January 8, 2014

Bits Bucket for January 8, 2014

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




RSS feed

197 Comments »

Comment by Housing Analyst
2014-01-08 05:55:30

“Why would pay more than new construction cost ($55 per square foot) for a rapidly depreciating 20+ year old resale house?”

Let me guess…… Because realtors tell you that the cost of a house cannot be evaluated using math?

Comment by azdude02
2014-01-08 07:27:58

Cause people are smart and homes appreciate in value with proper maintenance.

Comment by Housing Analyst
2014-01-08 07:31:30

Houses depreciate. The losses to offset that depreciation are massive.

 
Comment by Suite Joey Blue Eyes
2014-01-08 08:25:34

You’re flame, we get it.

Comment by Housing Analyst
2014-01-08 09:57:25

Liberace!

(Comments wont nest below this level)
 
Comment by Suite Joey Blue Eyes
2014-01-08 09:58:44

^^ my flame comment was directed towards azdude02 (daryl?) btw

(Comments wont nest below this level)
 
 
Comment by AmazingRuss
2014-01-08 20:28:39

This place is starting to match the cadence of an AA meeting.

 
 
Comment by eastcoaster
2014-01-08 07:57:24

I don’t frequent this blog as much as I used to, so this information may already be known, but what I want to know is this. You said in the bits bucket yesterday, “We build in all 48 states for $55-$60/sq. ft.” So what’s your story? Who is “we”? Are you saying you work for (or are) a builder who builds houses that cheaply? Then what? do you sell them cheaply? Doubt it. So are you part of the problem?…

Comment by Joe mamma
2014-01-08 08:11:52

Yeah are they stick built residential homes that are comparable apples to apples to SFHs? And can u put one up in Santa Barbara for me? Pleases I buy sight unseen at 60/sq ft!

Comment by inchbyinch
2014-01-08 08:57:52

eastcoaster & Joe mamma
HA’s $55+ a sq ft continuous bs is just that. I’ll order one in Montecito, my preference.

In 1984 new construction cost us $70- (17.5% APR ARM) and in 1998 we moved into a new construction view beauty at $109 sq ft at 8% APR 30 yr fixed.

HA lives in fairy dust land. I live in So Ca in east Ventura County. We’re 1 hour south of Santa Barbara.

In 2012 we paid $209 sq ft and we bought in a dip. Prices are much higher now. They’ll come down.

(Comments wont nest below this level)
Comment by Common Sense
2014-01-08 09:04:08

Never mind HA. I’m convinced that clown is a bot that just randomly spouts the same 5 quotes day after day. I boxed that mental midget into a corner yesterday and instead of responding to my statements, he just threw out those tired lines as if it somehow applied.

 
Comment by Housing Analyst
2014-01-08 09:38:07

Look at our Donkeys lining up… how cute.

We’ve been through this before. I told you to send the drawings. You came up with excuse after excuse after excuse.

 
Comment by eastcoaster
2014-01-08 12:02:49

Yet still no answer as to where I can find this company that can build me a house for $55/sq. ft.

 
Comment by Housing Analyst
2014-01-08 12:05:26

Any one of us can.

 
Comment by Blue Skye
2014-01-08 12:08:23

“In 1984 new construction cost us $70- (17.5% APR ARM)…”

Wow, must have had gold plated everything, or been on a very pricey lot. I bought in 1978 on one acre with a fantastic view for about $20/ft2.

A friend in Jax built for his daughter in 2006 for $35/ft2. He hired all the contractors directly. Not including the price of the land.

 
Comment by MiddleCoaster
2014-01-08 12:11:43

When HA spouts off about $55/sq ft buildings, he is talking about warehouses.

 
Comment by Housing Analyst
2014-01-08 13:57:36

No. Warehouses are far more costly to construct.

 
Comment by polly
2014-01-08 13:59:16

He is talking about a building put up on a $5000 lot, whatever it is. If you want to live someplace that doesn’t have $5000 lots, he tells you that they exist within 20 miles of your preferred location. The response to that being a great big, “So what? I don’t want to live 20 miles away from that location.” Then he starts calling you a debt donkey even if you don’t have any debt and don’t own a house. Or he accuses you of cherry picking your location. Which is exactly what I would expect from someone who is talking about building a place to sell, not a place to live.

 
Comment by Housing Analyst
2014-01-08 14:01:21

Back to “it’s the lot!” backpedalling?

You just don’t know. You’re over your head.

 
 
Comment by my failure to respect is unacceptable
2014-01-08 10:24:35

Joe mamma is so fat……

(Comments wont nest below this level)
Comment by my failure to respect is unacceptable
2014-01-08 15:20:07

No one, really?

 
Comment by Joe mamma
2014-01-08 18:01:36

That when the weatherman said it was going to by “chilly”, she ran outside with a spoon?

 
 
 
 
 
Comment by Housing Analyst
2014-01-08 05:56:42

“Resale housing is currently prices 40% higher than new construction costs (materials, labor and profit).

And considering new construction prices are massively inflated, resale housing is overpriced by 250%.

 
Comment by Housing Analyst
2014-01-08 05:57:55

If you take on mortgage debt at current massively inflated housing prices, you’ll enslave yourself for the rest of your life.

“Debt is bondage.”~Suze Orman, May 11, 2013

In other words, don’t buy housing at these massively inflated prices.

Don’t Be A Debt Donkey®

Comment by Puggs
2014-01-08 15:08:52

“When you eliminate debt and have a store house of savings you answer to nobody”

You better believe it!

 
 
Comment by Housing Analyst
2014-01-08 06:00:48

“So do you really think wages are going to double or triple to meet inflated prices of everything? Of course not. Prices will fall by 50% to meet existing wages as demand continues to collapse.”

Exactly.

Comment by Blackhawk
2014-01-08 07:28:19

What about when your rental prices double or triple?

What are your plans???

Comment by azdude02
2014-01-08 07:31:36

he is a renter for life.

Comment by Janet Felon
2014-01-08 10:18:25

You won’t even be able to rent after your foreclosure and destroyed credit. Nobody will want you. You better start warming back up to your parents, or at least somebody with a basement.

(Comments wont nest below this level)
Comment by azdude02
2014-01-08 20:13:18

more bs from a bitter renter.

 
Comment by Housing Analyst
2014-01-08 20:20:37

His piles of cash or your lifetime of debt and depreciating assets?

 
 
 
Comment by Housing Analyst
2014-01-08 07:33:18

Rental rates are falling. Even in NYC.

See for yourself.

“Manhattan Apartment Rents Drop for a Third Straight Month”

http://www.bloomberg.com/news/2013-12-11/manhattan-apartment-rents-drop-for-a-third-straight-month.html

Hold your cash close and stay out of debt.

Comment by Blackhawk
2014-01-08 08:17:14

HA,

So your plan is to “assume” that the rents will continue to drop? What if they don’t?

For some people, including myself, it makes sense to lock in the cost of housing and buying a house is the method I chose.

Yes, the price might decline, but I’m going to be building equity, saving $300 per month over rent and it’s mine. That means I can do just about anything I want to it and give it to my kids when I’m gone.

(Comments wont nest below this level)
Comment by Common Sense
2014-01-08 09:07:22

The guy is a bum. I explained to him that I’ve paid my house over 16 years ago. But he somehow thinks he’s ahead of the ball game because he rents. His reason being… omg housing depreciates! A clown indeed.

 
Comment by Housing Analyst
2014-01-08 09:39:23

You’re locked in for certain. But not in the way you think.

 
Comment by scdave
2014-01-08 09:42:42

A clown indeed ??

He is the barking Chiwawa on the front porch with the small doggie door in the front door for his exit…

 
Comment by Janet Felon
2014-01-08 10:20:36

“Common Sense” is a RealTROLL.

 
Comment by Common Sense
2014-01-08 11:03:51

He is the barking Chiwawa on the front porch with the small doggie door in the front door for his exit…

Accurate description of yourself. Shy away from any confrontation when someone has you over a barrel. Keep posting the same 5 bogus quotes that everyone has to scroll past to get to real commentary.
You’re going to pay more for housing for the rest of your life than someone who owns outright. Good luck with that. But since you have a million dollars in the bank, you’ll be ok when the dollar is nothing, right?

 
Comment by Common Sense
2014-01-08 11:05:38

“Common Sense” is a RealTROLL.

Your rent is 5 days past due, better figure something out quick.

 
Comment by Housing Analyst
2014-01-08 11:11:55

“Remember… rental rates are half the cost of buying at current grossly inflated asking prices of resale housing.”

That’s right. And never trust a word a realtor says.

 
Comment by Common Sense
2014-01-08 11:12:38

Sorry scdave, I thought HA wrote that.

 
Comment by Housing Analyst
2014-01-08 12:35:07

You’re a basket case.

 
Comment by Rental Watch
2014-01-08 12:46:13

@ Common Sense: The worst is that I’ve never heard HA say specifically that he rents…I asked him point blank before (whether he is a renter or owner), and his response was something akin to “this is not about me, it’s about you”, or some dribble.

He also noted a long time ago how he tried to buy a place at what he thought was a reasonable price and he was lamenting how he was outbid.

There’s a healthy streak of hypocrisy…

 
Comment by Housing Analyst
2014-01-08 12:48:00

dribble dribble dribble.

Stick with one username now.

 
Comment by Blue Skye
2014-01-08 12:54:28

Owning property makes some blind to the fact that we are in the midst of the biggest property bubble in history and are lined up for a massive correction.

Owing a truckload of money on a piece of precarious property makes some unable to do math.

 
Comment by Rental Watch
2014-01-08 14:10:50

I always have (stuck with one user name).

 
Comment by Housing Analyst
2014-01-08 14:11:45

Of course you have. Just like you didn’t overpay for a rapidly depreciating house.

 
Comment by Common Sense
2014-01-08 14:54:59

So HA, where was this gem located that you were trying to purchase? Do tell.

 
 
Comment by Puggs
2014-01-08 10:28:38

The only way to win in a rent/buy conundrum is to live in a house that is paid off.

(Comments wont nest below this level)
Comment by Common Sense
2014-01-08 11:08:40

According to HA, a house always depreciates so it should be treated as an asset and not a roof over one’s head. Renting is the best deal in EVERY situation.

