November 13, 2013

Bits Bucket for November 13, 2013

Post off-topic ideas, links, and Craigslist finds here.

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Comment by Blackhawk
2013-11-13 04:14:31

Obama’s Fallout for the Left

He’ll survive. His ideology has been exposed and damaged.

Comment by Bill, just South of Irvine, CA
2013-11-13 08:53:12

I regretted my 2004 vote for George W Bush. It was not obvious yet that he was a “progressive” and that his middle east meddling was a quagmire that should have been halted in its tracks within 24 hours of his second inauguration.

That said, Mr. Obama is even worse, as the article mentions. Where are Michael Moore and Cindy Sheehan? There are still tens of thousands of US troops in Afghanistan and still being killed or injured.

The threat of terror has gotten worse, not better. Tens of thousands of innocent olive-skinned people have lost their lives from our drones and other weapons. It has been “too quiet” and “so peaceful” (relative to 9/11). By historical precedent, something big and bad will happen to thousands of Americans who had nothing to do with mid-east meddling. We need an immediate 100% of withdrawal of all our military from overseas and an immediate end of taxpayer aid to any foreign nation.

Comment by Overtaxed
2013-11-13 10:51:58

Don’t blame me, I voted for Ron Paul. I suppose there’s some good that comes with backing the losing candidate; you never have to look at the results and think “What have I done!”. :)

Comment by Bill, just South of Irvine, CA
2013-11-13 19:04:27

In 2000 I voted for the libertarian candidate Harry Browne. In 2008 I wrote in Ron Paul. In 2012 I voted for Libertarian Gary Johnson.

I am now a voluntaryist - - for sure and skipped my local election in my district in Phoenix. I will skip the rest. I will not sanction this system.

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Comment by Bill, just South of Irvine, CA
2013-11-13 19:25:43

Oh wait. I forgot. According to Colorado I cannot ever be a voluntaryist because I am a socialist (according to him). Dang!

Comment by sleepless_near_seattle
2013-11-13 21:03:44

I am a socialist

Now how can he possibly know that when the definition seemingly changes here on a daily basis?

Interesting link, though. Thanks for sharing.

Comment by United States of Crooked Politicians and Bankers
2013-11-13 13:12:38

“I regretted my 2004 vote for George W Bush. It was not obvious yet that he was a “progressive” and that his middle east meddling was a quagmire that should have been halted in its tracks within 24 hours of his second inauguration.”

Absolute horsesh!t. You would have had to be deaf, dumb, and blind to not see what was going on by then. I voted for Bush in 2000, but his horrific policies were blatantly transparent by 2004, and I voted for John Kerry, and a Democrat for the first time in my life, because of the stench emanating from the oval office.

Comment by oxide
2013-11-13 16:59:04

I think it’s more of that “progressive = neocon” meme they’re trying to push nowadays.

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Comment by United States of Crooked Politicians and Bankers
2013-11-13 13:07:32

“He’ll survive.”

He can’t run again, and he’s not going to be impeached, so of course he’ll “survive.”

Comment by Pete
2013-11-13 16:05:24

“The Rest of the Story on Arizona Anecdote”

>>Conservative groups are highlighting the case of an Arizona man with leukemia whose insurance plan was canceled because it didn’t comply with the Affordable Care Act. A news report quoted the man as saying he would need to pay $26,000 to keep the same doctor. It turns out, he was able to get a new plan, which has his doctor in its network, for a lower premium and a lower out-of-pocket maximum than his old plan.<<

Comment by SDJen
2013-11-13 17:29:01

Good stuff. My neighbor lost his “catastrophic” plan. Was paying $200 a month for a policy that pays out a maximum of $400 per year. I didn’t like the ACA at first. I might change my mind about that.

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Comment by Blackhawk
2013-11-13 04:30:12

Death by Obamacare

How could they design a new healthcare system that didn’t consider cancer patients?

Comment by goon squad
2013-11-13 04:36:01

realtors are liars

Comment by phony scandals
2013-11-13 05:52:48

“realtors are liars”

No, realtors are “grossly misleading to the American public”.

They are sorry that loanowners are finding themselves in this situation based on assurances they got from realtors who researched this.

Suzanne Researched This - - 120k -

Dem. Rep: Obama ‘misleading’ on ACA

By Justin Sink - 11/12/13 10:54 AM EST

Rep. Kurt Schrader (D-Ore.) accused President Obama of being “grossly misleading to the American public” with his pledge that people could keep their health insurance under ObamaCare,

“So I think the president saying you could stay with it and not being honest that a lot of these policies were going to get canceled was grossly misleading to the American public”

Last week, Obama apologized to Americans who are losing their healthcare coverage despite his promise.

“I am sorry that they are finding themselves in this situation based on assurances they got from me,” - -

Comment by Housing Analyst
2013-11-13 05:54:22

Given the fact that housing demand is at 16 year lows and falling, How many paint chip eating realtors can the economy support?

Comment by goon squad
2013-11-13 07:24:38

“paint chip eating realtors”

Window lickers and jenkem huffers and bath salt snorters they are.

Comment by Albuquerquedan
2013-11-13 07:55:43

“paint chip eating realtors”

Correction: lead paint chip eating realtors

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Comment by Whac-A-Bubble™
2013-11-13 05:08:38

Is a QE3 taper in the bag?

Comment by Whac-A-Bubble™
2013-11-13 05:11:10

23 HRs ago
Investors Shun Bonds over Nerves on Fed Pullback
The headquarters of PIMCO, the heavyweight bond investor which suffered hefty net outflows in the third quarter

By Nick Cawley

Bonds may have been the asset class of choice in the immediate aftermath of the financial crisis which erupted in 2008, as investors sought to preserve their cash against a deteriorating economic backdrop. But times have changed, economies are growing and they now can’t stay far enough away.

Investors have their smallest allocation of funds in bonds in over seven years, a monthly survey by Bank of America-Merrill Lynch shows Tuesday, reflecting nerves ahead of an expected pullback from monetary stimulus by the U.S. Federal Reserve.

The survey of 222 investors, who run a total of $599 billion in assets, shows that bond allocations are now tied with April 2006 as the lowest that the bank has ever recorded from this survey, with a net 69% of respondents “underweight” bonds relative to their benchmarks, as U.S. equity and global credit prices hit all-time highs.

“Bond market fear is greater than stock market greed,” the bank said, as investors shun the fixed-income market, fearing capital losses, while they still believe in the equity markets, despite the lofty valuations.

Core-government bond yields have risen sharply–the flip side of sliding prices–since early May when the U.S. Federal Reserve said that it could start to scale back asset purchases, causing market participants to worry about a reduction in global liquidity.

At the start of May, 10-year U.S. Treasurys traded with a yield of 1.65% compared to their current level of 2.78% while 10-year German Bund yields rose to 1.78% from 1.16% in the same time-frame. Bond prices fall as yields rise.

Comment by Whac-A-Bubble™
2013-11-13 05:13:52

Asia Markets
Global Central Banks Seek Shelter From Fed Tapering

Central Banks Turn to South Korean Won, Australian and New Zealand Dollars
By Anjani Trivedi
Nov. 6, 2013 9:01 a.m. ET

South Africa’s central bank is entering new territory, diversifying its foreign-exchange reserves by buying assets denominated in currencies such as the South Korean won and Australian and New Zealand dollars.

Daniel Mminele, deputy governor of the South African Reserve Bank, said this week that the bank is “acutely aware of the risks” of the U.S. Federal Reserve winding down its monetary stimulus and had decided to protect itself against the higher U.S. Treasury yields that are expected to result.

The South African central bank isn’t alone. Others are seeking to defend themselves against exposure to the U.S. dollar and euro, amid economic uncertainty and the Fed’s intention to begin winding down its stimulus, which is expected either later this year or early next year. Yields and prices move in opposite directions.

Foreign holdings of Treasurys fell by US$128 billion over five consecutive months to August, with Asian countries shedding more than US$70 billion in U.S. government bonds year to date, according to the latest data from the U.S. Treasury Department.

Analysts say they expect this trend to continue.

“From that point of view, it makes sense for reserve managers to try and reduce exposure [to Treasurys]. If yields are to rise, that will reduce the valuations of their portfolios,” said Khoon Goh, senior currency strategist at Australia & New Zealand Banking Group in Singapore.

Comment by cactus
2013-11-13 09:32:39

Many signs pointing to a continued treasury Bubble bust

Don’t you think the US has played fast and loose with its money supply? Propping up RE, running big deficits, continuous low grade wars, outsourcing manufacturing jobs which shrink the tax base.

Next recession the FED bank may not be able to lower lending costs by buying debt. Then we will really see a deflation.

Comment by Whac-A-Bubble™
2013-11-13 12:02:19

Deflation = bullish for Treasurys

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Comment by Bill, just South of Irvine, CA
2013-11-13 17:52:25

Yes. And the loose money years ahead make it a great time to hold (for yield) or sell some long term bonds (for gains) and move into shorter term notes or even into T-bills - for those who do not want the insurance of Precious metals.

Conversely, when rates go up, it will be a great time to hold gold or sell at a trickle and later sell at a torrent. This explains what I read on a Kitco column. Rates going up are good for precious metals (spot prices). Rates going down or staying down are a good time to buy precious metals and sell some of your biggest gains in other asset classes.

BTW, I bought a good amount of precious metals in the form of quarter oz American Eagles. I bought so many that instead of the usual plastic sleeves, my salesman handed me a bottle for them. After I fill another pill bottle with quarter ouncers I will work on either tenth ounce or half ounce.

Comment by Bill, just South of Irvine, CA
2013-11-13 18:02:13

Gold manipulators did the metals buyers a favor this year. The bargain shoppers had plenty of opportunities to gradually move in and bag some of the stock gains, using proceeds to guy metals.

There is a difference between selling your bonds while rates are kept low and selling your bonds when rates go way up. In the former case it is joyful selling and the buyer is happy. And it is casual. You keep an eye on the Fed and mostly hold. You sell mostly to rebalance your assets or raise cash for your next car. In the latter case it is panic sell, a rush to the exits. As you buy short terms and money market funds you notice they get some yield themselves. But some of the buying spills into precious metals and drive their prices up. Because it is a rush out of treasuries as people go for the smallest ever maturities.

Comment by Bill, just South of Irvine, CA
2013-11-13 20:16:19

I like the sound of “clink, clink, clink, clink, clink, clink,…(and more clinks)” - the sound of insurance against thugocracy.

Comment by Whac-A-Bubble™
2013-11-13 05:34:59

11/13/2013 @ 6:00AM
Are Stocks In For A Sea Change?
This story appears in the December 2, 2013 issue of Forbes.
David Dreman, Contributor

Things couldn’t have been rosier for equities in 2013. As I write this, stocks are up 187% from the depths of the crisis-panicked stock market of March 2009, and this year stocks are already up 24%. It’s been a banner year except for those holding bonds. The 30-year Treasury, by contrast, is down 11% from January 2013.

Is this finally the end of the great bond bull market? The Fed, along with almost all industrial nations, has printed enormous amounts of currency to finance deficits. Our deficit has risen 67% in the past five years to almost $17 trillion. And this doesn’t consider the Fed’s quantitative easing programs, which put us in an even deeper hole.

I won’t bash Bernanke or his easy-money legacy. His money flood helped save our financial system. But the Fed has been easing far too long, and millions of retired investors are paying a frightful price in paltry returns on their savings. Moreover, millions of employees now have their retirement accounts badly underfunded.

Even though the Fed has not cut back on its purchases of Treasury and mortgage bonds, many folks fear that a tapering-down policy will cause the economy to slide back into a downturn. Both the Fed and major central banks appear to be trapped.

So where to now? If rates move up over time, as appears likely, holding mid- or long-term bonds will be calamitous. As the economy improves in the next few years, yields will begin to rise at a faster rate, destroying bond values. This could bring on a nasty bear market. In a worst-case scenario I see inflation climbing to 10%, as it did from 1978 to 1982. Back then long bonds yielded as much as 15%, while short Treasurys reached almost 20%.

Why are big institutional investors and bond experts ignoring this enormous danger? It’s textbook investor psychology. Investors tend to fixate on the present and recent past, and time and time again extrapolate these trends well into the future.

Don’t despair: After the initial shock of rising inflation and interest rates, the market will resume its climb. That’s precisely what happened from 1978 to 1982 when stocks climbed 14% annually, beating the rate of inflation by four percentage points. If I’m right on inflation and rates, we’re on the cusp of a major bull market move.

Comment by Whac-A-Bubble™
2013-11-13 05:38:03

10/22/2013 @ 1:45PM |2,642 views
Is ‘The Bond Rally Of A Lifetime’ Finally Over?
A. Gary Shilling, Contributor

When the Fed started talking about reducing its $85 billion monthly purchases of Treasurys and mortgage-backed securities in May, Treasury bonds started to fall (chart 1) and yields jumped (chart 2).

Although Fed officials have vigorously denied that tapering signals an impending rise in interest rates, investors obviously didn’t believe the central bankers.

Many interest rate forecasters shout that the three-decade-long decline in Treasury bond yields is over, and they may be right—finally. These same pundits have been saying so repeatedly ever since rates started down in 1981.

Comment by Whac-A-Bubble™
2013-11-13 05:48:34

Rule Numero Uno of investing: Don’t bet against the Fed!

Ken Fisher, Contributor
29-year Forbes columnist, money manager and bestselling author.

10/10/2013 @ 2:49PM
Betting Against Bernanke
This story appears in the October 28, 2013 issue of Forbes.

Long before folks fretted the demise of “quantitative easing,” I fretted its existence. It proved the reverse of its image, an antistimulus, and we’ve done okay not because of it but despite it. With its demise forthcoming, I’m bullish on banks, relative to the market.

Why? Banking’s core business is simple: Take in short-term deposits, make long-term loans. The spread between short- and long-term interest rates pretty well reflects future gross operating profit margins on new loans (effectively cost versus revenue). The bigger the spread, the more profitable future loans will be, all else being equal.

Ending so-called QE steepens that spread by definition, since it stops the Federal Reserve’s buying of long-term debt (thus lowering future long-term debt prices and pushing rates higher). As the spread rises, so will bank profitability on new loans, and banks’ eagerness to lend–along with overall loan revenue—will rise in lockstep.

Since long-term rates correlate highly between developed and less-developed nations, countries where the spread is smallest will now likely see the most relative improvement. Take Chile, for example. Its spread is basically zero. As long-term rates rise, its spread should rise relative to, say, Brazil’s, where the 90-day to 10-year spread is already high at 3%-plus. Hence, I’m more prone to buy Chile’s banks than Brazil’s.

Then, too, bigger banks tend to do well later in bull markets. And we’ve kicked the bankers sociologically so long that someday soon we’ll tire and seek new dogs to kick.

I remain content with the seven banks I recommended earlier this year: Australia & New Zealand Banking, Banco Santander , China Construction Bank , HSBC, JPMorgan Chase (JPM -0.24%), Royal Bank of Canada (RY -0.52%) and Wells Fargo (WFC -1.1%).

Comment by Whac-A-Bubble™
2013-11-13 06:43:45

European Stocks Drop as Investors Weigh Stimulus Outlook
By Inyoung Hwang - Nov 13, 2013 3:53 AM PT

European stocks fell, posting the biggest two-day drop in a month, as investors weighed corporate earnings and speculated stronger economic data will spur central banks to pare their stimulus measures. U.S. equity-index futures and Asian shares also retreated.

Stada Arzneimittel AG and Banco Popolare SC declined at least 3.5 percent after reporting profit that missed estimates. ProSiebenSat.1 Media AG slumped to a five-week low after its largest shareholder sold an almost 16 percent stake. ICAP Plc advanced 5.1 percent after saying cost cuts will boost results this year. Carlsberg A/S rose 2.3 percent after reiterating its forecast for full-year profit.

The Stoxx Europe 600 Index declined 0.6 percent to 319.72 at 11:51 a.m. in London. The gauge rallied for the past five weeks as the European Central Bank lowered its key interest rate and the Federal Reserve maintained bond purchases. Standard & Poor’s 500 Index futures slipped 0.3 percent today, while the MSCI Asia Pacific Index lost 0.9 percent.

We’re near the end of the earnings season and it was half light, half shadows,” Andreas Lipkow, a senior market strategist at Kliegel & Hafner AG in Berlin, said by telephone. “In the next few days, jobless claims and manufacturing data out of the U.S. will give more information about the Fed’s plans. Everybody is guessing when tapering will begin and the market is nervous about this.”

Comment by Whac-A-Bubble™
2013-11-13 06:48:09

Greenspan Says Yellen Was His Guide to Economics Research at Fed
By Jeff Kearns & Angela Greiling Keane - Nov 6, 2013 6:20 PM PT

Former Federal Reserve Chairman Alan Greenspan said that Janet Yellen would be a “great” chief of the central bank and that he relied on her to explain the newest academic research in economics while the two served together.

“She is an extraordinarily good economist,” Greenspan said today at the National Press Club in Washington. “It was very helpful to me because she was a professor and academic who had very significant insights into where various new theories were coming up and the like in academia.”

“I used to go to Janet and ask her, ‘explain this to me or that to me’ and I think she was terribly helpful,” said Alan Greenspan, former Federal Reserve chairman and president and founder of Greenspan Associates.

Yellen, who has been nominated to succeed Chairman Ben S. Bernanke after his term expires Jan. 31, would “be great, and I can’t imagine that it would be otherwise,” said Greenspan, who ran the central bank for more than 18 years. He spoke today about his recent book, “The Map and the Territory: Risk, Human Nature, and the Future of Forecasting.”

Greenspan, a private economist for much of his career, said he couldn’t keep up with the latest academic research, and that he came to depend on Yellen’s guidance after she joined the central bank as a governor in 1994 and later when she was San Francisco Fed president. Yellen had previously been an economics professor at the University of California at Berkeley.

“There were a lot of theories that had been developed when I never had time to watch them, which I never really followed very closely, and I didn’t quite understand,” Greenspan said. “I used to go to Janet and ask her, ‘explain this to me or that to me’ and I think she was terribly helpful.”

Greenspan, 87, said it would be “extraordinary and wonderful” for the central bank to have its first female chief in its 100-year history.

He added that Yellen, who would have to chart the exit from the Fed asset-purchase program that’s pushed its balance sheet to a record $3.84 trillion, “is going to have a very tough set of problems, and I think she knows it.”

Comment by Strawberrypicker
2013-11-13 06:51:16

I think you may be the only one here who believes there will be a taper, much less one anytime soon.

