBT. If anything, I’m saying it’s complicated and the Romney “makers vs takers” has always been bullshit. The fact is, Romney’s strongest demographics are old, downscale, rural whites with at most a bachelor’s degree (usually less). Meanwhile, among working age whites (25-54) with a college degree or more, Obama won. And among white women and the white under-40 crowd, Obama styled on Romney hardcore, running up huge margins.
Yet the GOP is unlikely to try and address concerns of working-age educated whites because 55+ age group still votes the most and the GOP has the South sewn up and has enough gerrymandered seats in places like Pennsylvania. For example, Obama won PA pretty easily, but the GOP has about 3/4 of Congressmen in PA because of the way the lines are drawn. Look at a congress district map of PA. The wealthy “Main Line” suburbs of Philly (Allyson Schwartz’s district, which used to be moderate GOP congressmen like Lawrence Coughlin and Jon Fox) plus the cities of Philly and PGH are bunched together into districts while the other areas are spread out to include as much exurb and rural areas as possible.
The meme falls apart if you look carefully although I admit I haven’t had a chance to do some research on my own.
If you haven’t done the research, how do you know that the mem falls apart?
If he’s going to try to back up Romney’s thesis that Obama’s voters are the “takers” and Romney’s are the “makers”, he won’t be able to do that. Not at all.
Whites still dominated voters and the only whites Romney won were old people and social conservatives. He was closer in some demographics than others, but Romney did terribly among working women and high education voters.
OTOH, Romney ran the table in the south, which dominates all the statistics regarding poverty and lack of education.
In other words, the “real picture” is mixed. Obama won minorities, but that also includes asians who have __higher__ average incomes than whites, as well as more traditional values and intact families. In addition, highly educated people have the highest earnings, the least divorces, the lowest out-of-wedlock pregnancies, but they went strongly for Obama. Even though they pay the highest taxes.
The idea that poor or lazy = Obama and hardworking taxpayer = Romney voter is full of shit.
That said, yada yada, both parties blow.
Well, you’ve got a point there. I remember when Romney made that statement about the 47% of the population that pays no federal income tax. If he actually thought that he couldn’t get any votes from the those people, he should have quit the campaign right then and there.
How about all those wealthy Wall Street bankers who took the federal bailouts? Do we know how they voted in the last election? Someone should should survey that group and see what they get up to.
I believe they hedge their bets by showering politicians of both parties with money, which is far more important than how they vote.
That’s a good point. They’ve got so much money that they can shower it on both parties. But they probably have a preference.
Right. The preference most likely favors the party currently in power.
They voted bailouts …. That means all democrats and some pubs.
One angle might have been the “Are you better off today than you were 4 years ago?” question too. If not, they’re not going to vote for the incumbent probably. Devil you know versus devil you don’t.
Gold = $1300/oz OR BUST!
So long as gold can hold the line at $1300/oz, gold bugs have no reason to fear.
Oct. 10, 2013, 9:26 a.m. EDT
Gold prices drop as budget hopes dent demand
By Victor Reklaitis, MarketWatch
NEW YORK (MarketWatch) — Gold futures dropped on Thursday as signs of a thaw in Washington’s budget standoff reduced safe-haven demand for the precious metal.
Gold for December delivery (GCZ3 -0.75%) fell $7.50, or 0.6%, to $1,299.70 an ounce on the New York Mercantile Exchange, testing the $1,300 level.
“There is a general ‘risk-on’ attitude in the market place Thursday morning as there is some hope that Democrats and Republicans in the U.S. Congress can very soon agree on a budget/debt ceiling plan that would reopen the partially closed government and raise its borrowing limit,” said Kitco analysts in a note.
The standoff thaw is likely to pressure gold and other assets viewed as safety plays. Top House Republicans are expected to meet with President Barack Obama on Thursday.
…
The Republicans darst not oppose this nomination.
Opinion: A Dangerous Pick to Head the Fed
Assistant editorial page editor James Freeman on why President Obama picked Janet Yellen to succeed Ben Bernanke, and what the choice means for monetary policy
10/9/2013 2:01:11 PM2:21
Elections have consequences.
The people wanted a far left senate and an even far “lefter” president.