 
Comment by Housing Analyst
2014-01-08 11:34:02

At current inflated asking prices of resale housing, renting hs half the monthly cost.

You should know this by now.

 
Comment by Common Sense
2014-01-08 14:07:03

Ironically, you are paying inflated prices as well. That rent you are paying for has been inflated many many times due to your landlord more than likely paying an inflated price for their real estate.
And this is the same in every place you will try to rent. Poop flows downstream, and you are in the retention pond, buddy.

 
Comment by Housing Analyst
2014-01-08 14:09:31

And it’s half the cost of carrying a mortgage.

Your point?

 
Comment by Common Sense
2014-01-08 14:30:08

point is mortagages have an expiration date. You will be paying inflated prices for life.

 
Comment by Housing Analyst
2014-01-08 14:38:46

And when you borrow to finance a rapidly depreciating asset at a grossly inflated price, your losses are irrecoverable.

Remember…. houses depreciate rapidly.

 
Comment by here's a fun fact
2014-01-08 15:48:45

maybe its a unique situation, but I have two free and clear houses, paid.cash, and upkeep costs are still more than I could have rented either for, and I’d have that cash in the bank(from the purchase)

“but I can paint it any color I want”
yes, for many thousands of dollars you can change the faucets to something else, new window coverings also.

punchline:
if you think not having a mortgage means you have no expenses you’re a liar about owning a free and clear house or you live in a sty.

 
Comment by Common Sense
2014-01-08 20:57:49

I have no clue how you managed to buy two houses and still pay more through upkeep than renting. Either you have an enormous tax bill or you are remodeling your kitchen every year. In any case you made a serious financial blunder. I would doubt with your expenses you would be able to rent the same place cheaper unless the landlord is willing to get screwed. Nobody here is saying once you finish paying the house there are no recurring bills. But taxes insurance and maintenance should be far less than the price of a rental.

 
Comment by Housing Analyst
2014-01-09 05:57:07

Remember…. The losses to depreciation are greatly understated. Additionally the losses to paying more than reproduction costs ($60/sq ft, retail) is a lifetime of losses.

 
 
 
 
 
Comment by Housing Analyst
2014-01-08 06:02:26

“Palo Alto CA Housing Prices Down 10% Year Over Year”

http://www.movoto.com/statistics/ca/palo-alto.htm

 
Comment by Housing Analyst
2014-01-08 06:04:03

“Phoenix AZ Housing Prices Down 13% Since May 2013″

http://www.movoto.com/statistics/az/phoenix.htm

Comment by Anklepants
2014-01-08 07:37:17

The fight is on. The prices are being reduced, week by week, month by month. Buyers are waiting to see if the FBs will blink. Don’t shoot til you see the whites of their eyes…

Fewer qualified buyers, tighter borrowing standards, investors gone from the market … In the next 6 weeks many will realize they need to do what they can to just get out whole without a loss.

Comment by inchbyinch
2014-01-08 09:05:37

Anklepants
Depends on when you bought, rents in your area, what kind of debt you’re carrying. Every case is different. Our accrual is $600-$700 month for taxes and insurance. Not bad for Baby Boomer monthly housing costs.

But I concur prices need to come way down. Our same house is going out at $177K more than we paid 16 months ago. That’s ridiculous.
We did use our inspection to get a fair haircut, but still…

Comment by Housing Analyst
2014-01-08 09:41:16

You got burned worse than anyone by paying a 220% premium for a depreciating 20 year old house…. and then threw more money at it.

How deep are you now? 200k loss? $300k?

(Comments wont nest below this level)
 
Comment by Anklepants
2014-01-08 19:01:50

If you really think you could get that, you should sell and realize that 170k immediately. Then buy it or similar back after this next drop.

You’ll never see that money in your pocket otherwise.

(Comments wont nest below this level)
 
 
Comment by oxide
2014-01-08 18:22:39

Just reducing the price is not an indicator of a falling market. Take HBB’s favorite used Honda. If nobody buys it and the seller reduces the price from $50K to $25K, is that really a craaaater? Of course not.

Comment by Anklepants
2014-01-08 19:03:20

If you think that the Honda is worth 50k, then that is a crater.

You think the Honda is worth 50k.

(Comments wont nest below this level)
 
Comment by Housing Analyst
2014-01-08 19:29:19

That would be an indicator of a 50% price reduction.

Better know as CRAYYYYYYYYYYYYYYYYYYYTERRRRRRRRRR!!!

(Comments wont nest below this level)
 
Comment by Janet Felon
2014-01-08 22:15:56

What if all the neighbors paid $50k for the Honda?

(Comments wont nest below this level)
Comment by Whac-A-Bubble™
2014-01-08 23:18:37

Then I’d conclude that Uncle Sam must have made subprime auto loans to all of them for economic stimulus reasons.

 
 
 
 
 
Comment by Housing Analyst
2014-01-08 06:37:44

“New York City Housing Prices Down 13% Year Over Year”

http://www.movoto.com/statistics/ny/new-york-city.htm

Comment by Albuquerquedan
2014-01-08 08:30:28

It is costing more to provide electricity for those houses too. Soaring electricity prices particularly in the NE. Thank you Obama for your war on coal: http://www.eia.gov/todayinenergy/detail.cfm?id=14511

Comment by scdave
2014-01-08 09:48:28

Gee’s Adan…Your endless loop “Obamas fault” is getting close to being as tiresome as RAL….

Comment by Albuquerquedan
2014-01-08 09:56:21

Since Obama spent the first three years of his administration saying it Bush’s fault and now has gone on to it Reagan’s fault, it seems fair. Moreover, Obama clearly does deserve the blame on this one, his coal war raised the cost of burning coal and caused a shift to NG which has now resulted in NG going up. Sorry but it is basic economics.

(Comments wont nest below this level)
 
Comment by Anklepants
2014-01-08 19:04:52

God forbid one guy waving the flag against the myriad trolls, shills and Messiah Kool Aid drinkers who pipe up here constantly.

(Comments wont nest below this level)
 
 
Comment by Janet Felon
2014-01-08 15:02:41

I don’t like coal powerplants. Course, I like to breathe.

 
 
 
Comment by Steve W
2014-01-08 06:45:05

After the walk to work today, I can tell you that the difference between a wind chill of -12 and -42 is INCALCULABLE.

Comment by Housing Analyst
2014-01-08 06:49:02

…. and so are the losses on housing at current asking prices.

Keep your wallet in your pocket and whatever you do, don’t borrow money.

 
Comment by overpaid government contractor
2014-01-08 06:56:42

The amount of money you will loose if you buy a house today is INCALCULABLE.

Comment by azdude02
2014-01-08 07:25:06

do you like losing other peoples money like wall street?

 
 
 
Comment by azdude02
2014-01-08 06:45:30

leverage yourself like the bankers do and the casino markets will pay off for you.

Comment by Mr. Banker
2014-01-08 06:52:44

Leverage yourself like he bankers do USING OTHER PEOPLE’S MONEY and the casino markets will pay off for you.

When you win you get to win big. When you lose … well, just whose money is it that is lost?

“You can’t lose with the stuff I use.” - Rev Ike

Comment by azdude02
2014-01-08 07:23:01

Its your only shot at escaping debt serfdom.

leverage your self @50:1 and just pray janet yellen keeps the whole scheme going.

Comment by Mr. Banker
2014-01-08 07:35:09

“… just pray janet yellen keeps the whole scheme going.”

The way it is set up now Janet Yellen isn’t given much of a choice.

“You can’t lose with the stuff I use.” - Rev Ike

(Comments wont nest below this level)
 
 
 
 
Comment by Housing Analyst
2014-01-08 06:51:44

“Sacramento Housing Prices Crumble 11% Since July 2013″

http://www.movoto.com/statistics/ca/sacramento.htm

 
Comment by Housing Analyst
2014-01-08 06:53:07

“Thousands Oaks CA Housing Prices Crumbling; Down 24% Year Over Year”

http://www.movoto.com/statistics/ca/thousand-oaks.htm

 
Comment by Housing Analyst
2014-01-08 06:54:16

“Simi Valley CA Housing Prices Fall 14% in 2013; Declines accelerating”

http://www.movoto.com/statistics/ca/simi-valley.htm

 
Comment by Housing Analyst
2014-01-08 06:55:40

“Moorpark, CA Housing Prices Down 26% Since 2010″

http://www.movoto.com/statistics/ca/moorpark.htm#city=&time=5Y&metric=Median%20L

 
Comment by Housing Analyst
2014-01-08 06:57:22

“Irvine, CA Housing Inventory Balloons 109%; Housing Demand Collapses”

http://www.movoto.com/statistics/ca/irvine.htm

 
Comment by Anklepants
2014-01-08 07:25:50

Disruptive shill of the day award for yesterday goes to . . .

Mr. Banker!

Rookie pop-up shill of the day for yesterday goes to …

Common Sense

Shill distraction Subject of the Day for 1/7 . . . Tie between the Knockout Game and Flobal Warming.

Congrats to all the nominees.

Who will win these prestigious awards today?

Comment by Housing Analyst
2014-01-08 07:35:02

“Anklepants”….. hmmm…. That must be RioAmerican in Yonkers you’re referring to.

Comment by Anklepants
2014-01-08 19:06:26

I do recall Copacabana playing during huge traumatic event.

 
 
Comment by Albuquerquedan
2014-01-08 08:09:21

Excuse me but the purpose of the bits bucket is to post stories not related directly related to housing. This helps prevent any postings on the housing part of the blog. Thus, there cannot be distractions on the bits bucket since everything is fair game. BTW, be careful ankle pants since due to global “warming” you might get frost bit on your azz in Yonkers.

Comment by Ben Jones
2014-01-08 08:29:53

‘the purpose of the bits bucket is to post stories not related directly related to housing’

That’s not how it started off. Back in the day, if I had a post on Florida, posters in say Virginia might try and hijack it with posts about their area. So the bits bucket was a place to post mainly housing bubble comments outside of area specific posts.

Comment by Albuquerquedan
2014-01-08 08:34:17

Thanks for the clarification. So is it restricted to stories directly related to the housing bubble?