Comment by Whac-A-Bubble™
2013-11-13 06:53:18

“…the only one here…”

I post articles about taper prospects, which should not be confused with my subjective beliefs about them.

Comment by Strawberrypicker
2013-11-13 07:08:33

What is your subjective belief about those prospects?

Also do you work in the bond field or something related? Just curious.

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Comment by Whac-A-Bubble™
2013-11-13 07:20:08

Just an amateur market watcher. Some folks get their kicks watching professional sports; I get mine watching bulls on steroids drive stocks to record highs and permabears crush prices into the ground.

Comment by Albuquerquedan
2013-11-13 08:18:36

But then he continues to confuse my posting of Rasmussen polls with a subjective opinion I might have had. If he was half as clever as he thinks he is, he would have noticed that I was not offering my opinion on the election outcome despite the fact that I am never shy with my opinions. The reason was simple, while I thought the election was never as predetermined as the board, and I thought it would be close when the polls had it a run away months before the election, I never believed that Romney had closed the deal and quiet frankly was never sure that his election would be better in preventing amnesty which is the critical issue of our time.

Comment by Whac-A-Bubble™
2013-11-13 10:06:21

Go to town, strawman Dan! Whatever you say about me won’t obviate the poor and eroding fundamentals for gold.

Comment by Albuquerquedan
2013-11-13 10:30:09

Eroding fundamentals? You are quite funny today. I have thousands of year of history on my side. The Chinese invented fiat paper money and then banned it because they know where it leads.

Comment by Whac-A-Bubble™
2013-11-13 12:04:31

Are Gold Prices in for a Rough Ride?
Follow the Crowd or Buck the Trend?
By Joseph Cafariello
Wednesday, November 13th, 2013

Investors in any market are continually faced with a major decision: follow the crowd or buck the trend. Following the crowd makes you late to the party, while bucking might have you sitting there for ages before the crowd ever arrives.

So what’s the case with gold, then? What has the crowd been doing lately? Should we buck the prevailing trend and buy at these low prices in the hope of getting the best seat in the house before the crowd arrives? What if the crowd never arrives? Do gold’s fundamentals make the move sound?

Already down some 26% this year and heading for its first losing year since the bull run began in 2001, gold is no longer the life of the party. Over the past couple of weeks, short futures contracts on gold increased by 37%, long positions fell 4.9%, and the combined open positions of futures and options shrank by 13%.

Investments in professionally managed precious metals funds also dropped, from $137 billion in August to $130 billion in September in line with gold’s recent retracement at the end of the mid-summer rally.

Gold has given back more than half of that $225 rally and has recently touched the critical $1,250 to $1,275 support area for the third time since July. This is a major support level, as it served as the high from late 2009 to late 2010. It’s a classic case of a prior ceiling of resistance becoming the current floor of support.

If gold breaks below this level, the metal could be in for a sharp tumble all the way down to its next level of support of $1,035 – which was the previous ceiling of resistance in 2008. Goldman Sachs (NYSE: GS) on October 18th called for just such a move, forecasting $1,050 by the end of 2014.

The pessimism over gold’s prospects has extended into the physical gold market as well. Projected gold purchases during this year’s Indian wedding season may drop to a mere 25% of last year’s season, as the government discourages imports and pushes for more recycling of jewelry already inside the country.

China too has seen slowing bullion imports in August and September, with Credit Suisse (NYSE: CS) last week noting that Chinese buying has already peaked for this year. Even in America, the sale of the U.S. Mint’s most popular gold coin, the American Eagle, has fallen in October to just 23% of its April sales volume.

U.S. Bank Wealth Management consultant Dan Heckman noted the pessimism to Bloomberg. “The U.S. economy is showing ample signs that it is growing, and that means the Fed will start looking at tapering either end of this year or early next,” he explained, referencing the Federal Reserve’s plans to reduce its monthly purchases of $85 billion worth of Treasuries and mortgage-backed securities. Since reducing stimulus strengthens the USD, gold, which is priced in USD, can now be purchased for less, and its price thus falls.

Compounding the problem for the gold price is the stellar rise in the equity market, as investors see better opportunities in stocks. That’s where the crowd is at the moment – in equities. With interest rates expected to remain low even after the Federal Reserve terminates its monthly buying program, the equity party looks set to continue for another year or two at the least.

Comment by Albuquerquedan
2013-11-13 12:49:25

“The pessimism over gold’s prospects has extended into the physical gold market as well. Projected gold purchases during this year’s Indian wedding season may drop to a mere 25% of last year’s season, as the government discourages imports and pushes for more recycling of jewelry already inside the country.”

The writer of this article does not seem to understand that with the high taxes, Indians have stopped buying at the legal shops but are smuggling gold in by the ton. The PTB may have pressured India into restricting legal imports but they have only created a new industry of smuggling, gold is pouring into the countries around India and is being smuggled in for sale in the gray market.

Comment by Suite Joey Blue Eyes
2013-11-13 13:02:59

Nate Silver’s analysis was obviously more to-the-point and insightful than Rasmussen. The entire Rasmussen/PPP/etc model of polling is outdated, a joke even on it’s best day. Anyone defending Rasmussen or other “major” pollsters is woefully behind the times.

Comment by goon squad
2013-11-13 13:54:52

Downlow Joe has entered the building.

Comment by Albuquerquedan
2013-11-13 15:51:24

Hey whac after the Yellin tapes hit the news wire treasuries tanked and gold popped. Maybe you could ask Nate for advice, since Rasmussen despite predicting the election within the margin of error cannot be trusted. If you don’t get some better advice you might be doing the yelling when the California pension funds go under due to underfunding.

Comment by Albuquerquedan
2013-11-13 15:56:54

The Business Insider reports that Yellen said the Fed has more work to do. Translates to big banks need more free money to keep those upside down mortgages on their books. The article goes on to state:

The Fed has held interest rates near zero since late 2008 and has quadrupled its balance sheet to around $3.8 trillion through three massive bond buying campaigns aimed at holding down long-term borrowing costs to spur growth and hiring.

Critics claim this could stoke future inflation and financial instability if the policy drives investors into risky investments and leads to another asset bubble.

Comment by Whac-A-Bubble™
2013-11-13 16:18:38

“Hey whac after the Yellin tapes hit the news wire treasuries tanked and gold popped.”

The markets interpreted her comments to suggest she will advocate continuing QE3 over a near-term taper. This is naturally good for gold, as the only thing propping up gold prices is the very low risk-free return.

Comment by Albuquerquedan
2013-11-13 16:31:55

Your perception of the obvious is uncanny, you must be involved in education in California. Yes, the only thing holding up the price of gold is the printing of money. However, that is like saying the only thing Einstein had going for him is intelligence.

Comment by Albuquerquedan
2013-11-13 16:43:54

However, that is like saying the only thing Einstein had going for him was intelligence.

For the grammar police!

Comment by Whac-A-Bubble™
2013-11-13 19:57:28

“Your perception of the obvious is uncanny,…”

Glad you agree that gold’s fundamentals suck rocks.

Comment by Bill, just south of Irvine
2013-11-13 21:55:05

“good for gold” in the sense of holding it’s price down near extraction costs so we can buy it. When inflation comes roaring back and rates go up, “good for gold” means hold, start selling a trickle, and keep selling over a few years. Move proceeds to long bonds.

Comment by Whac-A-Bubble™
2013-11-13 22:14:56

Bill — if you get the timing right, that sounds like a good plan. Just don’t get into the long bonds too early, as it took from roughly 1965 through 1982 for yields to top off last cycle. Anyone who was liquid enough in 1982 to buy long-term Treasurys could have made a killing.

Comment by In Colorado
2013-11-13 07:08:26

The DecTaper is yet another head fake.

Comment by Whac-A-Bubble™
2013-11-13 06:51:25

Yellen Rejoins QE Debate as Senate Hearing Gives Critics Forum
By Joshua Zumbrun, Jeff Kearns & Craig Torres - Nov 12, 2013 9:00 PM PT

Federal Reserve policy makers have publicly debated whether to maintain their bond-buying pace since well before Janet Yellen was named last month to succeed Chairman Ben S. Bernanke. One voice has been missing: Yellen’s.

Tomorrow, she’ll express her views publicly for the first time in seven months on the record stimulus she’s supported and that some lawmakers are using to justify voting against her. Testifying to the Senate Banking Committee, Yellen will try to defend a policy that’s swelled the Fed’s balance sheet to almost $4 trillion while facing four Republicans who voted no on her 2010 bid to be vice chairman.

“I still have concerns, which were the concerns behind my original vote on her original nomination, about her support of the quantitative easing and the entire direction the bank has been going for the last few years,” Idaho Senator Mike Crapo, the senior Republican on the Banking Committee, said in an interview. Crapo, who voted against her in 2010, said he hasn’t committed to how he would vote this time.

While Crapo and other critics on the panel may not have enough allies to block her, they have ample ammunition to make the hearing contentious. The nation’s jobless rate has exceeded 7 percent for more than four years since the end of the longest recession since the Great Depression, even as the Fed presses on with an unprecedented program to keep interest rates low.

Comment by azdude02
2013-11-13 06:54:11

They will eventually give you your taper by cutting back 5 billion a month to 80 billion just to appease the naysayers.

can this rigged stock market actually keep levitating if there is no POMO?

If they actually did taper the economy would tank. If they don’t taper the bubble grows larger and the crash will be larger. when the bubble pops and all the retail investors get crushed again it will be time to print some more money.

What do you think they will do?

Comment by Whac-A-Bubble™
2013-11-13 07:03:40

I haven’t a clue.

Comment by Whac-A-Bubble™
2013-11-13 10:09:18

Now that I have had a cup of coffee, let me refine that comment:

1) Since many doubt Yellen has the cajones to tighten, she may need to taper QE3 in order to establish a reputation for toughness.

2) Since everyone on the planet fears the onset of the taper, the Fed may rely on a few more months of jawboning to talk the market down from its ledge before actually taking any action.

3) To avoid spooking markets, once tapering begins, it is likely to be slower / smaller / later than expected.

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Comment by Albuquerquedan
2013-11-13 15:58:38

I finally agree with what one of your comments, you don’t.

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Comment by Whac-A-Bubble™
2013-11-13 16:20:03

I don’t know what that post means, aside from another feeble attempt to discredit me in support of your own book of trades.

Take a grade school grammar course and get back to us.

Comment by Albuquerquedan
2013-11-13 16:46:27

I finally agree with one of your comments, you don’t.

I guess figuring out that the “what” was added by mistake, was just too hard of a mental challenge for you.

Comment by Whac-A-Bubble™
2013-11-13 19:56:16

Your grade school grammar still doesn’t work, even after a feeble attempt to fix it.

Comment by cactus
2013-11-13 09:41:47

when the bubble pops and all the retail investors get crushed again it will be time to print some more money.’

Since everyone thinks this I’m betting they don’t bail out retail investors next time, or the Banks.

Big government will be far too busy trying to save itself next time

Comment by Whac-A-Bubble™
2013-11-13 10:04:09

Former colleague casts doubt Yellen will have courage to tighten
November 13, 2013, 11:30 AM
Kevin Warsh

Does Janet Yellen have the courage and conviction to tighten monetary policy when markets are opposed to it?

Kevin Warsh, her former colleague at the Federal Reserve, seems to have his doubts.

In an op-ed published Wednesday in the Wall Street Journal, Warsh said that the Fed has been handing out candy to spur markets higher.

“Consider the challenge when a steady diet of spinach is on offer,” Warsh said.

Comment by United States of Crooked Politicians and Bankers
2013-11-13 13:14:53

I am soooooooooooo tired of hearing about QE, taper, etc. I mean seriously, STOOOOOOPP!

Comment by Whac-A-Bubble™
2013-11-13 14:34:50

Is there anything else driving the economy at this point than the tension between taper talk and QE3 reality?

Comment by Whac-A-Bubble™
2013-11-13 14:37:26

Bugs and rodents and bailouts OH MY!

Nov. 13, 2013, 12:46 p.m. EST
Lessons from the switch to Bernanke from Greenspan
Experts saw Greenspan as golden era, which regulatory lapses soon tarnished
By Greg Robb, MarketWatch
Ben S. Bernanke, chairman of the Federal Reserve and former Fed Chairman Alan Greenspan chat before taking the stage at a 2010 conference on the history of the Fed in Jekyll Island, Ga.

WASHINGTON (MarketWatch) — When Ben Bernanke first went before the Senate for his nomination to become Federal Reserve chairman in November 2005, senators wanted to know just one thing: Would he continue to do everything that Alan Greenspan had done?

Bernanke hadn’t even waited until his nomination hearing to make the pledge. When he was introduced by President George W. Bush one month earlier, Bernanke said his “first priority would be to maintain continuity with the policies and policy strategies during the Greenspan years.”

“Bernanke promised to keep the Fed on the Greenspan standard,” said Lou Crandall, economist for Wrightson ICAP. That translated into gradual rate moves, with a deep commitment to stable prices, he said.

At that time, Greenspan was at the height of his popularity. Polls said he was nearly as admired as Oprah Winfrey. His 18 1/2-year tenure had been deemed a smashing success, as the economy seemed impregnable, having recovered smartly from both the Black Monday stock-market crash of 1987 and the dot-com bubble of the late 1990s.

Wall Street had wanted Greenspan to stay on. The market viewed Bernanke, a former professor of economics at Princeton University, as an untested academic who could only harm the Greenspan legacy with his dovish tendencies. He was nicknamed “Helicopter Ben” due to an image he mentioned in a speech in November 2002 on how to fight deflation, then a problem in Japan and not on anyone else’s radar.

Macroeconomists knew Bernanke better and were certain that the biggest problem he would face would be in getting other policy makers at the central bank to go allow with his idea of setting a formal target for inflation, something Greenspan had refused to do. At Bernanke’s nomination hearing, Senate Democrats worried about an inflation target, thinking that it might choke off job creation. But he sailed through the Banking Committee and was approved on the Senate floor by voice vote.

It didn’t take long before all of this conventional wisdom was tuned on its head. What had seemed to be easy has turned out to be anything but, economists said.

It soon emerged that Greenspan’s laissez-faire approach to regulation had allowed financial institutions to gamble away the country’s future on speculative trades involving too-complex-to-understand financial instruments.

All kinds of bugs and rodents came out of the woodwork, and everything blew up in Bernanke’s face,” recalled Robert Brusca, chief economist at FAO Economics.

Comment by Whac-A-Bubble™
2013-11-13 14:39:26

Market Pulse Archives

Nov. 13, 2013, 4:30 p.m. EST
Yellen defends QE as best way to normal economy
By Greg Robb

WASHINGTON (MarketWatch) - Janet Yellen, President Obama’s pick to be the first woman to lead the Federal Reserve, on Wednesday defended the central bank’s unpopular and unconventional asset purchase program, calling it the best way to get the economy back to normal. “I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy,” she said. Yellen’s comments came in her prepared statement to the Senate Banking Committee. Although the hearing is on Thursday morning, the committee released the text of her opening remarks early. She said the U.S. economy and financial system have come a long way since “the dark days of the financial crisis” but that important work lies ahead. She said that the housing sector “seems to have turned the corner.”

Comment by United States of Crooked Politicians and Bankers
2013-11-13 14:46:14

Hmmph. QE infinity, here we come. What a shock.

Comment by sleepless_near_seattle
2013-11-13 14:54:03

Today’s calculators apparently can’t go up to $85B * 12. And people can’t do math in their heads so…forward!

Comment by Whac-A-Bubble™
2013-11-13 16:22:38

“And people can’t do math in their heads so…forward!”

80*12 = 960
5X12 = 60

So $85B*12 = $1020B = $1.02 trillion per year in Fed balance sheet expansion.

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Comment by sleepless_near_seattle
2013-11-13 20:46:45

Whaaaat? Now you expect people to know the distributive property too??

Comment by Whac-A-Bubble™
2013-11-13 22:17:06

He who refuses to do arithmetic is doomed to talk nonsense.

– John McCarthy

Comment by tj
2013-11-13 05:20:37

Comment by RioAmericanInBrasil
2013-11-12 21:37:35

“Oh please” It is and was. Think bigger. “ObamaCare” is the “greatest thing since sliced bread” It has changed the argument.

Health-care is now a “right”.

health care is not a ‘right’ comrade. no one has a ‘right’ to someone else’s labor. that’s called slavery comrade. do you approve of slavery? yes, of course you do! you think it’s ok to force doctors to provide care.

of course you will say that doctors should get paid. but if doctors don’t have a right to their own labor, there is no end to what people like you might demand comrade. you want to be the ‘master’ comrade. you want power that shouldn’t be available to anyone.

Comment by Taxpayers
2013-11-13 07:01:37

msnbc has a 14 bill of rights hc-food-home-gov job

Comment by tj
2013-11-13 07:13:57

msnbc has a 14 bill of rights hc-food-home-gov job

it boils down to what a ‘right’ actually is.

if you believe in freedom, you believe in natural law and natural rights.

socialists/communists believe governments grant rights. rights than can be granted can be taken away.

Comment by Albuquerquedan
2013-11-13 16:03:40

Exactly. Very few understand the difference between rights by natural law and rights by positive law. However, it is the belief in natural law that made this country an exceptional place.

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Comment by Strawberrypicker
2013-11-13 07:15:29

I missed seeing the re-emergence of the Mango yesterday.

We’ll get a real good view of what this “right” is all about as 3 million more turn 65 every year. My guess is everything gets rationed big time, even the cat food.

Comment by tj
2013-11-13 07:18:33

My guess is everything gets rationed big time, even the cat food.

yes, we’ll be seeing the empty shelves that were on display in the soviet union. life is going to hard and bleak.

Comment by Albuquerquedan
2013-11-13 16:05:06

A few years of Yellen’s economics and the cats will be food. Little Tiger anyone?

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Comment by phony scandals
2013-11-13 05:37:17

Oh dear.

“Market indicators suggest that sellers are losing control of the market,”

Palm Beach County home sellers slash asking prices in Oct.
by Kim Miller

Sandra Lewis explores a potential home with her son in Riviera Beach in June. The family had submitted at least 10 offers on homes only to get beat out on each one.

About 18 percent of Palm Beach County homeowners trying to sell their homes cut their asking prices in October, up from just 12 percent in May, according to a new report.

Redfin, a Seattle-based real estate firm that opened a Palm Beach County office in May, also found that 25 percent of Broward County sellers, and 21 percent of Miami-Dade county sellers had to cut their prices last month.