The democrats controlled Detroit for 60 years of decline.
They were never voted out of office once.
Why?
Dangerous to who? Like this matters.
I think Yellen will bring in the collapse much sooner than anticipated if she acts the way most observers believe she will. How can that be so bad?
MOSCOW (AP) — A staggering 35 percent of household wealth in Russia is owned by just 110 people, the highest level of inequality in the world barring a few small Caribbean islands, a report by a major investment bank says.
Our oligarchs still have some catching up to do.
With Obama and Yellin, we will get there.
Bloomberg - New York Set to Reach Climate Point-of-No-Return in 2047:
“Temperatures in New York are increasing, and after 2047 they won’t return to the historical average of the past one and half centuries, according to a study today in the journal Nature.
The research highlights the urgency of cutting greenhouse-gas emissions because the warming climate may drive some species to extinction, threaten food supplies and spread disease, according to the study. By 2050, 5 billion people may face extreme climates, and migration and heightened competition for natural resources may trigger violence and instability.”
To quote the immortal words of the Decider, “Bring It On”
It’s been a nice ride kids, but now it’s Game Over
Enjoy the Die-Off
Don’t be silly. The psychotic “scientist” Svante Arrhenius who invented the Greenhouse Effect said it would be a boon to agriculture.
The best thing that humanoids can do is to not breed more humanoids.
If you need unconditional love to validate your sense of self, adopt a shelter pet.
Darwinism and population dynamics at it’s best… bring it.
Hey, has anyone seen the term “Barrycades” yet? “Barrycades” are the “Barryers” they put up to prevent war veterans, tourists and little old ladies from entering national parks and monunment areas. Of course, they also remove the Barrycades when illegal immigrants want to get together to throw a collective temper tantrum over shamnasty.
That should give a pause to any thinking man or woman in this country. Of course, it won’t.
Truly sad and pathetic people we have in power.
That should give a pause to any thinking man or woman in this country. Of course, it won’t.
What’s that, the fact that so many people have such a lame sense of humor? Barrycade, that’s really clever.
“Barrycade, that’s really clever.”
It’s a hoot and quite creative. Wish I’d thought of it myself.
I’ve read that Team Obama has forced privately run concessions on Federal land to shut down, even though they pay the government, not the other way around. Seems a tad abusive.
It won’t harm them if there are no customers around.
Talking about campgrounds, not ice cream stands. There would be customers, with reservations.
the president’s approval rating is 37% while the republicans are slittign their own throats.
They slit their own throats long ago, under Bush, with their Patriot Act and invasion of Iraq and their elevation of the toad Rove as the propagandist for the party. The dems are but following the example set and refining it.
If you find yourself with a slit throat, STOP CUTTING.
It reminds me of a guy I work with. He took most of this week off. He said that he had to change his vacation plans. He wanted take the family camping, but can’t do it because Obama closed the national parks.
Lucky for me, my vacation next week will be out of the country (other than my first cruise port in Key West where, unless the gov’t shuts down bars, I’m good to go).
Sloppy Joe’s, baby. And the Hog’s Breath saloon.
If you haven’t done it before and have time, check out the Fisher museum w/the gold treasure found on the sunken Spanish galleon, The Atocha. Really incredible stuff. I met Kane Fisher some years ago. Interesting crew.
OT response to NYCdj.
Correct me if Im wrong, but I think its you that always brings up Hip Hop music as the/a source of black people’s pathology. Everytime you do it, I want to counter it, but Im unsure of where I need to start in order for you to “get it”; so I end up forgetting to comment.
Its really annoying.
That being said, all white people need to hear this woman before they cite Hip Hop music as the source of any non constructive behavior in black people:
http://www.youtube.com/watch?v=Tf8db7ZGGBk
I didn’t intend to watch her entire presentation but its so comprehensive I couldn’t stop.
Oh, and I wanna add that all black PARENTS should sit down and listen to this presentation with their black children too.
Black people may think they have Hip Hop music, but really, its Hip Hop music that has them.