(Comments wont nest below this level)
Comment by Ben Jones
2014-01-08 08:54:50

It evolved into what it is. I saw that after a long time, people had other things they wanted to discuss. Because I see many of you as friends, I allowed more of that. It doesn’t always further my objective of this blog, but I do it as a courtesy. I only mention that so posters/readers might take note and behave accordingly. From time to time I consider not having a bits bucket anymore, but I’ll leave it be as long as it isn’t too much of a pain the in neck.

 
Comment by Albuquerquedan
2014-01-08 09:02:13

Thank you. We live in an interconnected world and while the connections to housing may not be obvious they are there.

 
Comment by Suite Joey Blue Eyes
2014-01-08 09:17:48

Unfortunately housing has become intimately interconnected with tax policy, redistribution, and the economy as a whole. If we get back to a roaring property market again, I think things will return to a housing focus.

 
Comment by phony scandals
2014-01-08 09:20:47

“So is it restricted to stories directly related to the housing bubble?”

I could be wrong, but I took it as….

“That’s not how it started off”

Just in case I am mistaken, I will run a test.

Taxpayers Give Ridiculously Large $100K Birthday Gift To Michelle Obama

January 7, 2014

Turning 50 is a major milestone in most peoples’ lives. For someone with the entitlement mentality of Michelle Obama, it can be an opportunity to waste even more taxpayer money than usual.

While she has already enjoyed yet another lengthy Hawaiian getaway with her husband and daughters, Obama was apparently not ready to return to the drudgeries of being the first lady. Instead, her family returned home without her, allowing her to continue enjoying the island alone.

Reports indicate that, as with other such trips, the taxpayers will ultimately pick up the tab for this outrageous vacation extension. The total cost – including security and travel expenses – is expected to approach $100,000.

This is hardly the first time Michelle Obama has arrived earlier or left later than Barack during a vacation. She routinely acts as though her position gives her free reign over the nation’s revenue and, considering she has repeatedly done so without consequence, seems justified in her approach.

Her return date has not been announced and, according to a White House statement, Barack Obama allowed her to stay behind as his birthday present to her. Millions of Americans would undoubtedly cherish the ability to spend six figures of someone else’s income to purchase a loved one’s gift. Unfortunately, this is a perk reserved for our imperial president.

http://overpassesforamerica.com/?p=734 - 64k -

 
Comment by priveledge of office.
2014-01-08 15:53:25

I’ve spent $100k on vacations like that.

 
 
 
Comment by Anklepants
2014-01-08 19:11:00

Dan, no worries, you are doing Yeoman’s work waving the flag against the myriad shills here. And you actually back up your comments with facts and a learned understanding. Not like some Mango millionaires.

 
 
Comment by Albuquerquedan
2014-01-08 08:23:13

Fighting PCness 24 hours a day. The media is so PC today they will never identify the race of a suspect unless he or she is white. In this description they can tell you the age and gender but not the race?

SAN FRANCISCO (CBS SF) — Police are seeking two suspects who pepper-sprayed a TV news crew and stole their camera in San Francisco’s Mission District on Monday evening.

The robbery was reported at about 6:25 p.m. in the 1100 block of Valencia Street.

The crew from Spanish-language station Univision 14, which consisted of four men between the ages of 28 and 61, was breaking down their equipment after filming in the area when two male suspects believed to be in their late teens ran up from behind and pepper-sprayed them, according to police.

The suspects then took the camera and fled west toward San Jose Avenue, police said.

The victims were treated at the scene for eye irritation and then released.

The incident was the latest in a series of robberies targeting TV news crews in the Bay Area and the third incident in the last six months. In August, a KGO-TV crew was robbed of their camera gear at gunpoint in broad daylight in Oakland by three men. In September, an armed security guard traveling with a KRON news crew in San Francisco foiled an attempted robbery and shot one of the suspects.

Local stations have been hiring private security guards to travel with news crews in high-crime areas.

 
 
Comment by Albuquerquedan
2014-01-08 08:00:03

The lengths that the MSM, doing the bidding of the PTB, will go to attack Sarah Palin are amazing. Here is a story which essentially accuses her of overtaxing big oil and hurting oil production. She championed a tax that tripled the taxes paid by big oil after investigations showed that they may have bribed officials to keep taxes low. The new tax generated $6.81 billion or three times what they were paying. It is of course a governors duty to maximize the benefits of finite resources to the public. That does not mean a tax so high that the resource does not get developed but that did not occur here. Of course, any tax will reduce output so it is a balancing act which she appeared to do a great job of doing. Sarah Palin at her core is Andrew Jackson type populist that is why the PTB hate her. Andrew Jackson fought against the big banks. Did he have flaws, ask the Native Americans about that.
Palin is not in the pocket of the PTB and certainly would not pursue policies such as open borders for the benefit of the PTB. Her policies are for benefit of Americans. The attacks on Cruz, Palin and the Tea Party all seek to prevent policies that interfere with globalization.

BTW, are the authors of the story suggesting there should be no tax on oil companies since that would increase production even more?

http://www.bloomberg.com/news/2014-01-08/bp-to-conoco-seek-alaskan-oil-comeback-as-palin-tax-dies-energy.html

Comment by In Colorado
2014-01-08 09:18:26

Interesting … the billionaires are turning on her.

Comment by Albuquerquedan
2014-01-08 09:38:27

The billionaires never supported her, that is the point. They wanted Romney as McCain’s running mate and then did everything in their power to discredit her when he picked her. These people always vet and make sure both the Republican and the Democratic candidate will support their agenda. They may prefer one over the other but they are both vetted. When McCain put Palin on the ticket, they had no trouble supporting Obama. The stock market may have been a house of cards but I think they originally intended to hold it up to after the election, however after the selection of Palin and the McCain ticket a head in the polls, they had no problem helping the stock market collapse which then got Obama elected.

Comment by Albuquerquedan
2014-01-08 09:44:50

The irony is I think the billionaires thought that it would be much easier to put humpty dumpty back together. I really do think that they anticipated a Reagan like V shaped recovery in the economy. They achieved a V shape recovery in the stock market but they have never been able to get people to trust the system enough to assume the previous debt levels.

(Comments wont nest below this level)
Comment by Albuquerquedan
2014-01-08 10:13:32

http://voices.yahoo.com/andrew-jackson-populism-democratic-party-33224.html

We have come full circle. Andrew Jackson’s power base was in the West and South and against the elites which included those in Virginia. The banking interests wanted control and he fought it and the kind of attacks on him were very similar to ones you now hear against Tea Party members. The Tea Party is very close to the Andrew Jackson wing of the Democratic party in those days.

 
Comment by Albuquerquedan
2014-01-08 10:19:16

This is an except from the link, remember this article was written by someone who actually was critical of Andrew Jackson, of course that is why it is in the MSM, but still it is instructive:

The rise of populist discontent following the 1824 presidential election, in which John Quincy Adams won the presidency in a congressional “corrupt bargain,” centered around the new feeling of democratic disenfranchisement in the western and southern states. The embodiment of these feelings came in the “outsider” candidacy and presidency of General Andrew Jackson, who wanted to bring the power to the American people for the first time since the Revolutionary War. Jackson was best known as the hero of the Battle of New Orleans, a critical military victory in the War of 1812. Jackson was also a local justice, Tennessee state legislator, and farmer who relied on grassroots political efforts to win the popular vote in the 1824 presidential election. Scorned by the “corrupt bargain” of Adams and Henry Clay, Jackson built a new party, the Democratic Party, to aid his efforts in bringing the American people into Washington D.C.
Jackson’s early presidency was unlike many others because his agenda was ad hoc and his general guide was to bring American people into the presidency. While he was a strong presence in Washington, he held events to open the executive office to the American public and hear out the problems of the common man. This showed his faith in the wisdom of the American people to know what is in the best interest of the nation. Jackson also wanted to expand the power of the executive office because of his contempt for elitist politicians and his belief in Jeffersonian, laissez-faire economics. Jackson, overall, wanted to increase the equality of economic opportunity for all Americans and to strengthen the American government to provide more for the public.

However, Jackson’s populist presidency was not as rosy as the platitudes he spoke of. His constant battle with the Bank of the United States, a predecessor of the Federal Reserve, was a political coup for Jackson and the Democrats but also created problems for his successor Martin Van Buren, who had to endure the horrible Panic of 1837. The Peggy Eaton Affair, involving the questionable relationship of Secretary of War John Eaton and the elitist social structure of Washington, again earned Jackson a reputation as an honest man but damaged his reputation with the Washington elite that could help him win some vital congressional battles. The Nullification Crisis, which involved the threat of South Carolina’s secession from the Union if forced to pay high tariffs, nearly tore the nation apart three decades before the Civil War. However successful Jackson’s actions in the executive office may have been during his presidency, they were responsible for damaging relations between different regions of the nation and the economic stability of the nation during subsequent administrations

 
 
Comment by In Colorado
2014-01-08 10:48:37

The billionaires never supported her, that is the point. They wanted Romney as McCain’s running mate and then did everything in their power to discredit her when he picked her.

McCain might have won had Rmoney been his VP. When they nominated Caribou Barbie the only conclusion I could come up with was that they knew what was coming down the road and decided it would be better to lose.

(Comments wont nest below this level)
Comment by Albuquerquedan
2014-01-08 10:59:41

She put him into the lead until the stock market collapse. If your theory was correct why not make efforts to hold the market up until after Obama took office? Your theory would make a lot more sense had the market collapsed later. Then, Bush could have avoided taking the blame for the collapse and he is clearly part of the PTB crowd. No, McCain shocked them by picking an unapproved candidate and they had to move. The stock market did not just fall on its own there was heavy selling during periods of low volume. It was just like the Clancy Novel Debt of Honor. No, the PTB helped engineer the fall knowing they would be bailed out and actually would make more money since they would be able to buy shares cheap.

 
Comment by In Colorado
2014-01-08 11:57:13

As soon as they nominated her, I knew the media would rip her to shreds, and they did, they made her look like a bumpkin. Sure, the Bush economy collapse didn’t help their cause, but I think that was just the final nail in the coffin.

I don’t see how she would have helped. He demographic was hard core, redneck, GOP’ers. She certainly wasn’t going to sway any swing voters with her Wasilla Hillbilly schtick, and that’s what you have to do to win.