“Market indicators suggest that sellers are losing control of the market,” said Tommy Unger, in a Redfin blog about the report. “Sellers are increasingly disappointed in buyer interest.”

Sacramento saw the highest percent of sellers dropping prices at 39 percent, followed by Seattle (36 percent), and Phoenix (35 percent).

Palm Beach County Realtors have said the hype over rapidly rising home prices leads sellers to overestimate what they can get for their homes, creating a of tug-of-war between agent and client.

“Price drops are usually a sign sellers didn’t get the offers they hoped for when they originally listed or they simply didn’t assess the current market conditions adequately,” Unger said. “It’s no surprise that our number one home selling tip is pricing your home right the first time.”

The median price for a Palm Beach County single-family home during the third quarter of the year was $250,000, up 14 percent from the same time in 2012.

Of sales that closed between July and the end of September, the average percent of original list price received by Palm Beach County sellers was 94 percent. That’s up from 88 percent last year.

This entry was posted on Tuesday, November 12th, 2013 at 9:30 am and is filed under Florida economy, Housing affordability, Housing boom. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Comment by Whac-A-Bubble™
2013-11-13 07:01:04

Sacramento saw the highest percent of sellers dropping prices at 39 percent, followed by Seattle (36 percent), and Phoenix (35 percent).”

Jingle Male
, care to offer any comments from the ground-level perspective?

Comment by In Colorado
2013-11-13 07:11:43

What would be telling is:

How much are prices dropping? $1000? $10,000? $100,000?
Is it across the board, or only in select (less desirable) nabes?

Comment by Strawberrypicker
2013-11-13 07:22:16

Is it across the board, or only in select (less desirable) nabes?

Doesn’t it always start this way with the stronger better areas holding out a bit longer? In the end they all take a whack.

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Comment by Jingle Male
2013-11-13 08:29:07

Colorado, everything you want to know is right here:

Average asking price ($/SF) down last week .06% (under 1%)

Average asking price ($/SF) up over last year by 18.5%

A lot of people see a another big bubble bust coming, but the conditions in the market are quite different in 2013 from 2006. We don’t have a huge pool of distressed sellers anymore and that is the first ingredient to have dropping values. In fact we have unmet demand. Many potential buyers are pondering when (not if) they will decide to purchase.

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Comment by Neuromance
2013-11-13 09:55:52

We don’t have a huge pool of distressed sellers anymore

What exactly does this mean? Foreclosure and/or short sale pressures were aggressively mitigated by federal and local government with the first 700 billion dollar bailout of the GSEs in fall 2008, followed by several other house-price support programs. My point: are those sales really different today than it was then? There was a great deal of government mitigation done from 2008 going forward of any distressed sales price pressure.

Is there some reliable measure of “distressed sales” (foreclosure/short sale) numbers?

Comment by Housing Analyst
2013-11-13 10:00:04

Considering current asking prices are 40% HIGHER than replacement cost(lot, labor, materials and profit) its a very long way down for housing prices.

Worse yet the massive amounts of inventory have yet to be disposed…… 4.4 million in the state of California alone.

What were you saying?

Comment by United States of Crooked Politicians and Bankers
2013-11-13 13:21:47

Asking Jingle about the strength of the housing market where his speculative flops reside and expecting an honest answer is like asking a barber if you need a haircut.

‘It is difficult to get a man to understand something, when his salary depends on his not understanding it.’.

Comment by Jingle Male
2013-11-13 15:55:19


My net worth and eventual retirement plan depends on my understanding the housing market correctly and in absolute detail. I have benefitted substantially from reading this blog since 2006 and have gone to great lengths to share the details of my success and failures.

I don’t whitewash anything here and I post factual details which often contradict what others on this blog believe.

I put my money to work at the bottom and have benefitted greatly…..more than I ever dreamed likely.

Comment by Housing Analyst
2013-11-13 16:17:18

uh huh… like your $90k Neptune meters.

You’re a fraud.

Comment by Jingle Male
2013-11-13 08:20:58

“Sacramento saw the highest percent of sellers dropping prices at 39 percent…”

Jingle Male, care to offer any comments…?
Sure, I am happy to chime in from the foothills (Placer County). The market here came back strongly in the spring of 2013. I sold a house in July for $124,000 more than I paid 3-years earlier (up 42% and a net gain of about $90,000 or 30% + annual return on $70,000 invested). The buyers actually offered $10,000 more, but the appraiser could not get there, so we lowered the price $10,000 to keep the bank loan (80%, 4.17%) and the deal.

So you see the frothiness in early 2013. People offering MORE than appraisers could justify. This lead to many sellers raising prices until the prices became so high they hit a wall (rising interest rates also contributed to the wall).

Are sales slowing? Yes. Is it also winter? Yes. Are people who were asking above market prices retrenching? Yes. Are home values dropping? No. I believe you will see closed sales showing values equal to or greater than the prices achieved in the summer of 2013. Demand is still strong, but big price appreciation is done for now. Moderation is the watchword.

Here is the telling stat for me (as a landlord): Rental rates have stagnated and/or dropped by 2-3% in the last few months. The rental inventory has jumped about 10-15% in my market. I don’t raise rents on existing residents, but I always go to market rate when the units go vacant (avg. tenancy = 3.7 years, avg. vacancy = <.01%). I would say market rents were up about 10% from 2009 and now they have dropped a bit.

It is a curious market and there is no certainty except this:

I am extraordinarily pleased with my purchases in 2008-9-10. They all cash flow about $1500/mon, the loans are getting paid down about $30,000/year and the values have increased 30-40%.
Buying SFR housing in the trough of 2008-2010 has been the best investment of my lifetime.

Comment by cactus
2013-11-13 09:54:55

Buying SFR housing in the trough of 2008-2010 has been the best investment of my lifetime.”


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Comment by Housing Analyst
2013-11-13 10:15:19

Did you overpay by 200%?

You did.

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Comment by Whac-A-Bubble™
2013-11-13 10:17:50

Good timing, to be sure, but never forget the debt of gratitude you owe the Fed for revving up quantitative easing in Spring 2009.

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Comment by Jingle Male
2013-11-13 12:02:43

I am forever grateful to the fed. I understand I was lucky to have them working the issues.

Comment by Housing Analyst
2013-11-13 20:32:34

And you borrowed to pay inflated prices for these depreciating shacks?


Comment by Ben Jones
2013-11-13 07:18:47

This is funny:

‘filed under Florida economy, Housing affordability, Housing boom’


Comment by Housing Analyst
2013-11-13 07:55:15


Now THAT chart exhibits what is the traditional definition of a “housing recovery”.

Comment by Jingle Male
2013-11-13 08:32:31

click on the 5-year graph……that tells a different story….

Comment by Housing Analyst
2013-11-13 08:40:18

Good point. The 5 year chart indicates prices have much further to fall.

Thanks for that tip JingleBalls.

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Comment by oxide
2013-11-13 05:51:35

From yesterday:

“Comment by jane
2013-11-12 21:58:54
Oxy, whoa there! Let’s re-examine that premise.
Not to put too fine a point on it, I also abhor the .01%’ers.

Methinks you tout the manifesto too gleefully, and with too much regularity and gusto…
You came up with the same solution to solve the estate tax problem for family farms <300 acres. Liquidate them and give the proceeds to the gummint! And for the same reason: because youuuuu can do a MUCH better job at figuring out how to redistribute others’ wealth than they can themselves! ”

Well, no jane, not really. I guess I wasn’t clear, but my manifesto of forcing criminals like Jeff Skilling to live lucky-ducky lives was not meant to be a punishment for all the rich for the “crime” of being rich. It was aimed at convicted felons and murderous dictators, which is what I thought the conversation was about. I am also somewhat disappointed that my suggestion brought on so much ire while goon’s suggestion of simply shooting them slipped right by.

Nowhere did I suggest that small family farms be liquidated in estate tax — did HBB ever have the estate tax debate?

Does government need to be downsized… well, everyone likes to say that… until something bad happens. Much of discretionary government spending is about prevention and protection. Admittedly, it’s difficult to appreciate government if the overall goal is to maintain the status quo. There’s a lot more glamour in doing something that gets on the news, like killing people and breaking things.

If it’s any consolation, my little section of government is shrinking slowly by attrition. They are also reducing salaries by attrition. When someone at a high salary moves into management track or retires, he is replaced by a lower salary worker to do the same work.

Comment by goon squad
2013-11-13 07:06:21

The parasite 0.001%er hedgies are expendable, they contribute nothing to the tangible economy. Line em up, shoot em all, bulldoze them into a mass grave.

Comment by Blue Skye
2013-11-13 07:22:32

“I’m sure that the 0.1%…..What say we strip them of all their wealth and assets…”

Sounded pretty clear to me.

The irony here is that the debt based lifestyle you embrace is the very thing that enriches those you hate.

Comment by MacBeth
2013-11-13 07:58:42

Does the stripping include all the 0.1%ers living in DC and in Martha’s Vineyard?

Does it include Congressmen? The President? Does it include Hollywood? Does it include numerous San Franciscans? New Yorkers?

Members of academia, particularly Ivy-leaguers?

Perhaps George Soros? Warren Buffett?

Or just the Skillings of the world?

Comment by goon squad
2013-11-13 08:27:41

“include all the 0.1%ers living in DC”

Government contractors = $500,000,000,000+ a year

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Comment by Housing Analyst
2013-11-13 08:11:00

“The irony here is that the debt based lifestyle you embrace is the very thing that enriches those you hate.

And there it is. As plain as day yet DebtDonkeys, GovLovers and LIEberals can’t wrap their empty warped skulls around it.

Comment by MacBeth
2013-11-13 09:23:05

That’s just it. They only think they hate them.

Liberals don’t judge people based on their behavior.

They judge people based on their allegiance. If you belong to the right group, you are golden. In Da Club!

Yet another example of how NeoCons = Progressives.

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Comment by Blue Skye
2013-11-13 09:55:49

So…how you think only depends on what group you are in? How do you know what group to join if you haven’t had your thoughts formed by them yet?

Comment by Strawberrypicker
2013-11-13 07:28:52

The entire department of education could and should be eliminated because public education has gotten nothing but worse in the last 20+ years. Just one example.

Government is NEVER about doing something efficiently or about producing the best result. It is about maintaining the power base of those in power and allowing the dispersement of blandishments.

Even if they absolutely know that something is useless and not working it does not get eliminated because that costs jobs, which lessens someone’s power.

Comment by tj
2013-11-13 07:43:12

It is about maintaining the power base of those in power

so true. that’s all it’s about to the politicos.

Comment by Housing Analyst
2013-11-13 06:07:36

So LIEberals…. let me understand you….

Because you have nothing, can afford nothing because prices are massively inflated, you borrow a lifetime of earnings but ignore that reality…..that massive amount is obscured by a monthly payment giving the illusion of affordability.

Secondly, because you have nothing, can afford nothing, you demand something and that anybody who has something must pay for it.

That’s the LIEberal Theology. Instead of addressing the issue, you develop your own corrupt solution because you’re afraid of what might happen if you stand up to the problem.

Cowardly free lunch LIEberals.

Comment by Whac-A-Bubble™
2013-11-13 06:09:14

Market Snapshot
STOXX 50 3,020.12 -14.56 -0.48%
FTSE 100 6,650.96 -75.83 -1.13%
DAX 9,050.45 -26.03 -0.29%

Secret Israel Housing Boom Defies Settlement Discord: Mortgages
By Jonathan Ferziger - Nov 13, 2013 4:38 AM PT

When David and Rivka Wietchner bought a home in the West Bank Jewish settlement of Har Bracha, they swooned over the mountain view, the embracing community and the 375,000-shekel ($106,000) price of a six-room apartment.

Two years later, the Israeli parents of three were even more delighted to discover their home would now sell for about 500,000 shekels, or 33 percent more. Boosted by rising demand, home prices are surging in Har Bracha, Hebrew for the Mountain of Blessing, and other remote settlements in the northern West Bank, even though they’re the most likely to be torn down in any peace deal with the Palestinians.

Comment by In Colorado
2013-11-13 07:17:23

They can sell, take their profits and buy an apartment with an ocean view on the Gaza strip!

Housing on the West Bank, appreciating? I guess pigs can fly.

A thought: wouldn’t the Palestinians want those apartments for their own people? Why tear them down if a peace deal is struck? Just evict the Israelis and move their own people in.

Comment by Army No Va
2013-11-13 11:24:16

Sell it to a Palestinian!!!!

Comment by sleepless_near_seattle
2013-11-13 13:12:08

…were even more delighted…

Only speculators would be “delighted” by this…

Comment by Housing Analyst
2013-11-13 06:16:37

“If you bought a house 1998 to current, you were set up like a bowling pin.”

And here comes the ball. Not just any ball…. it’ the headache ball…. and your shanty is sitting directly in the radius of it.

Comment by oxide
2013-11-13 06:29:47

Feinstein backs bill to allow Americans to keep health plans
By Kasie Hunt, NBC News

“Sen. Dianne Feinstein, D-Calif., announced Tuesday that she will support legislation aimed at repairing the now-broken promise that the president — and many senators — made to Americans when the Affordable Care Act was passed: That if they liked their health insurance, they could keep it.

Feinstein will co-sponsor legislation that Sen. Mary Landrieu, D-La., announced last week. The bill would extend the so-called “grandfather” clause and require insurance companies to keep offering insurance plans they sold before the health care exchanges opened on Oct. 1.”

So what does it mean to “require insurance companies to keep offering insurance plans they sold before the health care exchanges opened.” ? ISTM that it wasn’t Obamacare that canceled the plans. The insurance companies could have continued to offer the plans, but they yanked the plans anyway to trick people into buying a more expensive plan. Or, the insurance company deliberately lowered the quality of the plan below the Obamacare limit where it would be disallowed. Either way, the health insurance company conveniently blamed Obama.

If that’s the case, it’s kinda hard to say that Obama “lied.” Shouldn’t the ire be directed at the insurance companies who deliberately ensured that Obama became wrong?

This is also a convenient mechanism for a private insurer to remove the low-quality buyers from their private pools for the well-off, and throw them into the Exchanges, where the private insurer could tap into the government subsidy kitty. To them, it’s just another way to privatize the profits.. this time off the back of the sick.

(I wonder if Obama himself might be seething inside. The gov could have gone to a Medicare-like public option and killed off the health insurance companies for good. Instead, Obama pushed a plan that largely saved the health insurance industry’s bacon, and this is how they repay him.)

Comment by goon squad
2013-11-13 06:36:27

none of which addresses the real elephant in the room, that health care amounts to 18 percent of usa gdp. it should be at least 30 percent, that’ll show those euro-socialists who’s boss!

Comment by In Colorado
2013-11-13 07:24:53

that health care amounts to 18 percent of usa gdp

A friend’s wife is a neo-natal ICU nurse. With overtime she makes about 150K.

No wonder everyone wants to be a nurse. Granted, my friend’s wife is highly specialized and is paid more than the average nurse. But wages paid to US healthcare workers are much higher than those paid to comparably trained professionals in other countries.

But here’s another thought: a very big chunk of those babies in the ICU (the hospital is in metro Houston) were born to uninsured illegals who won’t be paying the bill. Someone is going to fund her fat paycheck. Guess who?

Comment by goon squad
2013-11-13 07:49:58

“born to uninsured illegals”

Who have multiple Nuevos Americanos anchor baby siblings who will grow up with free Medicaid, free WIC, free SNAP, free school bekfusses and lunches, and with liberty and Obamaphones for all!


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Comment by In Colorado
2013-11-13 10:32:25

free school bekfusses

They’re called “desayunos”, amigo. The sons of Aztlan don’t speak Ebonics.

Think about it. In many states you can take a written driver’s test in Spanish, but not in Ebonics.

Comment by Overtaxed
2013-11-13 11:09:11

“A friend’s wife is a neo-natal ICU nurse. With overtime she makes about 150K.

No wonder everyone wants to be a nurse. Granted, my friend’s wife is highly specialized and is paid more than the average nurse. But wages paid to US healthcare workers are much higher than those paid to comparably trained professionals in other countries.”

And this, right here, is the divergence we’ve been seeing over the last 50 years or so. Doctors used to live in the “nice house” and drive the “nice car” compared to what most of the people in the community had. Same with lawyers and other high status professions. They made more than the average guy, but not THAT MUCH more than a guy with a good blue collar job.

Fast forward to today. Your doctor probably lives in a gated community surrounded by other doctors/lawyers/etc. They drive cars that cost more than your house. They have huge boats, vacation homes, and a fat retirement account. Where they used to make perhaps 2X the blue collar worker, now they are making 10X (and maybe a lot more than that, depending on the specialty). The divergence is extreme and stark; the doctor and most of his patients no longer really live in the same world at all.

I’m picking on doctors here, but this has happened across lots of industries (including mine). My friends and I all went to good schools, and most of us continued on to good colleges. I went for IT and business, many of them went for “other stuff” (liberal arts, history, education, etc). Over the past 10 years, our lives have totally diverged, I’m going to guess that most of my friends have a household income that’s 1/5th or less of what my wife and I make. We no longer live in the same world, despite having similar backgrounds and education.

There’s an interesting book on this topic called “Coming Apart”; I never really thought about this topic until reading the book, but, as soon as I put it down, I could think of dozens of examples in my life that showed exactly what the author was talking about.

Is this bad/good? I really don’t know. What I do know is that my friendships are very different from what my parents had; all their friends went to college, got good jobs, and had nice lives. My friends who went for certain degrees and into certain jobs are similar, and mostly very successful. But most of my friends are not; they didn’t hit on the “right” fields in college (or didn’t have the aptitude) and are “scraping along” now in jobs that barely cover the cost of living a very modest lifestyle.

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Comment by Army No Va
2013-11-13 11:31:37

Return of the dominant model for most of human history.

Comment by Carl Morris
2013-11-13 11:39:16

“Special” doctors and nurses, yes. Otherwise doctors are now a bad example. Not sure our family doctors live much better than we do any more. The system has made sure as little surplus as possible has gone to them, just like the rest of us.

Comment by (Neo-) Jetfixr
2013-11-13 12:04:41

Quit bitching about health care worker pay.

Worked for me……..didn’t have to pay alimony to the ex-.

What was more fun was when both my daughters decided to “vote with their feet”, and move in with me, after a year or two living with “Chester the Molester” (aka ex-wife’s new husband)

Child Support works both ways.