Oh my word~
Housing Demand Falls 3 Years Straight in Sacramento
http://picpaste.com/pics/f4f10bb710a0cfa21e7b3a95bb0d3ccd.1381273516.png
“With foreclosure moratoriums in effect in all 50 states, the housing market is a seized up, static mess. And when the moratoriums expire, look out below.”
Exactly. It’s a long way down for housing prices.
Just imagine the flood of dilapidated crap shacks that will eventually deluge the market. It won’t be pretty.
If you take on mortgage debt at current massively inflated housing prices, you’ll enslave yourself for the rest of your life.
“Debt is bondage.”~ Suze Orman, May 11, 2013
Don’t Be A Debt Donkey®
Love all the Realtor crime articles posted below.
Meanwhile, the NAR lies are running thick on the City-Data forums. And if you dare question their lies, they ban you.
City-Data = koolaid drinkers only.
Thank you. We pass these articles on in the interest of the public.
“Meanwhile, the NAR lies are running thick on the City-Data forums. And if you dare question their lies, they ban you.
City-Data = koolaid drinkers only.”
ha-ha, been there, done that. Jay in CT (cd mod), bite my crank, matey.
That’s been my experience too.
I was banned for asking this simple question.
“Is city-data forum run by or owned or partially owned by national association of realtors or a NAR consultant?”
I was banned within 3 minutes of posting this question.
So what do you think the answer is to my question now?
Hah, being as how you’re up in the Northeast, I’m sure you’ve tangled with Jay in Ct, lol.
You should have said “an NAR …”
They might be grammar nerds.
Although I haven’t been banned. Yet. Posts have been deleted, though, as being off-topic or whatever. And I’ve had a couple of “infractions”, lol. It’s such juvie stuff. I mean, look at the level of discourse among some of the posters. It can be a good resource if you’re thinking of moving somewhere, but advice should be taken with lots of grains of salt.
Really, if I’m going to post anywhere, this is the place. Most of the posters here are intelligent, even though I may not agree with some. There’s some give and take and interesting, thoughtful posts. And of course I’m fond of our blogger. Lots of latitude here, and I appreciate it. I also appreciate a lot of the humor.
I too appreciate the humor here and more than that…. the lattitude to slap down the housing crime syndicate operators who attempt to direct the conversation here. Basically, if you attempt to run your scam here, you’re gonna get your #@*! slammed in the door.
I too appreciate the humor here
You should try to add some HA. Hint: Constant snarling, and never ending hateful name calling is not humor. (It’s not even countering an argument)
Have you ever met your other self?
Doesn’t the City-Data site belong to the NAR? I know I read that here some time ago. Maybe I just missed the snark? They lay it on thick regarding the zips I’ve looked at and shut down threads whenever things start to go negative. I think the realtors are running the show.
I suspect NAR owns City-Data. Yah. I’ve been TOSd from it many a time for bad-mouthing real estate on the Phoenix site under the pseudonym of … of … well I cannot say that part. But it’s true. The moderators are biased toward RE and kill the free speech of the ones who are objective.
“Meanwhile, the NAR lies are running thick on the City-Data forums. And if you dare question their lies, they ban you.”
Years ago I was reading a thread on City-Data regarding a $45k/yr income being able to afford a central California spec home for something like $270k, IIRC. It was a rational and sober discussion, but the thread was deleted after a couple of hours.
“Bowie realtor sentenced in mortgage fraud scheme”
http://www.gazette.net/article/20130828/NEWS/130829053/bowie-realtor-sentenced-in-mortgage-fraud-scheme&template=gazette
“Milford realtor charged with fraud”
http://youtu.be/njbrYYndYBg
“Former local Realtor executive charged with embezzling funds”
http://normantranscript.com/previous/x789529812/Former-local-Realtor-executive-charged-with-embezzling-funds
“Bridgeport realtor accused of stealing $ from buyers”
http://www.wtnh.com/news/fairfield-cty/bridgeport-realtor-accused-of-stealing-from-buyers
Imagine….
“Realtor allegedly steals $15,000 of jewelry from home up for sale”
http://www.myfoxphoenix.com/story/23603232/2013/10/03/realtor-allegedly-steals-from-home-on-sale
Hope and Change…Chicago style.