 
Comment by Albuquequedan
2014-01-08 12:09:26

Sure, the Bush economy collapse didn’t help their cause, but I think that was just the final nail in the coffin.

Had the economy not collapsed McCain would have won, she had increased turn out among the base that much. The collapse of the debt bubble was inevitable but the PTB had the power to postpone it and instead they accelerated it and I am still not hearing from you on why they would want to do that?

 
Comment by In Colorado
2014-01-08 14:03:13

Had the economy not collapsed McCain would have won, she had increased turn out among the base that much.

Well, that’s your opinion. The media did a great job of making her look like a fool, and she helped them. Her redneck demographic is always a slam dunk for the GOP. And if anyone brought out the “base” for the GOP, it was the scary black man.

 
Comment by Albuquerquedan
2014-01-08 14:07:43

Sorry Colorado but you are still not answering the question is why didn’t the PTB postpone the stock market crash until after Obama took office and in fact seem to be causing it? Somebody was forcing the market lower and Soros by himself could not have done it alone.

 
Comment by In Colorado
2014-01-08 20:15:06

Sorry Colorado but you are still not answering the question is why didn’t the PTB postpone the stock market crash until after Obama took office and in fact seem to be causing it?

Because it wouldn’t have mattered?

 
 
 
 
Comment by Overtaxed
2014-01-08 10:55:27

The republicans will never win again (and, yes, I typically vote R) unless the remove their heads from their a**es and take a look around. IMHO (and certainly for me personally) they need to drop their bats**t crazy religion/god/guns angle and run on a more libertarian platform if they hope to win. Simple fact of the matter, most people in this country aren’t rich. And the R’s are the party of the rich. They “sucker in” plenty of religious folks with their statements but then, once in office (thankfully) do absolutely nothing to appease the religious right that got them elected. The people who continually vote R are, IMHO, starting to wake up and realize that they aren’t the party of God, unless, of course, you think that Wall St and high paid execs are, in fact, the second coming.

There is desire in this country to have more freedom and less taxes and, consequently, services from the government. I hear it every day. Get out of our lives, stop regulating all kinds of stuff you have no business even discussing (probably the best example, steroids in baseball) and let us live our lives free of government oppression. The war on drugs needs to end, law enforcement and military employment needs to drop dramatically and a tremendous number of laws need to be repealed. I read somewhere (and I certainly believe this) that, on average, most American citizens commit about a dozen crimes a day, and, of those, several are felonies. That’s ridiculous, you make everything illegal and then, suddenly, nothing seems to really be “bad” anymore. Simple fix; no victim, no crime (except in the case of murder). The “state” pressing charges is a perversion of justice and needs to stop immediately.

Sorry for the rant, I’ve just been reading a lot the last few weeks and get more and more upset with the direction that this country is taking every day. And I’m not the only one. Take a look at the rise of the 20-30 year old’s who, for whatever reason, are simply dropping out of society. No good jobs, no good marriage prospects, no drive to make themselves better.. People are “going Galt” and it seems to be happening more and more everyday. This trend is being seen across the globe (China/Japan most notably) and, eventually, will be something that we have to, as a society, deal with. I’ve posted before about how “good jobs” every day that passes, require a higher and higher level of intelligence and training, and that, there is already a huge segment of society that simply can’t do the jobs that are open. We still struggle to find people to fill network engineering positions that pay at least 125K/yr. They already have jobs paying more, or they just have better options. And yet, at the same time, there are a tremendous number of unemployed out there who have no shot at becoming engineers (of any type) because they simply don’t have the intelligence to do the work. As this trend accelerates, we need to thing up solutions. What we’re doing today isn’t working.

Comment by scdave
2014-01-08 13:38:39

+1 OverTaxed…Well said and I would agree…

 
Comment by Albuquerquedan
2014-01-08 14:09:30

Simple fact of the matter, most people in this country aren’t rich. And the R’s are the party of the rich.

And the Democrats are the party of the super rich and the poor. There is no one looking out for the middle class.

Comment by Albuquerquedan
2014-01-08 14:19:14

Actually pretends to help the poor thereby gaining power for themselves, just like happened in Rome. What the war on poverty really does:

http://bastiat.mises.org/2014/01/horwitz-war-on-poverty-keeps-the-poor-down/

(Comments wont nest below this level)
 
 
Comment by MightyMike
2014-01-08 14:51:43

We still struggle to find people to fill network engineering positions that pay at least 125K/yr.

That might sound like a good salary, but if you can’t get anybody, you must not be offering enough.

 
Comment by Anklepants
2014-01-08 19:18:32

” I read somewhere (and I certainly believe this) that, on average, most American citizens commit about a dozen crimes a day, and, of those, several are felonies.”

That’s ridiculous and simply not true. It also takes away from the blame from the many, but on a percentage basis few, who do commit crime and should be punished.

While I sympathize with your point about Rich republicans (and another’s point about poor exploiting Dems) and a libertarian bent, other than speeding what are all these crimes? Downloading music? Cheating on taxes doesn’t happen every day.

 
Comment by Trapper
2014-01-08 19:33:56

Great commentary Overtaxed.
-T

 
 
Comment by Carl Morris
2014-01-08 16:29:13

Sarah Palin at her core is Andrew Jackson type populist that is why the PTB hate her.

And that is exactly why I like her despite her flaws. We could really use one of those about now. They would either put the banksters in their place or end up dead, though. And I do think she would try based on what she did to the PTB Alaska chapter.

 
 
Comment by Bill, just South of Irvine
2014-01-08 08:16:41

In 2013 bargain hunting gold bugs and central banks “got more physical.”

http://wallstcheatsheet.com/stocks/are-goldbugs-getting-more-physical.html/

Comment by Albuquerquedan
2014-01-08 08:39:20

The paper manipulation will work until it fails. On that day, you will want to own as much gold as possible. It may be days it maybe years but the manipulation will not last the decade.

Comment by Common Sense
2014-01-08 09:56:10

Yup, gold and ammo. You can have a million in the bank and it won’t be with the paper it’s printed on.

 
 
 
Comment by Suite Joey Blue Eyes
2014-01-08 08:17:10

Interesting PBS Frontline episode … “To Catch a Trader”, which deals with insider trading, securities regs, how a case is made, and the difficulties in building a case.

The episode mostly deals with the recent SAC case (which settled) but also a bit with Galleon Group, which put Raj Rathnatham (sp?) in jail for the rest of his life.

I don’t have cable so I watched online and you can too: http://www.pbs.org/wgbh/pages/frontline/to-catch-a-trader/

Comment by overpaid government contractor
2014-01-08 08:33:28

@Downlow Joe

I decided to be more MMM and sell the second vehicle. I actually haven’t been driving it for a few months because I’ve been “leasing” it to a friend who moved to Maui last year looking for paradise and moved back here with no job after she didn’t find it. I will sell it to her or someone else in the next few months.

The Civic gets 37 mpg highway and 30-ish in city driving. Sad panda boohoo to no more 4wd National Forest trailhead access but I can always carpool with friends.

The savings on gas and insurance will be added to the growing pile of money that I have after “throwing money away on rent” every month.

Comment by Suite Joey Blue Eyes
2014-01-08 09:11:11

Nice, esp. because civic parts are very inexpensive. I have fond memories of when RAL tried to tell me an alternator would cost me $700 (or whatever ridiculous price he said). The last few years I would buy the parts online — some sites will match your VIN number to the parts that will fit your car; I even bought from out of state Honda dealers sometime. Then I’d have a buddy of mine do the work if it was basic, or else I went to a local shop in a very unfancy area and paid cash for their labor time.

I’m not sure how CO taxes and fees work, but does selling the 2nd car help on those? I know some states tax people on the value of their cars, e.g. Connecticut.

Insurance is another savings. Everything adds up. Have you tried Progressive SnapShop yet? It’s free and they give you feedback on your driving and a quote at the end of 30 days. I found it would cost me more than GEICO, so I just send the snapshot back about 2 weeks ago in the prepaid box they send. I looked at the driving data and it seemed like it might work for someone driving mostly on highways or in the suburbs. It didn’t seem to care about the miles driven as much as it cared about “hard stops” and “heavy accelerations”. We drove an avg of 9 miles/day for the month but there were something like 20 hard stops and 3-4 heavy accelerations we were “penalized” for. It was worth the experiment, but GEICO at $370 for 6 months was a lot better price than what Progressive offered.

Comment by In Colorado
2014-01-08 09:25:14

I’m not sure how CO taxes and fees work, but does selling the 2nd car help on those?

They do tax cars here, but the tax drops rather quickly after a few years. From my experience registration fees/taxes dropped from $500 to $150 after about 5 years on a car that cost $20K new.

(Comments wont nest below this level)
 
 
 
Comment by rms
2014-01-08 08:36:34

“…which put Raj Rathnatham (sp?) in jail for the rest of his life.”

Wow, what happened to 36-months of golfing at Lompoc, CA?

Comment by Suite Joey Blue Eyes
2014-01-08 08:56:00

I should’ve been more specific. He would get out in something like 2025, but he’s going to die in prison I think. I haven’t seen good info about what disease/illness he has. I know he’s in a special facility for ill inmates.

 
 
 
Comment by Ben Jones
2014-01-08 09:10:38

This invoicing matter has come up before:

‘China’s regulatory body responsible for managing the country’s foreign exchange reserves (SAFE) announced last month that it was planning to increase enforcement and penalties associated with the abuse of trade payments to mask illicit inflows of foreign exchange. How exactly are traders using trade payments to circumvent controls on bringing foreign capital into China? One measurable way which Chinese regulators alluded to is a process known as “export over-invoicing”. This involves the deliberate falsification of export invoices to make it seem as if exporters are sending more goods out than they actually are. By doing this, an exporter can smuggle in additional capital—under the guise of legitimate trade payments—before diverting the foreign capital (illegally) into other more lucrative investments like bonds or real estate.’

‘Putting this into perspective, the $101 billion of foreign exchange brought in through illicit exports represents about 40 percent of the $253 billion of legal net FDI that China received from abroad during the same year. Such large sums of money have the potential to be destabilizing, and are most likely being used to fuel further currency and housing speculation within the country.’