Comment by rms
2013-11-13 13:08:28

“Fast forward to today. Your doctor probably lives in a gated community surrounded by other doctors/lawyers/etc. They drive cars that cost more than your house. They have huge boats, vacation homes, and a fat retirement account.”

Tell me about the trophy wife. :)

Comment by polly
2013-11-13 13:10:43

Glad that worked for you, fixer. Housing bubble helped a friend of mine out with a divorce settlement. She wanted to keep the house. He said she could have it which meant he got to keep his retirement account.

No idea how she paid for the thing on her own. She was doing legal temp work (not that well paid) when they divorced.

Comment by oxide
2013-11-13 15:53:16

I think Carl is closer to the mark. Older doctors may be raking it in, but the younger docs have $200-$300K of med school debt to pay off.

Comment by MightyMike
2013-11-13 19:33:57

Some doctors have those high student loans, but I wonder what portion of the total that is. My guess is that you went and surveyed medical students, you’d find that many of them have parents who are doctors or corporate executives or other one percenters who pay the med. school tuition for their kids.

Comment by Combotechie
2013-11-13 06:38:58

“We have to pass it to know what’s in it” = “now broken promise”

Stay tuned, there’s more to come.

Comment by azdude02
2013-11-13 06:44:49

damage control for hilary? I guess bill was making the rounds yesterday supporting this idea.

I wonder how many bills they will have to pass once they figure this disaster out?

Comment by Albuquerquedan
2013-11-13 08:10:00

It as all about control. That is what the claim that co2 is the primary driver of climate change was all about. I was checking the tables today and now 1998 averaged .62 F above the average instead of .61. NASA which uses ground based numbers in its published average instead of satellite (you cannot make this up) has consistently higher numbers than the satellite averages which do not count on third world type countries to accurately reporting data.
Since 1998 the amount of co2 in the air has soared but the global temperatures have dropped. Yet regulating a beneficial gas has become the focus of the environmental movement instead of addressing the burning of coal in China and India in a manner which fills the globe with mercury etc. It is about control and excuses to hobble our companies with high electricity rates to allow other countries and the billionaires which invested in them to make more money.

Obama and his type did not just lie about Obamacare, they lied about the primary cause of global warming between 1978 and 1998. They lied for the same reason to give government more control over people.

Comment by Bluestar
2013-11-13 10:58:31

When I looked at the most recent satellite data I don’t see a decline.

Draw a line from the left most data point (1979) to the latest data point (2013) and what is the slope of the line?

If China or India were to change their mix of power generation to reduce their toxic emissions what would be the best way to motivate them? Behavioral economics, Keynesian economics or military force?

Jack Smith AKA Bluestar

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Comment by Albuquerquedan
2013-11-13 12:34:56

There is no question about the warming from 1979 to 1998 but the increase in co2 levels did not stop in 1998 why hasn’t the temperature increased since then? But as far as toxic emissions it is quite simple. Countries that are killing the planet with toxic emissions should not be granted free trade status. There should be tariffs imposed on their goods equivalent to the costs imposed by environmental laws faced by companies that are using reasonable technology and practices to avoid toxic emissions.

Comment by Whac-A-Bubble™
2013-11-13 06:39:06

Shouldn’t the headline read “Feinstein backs Bill to allow…”?

Comment by Whac-A-Bubble™
2013-11-13 06:54:34

Bill Clinton Calls for Obama to Honor Pledge on Insurance
By Mike Dorning & Roxana Tiron - Nov 12, 2013 9:00 PM PT

Former President Bill Clinton endorsed altering a key provision of President Barack Obama’s health-care law, increasing pressure on the administration days before a House vote on a Republican proposal to let Americans keep their current plans through next year.

Clinton, who ranks as one of the most popular figures in the president’s party, stepped into a debate between the White House and some Democratic lawmakers up for re-election next year who are raising alarms over the cancellations of hundreds of thousands of individual insurance policies.

The former president said Obama should keep a pledge he repeatedly made in campaigning for the law that Americans wouldn’t lose coverage they liked when it took effect.

“Even if it takes a change to the law, the president should honor the commitment the federal government made to those people and let them keep what they’ve got,” Clinton said in an interview with the online magazine Ozy published yesterday.

Comment by jose canusi
2013-11-13 06:55:11

+1. I wonder what Obama thinks of Bill wandering into the fray and chiding him about keeping his promises. Must be really annoying.

OTOH, probably O doesn’t much care. After all, he’s the O-man, conflict is not his bag.

Comment by Strawberrypicker
2013-11-13 07:03:50

He’s the first guy in history to figure out that there is such a thing as a free lunch, so obviously he’s a messiah and a genius to all the nanny staters on our blog whose cognitive dissonance will push them into believing anything other than that he deliberately lied.

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Comment by jose canusi
2013-11-13 07:09:37

And besides, don’t disturb him when he’s playing Game of Drones. After all, there ARE priorities.

Comment by rms
2013-11-13 08:02:32

“And besides, don’t disturb him when he’s playing Game of Drones. After all, there ARE priorities.”

+1 LOL…true!

Comment by Strawberrypicker
2013-11-13 06:55:21

I said a week or so ago that this was going to be the next thing floated, oh it wasn’t Messiahcare but the evil insurance Connie’s that tricked you.

This happened because The Messiah’s minion wrote the rules causing this to happen, the same way they wrote the code causing the website to crash.

When they allow people to keep what they have, the whole thing collapses even worse.

Comment by oxide
2013-11-13 07:29:01

If it wasn’t the evil connies that canceled the plans, then why would Feinstein need to write a bill to “require” insurance companies to re-offer the plans?

I would like a real answer to this specific little question. Not the usual pontificating about the messiah or Hillary or socialism or freedom.

If Obamacare had disallowed the plans because they didn’t meet the standard, then Feinstein wouldn’t want them to be reoffered. But not only does she want them to be re-offered, she wants to REQUIRE that they be re-offered. So who MUST have yanked them?

Comment by Albuquerquedan
2013-11-13 08:46:25

“If Obamacare had disallowed the plans because they didn’t meet the standard, then Feinstein wouldn’t want them to be reoffered”

Feinstein wants them reoffered because the voters that have the plans want them reoffered. Your whole assumption is wrong. Sorry but there are many people that do not need or want mental health coverage. By mandating such coverage it drives up rates, there are other examples too numerous to list.

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Comment by Blue Skye
2013-11-13 09:21:39

It is pretty simple probably. Obamacare requires the existing policy to change because it specifies minimum coverages. If the insurance company is forced to give me coverage for a boob job or a pregnancy, then they are forced to cancel my old policy, which didn’t have that.

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Comment by oxide
2013-11-13 10:34:29

Obamacare requires the existing policy to change because it specifies minimum coverages.

I was talking about existing policies which were FINE with Obamacare standards. The insurance company themselves canceled the plans on their own, in order to throw Undesireables into the government-cheese exchanges, just as Polly’s article says. Blaming Obama for it was just a side benefit.

There are other policies that were substandard under Obamacare, but those were grandfathered in.

Comment by Ben Jones
2013-11-13 11:13:20

‘I was talking about existing policies which were FINE with Obamacare standards’

This is just sad. We’ve seen plenty of reports on people who were healthy that got policies cancelled. Now it’s all a big conspiracy to cancel profitable policies.

I guess it was inevitable. Shameless, but inevitable.

But it’s sad. No accountability for this mess. I have sat here at this desk and could see this was a slap-dab thing from the git-go. Oh sure, a bunch of bureaucrats, lobbyists and politicians can just reinvent an entire industry. Like it or not this is a business. Business doesn’t work like that.

So sure, let’s devolve into hair splitting, finger pointing. Where’s all that talk about how we’ll be forced into single-payer when this crashes? Do you think nobody read what was said, even here? Well, it’s crashing. You got what you wanted and now you want to take your finger prints off of it? No dice.

Comment by oxide
2013-11-13 11:57:32

We’ve seen plenty of reports on people who were healthy that got policies cancelled. Now it’s all a big conspiracy to cancel profitable policies.

Polly’s article has an answer for you, Ben.

“SK: If these are all the really healthy people, why would insurance plans cancel these products? That would give the people they want the most the opportunity to switch to one of their competitors.

JA: …Over time though, anybody who is in one of those risk pools is no longer meeting the requirements of the law. And people generally aren’t getting healthier. They get sicker. So the insurers are saying, why do we want to keep those policies. Let’s just move everybody toward the new ones.”

So there is precedent to dick around with policies, even for healthy people. You see that in employer insurance too. The “conspiracy” is from private insurers trying to maximize their profit.

Where’s the talk about single payer? I don’t think we’ll get single payer for a decade a least, and it won’t be directly. More likely, insurers will chase profit a little too hard, play a few too many shenangians on the Exchanges, and eventually p-o enough members of Congress to throw a couple cheaper Medicare-like public options into the mix. That’s a backdoor to eventual single-payer and everybody knows it.

Comment by Ben Jones
2013-11-13 12:17:32

‘The “conspiracy” is from private insurers trying to maximize their profit’

You must think no one is paying attention. I remember very well that NPR reported the insurance industry wrote the bill that eventually passed. No matter what twists and turns are occurring, the Democrats are responsible for it.

‘That’s a backdoor to eventual single-payer and everybody knows it’

Yeah, we all know what you and others want. You just don’t want any responsibility for the misery it would take to get there.

Luckily, the iceberg has been struck. If the people in these plans don’t sign up, there won’t be enough money to make this thing work. Feinstein and Clinton see electoral disaster ahead, and will likely help scuttle the dang thing.

Comment by oxide
2013-11-13 13:28:40

I think it’s pretty funny that you don’t want to upset the private health insurance apple cart because it would cause misery. Yet, you were all willing to destroy the entire banking system regardless of the collateral damage and misery that would result from a crash in that sector.

Anyway, if Hillary wanted to deliberately crash Obamacare, then why is Bill out there telling Obama to improve it? And if Hillary really thought the election would turn on Obamacare, she would wait a couple years for the opportune moment to scuttle it. Anyway, that’s years off. I suspect that 2016 will turn on some other issue.

And by “the misery that it takes to get there,” are you saying that the misery is temporary? That the public-option end would justify the miserable means?

Comment by Ben Jones
2013-11-13 14:39:20

‘you were all willing to destroy the entire banking system’

How did I want to destroy anything? I didn’t want to bail them out, if that’s what you mean. Interesting that about 80%+ agreed with me on that.

‘why is Bill out there telling Obama to improve it’

He said to honor the commitment to let people keep their plans. That’s death to the ACA for reasons I already said.

’she would wait a couple years’

Clinton doesn’t have a couple years. Anyway, it looks like there won’t be many Democrats left the way this thing is going.

‘are you saying that the misery is temporary’

Absolutely not. You can have misery and then it gets worse. I’ve seen single payer; it sucks.

‘you don’t want to upset the private health insurance apple cart’

I don’t want any part of it because insurance is a scam. Plus it’s what makes costs go up in the first place. I’ve noticed pretty much everybody here who is for this thing already has insurance. I don’t care if you want to be involved with these corporations, but leave me out of it.

Comment by Blue Skye
2013-11-13 14:56:32

It is pretty obvious that the misery that is Obamacare is on the working person. It is pretty obvious that the misery that would be taking down the Federal Reserve and the too-big-to fail banks would be on the money powers. Since, as your sociopathic rant yesterday makes clear, you would like to torture those rich folks, it must follow that you hate the average working person just as much. Yet you serve the banks, and you work for the taxpayer. Must be kind of difficult to keep a level keel.

Comment by Strawberrypicker
2013-11-13 19:41:23

Bush’s DOJ convicted Skilling. Where is the O man’s similar big get?

Comment by polly
2013-11-13 09:25:51

Oxide, this is very long, but it explains the individual health insurance market as well as I have ever seen. I’ll pull out a brief bit about the most important part, but read the whole thing if you have time.

SK: Before the health-care law, would you see a lot of cancellations in the individual market?

JA: When somebody has an individual policy, they have guaranteed renewability. So you think, once I get in, I’m protected, and they can’t raise my rates because of my health status. When I was running Pennyslvania’s insurance market, I would constantly see companies changing their coverage.

The insurer would offer a new policy, and the insurance company would say, look at how great this policy is. And I would ask whether they were taking everybody, and they would say no, we’ll take the people who pass underwriting. The only people who stay in the old policy then are the people who can’t pass underwriting. So there you’ll have a risk pool with unhealthy people.

SK: And I’d imagine their rates would go up?

JA: Yes, because they could rate each policy. A lot of people have left the original policy, and so they raise the rate. This was the question I got asked in one meeting I was in with the president before I got the job [at HHS]. And it was a question I would ask when I would see an insurer submit a 30 percent increase on some policy. My next question would be who is getting a decrease, because I know your company is not getting a 30 percent profit margin.

That all is changing. And that was the question I got asked by the president, why do these guys have to slice and dice the risk pool?

SK: How does that take us to the situation we have right now?

JA: We come to the current situation in that kind of context. The people who are probably most upset are people who have been doing pretty well over time. They might not even realize exactly how this happened. But they’re the healthy people who have been offered new coverage, and they’re pretty comfortable with that.

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Comment by polly
2013-11-13 10:12:47

Sorry. Not all that long. Just looked it because of the comments. I still think it explains the pricing strategy that the insurance companies used to get sicker people into separate risk pools so they could charge them so much they would drop coverage which allowed them to keep healthy people on the books at much lower rates. Until, of course, the healthy people got sick (even once) and became the people who couldn’t pass underwriting for new policies which left them in the bad risk pools with much, much higher premiums and eventually dropping out completely because they couldn’t afford it.

Comment by oxide
2013-11-13 11:34:57

Polly, here is an important snippet from the article:

“So, yes, it’s true they did not have to take their policy out of grandfathering,”*

So Obamacare allowed the old policies to be grandfathered in even if they were substandard. But it was the insurance companies who took the plan out voluntarily. And it’s nothing new — they’ve been cancelling policies in order to “slice and dice the risk pool” for years. They just found a new scapegoat.

*Ario goes on to say that tossing the cancelled people into the exchanges is a “good” thing, because at the end of the day they will get a better plan. But that’s the consequence of what the insurance companies did, not Obamacare.

Comment by polly
2013-11-13 11:45:26

I think if you read it carefully that they are only grandfathered if they existed in 2010. But, because the industry has been playing the “offer a new policy/don’t allow sick people into the new one/leave only sick people in the old policy/get to cancel the old policy because the pool of sick people can’t afford the prices on their new risk pool” game for so long that it is likely not many policies were grandfathered. They change them every year or every other year to play the risk pool game (and they have been doing that for a long time). It has been almost 4 years since 2010.

Comment by oxide
2013-11-13 12:05:19

I did see that, and I read that many of these policies are 1-2 year contracts anyway. So, evidently, insurance companies had been cancelling/changing their policies in 2010, 2011, and 2012. So why are individuals only raising a stink only NOW?

Or, perhaps, the insurance companies laid low those 3 years and saved all the cancellations until the Exchanges were set up and they could blame Obama. “Wait for the opportune moment, when it’s at most profit” for them.

(Jack Sparrow was wise beyond centuries…)

Comment by polly
2013-11-13 12:47:58

Yeah, that is possible. The thing is, that they have to pay out 80% in medical losses (that is payments to doctors and pharmacies and other health care providers to you and me). And they can advertise to try to reach certain demograohics, I suppose, but they can’t do “opposition research” anymore to keep sick people from signing up. Their whole model has changed. As near as I can tell, the only way for them to make more money is to have as many people sign up as possible and get their pricing right so they pay out 80% but not more (money left on the table) and not less (avoid administrative costs for premium refunds). Their incentives have changed completely. Old model was to avoid/get rid of certain people like the plague (pun intended).

Comment by Bill, just South of Irvine, CA
2013-11-13 16:29:13

Yuk yuk! Two nanny staters talking technicals of nanny statism to each other! Please continue!

Comment by MightyMike
2013-11-13 18:09:58

You’re mistaken. They’re discussing our wonderful healthcare insurance industry.

Comment by Housing Analyst
2013-11-13 19:02:09

Oh the tall tales LIEberals tell….

Comment by cactus
2013-11-13 10:01:44

But not only does she want them to be re-offered, she wants to REQUIRE that they be re-offered. ‘

Politics and I don’t think she knows what shes doing anyway

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Comment by MacBeth
2013-11-13 08:32:52

“When they allow people to keep what they have, the whole thing collapses even worse…”

Yep…and it’s all going according to plan.

Statists determined to ban individual liberty deliberately create crises where none exist.

The latest “solution” stated here - to reinstate - is designed to muddy the waters and keep the people arguing and highly confused. It’s part of the plan. (Trust Feinstein and Clinton - seriously? Based on their past behavior?)

Statists want power. They’ll negate, admonish and trash the idea of ethics and morals at every turn.

ObamaCare is inherently immoral. The desired outcome of ObamaCare is to dictate. It is not to improve healthcare. And it’s not to “redistribute wealth” either…the goal is beyond that.

Once you understand and accept that concept, you can start making other plans.

Think “black market healthcare” via bartering. Don’t forget that doctors, nurses and other healthcare professionals being forced out of practice will have to earn their keep somehow.

Think about getting your medical care overseas. (A possibility until it is eventually banned or taxed out of existence).

Comment by MightyMike
2013-11-13 11:32:20

ObamaCare is inherently immoral. The desired outcome of ObamaCare is to dictate. It is not to improve healthcare. And it’s not to “redistribute wealth” either…the goal is beyond that.

Do you have any evidence to back up this assertion?

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Comment by oxide
2013-11-13 13:29:47

Check the Gospel of Thomas.

Comment by Housing Analyst
2013-11-13 17:08:13

Hello Donkey.

Comment by Bill, just South of Irvine, CA
2013-11-13 16:30:53

Macbeth, this is partly what my gold is for.

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Comment by Whac-A-Bubble™
2013-11-13 06:55:52

Do members of the 1% political class give a flying fark about approval ratings? If so, why?

Comment by Whac-A-Bubble™
2013-11-13 06:57:40

Congress Approval Sinks to Record Low 9 Percent in Survey
By Michael C. Bender - Nov 12, 2013 9:00 PM PT

Congress’s job-approval rating fell to a 39-year low as a result of the budget standoff that closed the federal government for 16 days, underscoring the hurdle lawmakers face in next year’s re-election races.

The 9 percent approval in a Nov. 7-10 survey eclipsed the previous low of 10 percent, registered twice last year, according to a Gallup poll released yesterday.

“Incumbents have to watch everything in this political environment,” said Guy Harrison, a former executive director of the National Republican Congressional Committee. “You’re in an environment where if you get a cut, it can turn septic very quickly.”