————————
“Vindictive” Park Service Inflicting Maximum Pain During Shutdown
Colorado Observer | October 9, 2013 | Audrey Hudson
Aggressive actions and double standards used by the National Park Service are vindictive and designed to inflict maximum inconvenience and fear among visitors, say Republican lawmakers whose efforts to reopen the parks are gridlocked by Senate Democrats.
World War II veterans were blocked by barricades and armed guards from paying tribute at their memorial last week.
However, the national mall where the memorial is located was opened Tuesday to allow hundreds of illegal immigrants to stage a protest demanding amnesty.
“The Obama administration willfully disrespected our World War II veterans by barricading their memorial on the National Mall,” said Rep. Doug Lamborn, Colorado Republican.
“Now the administration is taking down the barricades and welcoming pro-immigration activists to the Mall,” Lamborn said. “This double standard is part of President Obama’s practice of using taxpayer dollars to pick winners and losers.”
“We’ve been told to make life as difficult for people as we can,” a Park Service ranger told The Washington Times. “It’s disgusting.”
“We’ve been told to make life as difficult for people as we can”
That sounds a lot like my local zoning board too.
It’s the perfect chance to showcase what gov does.
Take away social security and medicare for a few weeks and you will see fewer signs reading keep the governments hands off my medicare.
If one side wants to gut government you need to let the people know what that would look like.
Take away Congress’s pay and the shutdown would end overnight.
Take away Congress’s pay and the shutdown would end overnight.
Couldn’t they survive on their insider stock trades?
“We’ve been told to make life as difficult for people as we can,” a Park Service ranger told The Washington Times. “It’s disgusting.”
I entered “We’ve been told to make life as difficult” into Google News. All I got was those crackpot right-wing websites like Breitbart. We may find that it’s all been made up.
More importantly, the federal government is a huge, sprawling enterprise. Apparently, some people in Washington think that its size should be reduced somewhat. How is that the national parks, of all the federal agencies and departments, are getting so much attention? It’s bizarre.
I have a great idea for the Republicans. Let’s take this oppurtunity to sell off the national parks. Think about it. Surely private companies could run the parks better than a bunch of bureaucrats. Just imagine what the Disney people could do with Yosemite and the Grand Canyon. There’s also no reference to national parks anywhere in the constitution. And tens of billions of dollars could be raised to reduce the deficit. It’s win-win-win!
From WashingtonTimes.com October 13, 2013
“It’s a cheap way to deal with the situation,” an angry Park Service ranger in Washington says of the harassment. “We’ve been told to make life as difficult for people as we can. It’s disgusting.”
Read more: http://www.washingtontimes.com/news/2013/oct/3/pruden-the-cheap-tricks-of-the-game/#ixzz2hN4XXtB5
Follow us: @washtimes on Twitter
That helps prove my point. The Washingon Times is a right-wing rag owned by the Moonies.
And the Washington Post? …crickets…
Exactly. As if flagship statist scandal sheet is any different. Corrupt bastards.
Can you find that quote in the Washington Post? I did a quick search of their web site and I didn’t find it.
I’m just amazed about how much attention the parks are getting.
“Can you find that quote in the Washington Post?”
No I cannot. But my remark of course was to counter your line “The Washingon Times is a right-wing rag owned by the Moonies”
- don’t act so innocent.
I bet you are the same type who says no wrong about Pelosi/Reid/Obama but rags on about Bush/Cheney.
I don’t like ANY of them. But you are so blinded like Rio of your partisanship.
I wasn’t sure what you were getting at when you mentioned the Washington Post. I thought that were saying that it had also picked up that ranger story. I don’t read it much aside from one blog that’s pretty good. I remember reading around 10 or 20 years ago that they had decided to focus on serving their local audience and had given up on trying to be a national instutution.
As for me, I prefer to focus on policies, not individual politicians. So there are things that I would criticize Obama about. The high unemployment rate comes to mind quickly.
I wasn’t sure what you were getting at when you mentioned the Washington Post. I thought that were saying that it had also picked up that ranger story. I don’t read it much aside from one blog that’s pretty good. I remember reading around 10 or 20 years ago that they had decided to focus on serving their local audience and had given up on trying to be a national instutution.