‘Worryingly, there also appears to be a direct correlation between the amount of hot money entering China through export over-invoicing and the US Treasury bond rate. As rates have declined in the US due to the Fed’s monetary stimulus that began in 2009, export over-invoicing has increased in lock-step.’

‘Will the easing of monetary stimulus in the United States cause this hot money to quickly reverse its course? It’s very possible. A similar event happened in the 1997 crisis.’

http://www.trust.org/item/20140107121906-9yk6o/?source=hppartner

Comment by Suite Joey Blue Eyes
2014-01-08 09:14:35

China has known for a long time that it’s too hard to get foreign capital into the country, so companies will lie about export values, etc. There was a segment on this yesterday on APM Marketplace.

Chinese companies also routinely ship inventories through Hong Kong, which gives them a rebate on tarrifs for when the ship the same inventory BACK to China. I think the reasons given were that the appearance of control and rules matters and the policies are secondary. They want to appear in control so they can use that as a pretense if they ever need to take drastic measures re: an economic meltdown.

Comment by Ben Jones
2014-01-08 09:36:55

‘companies will lie about export values’

I was thinking about this. If you send me a bill for something I didn’t receive, why would I pay it? It would have to involve an arrangement of some sort where we both benefit. In any case, there is tax evasion and money laundering involved. What’s being hidden? Illegal drug profits? Ponzi schemes?

Comment by scdave
2014-01-08 10:00:41

What’s being hidden? Illegal drug profits? Ponzi schemes?

All the above and some…..

(Comments wont nest below this level)
 
Comment by Suite Joey Blue Eyes
2014-01-08 10:07:34

No, it’s the companies want to bring in outside funding from the U.S. It’s not easy to do this given the restrictions on capital. Not necessarily dirty money, just money that won’t have to clear all the official hurdles about investing in China. (I guess some could be laundered money, but I don’t think that is a big problem.) One way to circumvent the foreign capital controls is to inflate the value of the goods you export. So instead of saying you shipped 1.5 Billion of widgets last year, you say it was 1.8 Billion. Then, when ~1.8 Bil comes back into your company in China, it doesn’t look suspicious, it looks like your revenues for exported products.

Everyone knows this goes on in China, it’s nothing new. But because there are extensive laws about it, if China ever _does_ want to clamp down, they’ll be able to. If China wanted to promote law abiding behavior, they would adopt rules making it easier for non-Chinese to directly invest in China. Right now, it requires a lot of legal manuevering, hiring relatives of state officials, etc.

(Comments wont nest below this level)
Comment by Albuquerquedan
2014-01-08 10:44:13
 
Comment by Albuquerquedan
2014-01-08 12:19:27

An excerpt:

The average yield on structured “wealth management products” issued by banks is as high as 6.4%, according to Cnbenefit, a firm that tracks the industry. The yuan is also likely to appreciate as policy makers liberalize the financial sector. By comparison, ordinary deposits in Hong Kong pay 0.7%, according to the International Deposit Rates Exchange.

With that kind of differential, it’s not surprising that companies have found plenty of ways to move money into China, often under the guise of paying for export shipments. “Trade is still a major channel to bring in hot money,” said Liu Li-Gang, ANZ BankANZ.AU -0.47%’s chief economist for greater China.

Some of the export growth is undoubtedly real – the global economy has been doing better lately, and exports from China to the U.S. and Europe, which are showing signs of recovery, were strong. A weak base effect – exports in November 2012 were poor – also made the current month’s numbers look strong.

But a similar run-up in China’s exports that began in the fall last year came crashing to a halt in May after regulators tightened their supervision over customs invoicing. Data watchers are now on the alert for a sequel.

There are plenty of tricks in the playbook. Companies can overstate the value of their exports, or even physically pass goods through customs and then smuggle them back in. Or they can use letters of credit to get cheap money from Hong Kong banks that will be passed back to the mainland and parked in wealth management products until it is time to pay it back.

 
Comment by Suite Joey Blue Eyes
2014-01-08 12:45:17

Simply by loading a ship in Shanghai, sailing it to Hong Kong, emptying & reloading the ship, companies can make 17% because Hong Kong will reimburse them for the tariffs because China–> Hong Kong still counts as an export and HK charges tarrifs.

An additional fact — if these “round trips” and overstating of export values didn’t happen, the U.S. would still have the most exports by total value.

 
 
 
 
Comment by Albuquerquedan
2014-01-08 09:15:59

Yes and there has been reasonable speculation that the cash payments for housing in the United States were financed due to the over-invoicing.

Comment by Ben Jones
2014-01-08 09:21:13

‘Banks told to strengthen oversight of credit card delinquencies’

‘The China Banking Regulatory Commission Shanghai Office said some banks didn’t fulfill their obligation to inform credit card users of liability for malicious overdrafts…Banks should remind card holders that making repayments on past-due bills will exempt them from criminal liability, in order to minimize the negative impacts on the users and their families, and to maintain social harmony and stability, said the CBRC Shanghai office.’

http://www.ecns.cn/business/2014/01-07/95837.shtml

 
 
 
Comment by phony scandals
2014-01-08 09:29:41

Insight: Underfunded U.S. homeowner associations get heavy
By Michelle Conlin

Wed Jan 8, 2014 1:22am EST

(Reuters) - For six years, Ingrid Boak, who travels a lot for work as a racehorse trainer, ignored mail from her homeowner association.

Boak, of Lexington, Kentucky, says the letters were requests for $48 in annual fees for upkeep of the tidy neighborhood of one-story brick homes. Because she didn’t use the clubhouse or pool, or participate in social activities sponsored by the association, she didn’t think she needed to pay. Last September, while she was away, a neighbor called to tell her about a handwritten sign tacked to her front door. It said her house had been sold.

Masterson Station Neighborhood Association had foreclosed on her $120,000 home because she had $288 in unpaid dues, according to the association’s lawyer, Nathan Billings. Boak was sent nearly 30 notices before her property was foreclosed on, he said; the dues were mandatory association fees.

Boak says she does not remember seeing a foreclosure notice, and no one served her papers in person. She likens the experience to her father’s in East Germany, where the communist state took away property rights. “Now I’m 75, and the same thing is happening to me, in America,” she says. With her once-good credit damaged, she is unable to buy another house, and now rents her old one from the new owner for $900 a month.

The Community Associations Institute, an advocacy group for homeowner associations, says foreclosures are a last resort, but also a matter of fairness: Neighbors who pay shouldn’t be penalized by neighbors who don’t. “It’s a community, but it has to be run like a business,” says spokesman Frank Rathbun.

FEWER POTHOLES, FEWER RIGHTS

Homeowner associations first took off in the 1970s as local governments looked for a way to offload costly services, such as snow removal and road repair. Municipalities have encouraged their growth since through tax incentives and zoning laws.

Today some 63 million Americans live in homeowner associations, up from 2.1 million in 1970. Four out of five buyers of new homes, including condominiums, end up in such communities.

Boak isn’t the only one who paid a price for ignoring her mail. For four years, Colorado’s Woodmen Hills Filing Number 11 Design Review Council sent Christopher Wright notices for late payments that eventually reached $900, said the homeowner association’s attorney, Jerry Orten. But Wright, who told southern Colorado NBC affiliate KOAA that he thought the notices were fines for keeping his kids’ bikes outside, never responded.

Wright, who could not be reached for comment, was served in March with paperwork to foreclose. His $350,000 house recently sold at auction for $10,900.

http://www.reuters.com/article/2014/01/08/us-homeowners-association-insight-idUSBREA0706N20140108 - 106k -

Comment by inchbyinch
2014-01-08 10:02:12

HOAs - I am in Commercial PM, and HOA firms are the few hiring, which is a dilemma for me. I think they are hungry for power and the thought of a lien doesn’t sit well with me. I get the homeowner’s legal obligation thing, don’t get me wrong, but HOAs have morphed beyond sensibility and have become total totalitarian monsters.

Accounting jobs are few and far as well. OK, off to the races. Everybody have a great day.

 
Comment by In Colorado
2014-01-08 10:54:54

I know that our HOA has a few houses in arrears. From what I have gathered at HOA meetings, they are content with issuing late fees and liens. If they foreclosed (not sure they can do that here) they would have a homeowners revolt.

Two years ago, a couple of activist board members wanted to raise fees and build a pool/clubhouse. That died FAST when all the angry homeowners showed up at the meeting.

Comment by polly
2014-01-08 14:12:36

The only way for something like that to die FAST is for people to read their mail. Same thing for the people whose houses were sold out from under them for small debts. They didn’t read the papers. You think that the only penalty for not paying your HOA dues (a responsibility you took on when you bought the house) is to not be allowed to use the pool or the club house? Well, as long as you read the agreement and make sure that is the case, that is fine. But if you are just guessing that loss of pool passes is the only outcome because you think it should be, or that was the case when your parents had a house with an HOA? Well, that is your risk to take.

A huge number of headaches in the world can be avoided by reading stuff before you sign it.

 
 
 
Comment by Ben Jones
2014-01-08 09:41:36

‘The $3.7 trillion municipal bond market could be headed for a heap of trouble and it could all be triggered by events in Puerto Rico.’

‘According to Larry McDonald, Senior Director at Newedge, Puerto Rico’s $53 billion of public debt ($160 billion – or $46,000 per person – if you add in other government debts and pension obligations), is making the commonwealth’s finances look eerily similar to that of Greece. And, says McDonald, Puerto Rico’s accounting is even less transparent than that of his old firm, Lehman Brothers, around the time of the financial crisis.’

‘McDonald believes Puerto Rico will ultimately be able to sell additional bonds this coming February, though not at the levels they’d like.’

“The government thinks it can sell $2 billion worth of paper,” says McDonald. “I think it’s going to be more like $500 million. It’s a real watershed moment because if they don’t sell this paper, the market is going to lose all confidence. But, I think they’re going to get the deal done.”

‘Puerto Rico was able to fund itself at relatively low rates in part because the Federal Reserve Bank’s quantitative easing policy brought yields lower, according to McDonald. Investors seeing slightly better returns were attracted to Puerto Rico’s debt in the same way they flocked to credit default obligations and sub-prime mortgage bonds when rates were low before the financial crisis, he says.’