Senate Democrats and House Republicans are trying to protect their narrow majorities next year, while quelling intra-party turmoil. Several Senate Democrats seeking re-election in states that President Barack Obama lost in 2012 are pushing for revisions to his signature Affordable Care Act. Business interests, such as the U.S. Chamber of Commerce, and the limited-government Tea Party movement are battling for the future of the Republican Party in several primary races.

The public dissatisfaction has clipped Obama, too. A poll from Quinnipiac University released yesterday shows U.S. voters disapproved of his performance, 54 percent to 39 percent.

Obama’s slide in the poll follows the troubled rollout of his health-care law and the president’s apology over some individuals seeing their insurance plans canceled after he had promised they could keep them.

Comment by my failure to respect is unacceptable
2013-11-13 07:28:23

Who are these 9% people?

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Comment by Albuquerquedan
2013-11-13 13:01:00

Latest polls out show the generic republicans running neck and neck with the generic democrats. Just a few weeks ago the democrats had a nine point advantage. In the late 80’s the democrats had the sense to repeal a tax on seniors to fund long term care, we will see if they are smart enough to repeal prior to 2014 or they will wait for 2010 type carnage.

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Comment by Housing Analyst
2013-11-13 13:11:05

WGAF. Both are corrupt.

Comment by measton
2013-11-13 11:46:08

The difference of course overtaxed is that your job could be outsourced. Foreigners can be given visas to work in dark holes doing what you do and no one knows the difference. Doctors Nurses Lawyers etc so far have not been outsourced. Make no mistake about it their time is coming. They work for a living and workers will not be allowed to maintain their wealth. My brother is a surgeon and every year medicare cuts payments to doctors but they are not allowed to bargain with drug companies and device makers for cheaper drugs and devices. They have to pay what these companies demand. The drug companies price their drugs at nose bleed elevations knowing that those with medicare and good insurance will pay these rates. Those that fall through the cracks are given vouchers to cover copays, and occasionally they throw out free drug to those without insurance but they then deduct this as charity and deduct it from their taxes. My best friends wife is a nurse and they are moving more and more jobs to nurse assistants making 10 bucks an hour and making nurses manage more and more patients. Lawyers are also being hit. Prior posters have put out articles on the unemployment rate for lawyers. Work is being off shored as well. Large firms with influence in terms of who they know in politics and on the bench are getting rich but smaller firms not so much. Then there is tax policy which taxes these groups at the highest rate per dollar earned. Effective tax rates for this group are in the mid 20% range while the elites pay less than 10% on earnings. Next up will be means testing for medicare and SS. These cuts will be a rounding error for the elites but will hit the upper middle class and those in the 90-99% range.

Comment by inchbyinch
2013-11-13 13:57:25

You all hear about the push for cholesterol drugs to be expanded to those currently left behind. Rope everyone in.
I read that BP at 120/80 is now considered pre-hypertension. wth
Diabetes use to be at a 140-145 count and is now 124-129. Can big pharma be anymore corrupt? And buying off medical research universities was brilliant. Scary stuff.

Comment by oxide
2013-11-13 17:14:27

Right on. Who is REALLY angling for “control” here?

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Comment by Whac-A-Bubble™
2013-11-13 06:35:15

What is more dangerous: Bubbles or deflation?

Comment by Whac-A-Bubble™
2013-11-13 06:37:38

Central Banks Risk Asset Bubbles in Battle With Deflation Danger
By Rich Miller, Simon Kennedy & Michelle Jamrisko - Nov 12, 2013 7:53 PM PT

Central banks are finding it’s easier to push up stock and home prices than it is to prevent inflation from falling short of their targets.

While declining costs for everything from gasoline to coffee can be good news for consumers, disinflation makes it harder for borrowers to pay off debts and businesses to boost profits. The greater danger comes when disinflation turns into deflation, which leads households to delay purchases in anticipation of even lower prices and companies to postpone investment and hiring as demand for their products dries up.

“There is definitely a whiff of disinflation again taking hold globally,” Robert Sinche, global strategist at Pierpont Securities Holdings LLC in Stamford, Connecticut, said Nov. 5 on Bloomberg Radio’s “Bloomberg Surveillance.”

Federal Reserve Chairman Ben S. Bernanke and his central-bank counterparts are trying to avert the deflationary danger by pumping up their economies with lower interest rates and monetary stimulus. They have bet the run-up in stock and home prices they’ve engineered would boost consumer and corporate confidence and spur faster growth and higher inflation. Now they’re having to maintain or intensify their aid — running the risk those efforts do more harm than good by boosting equity and property prices to unsustainable levels.

“You have a wall of liquidity” that’s “leading to asset inflation and eventually to bubbles,” Nouriel Roubini, chairman of Roubini Global Economics LLC, said Nov. 7 on Bloomberg Television’s “Street Smart.”

Comment by Whac-A-Bubble™
2013-11-13 06:41:28

Market Snapshot
STOXX 50 3,002.62 -32.06 -1.06%
FTSE 100 6,624.26 -102.53 -1.52%
DAX 8,987.84 -88.64 -0.98%

Asia Stocks Drop on China Plenum Disappointment, Fed Bets

By Yoshiaki Nohara - Nov 13, 2013 12:50 AM PT

Asian stocks fell, with the benchmark index headed for a five-week low, after China’s leaders failed to outline steps to curb state dominance of the economy and amid bets the Federal Reserve may start reducing stimulus next month.

Banks slumped in Hong Kong after a communique at the end of China’s four-day plenum made scant mention of financial reforms. Tencent Holdings Ltd., China’s biggest Internet company, fell 4 percent after a news report quoted its chairman saying the company’s valuation is “scarily” high. Noble Group Ltd. lost 2.8 percent in Singapore after Asia’s largest commodity trader by sales said profit slumped. Pioneer Corp. surged 22 percent after the Japanese maker of car stereos posted an unexpected first-half operating profit.

The MSCI Asia Pacific Index dropped 0.9 percent to 138.50 as of 5:19 p.m. in Tokyo, poised for its first decline in three days and the lowest close since Oct. 8. All 10 industry groups on the measure fell.

Quite a few people put on their positions ahead of the communique, expecting actionable moves to be made, but that’s not the case,” said Andrew Sullivan, director of sales trading at Kim Eng Securities in Hong Kong. “The market is just disappointed.”

Comment by azdude02
2013-11-13 06:47:46

deflation cause the bankers get hurt

With bubbles they just print a bunch of money after they pop and blame each other for years until people forget about it.

Comment by Whac-A-Bubble™
2013-11-13 07:02:12

Actually they just pretend not to see the bubbles they created until they are only visible through the rear view mirror.

Comment by Overtaxed
2013-11-13 06:58:00

Depends if you’re a borrower or a lender. :)

Comment by Whac-A-Bubble™
2013-11-13 07:07:19

Neither a borrower nor a lender be. For loan oft loses both itself and friend, and borrowing dulls the edge of husbandry.

– Shakespeare’s Polonius

Comment by Blue Skye
2013-11-13 07:42:43

Borrowers win in the early stages of a credit pyramid, then lose when it crashes. Lenders win in the early stages of a credit pyramid, then walk with the profits when it crashes. Savers lose the whole way up and hope for some relief when the pyramid crashes.

Comment by rms
2013-11-13 08:07:17

“What is more dangerous: Bubbles or deflation?”

A question Nixon should have asked prior to dismantling the gold standard.

Comment by Blue Skye
2013-11-13 08:48:20

Maybe it was more fractional reserve banking gone wild, which resulted in the gold reserves being inadequate to honor the outstanding Dollar Notes. It was a faux gold standard by Nixon’s time. The only question for Nixon was to give our gold reserves to France, or not.

Comment by cactus
2013-11-13 10:04:45

What is more dangerous: Bubbles or deflation?

deflation just ask Bernake

Comment by phony scandals
2013-11-13 06:58:34

Federal Reserve Whistleblower Tells America The REAL Reason For Quantitative Easing

Michael Snyder
Economic Collapse
November 13, 2013

A banker named Andrew Huszar that helped manage the Federal Reserve’s quantitative easing program during 2009 and 2010 is publicly apologizing for what he has done. He says that quantitative easing has accomplished next to nothing for the average person on the street. Instead, he says that it has been “the greatest backdoor Wall Street bailout of all time.” And of course the cold, hard economic numbers support what Huszar is saying.

The percentage of working age Americans with a job has not improved at all during the quantitative easing era, and median household income has actually steadily declined during that time frame. Meanwhile, U.S. stock prices have doubled overall, and the stock prices of the big Wall Street banks have tripled. So who benefits from quantitative easing? It doesn’t take a genius to figure it out, and now Andrew Huszar is blowing the whistle on the whole thing.

From 2009 to 2010, Huszar was responsible for managing the Fed’s purchase of approximately $1.25 trillion worth of mortgage-backed securities. At the time, he thought that it was a dream job, but now he is apologizing to the rest of the country for what happened…

I can only say: I’m sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed’s first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I’ve come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.

When the first round of quantitative easing ended, Huszar says that it was incredibly obvious that QE had done very little to benefit average Americans but that it had been “an absolute coup for Wall Street”…

Trading for the first round of QE ended on March 31, 2010. The final results confirmed that, while there had been only trivial relief for Main Street, the U.S. central bank’s bond purchases had been an absolute coup for Wall Street. The banks hadn’t just benefited from the lower cost of making loans. They’d also enjoyed huge capital gains on the rising values of their securities holdings and fat commissions from brokering most of the Fed’s QE transactions. Wall Street had experienced its most profitable year ever in 2009, and 2010 was starting off in much the same way.

You’d think the Fed would have finally stopped to question the wisdom of QE. Think again. Only a few months later—after a 14% drop in the U.S. stock market and renewed weakening in the banking sector—the Fed announced a new round of bond buying: QE2. Germany’s finance minister, Wolfgang Schäuble, immediately called the decision “clueless.”

That was when I realized the Fed had lost any remaining ability to think independently from Wall Street.

Of course the fact that the Fed cannot think independently from Wall Street should not be a surprise to any of my regular readers. As I have written about repeatedly, the Federal Reserve was created by the Wall Street bankers for the benefit of the Wall Street bankers. When the Federal Reserve serves the interests of Wall Street, it is simply doing what it was designed to do. And according to Huszar, quantitative easing has been one giant “subsidy” for Wall Street banks…

Having racked up hundreds of billions of dollars in opaque Fed subsidies, U.S. banks have seen their collective stock price triple since March 2009. The biggest ones have only become more of a cartel: 0.2% of them now control more than 70% of the U.S. bank assets.

But Huszar is certainly not the only one on Wall Street that acknowledges these things. For example, just check out what billionaire hedge fund manager Stanley Druckenmiller told CNBC about quantitative easing…

“This is fantastic for every rich person,” he said Thursday, a day after the Fed’s stunning decision to delay tightening its monetary policy. “This is the biggest redistribution of wealth from the middle class and the poor to the rich ever.”

“Who owns assets—the rich, the billionaires. You think Warren Buffett hates this stuff? You think I hate this stuff? I had a very good day yesterday.”

Druckenmiller, whose net worth is estimated at more than $2 billion, said that the implication of the Fed’s policy is that the rich will spend their wealth and create jobs—essentially betting on “trickle-down economics.”

“I mean, maybe this trickle-down monetary policy that gives money to billionaires and hopefully we go spend it is going to work,” he said. “But it hasn’t worked for five years.”

And Donald Trump said essentially the same thing when he made the following statement on CNBC about quantitative easing…

“People like me will benefit from this.”

The American people are still being told that quantitative easing is “economic stimulus” which will make the lives of average Americans better.

That is a flat out lie and the folks over at the Federal Reserve know this.

In fact, a very interesting study conducted for the Bank of England shows that quantitative easing actually increases the gap between the wealthy and the poor…

It said that the Bank of England’s policies of quantitative easing – similar to the Fed’s – had benefited mainly the wealthy.

Specifically, it said that its QE program had boosted the value of stocks and bonds by 26 percent, or about $970 billion. It said that about 40 percent of those gains went to the richest 5 percent of British households.

Many said the BOE’s easing added to social anger and unrest. Dhaval Joshi, of BCA Research wrote that “QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it.”

And this is exactly what has happened in the United States as well.

U.S. stocks have risen 108% while Barack Obama has been in the White House.

And who owns stocks?

The wealthy do. In fact, 82 percent of all individually held stocks are owned by the wealthiest 5 percent of all Americans.

Meanwhile, things have continued to get even tougher for ordinary Americans.

While Obama has been in the White House, the percentage of working age Americans with a job has declined from 60.6% to 58.3%, median household income has declined for five years in a row, and poverty has been absolutely exploding.

But the fact that it has been very good for Wall Street while doing essentially nothing for ordinary Americans is not the biggest problem with quantitative easing.

The biggest problem with quantitative easing is that it is destroying worldwide faith in the U.S. dollar and in the U.S. financial system.

In recent years, the Federal Reserve has started to behave like the Weimar Republic. Just check out the chart below…

The rest of the world is watching the Fed go crazy, and they are beginning to openly wonder why they should continue to use the U.S. dollar as the de facto reserve currency of the planet.

Right now, most global trade involves the use of U.S. dollars. In fact, far more U.S. dollars are actually used outside of the United States than are used inside the country. This creates a tremendous demand for U.S. dollars around the planet, and it keeps the value of the U.S. dollar at a level that is far higher than it otherwise would be.

If the rest of the world decides to start moving away from the U.S. dollar (and this is already starting to happen), then the demand for the U.S. dollar will fall and we will not be able to import oil from the Middle East and cheap plastic trinkets from China so inexpensively anymore.

In addition, major exporting nations such as China and Saudi Arabia end up with giant piles of U.S. dollars due to their trading activities. Instead of just sitting on all of that cash, they tend to reinvest much of it back into U.S. Treasury securities. This increases demand for U.S. debt and drives down interest rates.

If the Federal Reserve continues to wildly create money out of thin air with no end in sight, the rest of the world may decide to stop lending us trillions of dollars at ultra-low interest rates.

When we get to that point, it is going to be absolutely disastrous for the U.S. economy and the U.S. financial system. If you doubt this, just read this article.

The only way that the game can continue is for the rest of the world to continue to be irrational and to continue to ignore the reckless behavior of the Federal Reserve.

We desperately need the rest of the planet “to ignore the man behind the curtain”. We desperately need them to keep using our dollars that are rapidly being devalued and to keep loaning us money at rates that are far below the real rate of inflation.

If the rest of the globe starts behaving rationally at some point, and they eventually will, then the game will be over.

Let us hope and pray that we still have a bit more time until that happens.

Comment by Blue Skye
2013-11-13 07:44:02

Captain Obvious.

Comment by Ben Jones
2013-11-13 07:49:19

‘Huszar also said that QE thwarted the idea of reining in banks “too big to fail.”

“By virtue of reflating the markets, we’ve potentially taken the emphasis out of breaking up what is ultimately a banking cartel in the United States,” he said, adding that “0.2 percent of banks control 70 percent of assets in this country.”

And they’ve foamed the runway with millions of shack buyers/HARP cliff-hangers. Can’t say you weren’t warned.

Comment by azdude02
2013-11-13 08:16:59

how far in advance will wall street and their friends know the punchbowl will be taken away? Seems like they make money on the way up but a lot more on the way down.

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Comment by Albuquerquedan
2013-11-13 08:49:28

I remember when I said this at the beginning of the Obama administration telling everyone that Obama was pursuing policies that were enriching the wealthy and I was tarred and feathered by the Obama supporters.

Comment by sleepless_near_seattle
2013-11-13 12:05:59

+1…but thanks for posting, phony.

Comment by rms
2013-11-13 08:32:02

“Federal Reserve Whistleblower Tells America The REAL Reason For Quantitative Easing”

Well, aside from that, Mrs. Lincoln, what did you think of the play?

Comment by Ben Jones
2013-11-13 09:09:50

Well, we certainly shouldn’t audit these people.

“We need uncertainty,” counters (David) Stockman, Ronald Reagan’s budget director, a former Michigan Congressman and founder of Heartland Industrial Partners, a private equity firm. “Fed policy is off the deep end so far that we’re in danger of financial instability of massive magnitude. I praise Rand Paul for trying to stop this nomination…zero interest rates for six years is an invitation to massive speculation, carry trades, the best thing the 1% ever had happen to them.”

Comment by Blue Skye
2013-11-13 09:29:25

Jessup: You can’t handle the truth… You don’t want the truth…

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Comment by rms
2013-11-13 13:30:51

“I praise Rand Paul for trying to stop this nomination…”

I was under the impression that the current federal reserve nomination was rather like Mugabe running for elected office in Zimbabwe; didn’t realize we had another option.

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Comment by Neuromance
2013-11-13 10:10:56

• The Federal Reserve gets away with this because they have the “dual mandate” which includes maximizing employment.

• They should not have the responsibility of maximizing employment.

• Why? Because it leads to central-planning like behavior. A unique economic behemoth, capable of printing money, making huge purchases in the economy which have no impact on it, leads to massive malinvestment and distortions.

• Leaders always have a tendency to draw power unto themselves. That is why we have checks and balances within the government. That is why churches, as competing power structures, were not allowed to commingle with government. An entity like the Fed, a GSE on steroids, the tail which wags the dog, will have the same propensity. That is another reason why it must always have a limited scope of responsibility and authority.

Comment by Neuromance
2013-11-13 12:54:00

About central planning.

Venezuela vows to take other stores in attack on retailers
By Girish Gupta
10:30 p.m. EST November 11, 2013

President Nicolás Maduro ordered managers of electronics chain Daka to lower prices or face prosecution.

CARACAS, Venezuela — Venezuela’s President Nicolás Maduro intensified his perceived fight Monday against “bourgeois parasites” he accuses of an economic war against the socialist country by threatening to force more stores to sell their merchandise at cut-rate prices.

National guardsmen, some of whom had assault rifles, were positioned around outlets of an electronics chain that Maduro has ordered to lower prices or face prosecution. Thousands of people lined up at the Daka stores hoping for a bargain after the government forced the companies to charge “fair” prices.

Five managers of electronic retailers including Daka are being threatened with prosecution for unjustifiable price hikes, the Venezuela government said. More stores may be at risk, as well. Government inspectors were dispatched to check prices at an array of other businesses.

“This is for the good of the nation,” Maduro said, referring to the military’s occupation of Daka. “Leave nothing on the shelves, nothing in the warehouses … Let nothing remain in stock!”