As for me, I prefer to focus on policies, not individual politicians. So there are things that I would criticize Obama about. The high unemployment rate comes to mind quickly.
It’s a darn good thing the shutdown didn’t strike during the red hot summer sales season!
Oct. 10, 2013, 8:48 a.m. EDT
Housing market shut down along with government
The impasse is delaying mortgages and may scuttle home sales
By AnnaMaria Andriotis
Home buyers are encountering new hurdles to getting a mortgage thanks to the government shutdown.
As the shutdown enters its tenth day, some lenders are delaying mortgage approvals and others are refusing applications entirely. Originations of mortgages backed by the U.S. Department of Agriculture, which are given to buyers in rural areas, came to a halt after the agency shut down last week. Separately, some lenders say it’s taking longer to process mortgages that are insured by the Federal Housing Administration, which has been operating with a limited staff since the shutdown. And some lenders are not originating mortgages at all until they can once again verify applicants’ income with the Internal Revenue Service, which is shut down.
As the shutdown drags on, even more mortgage applications could be derailed. “The first day we weren’t too concerned, but now we are a week in and procedural issues are starting to affect more loans,” says Mark Goldman, a senior loan officer at San Diego-based mortgage brokerage C2 Financial Corp.
Experts warn that the shutdown could hamper the housing recovery. If borrowers aren’t able to get mortgages, home sales will likely drop, pulling down prices with them.
Delays in getting a mortgage are occurring for two very different buyers: (1) Those who have lower incomes and rely on government mortgages to buy homes, and (2) the wealthy, who often get jumbo mortgages that banks hold on their books and on which they set their own underwriting rules, says David Stevens, CEO of the Mortgage Bankers Association, which represents mortgage lenders.
…
Too funny….. The truly wealthy people I know don’t own houses for the simple fact that they’re losses.
“the wealthy, who often get jumbo mortgages that banks hold on their books and on which they set their own underwriting rules, says David Stevens, CEO of the Mortgage Bankers Association, which represents mortgage lenders.”
Wasn’t there some story about that Facebook dude Zuckerberg getting a 1% mortgage to buy a house. You must hang with uper-wealthy people. Aren’t you special.
It sounds like the Republicans may be setting up the Democrats for a new debt ceiling showdown over the holidays. Wasn’t there one of these last holiday season? (I vaguely recall some kind of 11th hour 59th minute agreement on New Year’s Eve 2012 to repeal the 2% F.I.C.A. tax holiday…)
Bah, humbug!
There was one last year and it was settled New Year’s Eve or a day earlier I think. There was one in 2011 too. There will be one or two debt crises in 2014. Then there will be a permanent one party Democrat government and QE infinite from then on.
Looks like Kwame Kilpatrick the so called “Hip Hop Mayor” was sentenced to 28 years.
Can one of you “legal eagle” types translate that into how much time he will actually serve behind bars?
In other words, what does that sentence really mean?
Thanks in advance.
“Looks like Kwame Kilpatrick the so called “Hip Hop Mayor” was sentenced to 28 years.”
Wow, I’ve seen half that sentence for murder back when Rose Bird was the Chief Justice of California. Kwame probably got 8-yrs for corruption and 20-yrs for being black, or something like that. If Kwame is Jewish he’ll be pardoned in 2016, or he’ll serve 15-yrs of his sentence perfecting his golf swing in Lompoc, CA.
Something tells me investment banks and hedge funds in a position to pounce are set to make a killing off this yield spike.
The T-bill yield spike could actually be a buying opportunity
October 10, 2013, 5:23 PM
Ultra-short-term Treasurys have become one of the the biggest victims in the debt-ceiling standoff engulfing Washington, with yields on 1-month bills jumping as high as 0.522% and recently trading around 0.406%.
But that’s led some investors to an unlikely conclusion: these yields are actually starting to look attractive.
“I think we’ll look back on this as a buying opportunity,” said Paul Montaquila, fixed-income investment officer with Bank of the West and BNP Paribas Securities Corp. He noted that he’s had some customers looking to load up on T-bills as others are getting out of the market.
…
Follow-on thought: This looks a bit like the financial market equivalent of a magnitude 9.0+ earthquake. Is the financial equivalent of a tsunami soon to follow?