“I think this new bond that Puerto Rico is going to come up with is going to be a third lien with a claim on the sales tax revenues,” says McDonald, “a very interesting claim that’s going to keep some people comfortable. But, [its interest rates are] going to be way above the general obligation bonds.”

http://finance.yahoo.com/blogs/talking-numbers/this-could-be-another-lehman-like-crisis-034217339.html

Comment by scdave
2014-01-08 10:07:16

Puerto Rico has been on the lips of many analysts the last several weeks.

 
 
Comment by taxpayers
2014-01-08 09:42:55

uk prices drop -making ha rabid

inventory still tight here in obama funded ,gov worker sector 22151

Comment by Housing Analyst
2014-01-08 13:22:58

Looks like prices are down 8% YoY right in your back yard.

http://www.movoto.com/statistics/va/annandale.htm

 
 
Comment by Housing Analyst
2014-01-08 10:06:49

“Costa Mesa Housing Prices Crumble 6% in 2013; Inventory Balloons 102%”

With prices as grossly inflated as they are, it’s no wonder housing demand has collapsed to 16 year lows.

 
Comment by Housing Analyst
2014-01-08 10:09:21

“Huntington Beach, CA Housing Prices Spiral Down 8%; Inventory Looms”

http://www.movoto.com/statistics/ca/huntington-beach.htm

Comment by Puggs
2014-01-08 10:35:53

Inland it’s worse!!

 
 
Comment by Housing Analyst
2014-01-08 10:16:37

San Clemente, CA Housing Prices Crater 33% Since April 2013 On Sinking Demand

http://www.movoto.com/statistics/ca/san-clemente.htm

 
Comment by phony scandals
2014-01-08 10:33:29

Scientists Discover Conjoined Gray Whale Calves Dying Near West Coast

by Mikael Thalen
January 7th, 2014
Updated 01/07/2014 at 8:41 am

Following continued news of disturbing sea life occurrences off the West Coast, scientists in Mexico’s Scammon’s Lagoon, also known as Laguna Ojo de Liebre, have discovered what appears to be the first ever documented case of conjoined gray whale calves.

Discovered last Sunday, the calves, which did not survive, measured in just under seven feet long, much smaller than the average newborn length of 12 to 16 feet.

“Unfortunately the specimen died, his survival was difficult,” a translated comment from the Guerrero Negro Verde Facebook page reads.

Shockingly underdeveloped, American Cetacean Society researcher Alisa Schulman-Janiger believes the calves were the result of a miscarriage. Later collecting the carcass for further analysis, scientists made no comments regarding a possible cause.

Although no information has yet been released, concerns over the ongoing Fukushima disaster has many asking questions, especially in light of rare animal deaths spreading along the West Coast.

Incidences such as the ongoing “melting sea star” epidemic, which has been seen off the coast off California, Oregon, Washington and Canada, has yet to be explained as sea stars are found literally disintegrating.

Even with Japanese scientists finding “high” Cesium levels in plankton throughout the Pacific as far back as May 2013, governments continue to call the amounts safe.

A recent study published in the journal Proceedings of the National Academy of Sciences found that the number of dead sea creatures covering the floor of the Pacific is higher than it has ever been since monitoring began 24 years ago. Despite attempts by some to “debunk” the study and blame the occurrence on “global warming,” a closer look at the study clearly points to Fukushima as the most likely factor.

Following the Department of Health and Human Services’ purchase of 14 million doses of potassium iodide last week, many believe the federal government has begun preparing as the situation in Japan worsens.

Admittedly high radiation levels recently found on a California beach have also brought national attention to the subject, with major news outlets such as the Drudge report linking to reports of the incident.

While the verdict is still out on the once in a lifetime whale discovery, the continued growth of rare occurrences has only peaked the public’s interest.

http://www.storyleak.com/scientists-discover-conjoined-gray-whale-calves-dying-near-west-coast/ - 62k -

 
Comment by Whac-A-Bubble™
2014-01-08 10:40:59

A jumbo mortgage without a jumbo down payment
Private mortgage insurance makes a comeback
By AnnaMaria Andriotis, MarketWatch

Private mortgage insurance is slowly starting to creep back into large home loans, adding a new fee for some wealthy borrowers.

Traditionally, this insurance is sold to buyers who make small down payments, typically less than 20%, and is designed to protect lenders if a borrower defaults. The policies were widely used during the housing boom, but insurers scaled back amid rising foreclosures. Demand for the product plummeted when banks ended low down-payment programs for most borrowers.

But now, as home values are rising and banks are experimenting with looser lending standards, private insurers are preparing a comeback. They are especially interested in private jumbo loans, which exceed $417,000 in most of the country and $625,500 in pricier markets. To appeal to wealthy borrowers, insurers are lowering costs and increasing the size of mortgages they will cover.

In December, Mortgage Guaranty Insurance Corp., a private-mortgage insurer, increased the maximum mortgage it will insure from $750,000 to $850,000. Genworth Mortgage Insurance also raised its cap to the same level from $625,500 in October. Both insurers say they will consider even larger loans on a case-by-case basis. Similarly, United Guaranty, a subsidiary of AIG, which insures mortgages of up to $850,000, says it introduced a limited program this year for loans of up to $1 million. Another insurer, Radian Group says it may consider raising its $850,000 cap.

The moves come as the jumbo-mortgage market heats up. Private jumbo originations are on pace to hit the highest level since 2007, and some lenders are lowering down-payment requirements to attract more borrowers.

Jumbo loans account for less than 2% of the total dollar amount of loans that are insured, according to the four major insurers. But these companies say they see an opening to grab market share: They say small lenders, including community banks and credit unions, have been contacting them over the past year in search of insurance for low down-payment jumbos. “We’re making these changes because we sense some level of demand—in the last six months the number of inquiries have increased,” says Anthony Guarino, vice president of risk policy at Genworth.

Comment by Puggs
2014-01-08 10:48:05

Supersize my McMortgage!!

 
 
Comment by Puggs
2014-01-08 10:55:40

California poster child for flip to flop! Short days on market and two major price cuts…

http://www.zillow.com/homedetails/9129-Faywood-St-Bellflower-CA-90706/21062478_zpid/

Comment by In Colorado
2014-01-08 11:44:33

That would go for 160k in my little burg.

 
Comment by Housing Analyst
2014-01-08 11:47:15

SINK lolz

 
Comment by Ben Jones
2014-01-08 12:03:29

10/10/13 Sold $355,000

Still trying to make 70k or so. Nice paint job, BTW.

Comment by Rental Watch
2014-01-08 12:40:44

Nice paint job, BTW.

Seriously…inspired by Potato Bugs…

Comment by scdave
2014-01-08 13:44:10

Nice paint job, BTW ??

Oh my goodness…LOL…That has to be the most Butt Ugly paint job I have ever seen…Someone got some free paint…No-way someone paid good money for those colors…

(Comments wont nest below this level)
Comment by NH Hick
2014-01-08 19:44:38

Looks like it would make the perfect home for your typical used car salesman with the plaid jacket and striped pants.

 
 
Comment by ahansen
2014-01-09 00:23:44

LMAO.

(Comments wont nest below this level)
 
 
Comment by Albuquerquedan
2014-01-08 14:29:46

What is up with that? The green lines go horizontal on part of the house and vertical on the other part. It is not only the color scheme that is whacked.

 
 
Comment by rms
2014-01-08 12:54:23

“California poster child for flip to flop!”

A friend in San Jose, CA grew up in a near identical floor plan, and in his neighborhood that would fetch about $650k today, and $145k up in my world.

 
 
Comment by Housing Analyst
Comment by Carl Morris
2014-01-08 17:00:17

Don’t tease me like that.

 
 
Comment by Suite Joey Blue Eyes
2014-01-08 11:32:34

Aereo just released for Android phones (it’s in public beta testing).

It should also be up and working for Google Chromecast and XBox/PlayStation soon. (You can sign up to see updates on your prefered device compatibility.)

Say bye-bye to your need to carry cable just to watch network TV/sports. (Of course, you won’t have ESPN, but things like the Olympics and most championship games are still on broadcast networks.)

https://aereo.com/devices

Just to see how Aereo works, I logged on and put some football on the other week (it was on CBS). If you have a fast wifi network, it’s no different from watching on TV. I had it up on a 37″ monitor/tv using Firefox… looked great.

Comment by In Colorado
2014-01-08 11:48:46

Say bye-bye to your need to carry cable just to watch network TV/sports. (Of course, you won’t have ESPN, but things like the Olympics and most championship games are still on broadcast networks.)

You can watch the World Cup this summer on the broadcast Spanish language channels. In English you’ll probably need ESPN.

I’ve been using Aereo with a Roku box (which I also use for Netflix and Amazon Prime). It works great.

Cable/Satellite are just faint memories for me now. I sure don’t miss the $80 monthly bill.

Comment by Puggs
2014-01-08 12:05:41

That always kills me. I pay YOU $80 or more/mo. to watch commercials?!?! Yeah, no.

Comment by In Colorado
2014-01-08 13:58:33

I only watch the broadcast channels for the sports. It’s bad enough that it’s “appointment TV”. It’s 7PM! Drop everything! It’s time for XYZ! - Forget that! But I also have to be tormented with commercials? I guess I could record, watch later and skip the ads, but that’s even more work.

(Comments wont nest below this level)
Comment by oxide
2014-01-08 18:45:54

I had to stop watching football because it turned into nothing but contracts, commercials, and concussions. It took me a long time to figure out why they embedded so many advertisement into the program itself… duh, DVR..

 
 
Comment by Suite Joey Blue Eyes
2014-01-08 13:59:02

The other great thing about Aereo is, you can click and set things to DVR record, then watch them on any other device. I think Aereo lets you register 5 devices/screens for any given month. And the choices include PC, TV (directly to a smart TV or indirectly with chromecast), smart phones, roku, PlayStation/XBox, and tablets.

I’ve never DVR’d anything on Aereo, so someone else will have to chime in on whether you can skip the commercials. I’m guessing yes? Which is probably why the networks are PO’d and why the case is in federal court right now.

(Comments wont nest below this level)
 
 
 
 
Comment by Neuromance
2014-01-08 12:12:05

Former Secretary of Defense Robert Gates fires a few choice salvos in his new book.

Seems like Congress isn’t making an effort anymore to hide its dysfunction. All I can say is, ‘Heh’.