The assault against business comes amid a severe shortage of basic goods and extreme inflation, which is currently at an annual rate of 54.3%. Both are tied to policies of the government, which is boosting public spending and printing money in record amounts to pay for it.

Venezuela’s central bank said the country’s money supply grew 70% in the past year. As a result, the value of the Venezuela bolivar continues to drop at a time when the country must import increasing amounts of basics like food and even toilet paper due to failed state schemes for running the economy.

Venezuela’s obviously a banana republic, poorly governed. Japan and the US would never engage in such ill-conceived schemes.

Comment by Albuquerquedan
2013-11-13 17:07:15

Yes, but our allowing the money supply to increase by 300% will not cause inflation because Obama has the power to stop the oceans from rising.

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Comment by Housing Analyst
2013-11-13 17:11:47

That’s not inflation….. carry on.

Comment by jane
2013-11-13 20:37:16

Reminds me of the bulging-eyed populists on national tee vee, frothing at the mouth whilst shouting “LAS MALVINAS!!! LAS MALVINAS!!!” in response to an Argentine junta’s invasion of the Falkland Islands in 1982.

The junta, faced with massive inflation, children with bloated bellies sleeping on the sidewalks, and massive shortages of foodstuffs despite the fact that they could double in price overnight…embarked on a diversionary tactic with which to unify the people, who had been calling for an overthrow.

The junta invaded the Falklands, thereby inciting a nationalistic fervor which enabled the starving masses to forget their empty bellies, and quelled the calls for government overthrow.

Despite supply line challenges, the Brits kicked their a**es. On the Argentine domestic front, that bit was suppressed until it could no longer be hidden. Took several months, pre-Internet. The passions of the unruly masses devolved back into torpor, having been dissipated on a diversionary target.

It is virtually impossible to underestimate the ignorance of the masses, or their willingness to be manipulated.

Sound familiar? History may not repeat itself, but it does rhyme (paraphrase of Mark Twain aphorism).

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Comment by WT Economist
2013-11-13 10:53:17

“If the rest of the world decides to start moving away from the U.S. dollar (and this is already starting to happen), then the demand for the U.S. dollar will fall and we will not be able to import oil from the Middle East and cheap plastic trinkets from China so inexpensively anymore.”

Something tells me they will be worse off than we are when that happens.

Comment by Whac-A-Bubble™
2013-11-13 07:08:54

Is it blue skies and ever-rising prices from here on out for the stock market?

Comment by Whac-A-Bubble™
2013-11-13 07:10:34

Where’s the market oopmh? Cisco and a turnaround on Exxon Mobil
November 13, 2013, 7:11 AM
By Shawn Langlois

Unless you weaseled into pre-IPO Twitter shares or loaded up on Potbelly before yesterday’s earnings, the market is lacking a certain oomph these days. That’s not necessarily a bad thing. The only true excitement we’re likely to see with stocks pushing these levels is the kind that involves fire sales, margin calls and laptops through the window.

But as we’ve bandied about in this space before, and as Gluskin Sheff’s David Rosenberg just wrote to subscribers: The popular perception that a nasty correction is imminent could be the very thing that prevents it from happening. This bubble just can’t be a bubble if everybody keeps saying it’s a bubble.

Then again, some of the data he cites tells a different story. We haven’t seen a 10% pullback in 530 trading days, and sentiment readings are running high at 65% bullish on stocks. Plus, net bullish option contracts have surged from a month ago.

“This is otherwise known as performance chasing,” he said. And if we chase our way into this — perhaps the most telegraphed bubble pop in history — we’ll be able to look back at the Twitter (TWTR -2.33%) IPO as the pin-prick moment.

Comment by azdude02
2013-11-13 07:51:55

We all know its a bubble but the FED is hell bent on keeping the stock market high. As long as there is QE the market wont crash.

Asset bubbles are driving the economy, it sure isnt and job growth. Lots of people are out of work but as long as stocks and homes keep levitating they are happy.

Comment by tj
2013-11-13 08:02:50

As long as there is QE the market wont crash.

QE won’t prevent the crash, only delay it.

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Comment by Ben Jones
2013-11-13 08:04:43

‘As long as there is QE the market wont crash’

I see it somewhat differently. Before there was QE, it was the plunge protection team people talked about. But the idea there was a secret effort to stop panics. What the Fed is doing now is life support.

If you step back from the day to day stock market circus, you have to wonder; is this all we have now? This country used to be an economic powerhouse. Sure, we’ve had some bubbles, but there was a real economy there too. What do we have now? Cell phones made in China? Twitter?

In the wake of the first melt-down, we here knew TARP was a fraud. Changing the accounting rules for banks was a fraud. Those were one time things, really. I’ve mentioned it was startling when the Fed and the government decided that housing was going to get us out of this funk. Housing? Jeebus, that’s the best you’ve got Bernanke? We’re relying on this idiot to get the economy going?

I can remember a time when we didn’t get up every morning and look east, to Washington DC. When we had a real economy. The true damage from all this is not what’s happening. But what’s not happening.

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Comment by azdude02
2013-11-13 08:24:23

I hear you. Now we have asset bubbles and they hope some of that money trickles down to the guy on food stamps.

Dude I look around the area I’m in and there is no growth going on at all. I went down to run some errands yesterday and some of the same buildings are still vacant after 5 years. Now a couple buildings have been occupied by dollar stores.

Absolutely nothing has changed around here. More debt is the only thing keeping things afloat.

Comment by In Colorado
2013-11-13 10:27:16

I see it somewhat differently. Before there was QE, it was the plunge protection team people talked about. But the idea there was a secret effort to stop panics. What the Fed is doing now is life support.

I couldn’t agree more.

Comment by AbsoluteBeginner
2013-11-13 12:33:37

‘Dude I look around the area I’m in and there is no growth going on at all. I went down to run some errands yesterday and some of the same buildings are still vacant after 5 years.’

Well, they are not just going to give the real estate away. Town down the road from where I live right now had local merchant erect a McMansion-like retail store building about 8 years ago, height of real estate mania. Drove by it last week. Still not occupied with anything and up for sale/lease. Don’t know the particulars other than maybe the merchant spent big buckaroos to get the building built…for what? To sit years w/o any cash flow? I saw ads on local RE sites for what they wanted for monthly lease rates. Guess they balked at taking a lower market rate and locking themselves into a bourgeois contract now the building sits empty. By my calcs, they lost out on perhaps $200K in cash flow. I think the family has money, so they probably do not care. But I drive by the building every now and then and think, geez, good location but probably priced too high that nobody wants to touch it.

Comment by Housing Analyst
2013-11-13 13:00:10

Look folks…. Nearly everyone is brainwashed. Don’t believe me? Just ask a simple question about current events. They will invoke the most recent media blurb. Try this. It’s true. They ignore their own losses just to repeat the media blurb. It’s stunning.

The strangest thing I’ve seen in my entire life is what has occurred over the last 13 years….. the mass detachment from reality is truly something hideously spectacular.

Comment by sleepless_near_seattle
2013-11-13 14:29:11

Try this. It’s true.

Seems to hold within my circle for sure…

Comment by jane
2013-11-13 20:46:07

HA, it’s the newspeak.

Your observation, of course, aligns with my own observations.

Comment by Whac-A-Bubble™
2013-11-13 07:16:13

Nov. 13, 2013, 8:57 a.m. EST
Stock futures hit by China worries, Europe rate fears
Recent IPO Potbelly jumps in premarket trading; Yellen testimony awaited
By Victor Reklaitis and Barbara Kollmeyer, MarketWatch

NEW YORK (MarketWatch) — U.S. stock futures fell Wednesday, joining declines for global equities with China’s market hit hard after the country’s leaders failed to provide clear policy direction.

European stocks also dropped after the Bank of England indicated it could raise interest rates sooner than expected. In addition, strategists cited positioning ahead of Thursday’s testimony by Janet Yellen, who is expected to take over leadership of the Federal Reserve.

“It could be that traders expect her to try to sound less dovish than she is perceived,” said Stephen Guilfoyle, chief economist at, in emailed comments.

Futures for the Dow Jones Industrial Average (DJZ3 -0.54%) fell 93 points, or 0.6%, to 15,617, while futures for the Standard & Poor’s 500 index (SPZ3 -0.53%) fell 10.40 points, or 0.6%, to 1,754.70. Futures for the Nasdaq 100 (NDZ3 -0.71%) dropped 24 points, or 0.7%, to 3,340.50.

Comment by phony scandals
2013-11-13 07:17:45

“This is fantastic for every rich person,” he said Thursday, a day after the Fed’s stunning decision to delay tightening its monetary policy. “This is the biggest redistribution of wealth from the middle class and the poor to the rich ever.”

Comment by Ben Jones
2013-11-13 08:27:40

‘On Friday the U.S. Labor Department reported that 720,000 Americans left the labor force.’

‘This exodus pushed the labor force participation rate down to 62.8 percent, the lowest level since 1978. One out of three adults in neither working nor actively looking for work.’

‘So why does the size of the labor force matter? For one, if people are leaving the labor force for economic reasons (and they’re not going back to school), it would mean that the economy is in much worse shape than the official unemployment rate suggests. The jobless rate is officially 7.3 percent, but that only counts people who are actively seeking work — not labor force dropouts.’

‘The size of the labor force also goes a long way in determining America’s growth prospects. If baby boomers are retiring faster than expected, then long-run U.S. economic growth will be lower than projected.’

‘Even worse, if discouraged workers are dropping out of the labor force entirely, they may never make their way back into jobs. Their skills erode over time. Companies don’t bother to look at their resumes. They essentially become unemployable.’

‘That’s a massive human tragedy. It could also mean the U.S. economy will be significantly weaker in future.’

There should be all hands on deck to sort this out. What are we doing? Encouraging people to go into debt to buy a house? Arguing about some half-a**ed health care plan?

Comment by Whac-A-Bubble™
2013-11-13 10:02:38

U.S. October Jobs Report Shows Labor Force Shrinks to 35-Year Low
Economics / Employment Nov 12, 2013 - 01:24 PM GMT
By: Money_Morning

Diane Alter writes: Despite worries the 16-day government shutdown would weigh on job growth, the October jobs report was surprisingly strong.

That’s what the government is reporting, anyway…

According to the Labor Department numbers released today (Friday), employers increased headcount by 204,000 in October, handily beating the 120,000 many economists expected. The government report also showed revisions to late summer numbers, revealing an extra 60,000 jobs total were created in August and September.

Although the October report included the robust 204,000 number, it was full of uninspiring data:

- The labor force participation rate continues to drop. It slipped to 62.8% from 63.2%, last month, the lowest read since March 1978. An astonishing 932,000 - nearly 1 million Americans - dropped out of the labor force last month, bringing the rate to a fresh 35-year low. It marks the third-highest monthly increase in individuals leaving the labor force in U.S. history. “At this pace, the people out of the labor force will surpass the working Americans in about 4 years,” writes ZeroHedge.

- October job gains were highest among the lowest-paying sectors. These are actually are a “net drag” on the economy, according to The Wall Street Journal, due to the amount of assisted government benefits these workers receive. A University of California, Berkley, and University of Illinois study found front-line workers at fast-food restaurants, and their families, received at least $7 billon annually in public benefits to supplement their wages.

- The federal government continued to trim workers, cutting 12,000 (one-third of which were at the U.S. Postal Service). That brings the year-to-date total to 94,000. Excluding the postal service, the October report showed federal jobs at the lowest level since 2009.

- The number of long-term unemployed held steady at 4.1 million, accounting for 36.1% of the unemployed.

- The number of temporary workers rose by nearly 500,000. The mushrooming number likely includes non-essential government employees and government contractors affected by the government shutdown. The number underscores the distorted picture the BLS report paints of the labor market, in part due to the thousands of federal workers furloughed during the payroll period upon which the jobs data is based.

- The unemployment rate rose to 7.3% from 7.2% in September. The official unemployment rate counts only those workers who are actively seeking work. If the same percentage of adults were in the workforce today as when U.S. President Barack Obama took office, the unemployment rate would be upwards of 10.8%, the Washington Post reports.

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Comment by WT Economist
2013-11-13 10:55:16

Someone could have predicted this 20 years ago. It is a combination of demographics and low wages.

Basically, we face a future with plenty of jobs for those who want them, at wages that don’t pay enough to live any where close to the way Generation Greed people did in the 1990s and 2000s.

Comment by Rental Watch
2013-11-13 11:51:15

WT Econ…have you looked at the participation rate by age cohort recently? I haven’t, but studying that would tell you if you were in a demographically driven change, or one that is simply indicative of people giving up…

Comment by Blue Skye
2013-11-13 11:54:12

“There should be all hands on deck to sort this out.”

It’s too early for sorting out. Most of us are still at the party. The Credit/speculative/housing mania has to die a hard and painful death before we start to wonder how America can begin to earn a living again. The clowns in DC will be the last to the table, the stage lights tend to blind them.

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Comment by Ben Jones
2013-11-13 11:58:23

There has to be a point when we realize what’s going on. One would think that having hundreds of thousands drop out of the labor force in one month would get somebody’s attention. What’s it going to take? 2 million in one month? 5?

Comment by Housing Analyst
2013-11-13 12:55:21

“the stage lights tend to blind them.”

Well that’s a good thing no? It just makes the job a little easier…..

Comment by Blue Skye
2013-11-13 12:57:05

Just my opinion, but that isn’t going to do it. Vision won’t clear until the mania is over. The housing bubble has to crash first.

Comment by goon squad
2013-11-13 07:22:45

Here’s a follow-up to a heartwarming tale of how diversity is our strength and that our differences only make us stronger (with COEXIST stickers)

Denver Post - Man sentenced to 80 years in death of 14-year-old Commerce City girl:

“On Tuesday, Adams County District Judge Katherine Delgado sentenced the 25-year-old Padilla-Villalobos to 80 years in prison — 48 for a second-degree murder charge and 32 years for second-degree kidnapping.”

More COEXIST from a previous Denver Post article, which online article commenters have noted has been scrubbed of any mention that Padilla-Villalobos is an illegal immigrant from Mexico, because that’s how the sh*tlib media roll, yo:

“Ezequiel Padilla-Villalobos, who is accused of stabbing his girlfriend’s 14-year-old sister to death, will also be charged with sexual assault … He later told Commerce City officers that he was drinking heavily and using cocaine before his girlfriend, FlorMaria Acosta, sent him a text message asking him to get her sister “Gabby” from their mother’s house in Broomfield … Padilla-Villalobos said he leaned over and started strangling the girl as soon as he parked the truck on Verbena Street. She struggled against him before he stabbed her with a kitchen knife that he had used to cut vegetables says before, the affadavit says.”

Comment by my failure to respect is unacceptable
2013-11-13 07:30:44

How dare Jose be this cruel? This kind of cruelty is reserved for only the native born US Americans.

Comment by Albuquerquedan
2013-11-13 08:23:30

No, but we certainly don’t need to import more people like him. A country need a system of back ground checks, exams etc. Not just allow anyone in who happened to run faster than the border patrol.

Comment by goon squad
2013-11-13 07:43:57

Speaking of sh*tlib media, here an orgy of sh*tlibbery in the Washington Post, resulting from columnist Richard Cohen’s piece on Tuesday:

“People with conventional views must repress a gag reflex when considering the mayor-elect of New York — a white man married to a black woman and with two biracial children. (Should I mention that Bill de Blasio’s wife, Chirlane McCray, used to be a lesbian?) This family represents the cultural changes that have enveloped parts — but not all — of America. To cultural conservatives, this doesn’t look like their country at all.”

Today’s Post piece continues:

“The baying for Cohen’s head on the internet quickly ensued — primarily from liberals who might otherwise consider Cohen, who has been a left-of-center presence on the newspaper’s op-ed page for a generation, one of their own.

Cohen begs to differ. Strongly.

“I don’t understand it,” said the columnist, who lives in New York City. “What I was doing was expressing not my own views but those of extreme right-wing Republican tea party people. I don’t have a problem with interracial marriage or same-sex marriage. In fact, I exult in them. It’s a slander” to suggest otherwise. “This is just below the belt. It’s a purposeful misreading of what I wrote.”

Cohen says he inspires strong passions because he’s willing to veer from liberal orthodoxy on racial or cultural topics. “People feel strongly about these things, and they feel the need to punish you if you don’t agree,” he said.

Comment by my failure to respect is unacceptable
2013-11-13 07:54:09

Cohen is racis’….pure and simple. He got caught and now he claims he was just chanelling teabillies……like he knows what every teabilly stands for….what a fookin’ idiot!

Comment by goon squad
2013-11-13 08:00:26

I hate these coastal f*cks.

Their attitude reminds me of the classic New Yorker cover:

Comment by AbsoluteBeginner
2013-11-13 12:37:03

That’s funny. I’ve come to the conclusion that California is the center of the universe.

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Comment by goon squad
2013-11-13 12:43:17

“California Songs” by Local H:

Comment by jane
2013-11-13 21:11:46

Goon, I hope I will get to shake your hand some day.

It would be interesting to imagine the DC version of the same image. DC takes up half the real estate. Bands to the left and right of DC, as well as the topmost half beyond the 1/4″ representing Virginia - these are wastelands of emptiness punctuated by the dots representing the locations of the initial caucuses and primaries.

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Comment by In Colorado
2013-11-13 10:22:46

Should I mention that Bill de Blasio’s wife, Chirlane McCray, used to be a lesbian?

I thought that wasn’t possible because either you were born that way or not. Or maybe she’s bi?

Comment by goon squad
2013-11-13 11:27:04

That question in parentheses is Cohen’s, not mine.

McCray was probably on the trendy lesbian bandwagon in college, you get more COEXIST points that way.

Comment by In Colorado
2013-11-13 13:07:42

That question in parentheses is Cohen’s, not mine.

Yes, I knew that those were Cohen’s words.

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Comment by spook
2013-11-13 11:05:06

(Should I mention that Bill de Blasio’s wife, Chirlane McCray, used to be a lesbian?)

No you shouldn’t because lesbians are non threatening.

Comment by goon squad
2013-11-13 08:14:50

here’s even more coexist, linked from drudge

brooklyn rabbi: gang of teens playing disturbing game of ‘knock out the jew’

‘the nypd is looking into a series of attacks on jews in brooklyn. at least one attack was caught on surveillance tape.

some of the assaults may be part of a disturbing game, cbs 2’s john slattery reported on tuesday.

brooklyn assemblyman dov hikind said the attacks are not muggings. it’s not about money. he said the victims are being attacked because they are jews.’

no worries, communist de blasio will take care of all of this.

remember crown heights?