Not sure how 11:49 pm on Oct 10 in London translates to U.S. time zones?
ft dot com
Last updated: October 10, 2013 11:49 pm
Big banks make contingency plans for US default
By Tracy Alloway and Michael Mackenzie in New York and Gina Chon in Washington
Big banks and investors are preparing contingency plans to deal with the potential impact on the $5tn “repo market” of the US government missing a payment on its bonds, even as Republicans propose a six-week reprieve for the debt ceiling limit.
The repo market is a crucial financing area for banks, who post their holdings of Treasury securities as collateral for short-term loans from money market funds, insurers and other investors. With the status of short-term Treasury bills being called into question because of the debt ceiling deadlock in Washington, banks are being forced to rapidly reconsider the Treasury securities they can use as collateral.
One senior banker said that three large repo lenders had asked his company, a big US investment bank, to start thinking about how it would amend the agreements for its repo deals to explicitly exclude shorter-term Treasury securities that are viewed as most vulnerable to the gridlock in Washington.
Investors had initially focused on T-bills due to mature on or after October 17, the day the US Treasury department said it would run out of resources to pay its debt. But on Thursday, with Republican leaders proposing a temporary lift in the debt limit, focus quickly shifted to T-bills due to mature in November and December.
“It’s a recalibration,” the banker said. “We’re definitely seeing some pretty big investors looking to exclude these maturities.”
The yield on one-month Treasury bills maturing at the end of November jumped to 10 basis points, after being a relative oasis of calm at 3 bps as recently as Tuesday.
Yields on December bills are also in the double digits as market participants said that a short-term reprieve for the debt ceiling would do little to alleviate the issue of liquidity risk surrounding the use of T-bills as collateral for repo and derivatives trades.
…
T bill yields going up? That’s exciting! I just started ramping up my T-bill purchases (starting with November’s 52-week bill).
Figure it like a piggy bank. Cute, knowing all along the value of the dollar goes down WRT gold. But I’m within 5 years and 2 months of being able to start distributing my 401k and Roth without tax penalty. I don’t intend to retire in 5 years but I want to prepare for the option in case my health goes bad.
You ain’t kidding man! 5 day day discount rate is .3 Compare that to the last 52 week rate of 0.12. Curiously the 7 day discount rate is 0.03 and the 4 week rate is 0.35. What happened to the 7 day rate? Well it was out a week ago. But the 13 week and 26 week ones are out today and they are lower. Not sure what gives. I guess more buyers for the 13 week and 26 week ones.
These are a far cry from the 52 week rates of 7 years ago when yields were above 3.0.
I’m sure it will take several years for yields to return to those levels. Probably about 8 years. That’s the time Hitlary will be chased out of office by people carrying pitchforks and they coax the states to put in an amendment that only taxpayers older than 35 are allowed to vote (but no one under 35 is to be conscripted).
Without over thinking it, the bizarre spike in short-term interest rates brings to mind similarly verklempt debt market conditions just before the stock market started diving in Fall 2008.
“…in a position to pounce…”
One such firm is Pimco.
Pimco’s Bill Gross to Fidelity: ‘We’ll buy those bonds’
October 10, 2013, 4:47 AM
On the heels of news that Fidelity has cut out its exposure to short-term Treasury bills due around the time the U.S. could breach its debt ceiling, Pimco’s bond guru Bill Gross told CNBC this:
However, Gross says both companies are probably doing the right thing:
“Breaking the buck“ occurs when the net asset value of a money-market fund drops below $1, and can happen when a money-market fund’s investment income doesn’t cover operating expenses or investment losses.
Treasury bills are an integral part of money-market funds, and the yield on 1-month Treasury bills (1_MONTH) has been spiking higher on mounting fears that lawmakers will not be able to reach a deal on raising the nation’s debt ceiling by the deadline of October 17.
Gross told CNBC that chances are 1 in a million that the U.S. will default on its debt, though that doesn’t mean markets aren’t going to fret about it. Stock futures were pointing to a strong open for Wall Street on Thursday, amid some glimmers of hope linked to a meeting between President Obama and a core group of Republicans later in the day.