The Quiet Fury of Robert Gates
Bush and Obama’s secretary of defense had to wage war in Iraq, Afghanistan—and today’s Washington
By Robert M. Gates
Jan. 7, 2014 4:32 p.m. ET
Wall Street Journal

Such difficulties within the executive branch were nothing compared with the pain of dealing with Congress. Congress is best viewed from a distance—the farther the better—because up close, it is truly ugly. I saw most of Congress as uncivil, incompetent at fulfilling their basic constitutional responsibilities (such as timely appropriations), micromanagerial, parochial, hypocritical, egotistical, thin-skinned and prone to put self (and re-election) before country.

I was more or less continuously outraged by the parochial self-interest of all but a very few members of Congress. Any defense facility or contract in their district or state, no matter how superfluous or wasteful, was sacrosanct. I was constantly amazed and infuriated at the hypocrisy of those who most stridently attacked the Defense Department as inefficient and wasteful but fought tooth and nail to prevent any reduction in defense activities in their home state or district.

I also bristled at what’s become of congressional hearings, where rude, insulting, belittling, bullying and all too often highly personal attacks on witnesses by members of Congress violated nearly every norm of civil behavior. Members postured and acted as judge, jury and executioner. It was as though most members were in a permanent state of outrage or suffered from some sort of mental duress that warranted confinement or at least treatment for anger management.

Wars are a lot easier to get into than out of. Those who ask about exit strategies or question what will happen if assumptions prove wrong are rarely welcome at the conference table when the fire-breathers are demanding that we strike.

[Chickenhawks]

http://online.wsj.com/news/articles/SB10001424052702304617404579306851526222552

Comment by MightyMike
2014-01-08 14:25:34

I was more or less continuously outraged by the parochial self-interest of all but a very few members of Congress. Any defense facility or contract in their district or state, no matter how superfluous or wasteful, was sacrosanct. I was constantly amazed and infuriated at the hypocrisy of those who most stridently attacked the Defense Department as inefficient and wasteful but fought tooth and nail to prevent any reduction in defense activities in their home state or district.

Eisenhower originally considered using the phrase “military industrial congressional complex” in his farewell address.

 
Comment by Albuquerquedan
2014-01-08 14:34:22

He did not help Hillary’s chances in 2016 with his comments about her. Let’s see she was for the invasion which got us into the mess but against the surge which actually allowed us to get out with some dignity. But she really was for the surge but opposed it for political reasons. Yes, she is presidential caliber. (Not)

 
 
Comment by Albuquerquedan
2014-01-08 12:32:07

As I said a few days ago, the Chamber of Commerce is pushing immigration more than anyone hence their attacks on the Tea Party:

http://freebeacon.com/chamber-of-commerce-declares-2014-the-year-of-immigration-reform/

Comment by In Colorado
2014-01-08 14:06:12

Especially since the natives are increasingly grumbling that they can’t survive on $7.25/hr.

 
 
Comment by Albuquerquedan
2014-01-08 12:42:03

From WUWT story:

Cheating students more likely to want government jobs, study finds

November 18, 2013|By Emily Alpert Reyes

College students who cheated on a simple task were more likely to want government jobs, researchers from Harvard University and the University of Pennsylvania found in a study of hundreds of students in Bangalore, India.

Their results, recently released as a working paper by the National Bureau of Economic Research, suggest that one of the contributing forces behind government corruption could be who gets into government work in the first place.

Researchers ran a series of experiments with more than 600 students finishing up college in India. In one task, students had to privately roll a die and report what number they got. The higher the number, the more they would get paid. Each student rolled the die 42 times.

Although researchers do not know for sure if any one student lied, they could tell whether the numbers each person reported were wildly different than what would turn up randomly — in other words, whether there were a suspiciously high number of 5s and 6s in their results.

Cheating seemed to be rampant: More than a third of students had scores that fell in the top 1% of the predicted distribution, researchers found. Students who apparently cheated were 6.3% more likely to say they wanted to work in government, the researchers found.

“Overall, we find that dishonest individuals — as measured by the dice task — prefer to enter government service,” wrote Hanna and coauthor Shing-yi Wang, an assistant professor at the University of Pennsylvania’s Wharton School.

Comment by Muggy
2014-01-08 15:21:09

Thanks for posting an article about a study in Bangalore, India.

 
 
Comment by phony scandals
2014-01-08 12:47:02

“the citizens of Slavelandia will have no recourse but action.”

Employment Recovery? 1,600 Workers Apply For Just 36 Jobs At An Ice Cream Plant In Maryland

Michael Snyder
Economic Collapse
January 8, 2014

The stock market may be soaring to unprecedented heights, but things just continue to get even tougher for the middle class. In this economic environment, there is intense competition for virtually all kinds of jobs. For example, more than 1,600 applications were recently submitted for just 36 jobs at an ice cream plant in Hagerstown, Maryland. That means that those applying have about a 2 percent chance of being hired. About 98 percent of the applicants will be turned away.

That is how tough things are in many areas of the country today. It is now more than five years after the great financial crash of 2008, and the level of employment in the United States is still almost exactly where it was at during the worst moments of the last recession. And this is just the beginning. The next major financial crash is rapidly approaching, and once it strikes our employment crisis is going to get much, much worse.

Working at an ice cream plant does not pay very well. But at least it beats flipping burgers or stocking shelves at Wal-Mart. And in this economy, there is no shortage of desperate workers that are willing to take just about any job that they can find. The following is how a Breitbart article described the flood of applications that were received for just 36 positions at an ice cream plant owned by Shenandoah Family Farms in Hagerstown, Maryland…

Thanks to persistent unemployment and low availability of low-skill jobs, Shenandoah Family Farms’ ice cream plant in Hagerstown, Maryland has received over 1,600 applicants for a grand total of 36 jobs. Many of those applicants are former workers at the Good Humor plant that was bought by Shenandoah Family Farms. “You’d think that after 20-some-years working someplace at least somebody would think you area a good person, that you’d show up on time every day, and that would be worth something,” Luther Brooks, a 50-year-old former worker at the plant told the Washington Post. “I can’t get nothing. I’ve tried.”

Anyone that believes that the economic crisis is “over” is just being delusional. It may be “over” for the boys and girls that work on Wall Street, but even their good times are only temporary.

Of course most Americans are not fooled by the propaganda being put out by the mainstream media. According to a recent CNN poll, 70 percent of all Americans believe that “the economy is generally in poor shape”.

And according to another survey, the economy is still the #1 concern for American voters by a good margin and unemployment is still the #2 concern for American voters by a good margin.

In other words, “It’s the economy, stupid!”

The American people can see that mid-wage jobs are disappearing and that the middle class is being systematically eviscerated. The following is a short excerpt from a recent Business Insider article…

A startling number of middle-class jobs may be headed toward extinction.

More than any other job class, mid-level positions have struggled to recover from the recession, and only a quarter of jobs created in the past three years are categorized as mid-wage. There are high-skilled professional jobs that require college degrees and low-skilled service jobs for less educated workers, but the middle is getting squeezed.

As mid-wage jobs disappear, they are being replaced by low wage jobs. As I mentioned yesterday, one recent study found that about 60 percent of the jobs that have been “created” since the end of the last recession pay $13.83 or less an hour.

And this is just the beginning of the decline of the middle class. Another great financial crisis is rapidly approaching, and once it arrives things are going to get much worse than they are right now.

A number of very prominent experts believe that this next great financial crisis could begin in 2014. For example, in a recent article entitled “Top Ten Trends 2014: A Year of Extremes“, Gerald Celente warned that “an economic shock wave” could hit the United States by the middle of the year. Here are some excerpts from that article…

-”In 33 years of forecasting trends, the Trends Research Institute has never seen a new year that will witness severe economic hardship and social unrest on one hand, and deep philosophic enlightenment and personal enrichment on the other. A series of dynamic socioeconomic and transformative geopolitical trend points are aligning in 2014 to ring in the worst and best of times.”

-”Such unforeseeable factors aside, we forecast that around March, or by the end of the second quarter of 2014, an economic shock wave will rattle the world equity markets.”

-”Nearly half of the requests for emergency assistance to stave off hunger or homelessness comes from people with full-time jobs. As government safety nets are pulled out from under them – as they will continue to be for the foreseeable future – the citizens of Slavelandia will have no recourse but action.”

You can read the rest of that article right here.

And according to the Wall Street Journal, United-ICAP chief market technician Walter Zimmerman in convinced that 2014 will mark the beginning of a massive stock market decline. In fact, he believes that over the next couple of years it could fall by more than 70 percent…

In what may be the bearish call to end all bearish calls, one technician believes 2014 will be the year of “major reversals,” with the Dow Jones Industrial Average expected to start a two-year decline that could eventually take it down more than 70% to below 5000.

If his forecast is correct, it will make what happened in 2008 look like a Sunday picnic…

“Based on our longer-term time cycles the present stock market rally must be considered the bubble to end all bubbles,” Mr. Zimmerman wrote in a note to clients.

He doesn’t believe the Dow Industrials will hit a long-term cycle low until 2016, somewhere in the 5770 to 4650 range. The Dow hasn’t seen those levels, which are 65% to 72% below current prices, since late-1995 to mid-1996.

This article was posted: Wednesday, January 8, 2014 at 5:45 am

Tags: economics

Comment by Albuquerquedan
2014-01-08 14:00:29

Thanks to persistent unemployment and low availability of low-skill jobs, Shenandoah Family Farms’ ice cream plant in Hagerstown, Maryland has received over 1,600 applicants for a grand total of 36 jobs

So do we really need to allow unskilled labor into this country if we have more than 40 applicants for every position?

 
Comment by Puggs
2014-01-08 14:24:36

I don’t think the downturn would be till early or mid 2015.

Comment by Albuquerquedan
2014-01-08 14:37:33

Actual downturn you are probably right. But with a recovery as weak as this one, I am not sure that a blue collar worker can see the difference. I wish they would allow X to post at Guantanamo for his opinion. JK.

Comment by aNYCdj
2014-01-08 20:19:18

http://theeconomiccollapseblog.com/archives/if-you-are-waiting-for-an-economic-collapse-just-look-at-what-is-happening-to-europe#comments

It would be hard to put into words the extreme desperation that unemployed workers throughout Europe are feeling right now. When you can’t feed your family and you can’t find work no matter how hard you try, it can be absolutely soul crushing.