Comment by Albuquerquedan
2013-11-13 08:27:09

It was high crime rates that led to the conservative revival the first time. The old joke about a conservative being a liberal that had been mugged was very true. The knock out game may just knock out the “permanent majority”.

Comment by In Colorado
2013-11-13 10:20:22

There is a parallel joke: A liberal is a conservative who lost his pension and/or was laid off.

I know far more people who have had their jobs offshored than who have been mugged. In fact, I don’t know anyone who has been mugged. Maybe it’s a flyover thing.

Comment by Albuquerquedan
2013-11-13 13:06:59

The saying might have more impact if anything had improved under Obama. May have moved some people over during W reign but I think most people are seeing that Obama and Bush are cut from the same cloth and it is not the conservative cloth.

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Comment by In Colorado
2013-11-13 13:10:59

The saying might have more impact if anything had improved under Obama.

True, but it was under W that my chops, and those of thousands of my coworkers, really got busted. At least under the big O my income increased, and I’ve made up for most of the lost ground from the W years. YMMV, of course.

Comment by Albuquerquedan
2013-11-13 13:23:50

You are the exception all the numbers show that adjusted for inflation Americans median income has been dropping throughout this so called “recovery”.

Comment by sleepless_near_seattle
2013-11-13 14:47:46

I think most people are seeing that Obama and Bush are cut from the same cloth and it is not the conservative cloth.

I now realize that’s true on this blog. Within my personal circle, not so much…

Comment by goon squad
2013-11-13 11:32:26

De Blasio hasn’t even been sworn in as mayor yet and it’s already turning into Koch NYC. Expect to see more tales of mayhem (in the Post or Daily News, as sh*tlib media only reports things like the Tawana Brawley hoax) forthcoming, maybe the Long Hot Summer will be here soon :)

Comment by MightyMike
2013-11-13 11:52:22

So you’re mourning the loss of your hero Mayor Bloomberg from a city that you hate.

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Comment by goon squad
2013-11-13 12:07:34

I don’t hate New York, but I hate many aspects of what it has turned into. Here David Byrne (of the Talking Heads) laments the cultural death of the city:

The same New York City that produced bands like the Velvet Underground and Sonic Youth (and in Manhattan, not in Brooklyn at that) is now an urban playground for trust-funders and produces “culture” like that of vacuous twit Lena Dunham.

Comment by Young Deezy
2013-11-13 16:03:06

If David Byrne’s looking for cheap digs and an Authentic Multicultural Experience(tm), I hear Detroit’s got plenty of both.

Comment by MightyMike
2013-11-13 18:04:45

That’s interesting. I was going to mention that HBO show Girls yesterday when I wrote about the two sisters from Florida that I know who lived on the edge of poverty in NYC for a few years. The characters on Girls represent some of the people that Harpsichord Joe was talking about when he wrote about young college graduates streaming into New York and a few other cities. If they get crappy barista jobs life is going to be pretty grim in such an expensive city, unless they get an allowance from Mom and Dad. And the presence of such people is probably driving up rents and exacerbating the problem.

I skimmed the David Byrne article when it came out last month. During the same period that he moved to New York, lots of working class and middle class New Yorkers were heading out to the suburbs and the city was becoming a place for the rich and the poor, along with a few young people like him who were willing to live in cold water flats. I could imagine that, if present trends continue, gentrification could extend to most of the city and there would be no poor left at all, just one percenters.

Comment by Housing Analyst
2013-11-13 08:45:26

Tampa Florida Housing Inventory Skyrockets 37%

A sea of excess empty housing units.

Comment by Housing Analyst
2013-11-13 08:49:20

Sacramento CA Housing Inventory up a Whopping 72% as Prices Crater

With 4.4 MILLION excess empty and defaulted houses in California alone, this shouldn’t be any surprise.

Comment by Ben Jones
2013-11-13 08:57:38

Oh dear.

‘San Diego County’s housing market continued to slow in October, with the median price of a home falling $9,250 from the month before. It was the biggest drop in month-to-month values since prices fell $16,000 from December 2012 to January 2013, generally considered the slower time of the year.’

‘Mark Goldman, a loan officer and real-estate lecturer at San Diego State University, said the market is decelerating, as yearly gains of 20 percent were unrealistic. “The buyers are cooling a bit,” he said. “There was very limited inventory and people were bidding up prices and realized they overshot the market of what the properties were worth.”

‘Inventory was up in October with 6,990 active listings in the county, up from 5,312 in the same month of last year, SDAR reports. As of Tuesday, there were 6,848 active listings in the county. The amount of homes available has climbed steadily since January, when there were 4,142 active listings. Listings rose above 6,000 in August, the first time inventory has reached that mark since July 2012.’

‘realized they overshot the market’

Gosh, I hope they didn’t borrow the money they “overshot” with.

Comment by Ben Jones
2013-11-13 09:24:42

‘California foreclosure activity – Notices of Default, Notices of Trustee Sale and Foreclosure Sales – edged higher in October but remained at or below pre-housing crisis levels, according to a new report from PropertyRadar.’

“While the low level of foreclosures seems to be good news, the market is ignoring the 1.5 million underwater California homeowners at risk of default that can neither sell an existing home or buy another,” says Madeline Schnapp, director of economic research for PropertyRadar. “These underwater homeowners are a big drag on the California real estate market recovery and keep much needed inventory off the market.”

Comment by Rental Watch
2013-11-13 12:14:31

For what it’s worth, Corelogic estimates the number of negative equity borrowers in CA in Q2 2013 at just over a million (1,036,000).

This is down from 1,437,000 in Q1 2013.

If the timing of their “Equity Report” releases is consistent, their Q3 2013 data should be out by December 15.

Whatever “negative equity” is doing to distort markets is on the decline.

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Comment by Housing Analyst
2013-11-13 12:20:21

“For what it’s worth”

Coming from you? An underwater land speculator desperately attempting to convince himself that he didn’t overpay?

Not much.

Comment by my failure to respect is unacceptable
2013-11-13 13:20:23

It will be on the rise as house prices start falling.

Comment by Rental Watch
2013-11-13 16:29:47

Trying to convince myself we didn’t overpay?


Just trying to see if anyone can produce any data that changes my perspective on the market. So far, I’ve gotten made up numbers from you and conjecture by others that isn’t supported by related data.

Comment by Housing Analyst
2013-11-13 16:41:20

And now your backpedalling and denying it.

Comment by Puggs
2013-11-13 16:46:53

Long beach…34 price drops of more than 10K. Days on market up. Listings up. Facts are stubborn things. Granted it is winter - But there is NO winter in LA LA Land.

Comment by Rental Watch
2013-11-13 18:05:20

What matters is closed sales, not asking (or even wishing) prices.

Probably a good third of the markets that I’m tracking in LA County have showed roughly flat prices over the past three months…interestingly, Long Beach isn’t one of them (they are up 3%–10% annualized over the past 3 months).

Time will tell if that is an indicator of a leg down, or just a pause in the medium term trend. Based on the rents we are actually collecting on the homes compared to what we think the home is worth, it appears to us that the own vs. rent equation is not yet out of whack.

Comment by Housing Analyst
2013-11-13 18:21:38

And closed sales continue to fall.

Worse yet, rental rates are half the carrying costs of buying..

Now run.

Comment by Whac-A-Bubble™
2013-11-13 09:55:41

To make matters still worse, now their taxes are going up.

How do you collect taxes from an all-cash Chinese or Canadian investor who lives abroad?

Why your property tax bill is going up
County assessor notifications hit 62,000 owners, 150k likely next year
By Roger Showley
1:40 p.m. Nov. 12, 2013

County Assessor Ernest Dronenberg confers with a county treasurer-tax collector assistant at the County Administration Center. County Assessor Ernest Dronenberg confers with a county treasurer-tax collector assistant at the County Administration Center. — Howard Lipin

San Diego County property values are on the rise again — and so are property taxes.

The county assessor has notified more 62,000 owners that their temporary tax cuts, dating back to 2006, are now over and they’ll owe more, come Dec. 10 tax day.

“We’ve turned the corner in 2013,” said Jeff Olson, chief of assessment services, referring to years of dropping tax assessments stemming from the depressed market.

Comment by sleepless_near_seattle
2013-11-13 15:23:36

A few years back I told how I lived (rented a dirt cheap cottage on friends’ palatial grounds) very near Rasheed Wallace’s former residence he bought when he played for the JailBlazers. I happened to catch the news the other night that had expose on Portland’s largest tax deadbeats…Wallace came in at $150k owed.

He hasn’t moved to China, but he had no comment…

BTW, he STILL hasn’t sold the house 6+ years later…
Rasheed’s place

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Comment by Puggs
2013-11-13 16:37:36

That’s the prob in tits up So. Cal. Property taxes will nail yer A$$.

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Comment by Ben Jones
2013-11-13 09:03:56

Boy, I hope they didn’t overshoot in Texas:

‘Sales of pre-owned homes in North Texas rose 10 percent in October from a year earlier. It was the smallest year-over-year gain in area home sales since December 2012. While home purchases were still up last month, they grew at only a third the rate of increase back in April.’

“The market is still good to strong, just not crazy strong like this past season,” said Dr. James Gaines, an economist with the Real Estate Center at Texas A&M University. “We expect a seasonal adjustment in fall and winter.”

‘David Brown who heads the Dallas office of housing analyst Metrostudy Inc, said the smaller home sales gains are to be expected. “A 20 percent to 30 percent year-over-year gain is unsustainable,” he said. “The frenzy that started in the fourth quarter of last year and ran through the first half of this year is beginning to ease.”

Comment by (Neo-) Jetfixr
2013-11-13 09:29:40

So much for “getting the family together” on Thanksgiving……

Called daughter the elder last night. Still a 50/50 proposition that SIL (contract worker) was going to have to work all Thanksgiving weekend, including Thanksgiving day.

She works at American Eagle, as a manager. She was told yesterday that their store will open at 8pm on Thursday night. Because “everyone else is doing it”.

They opened at midnight last year. I asked her “How many idiots show up at midnight to shop?’

Her answer? “Lots of people. They all gotta latch on to a “bargain” before it’s gone”.

She noted that this is a 95% female affliction.

Comment by Whac-A-Bubble™
2013-11-13 09:57:22

I once took one of my sons to the early-morning Black Friday opening of a local Target store. We mainly went to watch the shoppers overrun the store in a consumption frenzy.

Comment by In Colorado
2013-11-13 10:17:08

I once went to the local WalMart, hoping to snag a cheap laptop. 0.0001 seconds after I arrived I knew it was a lost cause, turned around and went home. This was when they opened at 5 AM on Black Friday.

Comment by Rental Watch
2013-11-13 11:55:42

If the weather is good on Black Friday, we might take a walk to the local mall (probably a nice 20 minute walk)…watch the madness without needing to park in it.

Comment by (Neo-) Jetfixr
2013-11-13 12:15:54

Any closet racists on this board who say that “Flash Mobs” are a exclusively black/hispanic thing, hasn’t been to any WalMart out in flyover on Thanksgiving weekend when the doors are unlocked.

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Comment by WT Economist
2013-11-13 10:58:35

I started collecting rather than recycling all the catalogues around Halloween. I’m going to let the stack pile up until Christmas, and move it under the tree…next to the presents.

All the money spent trying to get us to buy things we didn’t see fit to just buy when we needed them, and all the stuff we bought.

Then we’ll take a picture.

Comment by spook
2013-11-13 11:09:02

Whats a catalog?

Comment by sleepless_near_seattle
2013-11-13 11:42:12

Because “everyone else is doing it”.

Uniquely American (Eagle)

Comment by sleepless_near_seattle
2013-11-13 11:30:47

StrawberryPicker from Monday: “Today it isn’t about helping hard working people. It is about handouts to no-working people and what that does to our society and it’s future.”

I hear you but that’s always the rationalization: “I didn’t mean you; it’s those “other” people.” Who are these “non-working people”? What percent of people that qualify for things like TANF refuse to work? I’d honestly like to know. I know they exist, I just don’t see a number attached to it.

And note he said “the mouth-breathers and government-cheese-eaters they would have to interact with in public school.” How many people here are products of public school? Talk about coastal elitist.

“What percentage would you need to beleive are in the gaming the system category before you did let it worry you? Because I see it as at least 30 percent plus.”

5%. (2.35M of the 47M SNAP recipients) If it’s 14M, show me. The numbers I usually see are the recent increase in the number of people qualifying which is a huge, but different, issue. But frankly I’d rather focus first on eliminating foreign aid…building schools for foreign mouth-breathers, if you will.

But what really chapped my azz was reading NE’s comments a day after reading the Sunday Bits, a banner day in HBB bootstrapper denial, followed by his d-bag response about whether I realize what we denied some other family.

For once I’d just like one of you guys to have the b@llz to say something on the order of, “Thanks, taxpayers, for your role alongside the private sector in getting my industry off the ground. While it may not benefit everybody directly, on net it is positive for society, including the multiplier effect throughout the industry, so I appreciate your hard earned tax dollars being redistributed to support the industry upon which my livelihood now depends.”

I know how grateful I was that it helped our family get through a short rough patch. Why is it so hard for y’all to show a little gratitude to taxpayers who helped lay the ground work for the rest of your lives.

Comment by Northeastener
2013-11-13 16:45:35

Why is it so hard for y’all to show a little gratitude to taxpayers who helped lay the ground work for the rest of your lives

Isn’t going to happen…

It is theft and redistribution. Want to know where it ends? Take a look at the latest out of Venezuela. A free TV for everyone and store managers in jail, all overseen by the Army and applauded by the President.

Comment by sleepless_near_seattle
2013-11-13 18:36:14

Isn’t going to happen…

It is theft and redistribution.
I agree. You know this because you live it. Have you ever once stopped to think that every dollar the government took from other hard working families to redistribute to the DOD for the creation of your industry was a dollar that could have gone to them instead of you?

Government: Picking winners is what you do.
And you’re glad they picked your industry as one of the winners, aren’t you? Seriously…if I have it wrong, help me understand it. If not, enjoy swimming in your taxpayer subsidized ocean of denial.

Comment by MightyMike
2013-11-13 17:37:50

But what really chapped my azz was reading NE’s comments a day after reading the Sunday Bits, a banner day in HBB bootstrapper denial, followed by his d-bag response about whether I realize what we denied some other family.

It occurred to me after that exchange that we could ask the same question about war spending. A few years ago the economist Jospeh Stiglitz estimated that the total cost of war with Iraq and the subsequent occupation would be $3 Trillion. That’s roughly $10,000 for every American. The same question could be asked. Does anyone realize how much that will cost the families that will have to pay for it? For some reason that question doesn’t come up much. When it does come up, it doesn’t arouse the same anger that food stamp spending generates. I find that to be interesting.

The other interesting part was StrawberryPicker’s arguments. First he was concerned about “handouts to no-working people”. I asked him he had any facts to back up his 30 percent plus assertion. So he basically said that he just made up that 30 percent fraud because you can’t trust any study that might come form the government or a university.

So basically anybody who might be in a position to estimate the amount of fraud can’t be trusted. So let’s all just make up our own numbers based on the random thoughts floating around in our heads.

This also got me thinking. What would be an example of this rampant fraud? Well one type of fraud would be people getting food stamps who don’t actually need them. In other words, these would people with decent jobs who can afford to feed themselves, but get the food stamps anyway. This would be the exact opposite of “handouts to no-working people”.

Comment by sleepless_near_seattle
2013-11-13 18:38:26

It’s indefensible, but defend it to the bitter end folks like NE will. I’d say it’s truly the definition of “it is difficult to get a man to understand something, when his salary depends on his not understanding it” but it’s pretty clear in this case that denial trumps (and is more insidious than) understanding. They understand perfectly. Gotta keep that glass house intact.

Comment by Strawberrypicker
2013-11-13 20:33:08

That is correct. There are no figures to back up how much fraud but there have been many news reports of widespread fraud. Who is going to do the studies, the agency that runs this programs IG? He’s controlled by the same people that propagate the fraud. Maybe some nice university full of libtards will do an unbiased study? Some conservative group? Good luck getting the data.

I’ve actually participated as a researcher in one such study. I saw how when the results didn’t match what they wanted them to say the data was spun to the right conclusions.

The handout programs have exploded because society has chosen to look the other way on fraud. From the massive numbers of those who lied on mortgage apps to the handout recipients who aren’t disclosing other sources of income, other unreported people living in their Section 8 housing, scamming disability through back pain or mental illness or chronic fatigue syndrome, claims of learning disabilities in children, claims to actually be seeking work, continuing to get dead daddy’s social security, on and on to get more of the handout. Lying is the problem.

You need to wake up to what is going on. It is far more than 5 percent so you should be worried.

Comment by sleepless_near_seattle
2013-11-13 23:10:00

Okay, color me worried. I’m not convinced it’s 30% but call it somewhere between 5 and 30. I’d still rather start by pulling troops and ramping down foreign aid first.

The bigger point to the rant was that those that are the loudest about redistribution can’t admit that they have benefited from it, when it’s blatantly obvious that it played a part in their lives, even if not strategically.

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Comment by Strawberrypicker
2013-11-13 20:47:58

Actually the fraud is people getting food stamps and not disclosing all that they are required to truthfully on the forms to qualify. They’ll justify it by saying they needed it to get by.

Comment by sleepless_near_seattle
2013-11-14 01:34:46

After thinking about this some more, have the incidents of fraud as a *percentage* of those who receive aid gone up (as it seems you might be implying), or is it simply that the number of incidents of fraud has gone up due to having a larger number of people on aid due to population growth? (larger volume but not larger percentage)

IOW, I think the things you’d need to look at are:

(a) Percentage of overall population receiving aid, compared now and 30 years ago.
(b) Incidence of fraud as a percentage of those receiving aid, compared now and 30 years ago.

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Comment by Strawberrypicker
2013-11-13 20:02:15

Is this implying I said this:

“And note he said “the mouth-breathers and government-cheese-eaters they would have to interact with in public school.” How many people here are products of public school? Talk about coastal elitist.”

I never said that, but I’m the only person you mention prior to the quote. I like public schools and their decline is one of the tragedies of our civilization.

I appreciate the apology in advance.

Comment by sleepless_near_seattle
2013-11-13 20:48:18

Yes, sorry. By he I meant NE. As in, I was “talking” to you about NE.