…
Oct. 11, 2013, 12:03 a.m. EDT
Oil dips as lawmakers fail to agree on deal
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Obama, Republicans don’t come to deal
By Shawn Langlois, MarketWatch
LOS ANGELES (MarketWatch) — Oil futures on Friday eased back from the prior session’s strong move as hopes for an end to the U.S. government standoff were put on ice when lawmakers failed to either reach a deal to get back to business or raise the U.S. debt limit.
…
Perhaps Mr Market enjoyed a proverbial victory declaration on the deck of a ship today?
After all, the plan to crash the economy and later use a propaganda campaign to try to pin the blame on Obama is a tried-and-tested strategy from the Republican play book.
Recession risk seen if debt ceiling isn’t raised
Paul Davidson, USA TODAY 9:08 p.m. EDT October 10, 2013
Financial turmoil would ensue if Congress fails to raise the nation’s debt limit will, industry officials and economists said Thursday. The nation could fall back into a recession.
Story Highlights
A default would push up interest rates
Banks would curtail lending
Stocks would plummet
A failure by Congress to raise the nation’s debt ceiling would cascade through the economy, increasing borrowing costs for consumers and businesses, chilling credit markets, driving down stocks and killing jobs, industry officials and economists say.
“We will set off a chain of events that will cover our entire economy and impact all Americans,” Frank Keating, CEO of the American Bankers Association told the Senate Banking Committee Thursday. “These impacts would not be easily reversible. The repercussions could linger for years, providing a constant drain on our economy.”
The Treasury Department has said it will run out of borrowed money on October 17 unless Congress votes to raise the nation’s $16.7 trillion debt limit. Missing that deadline by even a few days likely would shave about three-tenths of a percentage point off fourth-quarter economic growth, says Mark Zandi, chief economist of Moody’s Analytics.
…
If DC had to prioritize payments, why would it be to bond holders, given that most of them are foreign governmental entities? Wouldn’t it make more political and financial sense to prioritize payments to U.S. citizens, such as Social Security and Veteran’s Benefits?
October 10, 2013 6:26 am
Global leaders express fears on US debt
By FT reporters
A failure of the US to resolve its debt ceiling arguments threatens the security of investments and risks financial instability, global leaders warned on Thursday, with the danger of derailing the fragile global economic recovery.
Opening the International Monetary Fund and World Bank annual meetings in Washington, the heads of the two international organisations stressed the importance of a speedy resolution, while Chinese premier Li Keqiang has expressed his nation’s concern.
The issue is likely to overshadow the annual meetings where the US can expect to come under fire from other countries for threatening global stability.
Christine Lagarde, IMF managing director, insisted that she was not trying to tell Americans how to resolve their political differences, but had to warn of the risks to the world economy in the event of a US default, and the IMF had to prepare for the consequences.
“You know, in a few weeks, I hope we can look back and say ‘what a waste of time that was because it was unnecessary because it didn’t happen’,” Ms Lagarde said, hoping that the US can agree to raise the debt ceiling before the 17 October deadline.
Her concern was reinforced by Jim Kim, the World Bank president, who said that in August 2011, when the US came close to defaulting, poor countries’ cost of borrowing rose 0.75 percentage points for many months and there were persistent stock market falls. “Even a near miss will have a real impact on developing countries . . . and so we urge all policy makers to move quickly to come to some resolution,” Mr Kim said.
China, which has roughly 60 per cent of its $3.5tn foreign currency reserves invested in US assets, is watching the debt debate in Washington uncomfortably. Mr Li said his nation was paying “great attention to the US debt ceiling issue” in a meeting with John Kerry, US secretary of state, at an Asian summit.
The brief comments, published on the official government website on Thursday, are the highest-level Chinese statement to date about the US debt discussions.
The fear is that a default would pummel the value of China’s holdings of US government bonds, cause collateral damage to its other US investments by hurting the dollar, and deal a blow to the fragile global economic recovery.
Earlier this week Zhu Guangyao, China’s vice-finance minister, called on politicians in Washington to “ensure the safety of the Chinese investments” in the US. Mr Zhu also said that in the event that the US failed to raise its borrowing limit, Washington should prioritise making interest payments to bond holders.
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