To get an idea of the level of desperation in Spain, check out the following anecdote from a recent NPR article…

Having trouble wrapping your head around southern Europe’s staggering unemployment problem?

Look no further than a single Ikea furniture store on Spain’s Mediterranean coast.

The plans to open a new megastore next summer near Valencia. On Monday, Ikea’s started taking applications for 400 jobs at the new store.

The company wasn’t prepared for what came next.

Within 48 hours, more than 20,000 people had applied online for those 400 jobs. The volume crashed Ikea’s computer servers in Spain.

(Comments wont nest below this level)
 
 
 
 
Comment by Housing Analyst
2014-01-08 12:53:29

“Pending Home Sales Plunge At Fastest Pace Since April 2011″

http://www.zerohedge.com/news/2013-12-30/pending-home-sales-plunge-fastest-pace-april-2011

Collapsing demand. It’s what happens when the price of an object is grossly inflated.

 
Comment by Housing Analyst
2014-01-08 13:01:47

Mortgage Applications Index Decreased To Lowest Level Since December 2000

http://www.bloomberg.com/news/2014-01-08/u-s-mba-mortgage-applications-index-increased-2-6-last-week.html

With housing demand collapsing, this is no surprise.

 
Comment by Albuquerquedan
2014-01-08 13:38:12

From WUWT
Cheating students more likely to want government jobs, study finds

November 18, 2013|By Emily Alpert Reyes

College students who cheated on a simple task were more likely to want government jobs, researchers from Harvard University and the University of Pennsylvania found in a study of hundreds of students in Bangalore, India.

Their results, recently released as a working paper by the National Bureau of Economic Research, suggest that one of the contributing forces behind government corruption could be who gets into government work in the first place.

Researchers ran a series of experiments with more than 600 students finishing up college in India. In one task, students had to privately roll a die and report what number they got. The higher the number, the more they would get paid. Each student rolled the die 42 times.

Although researchers do not know for sure if any one student lied, they could tell whether the numbers each person reported were wildly different than what would turn up randomly — in other words, whether there were a suspiciously high number of 5s and 6s in their results.

Cheating seemed to be rampant: More than a third of students had scores that fell in the top 1% of the predicted distribution, researchers found. Students who apparently cheated were 6.3% more likely to say they wanted to work in government, the researchers found.

“Overall, we find that dishonest individuals — as measured by the dice task — prefer to enter government service,” wrote Hanna and coauthor Shing-yi Wang, an assistant professor at the University of Pennsylvania’s Wharton School.

Comment by Albuquerquedan
2014-01-08 13:58:46

Sorry about the double post, I was not sure I had posted it when it had been almost an hour.

Comment by we are amazed but not amused
2014-01-08 16:16:26

a 6.3% (less than the error factor)differential in a study in india, that the studiers had no clue as to actual numbers rolled, relying on “averages” to get this dismal differential you thought worthy of a post….

one badly balanced die….

 
 
 
Comment by Rental Watch
2014-01-08 17:07:36

In the January 6th Bits, I chose 10 homes that were “Pre-Market” in the City of Stockton, in order to track how these homes move through the system to eventually come onto the market. 5 of the homes were “Pre-Foreclosure”, and 5 were “Foreclosed”.

Here is the first update.

2414 Otto Drive is no longer listed as “Pre-Foreclosure”. Apparently it was sold at foreclosure auction for $166,500 on 12/30/13 (and that sale must not have been registered by Zillow yet).

It must not have been taken back by the bank, but sold to a third party, since the 5 “Foreclosed” homes are noted to have been taken back by the bank, and this one is not listed as “Foreclosed”.

The summary for this home:

NOD filed by OneWest Bank FSB on 4/3/13
Notice of Sale was originally for 12/12/13
Home was sold at foreclosure auction 12/30/13

From NOD to resolution: 271 days.

 
Comment by Professor Bear
2014-01-08 18:12:13

Jan. 8, 2014, 4:19 p.m. EST
10-year Treasury pauses at 3% after Fed minutes
Stories You Might Like
Fed tapered as it saw QE benefits slip over time
By Ben Eisen, MarketWatch

NEW YORK (MarketWatch) — Government debt prices tanked Wednesday, sending the 10-year Treasury yield back to 3%, though the benchmark note largely shrugged off the release of minutes from the Federal Reserve’s last meeting.

The minutes, which provide a look into the Fed’s decision to curtail its bond-buying program, showed concern about the waning benefits of the stimulus. The central bank said at its December meeting that it would pair its asset-purchase tapering with a commitment to holding down key policy rates until the unemployment rate falls well below 6.5%.

“The thing I was watching for was what was the primary reason they decided to taper, and the question was around the efficacy of the program,” said Kathy Jones, fixed-income strategist at Charles Schwab. “Overall it was as anticipated and it keeps us moving forward with the taper.”

Comment by Whac-A-Bubble™
2014-01-08 23:14:02

Did you dump your bond fund yet?

Comment by Whac-A-Bubble™
2014-01-08 23:15:02

ft dot com
Global Market Overview
Last updated: January 8, 2014 9:15 pm
Robust US jobs data lift Treasury yields
By Dave Shellock

Wednesday 21:10 GMT. Further signs of strength in the US and eurozone economies helped fuel a sell-off in highly-rated government bonds, although equities on both sides of the Atlantic saw little follow-through buying after the previous session’s solid gains.

There was limited reaction in the markets to the minutes of the Federal Reserve’s December policy meeting, which indicated that the central bank planned to “proceed cautiously” in slowing down its monthly asset purchases.

Dan Greenhaus, chief global strategist at BTIG, said the minutes had merely reinforced what was already known.

“The Fed is going to go somewhat slowly in its initial steps to slow purchases. But after a 4 per cent GDP print in the third quarter, and the possibility of a 3 per cent-plus print in the fourth quarter, investors will have to be on guard for an acceleration in economic activity and with it, a greater reduction in asset purchase volumes.”

Treasury bond prices had already come under pressure after ADP, the US private payroll processor, said the pace of job creation in December had been the highest in a year. Figures from the eurozone, meanwhile, showed retail sales rising sharply in November, while German factory orders and exports in the same month were also encouraging.

But equity bulls in the US and Europe appeared unimpressed. In New York, the S&P 500 ended flat at 1,837, while the FTSE Eurofirst 300 edged up 0.1 per cent.

In Tokyo, the Nikkei 225 rose 1.9 per cent in response to overnight strength on Wall Street after a narrowing of the US trade deficit in November fuelled expectations of stronger growth in the fourth quarter.

Furthermore, Christine Lagarde, the International Monetary Fund’s managing director, said she expected the organisation to upgrade its global growth forecasts in the next few weeks.

The optimistic view on the US got a further boost as ADP said private employers had added 238,000 jobs last month, prompting talk that the official non-farm payrolls report – due out on Friday – would be strong.

Analysts said robust jobs growth would be likely to strengthen the Fed’s resolve to keep winding down its monthly asset purchases, or quantitative easing.

“Rising employment growth would increase the chances of a self-sustaining US upturn as consumer spending rises and confidence picks up, paving the way for a finish to QE at the end of 2014,” said Nick Stamenkovic, macro strategist at RIA Capital Markets.

This backdrop does not bode well for Treasuries.”

Indeed, the yield on the 10-year US government bond – which moves inversely to its price – was up 6 basis points at 2.99 per cent. However, the 10-year has found it difficult to establish a foothold above the 3 per cent level since the Fed unveiled its “tapering” plans last month. Analysts said this has largely been down to the Fed’s insistence that interest rates would remain low for some time to come.

“The Federal Open Market Committee’s strengthened forward guidance suggests that expectations for short-term term interest rates in coming years are likely to remain low,” said John Higgins at Capital Economics.

“If the Committee is successful in anchoring short-term rates, there is little reason to expect long-term yields to rise sharply. We forecast the 10-year yield to drift up to 3.25 per cent by the end of this year.”

 
 
 
Comment by Whac-A-Bubble™
2014-01-09 20:53:43

Is it Ground Hog Year for Mr Market?

Comment by Whac-A-Bubble™
2014-01-09 20:55:41

Is slow start for stocks in 2014 a warning sign?
Adam Shell, USA TODAY 5:50 p.m. EST January 8, 2014
Is stock market’s slow start to January a bad omen after a stellar year in 2013?
Story Highlights
History says weak January bodes ill for stocks the rest of the year
First five days of January are deemed an “early warning system”
How stocks fare rest of month could set tone for next 11 months

NEW YORK — Quick starts to the new year typically are a bullish sign for the stock market. That’s why a drop of 0.6% for the Standard & Poor’s 500-stock index in the first five days of 2014 is raising a warning flag on Wall Street.

Slow starts for stocks, however, don’t necessarily spell doom, but neither do they envelop the market in a bullish halo, says Jeffrey Hirsch, editor of the Stock Trader’s Almanac.

January has historically been a bullish month for stocks. In fact, whether stocks finish January up or down often sets the direction of the market for the entire year.

So when stocks stumble out of the gate, as they have this year, with the S&P 500 falling in four of the year’s first five sessions, it can have a negative effect on investor psychology.

That’s especially true when the market is coming off a gain of nearly 30%, its best year since 1997, and hasn’t suffered a serious downdraft of 10% or more since 2011. Not to mention the stock market will have to deal with the Federal Reserve dialing back its market-friendly bond-buying program starting this month, a policy shift that will force the economy to stand on its own two feet.

In short, it often creates an “uh-oh” moment for investors.

“When the year starts out crappy,” says Hirsch, “it puts a damper on people’s outlook.”

That’s why the Almanac treats the first five days of trading as an “early warning signal.”

Since 1950, according to the Almanac, in the 23 years when the S&P 500 was down in its first five sessions, the large-company stock index finished up for the full year just 12 times, which equates to 50-50 odds that stocks will close higher in 2014. In contrast, following the 40 times the first five days were positive, the S&P 500 finished the year in the black 85% of the time, with an average annual gain of 13.6%.

 
 
Name (required)
E-mail (required - never shown publicly)
URI
Your Comment (smaller size | larger size)
You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.

Trackback responses to this post