Comment by goon squad
2013-11-13 11:40:02

And this from nanny state, gun grabbing, Big Gulp banning Bloomberg:

“The world is headed for its seventh warmest year on record with temperatures that were unprecedented two decades ago, the United Nations said.

The global average temperature through September is on par with the average for the 2001 through 2010 decade, which was the warmest ever, according to the WMO. With the main greenhouse gases at a record in 2012 and set to rise further, (Michel) Jarraud said the planet is committed to a warmer future.”

Enjoy the die-off :)

Comment by Albuquerquedan
2013-11-13 13:10:58

“And this from nanny state, gun grabbing, Big Gulp banning Bloomberg”

Exactly, spin trying to get ahead of the fact that unlike many were predicting including Slate 2013 is not going down as the warmest year ever. Heat up and iron and then shut it off, it does not cool off quickly.

Comment by Bluestar
2013-11-13 15:01:41

You want to watch real scientist debate global temperatures go check out Dr. Judith Curry’s blog.

First she posts a study that was just released by Kevin Cowtan and Robert Way that shows the Arctic has been warming much faster than the rest of the planet. Curry then criticizes the authors choice of statistical methods and pretty much downplays the results of the study. The real fun starts just a few minuets later when the actual authors of the research paper show up on her blog to defend their analysis.

Imagine if Ben Bernanke or Janet Yellen showed up on this blog to defend QE. This ought to be good!

Please vote for my entry in the Biggest Energy Saver contest,
You can vote once each day so they do add up.

Jack Smith AKA Bluestar

Comment by goon squad
2013-11-13 11:55:29

More Bloomberg. Here attacking bootstrappy beacons of capitalism and eagles and flags and mom and apple pie, McDonald’s and Wal-Mart:

“It seems that welfare queens are back in the news these days. The old stereotype was an inner-city unwed mother — that’s dog-whistle-speak for black — having multiple babies to get even bigger welfare checks (throw in a new Cadillac and the myth is complete). Regardless, welfare reform of the 1990s ended that narrative.

No, the new welfare queens are even bigger, richer and less deserving of taxpayer support. The two biggest welfare queens in America today are Wal-Mart and McDonald’s.

The issue has become more known as we learn just how far some companies have gone in putting their employees on public assistance. According to one study, American fast food workers receive more than $7 billion dollars in public assistance. As it turns out, McDonald’s has a “McResource” line that helps employees and their families enroll in various state and local assistance programs. It exploded into the public when a recording of the McResource line advocated that full-time employees sign up for food stamps and welfare.

Wal-Mart, the nation’s largest private sector employer, is also the biggest consumer of taxpayer supported aid. According to Florida Congressman Alan Grayson, in many states, Wal-Mart employees are the largest group of Medicaid recipients. They are also the single biggest group of food stamp recipients.

Why are profitable, dividend-paying firms receiving taxpayer subsidies? The short answer is, because they can.

Both McDonald’s and Wal-Mart are engaging in perfectly legal behavior. The system was set up long ago in ways that failed to imagine companies doing this. Yes, they are taking advantage of the taxpayer, but they are also operating within the law.”

Comment by (Neo-) Jetfixr
2013-11-13 12:37:47

Teardowns are booming again in the inner KC suburbs.

Nothing like stealing the natives land. It’s an American Tradition.

But instead of using the US Army to force the natives onto the reservation, we’ve become more civilized, and force them out with giant property tax bills.

Comment by Housing Analyst
2013-11-13 12:49:05

From the article: “You take all the equity you spend doing the one house and put it in a big hole,” he observed. “You have to pay off the mortgage and do full new financing. It’s the least efficient and most expensive way to get a new home.”

So he has a million $(not including a half million in interest) in a $300k house…..

Mr. Banker….. your comments?

Comment by (Neo-) Jetfixr
2013-11-13 13:12:51

Old paradigm = The middle class moved to the outer burbs, mainly to get away from the problems created by “those people”.

New paradigm = The worldwide upper 10%/creative class buying up all of the property in the inner burbs, tearing down 50-60s ranches, and building Starter Castles, to get away from the problems created by “those people” (current and formerly white middle class).

Suburban (mostly white) Middle Class = Viewed as 47%ers/Wretched Refuse, whether they recognize it or not.

Comment by Rental Watch
2013-11-13 16:41:49

This is interesting. Interesting in that there are apparently a lot of people who didn’t try to sell their house when in default, let it go to foreclosure, only to have it sell for more than the debt…

Comment by cactus
2013-11-13 16:47:55

WASHINGTON (Reuters) - Janet Yellen, President Barack Obama’s nominee to chair the Federal Reserve, said the U.S. central bank has “more work to do” to help an economy and labor market that are still underperforming.

“I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy,” Yellen, the Fed’s current vice chair, said in remarks prepared for delivery to the Senate Banking Committee on Thursday.

Yellen would be the first woman to lead the U.S. central bank if her nomination is confirmed by the Senate, as widely expected, although she will face heavy questioning from Republicans on the banking panel critical of the Fed’s easy money stance.

In comments that appeared aimed at pre-empting some of that questioning, Yellen said the economy and labor market were performing “far short” of their potential, while price pressures remained muted.

“Inflation has been running below the Federal Reserve’s goal of 2 percent and is expected to continue to do so for some time,” she said, according to a copy of the testimony made available on Wednesday in advance of the hearing.

Stock and bond futures both edged higher and the dollar slipped against the euro after the news hit traders’ screens, continuing a trend that began earlier on Wednesday on speculation her remarks would strike a dovish tone.

Comment by azdude02
2013-11-13 17:42:22

just print some more cash, buy some more bonds so stocks and homes keep going up. Does it take a genius to figure out what to do?

its so simple even a caveman could do it.

Comment by phony scandals
2013-11-13 17:13:41

Seattle Police Announce ‘Mesh Network’ Deactivation Following Major Document Leak

by Mikael Thalen
November 13th, 2013
Updated 11/13/2013 at 10:29 am

The Seattle Police Department announced Tuesday evening that it will begin temporarily deactivating the city’s massive wireless mesh network following a major document release by Storyleak and Infowars detailing the network’s expansive web of surveillance abilities.

“The wireless mesh network will be deactivated until city council approves a draft policy and until there’s an opportunity for vigorous public debate,” Seattle Police Spokesperson Sgt. Sean Whitcomb said.

Police Chief Jim Pugel gave the orders to begin the deactivation process earlier in the day, while also claiming they had not been actively using the network. Seattle police now say the network was “operational” but not being “operated” after allegedly forgetting to turn off the system following its initial test phase, contradicting earlier claims.

“Our position is that the technology is the technology, but we want to make sure that we have safeguards and policies in place so people with legitimate privacy concerns aren’t worried about how it’s being used,” Whitcomb said.

According to police, the network deactivation process is more advanced than simply flipping a switch, but no specific timeline was given as to when the network would be completely deactivated.

Although a newly passed city ordinance required the Seattle government to submit user policy information for the mesh system to city council within 30 days of implementation for public review, the system’s roll-out continued without public approval.

Following refusal from Homeland Security and Seattle police to release the surveillance capabilities of the mesh network nodes appearing all throughout the downtown area, documents given to Storyleak and Infowars blew the lid off the secretive program, revealing its massive reach to countless Seattle surveillance systems.

Major data points not only included the network’s ability to log specific information of mobile device users stepping inside the mesh network’s perimeter, but it’s connection to the local DHS-run Fusion Center and Seattle’s Department of Transportation Intelligent Transportation System, which controls the city’s license plate readers and traffic cameras.

These revelations follow several key articles breaking down other advanced surveillance systems including the vast deployment of conversation recording microphones in major cities, as well as the “Intellistreets” light fixtures, most recently rolled out in Las Vegas.

While many question the actual extent of the mesh network’s “deactivation,” the announcement made by Seattle police is yet another example of real media’s ability to shift the outcome of major political events in our current climate of corruption and cowardly corporate news. - -

Comment by phony scandals
2013-11-13 18:16:38

In this corner, owing $1.1 million in cashed out equity, star of BS sob story broadcast on 60 minutes and reigning Deadbeat champion Lynn Szyyyyyyyyymooooooniak.

Florida foreclosure fighters fight each other

Posted: 4:24 p.m. Friday, Sept. 13, 2013

By Kimberly Miller - Palm Beach Post Staff Writer

Foreclosure fraud fighters are battling each other in court after a Palm Beach Gardens woman was accused of stealing someone else’s ideas and work to win an $18 million whistle-blower lawsuit against major lenders.

Ignacio Damian Figueroa, a Fort Lauderdale resident who runs, says he did thousands of hours of research and gathered flawed documents for Lynn Szymoniak believing he would be included in the lender lawsuit. - 76k

Comment by Patrick
2013-11-13 18:42:10

The Fed could print extra money forever but would probably cause runaway inflation.

If they stop printing they will sink both the equities/bond and real estate markets.

But if they simply taper by increasing rates, jawboning as they do it, they will provide clear guidance to all markets of future effects.

Yes, prices will go down - but as dramatically as an unknown threat ?

Comment by Whac-A-Bubble™
2013-11-13 19:48:27

They also have the option to prop up asset prices in new as-yet untold ways in case the QE3 taper tanks markets.

Comment by Bill, just South of Irvine, CA
2013-11-13 20:32:05

Arizona’s lost homeownerhip

“The figures for metro Phoenix were the starkest: Homeownership dropped to 62.9 percent in the 2010-12 period from 67.3 percent in 2007-09, records show. The 4.4 percentage-point decline was the largest reversal of fortunes among the nation’s 50 largest metro areas. Las Vegas was a distant second.

Similarly, Maricopa County topped Northern California’s Contra Costa County to rank as the nation’s No. 1 county for deterioration in homeownership.”

Comment by Whac-A-Bubble™
2013-11-13 21:31:41

“Northern California’s Contra Costa County”

We used to live there, during the Housing Bubble’s first parabolic stage, when anyone who could breath got a loan.

Comment by Whac-A-Bubble™
2013-11-13 21:43:41

U.S. homeownership at 1995 levels despite housing rebound
A home sale in Washington, D.C. (Jim Watson / AFP/Getty Images / May 1, 2013)
By Andrew Khouri
November 5, 2013, 10:25 a.m.

Homeownership in the United States remained flat last quarter, staying at its lowest level in nearly two decades and underscoring the dominant role investors have played in the housing recovery.

The nation’s homeownership rate was 65.1% on a seasonally adjusted level in the third quarter, unchanged from the second quarter, the Census Bureau reported Tuesday. Homeownership fell from a 65.3% rate in the third quarter last year. Besides the second quarter of this year, home ownership hasn’t been this low since the last three months of 1995.

The fact that homeownership has fallen during the housing rebound shows investors have been a major force in sending home prices skyrocketing. Individuals and Wall Street players have descended on the housing market, looking for bargains and cash flow. They have scooped up many lower-priced homes to flip or rent out.

Their presence has made it difficult for many first-time buyers to compete, but higher prices also helped existing homeowners escape their negative equity positions — meaning they no longer owe more on their mortgage than their house is worth.

But now, investors have shown signs of pulling back because higher prices have made their investments less attractive. That has raised questions about whether first-time buyers will step in to fill the void, which experts say is key to a continued recovery.

The homeownership rate peaked, on a seasonally adjusted level, amid the housing boom, at 69.4% in the second quarter of 2004.

Comment by Whac-A-Bubble™
2013-11-13 21:47:07

Southern California housing market slows after torrid rebound
By Andrew Khouri
October 16, 2013, 4:54 p.m.

The median home price stays flat for the third straight month, easing fears of another housing bubble and signaling a return to a more normal market, experts say.

A “For sale” sign is displayed in front of a house in KB Home’s Whisler Ridge housing community in Lake Forest. (Patrick T. Fallon, Bloomberg / September 23, 2013)

Southern California home buyers have apparently had their fill of bidding wars, home shortages and double-digit price hikes.

For the third straight month, the median home price across the Southland stayed essentially flat, at $382,000. The September data confirmed expert predictions that waning demand would throw a wet blanket over the white-hot market. The stall is owed to multiple factors: buyer fatigue over skyrocketing prices, higher mortgage rates, an expanding supply of homes and a pullback by investors who had swarmed the market.

The cooling has quelled fears of another housing bubble and signals a welcome return to normality, experts say. The California Assn. of Realtors predicts that year-over-year price increases will return to 6% next year, more in line with historical norms.

“The market was starting to get too hot for a lot of people to touch,” said Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate. “Now we are moving toward a more sustainable growth path.”

The rapid run-up in prices peaked in June — with a whopping 28% year-over-year increase in the median price. Sellers dominated the market, often getting multiple bids for more than the asking price amid heavy demand and scarce supply. But sellers listing their homes now are finding a different, more empowered, class of buyers.

“They don’t feel the need to pull the trigger if it’s not a perfect house,” said Broker Derek Oie, owner of Century 21 the Oie Group in the Inland Empire.

Comment by Whac-A-Bubble™
2013-11-13 22:04:06

California’s high living costs create high poverty
By Dan Walters
Published: Sunday, Nov. 10, 2013 - 12:00 am

Those on the starboard side of California’s political ledger often complain about the state’s high tax burden, its dense regulatory structure and other policies that make the state a difficult place in which to do business.

Those on the port wing dismiss those complaints as self-serving, not to mention selfish, and contend that our taxes and regulations are necessary elements of a civil society.

What’s missing in this perennial debate in the media and the halls of government is the effect of political policies on ordinary Californians.

It’s expensive just to live in California. Not only are taxes high, but the costs of housing, fuel, utilities and other necessities of day-to-day life are high as well. Overall, California ranks in the top 10 percent of states in cost-of-living calculations.

Some of the factors in the state’s high cost of living are beyond the realm of political and governmental policy, but others are not.

Housing costs are high, in part, because of high fees imposed by local governments, for instance.

The state demands that refiners brew gasoline especially for California and we have the highest fuel taxes in the nation; high fuel prices not only affect motorists but also costs of transporting food and other goods.

Our utility rates are high because of official decrees, and will climb higher as private and public power suppliers shift to “renewable” sources in the name of fighting climate change.

Living costs may not be particularly burdensome for those at the top of the economic ladder – the fortunate folks who live in Beverly Hills, Hillsborough or other affluent enclaves. But they do affect those on the middle and lower rungs, as a new Census Bureau report underscores.

California’s official poverty rate of 16.5 percent is somewhat higher than the national rate of 15.1 percent, but under an alternative Census Bureau method of calculating poverty that includes cost of living, our poverty rate soars to – by far – the highest rate of any state. Nearly a quarter of Californians, 23.8 percent, live in poverty.

This is, or should be, a matter of shame, especially for politicians who profess to represent society’s underdogs but who enact policies that raise their struggling constituents’ cost of living, or inhibit the creation of jobs that would lift poor Californians out of poverty.

Comment by Whac-A-Bubble™
2013-11-13 22:06:15

California poverty rate reflects poor government
Becky Yeh - California correspondent ( Wednesday, November 13, 2013

One legislative analyst says California’s high poverty rate is just another indication of the problem with the state’s large government.

The Census Bureau reports that, by a large margin, California still has the highest poverty rate of any state. The report says almost a quarter of the state’s residents live in poverty. An alternate calculation determines that one in four state residents are considered poor, which means that the state has almost 2.8 million more people in poverty than recorded in the official poverty rate. Nevada holds the second highest alternative poverty rate, while Iowa and Wyoming hold the lowest rates.

“Let’s be honest; the facts speak for themselves here,” he says. “California has the fifth highest unemployment rate in the nation and the highest income and sales tax rates in the country. Perhaps this is why the legislature has a approval rating hovering around 10%.”

The official rate determined by the Census Bureau essentially assumes that the cost of living is the same nationwide. The alternative method incorporates broader factors, including taxes, daily costs and noncash benefits.

Comment by Whac-A-Bubble™
2013-11-13 22:08:48

We’re Number One!

CA Surpasses Mississippi, Lousiana as Most Impoverished State
Nearly a quarter of Californians live in poverty, new study finds
By Andrew Lopez | Friday, Nov 8, 2013 | Updated 5:17 PM PST
Poverty In CA Is Worse Than in Mississippi

An alternative method of measuring poverty revealed that California is the most impoverished state in the country, with nearly a quarter of its residents living below the poverty line due mostly to housing costs.

The number of poor Californians jumped from 6.2 million to nearly 9 million over three years, according to the United States Census Bureau, who used in their study factors such as housing costs, tax credits and other programs that assist low-income families.

Though some experts say the report might underestimate safety-net benefits offered in the state, overall it does point to a state struggling to keep up with living costs.

“A large number of Californians are under economic distress,” said Marybeth Mattingly, a research consultant at Stanford who works on the California Poverty Measure.

Comment by Whac-A-Bubble™
2013-11-13 22:26:00

Another day, another record close on Wall Street. This bull cannot be stopped!

S&P 500, Dow end at records: stock market live blog recap

November 13, 2013, 9:20 AM

U.S. stocks ended at a record highs Wednesday ahead of confirmation hearings for Janet Yellen to head the Federal Reserve. Here’s a recap of the day’s action from MarketWatch’s live blog.

Comment by sleepless_near_seattle
2013-11-13 23:14:16

This bull cannot be stopped!

I chuckled when I saw the top three headlines this evening:
Cisco slumps 11% on weak sales and outlook
Japan economy slows dramatically
The bull is back! Dow and S&P hit records

Comment by Whac-A-Bubble™
2013-11-13 22:30:38

Bitcoin values always go up! This credit bubble knows no limits!!

Nov. 13, 2013, 10:57 p.m. EST
China catches bitcoin buzz, but with familiar doubts
By Wu Hongyuran and Zheng Fei

BEIJING (Caixin Online) — A few blocks west of Zhongguancun, a technology hub in the capital, wannabe entrepreneurs gather in a coffeehouse named Garage to share ideas and meet potential investors.

The shop, apparently named for the place late Apple Inc. co-founder Steve Jobs built his first computers, gives a sense of entrepreneurial risk-taking because it allows consumers to pay in bitcoin, a virtual currency that few people use in daily life.

Accepting bitcoins is a good investment, said Zhao Dong, the shop’s co-manager. In front of him, a laptop screen shows that the price of bitcoins has surged from below $140 per unit to a high of $230 in the two-week period ending Oct. 24 on Mt. Gox, the world’s largest bitcoin trading platform. The price has come down a bit but was still much higher than at the beginning of the month.

If this growth rate continues, a bitcoin would be worth $1,000 in less than six months,” Zhao said, pointing at a steep segment of the curve.

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