Not Only Irrational, But Systematically Irrational
It’s Friday desk clearing time for this blogger. “Real estate agents are hoping to capitalize on Colorado’s marijuana industry– selling homes to out-of-state buyers trying to move to the state for retail pot sales. Real estate agent Bob Costello said he will help clients find homes in pot-friendly cities like Denver. Ideally the home will be far from a school, well-ventilated and not too close to neighbors. ‘You see thinks like, I’m a Christian-friendly realtor or I’m a gay-friendly realtor. Great. So I’ll be a 420-friendly realtor,’ said Costello.”
“For 2014, Tim Hopkins, a former 400 North Board of Realtors president predicted new construction will be a ’strong force’ in the market, particularly in the southern half of the Forsyth County. ‘We’re seeing new construction like we haven’t seen in many years,’ he said. ‘There are new subdivisions going up all over the place, especially south of Hwy. 20.’ ‘If you drive around, [developers] are starting to build communities starting in the 400s and we haven’t seen that in years, probably since around 2007,’ said Tara Locke, president-elect of the 400 North Board of Realtors.”
“Brooklyn is chugging ahead as Manhattan’s notoriously expensive rental market is easing. The median rent in Manhattan fell 1.6% to $3,100, according to Douglas Elliman. The gap between Manhattan and Brooklyn is now just $440 - it has been hovering from about $300 to $450 since the fall. Back in 2008, the gap was closer to $1,100. ‘Prices are down and inventory is up, so all in all now’s a great time to be in the market for a new apartment,’ in Manhattan, said Citi Habitats president Gary Malin.”
“Sellers have been holding their homes off the market until after the holidays, agents say. One challenge in January will be helping sellers price their home according to the current market, instead of the expectation that values will rise, said Diane Busch, a Coldwell Banker agent in Indian Wells. ‘The problem is that sellers also tend to be a little too optimistic,’ Busch said. ‘They really need to look at what the numbers are for the sale of their property.’”
“Looking over their shoulder at 2013, desert real estate brokers say the year was a turnaround in equity sales. Fewer homeowners had short sales and foreclosures. Home prices leaped upward, and then flattened from summer through the end of the year. ‘Frankly speaking, we’re off the highs,’ said Rick Jenkins, vice president of the Orange County and desert regions for Coldwell Banker.”
“Britt Reints was preparing to travel for about a year, so she spoke to real estate agents about selling her home or renting it while she was away. ‘Once we found out it would take about ten years for us to even get back to even, we decided to cut our losses and short-sell the house,’ she says. ‘That obviously ruined our credit, but it also made us leery of purchasing again until we’re certain we want to live in one place for at least 15 years. The idea that paying a mortgage is just like paying rent—but better—is no longer something we can just assume.’”
“The number of properties sold in Hong Kong fell by more than a third last year to a 17-year low as a surge in sales tax, designed to burst a price bubble, turned off buyers in one of the world’s most expensive cities. Li’s Cheung Kong (Holdings) Ltd, the city’s second-largest developer, offered price discounts of up to 25 percent for a new residential home development launched last weekend. ‘In 2014 there will be pressure to cut prices further for inventory clearance,’ said CLSA property analyst Nicole Wong, adding that developers had already been forced to price homes in newly built properties some 20 to 30 percent below those for sale in older buildings. Supply for new homes may increase by up to 85 percent in 2014, she said.”
“According to transaction records from Singapore Real Estate Exchange agencies, 20.2% of HDB resale deals closed below valuation in December. In comparison, 13.0% closed below valuation in November. December posted the highest ratio of negative COV transactions since the financial crisis in May 2009, when the ratio was 25.9%. Five HDB towns saw more than 30% of all transactions closed with negative-COVs. More than half of all HDB transactions in Seng Kang and Punggol closed below valuation.”
“Prices of houses traded on North Korea’s black market are dropping precariously, causing panic among dwellers, according to sources inside the country. ‘Housing prices in Gilju-gun, North Hamgyong province dropped to around U.S. $500 from what was U.S. $3,300 last summer,’ a source from the province told RFA’s Korean Service on condition of anonymity. He said that in North Hamgyong’s Cheongjin city, the trading price for a two-bedroom home had plummeted to around U.S. $3,300 from U.S. $8,300 in the summer last year, and yet no buyers were showing any interest.”
“A second source in North Hamgyong province said that housing prices appeared to be linked to North Korea’s local unofficial marketplaces, or ‘jangmadang.’ ‘The overall cost of products at the jangmadang also declined around the middle of last month while house prices were falling,’ the source said. ‘In recent years, the housing prices and prices at the jangmadang had [simultaneously] skyrocketed … I think the increasing prices of houses slowed demand for housing and led to the housing price collapse.’”
“Nobel Prize winner Paul Krugman, warns against a Norwegian housing bubble. The Prime Minister dismisses his concerns, but Krugman fears her statements may end in humiliation. Krugman, however, thinks that Solberg statement is in itself a sign of a bubble-situation. ‘I had not expected political reactions to this. Can you imagine a president or state leader going out in the public to declare that there aren’t any bubbles in the market? That can quickly end in humiliation,’ Krugman states and adds ‘When politicians say that everything is ok, that is a sign of a bubble-situation.’”
“Former Federal Reserve Chairman Alan Greenspan, who presided over much of the housing bubble before leaving office Jan. 31, 2006, says it was impossible to predict the destructive outcome of that bubble. ‘It’s a question of what’s causing these various crises,’ he told MSNBC’s ‘Morning Joe’ program. ‘The basic problem is we can’t forecast beyond the immediate horizon. Everyone wants us to. But no one in the real world can do that.’”
“In looking back at the financial crisis, Greenspan said he has asked himself ‘is there anything that would have told me things were about to crack?’ The answer: ‘I would say no,’ Greenspan said. ‘There is no bubble out there which you can tell when it was going burst.’”
“It’s important to note that human irrationality played a role in the housing bubble, Greenspan says. ‘Everybody assumed a substantial part of human beings were rational. There are big disagreements on what proportion of it was not only irrational, but systematically so. Economists would essentially say if it were random, you could just forget it. But it’s not, it’s systematic.’”
“Great. So I’ll be a 420-friendly realtor,’ said Costello.”
Denver = future junkie Mecca of America
Hampsterdam!
Reefer Madness!
Reefer Madness (1937)
PotHeads
We’ve got Peyton and we’ve got legal weed. You’ve got nothing.
He’s throwing another $20K of equity my way this Sunday.
Gotcha PotPipe.
‘we’ve got legal weed. You’ve got nothing’
I don’t know Panama Red, Arizona has medical MJ and I even see sign spinners pushing the stuff here in Flagstaff.
Correction: we’ve got legal retail weed.
You can’t have both a medical card and a concealed carry permit.
And some people don’t want their name on “the list” despite its alleged confidentiality.
I expect to see a user pop up named
MrGreen 
but we won’t know if it’s you, Bill or myself…. 
Just keep that money flowing here from other states, please.
Kansas can keep their evolution-based science textbooks and Alabama can keep their ten commandments in front of the courthouse and Florida and Texas can keep their medieval drug laws, and we’ll keep all the money from the out-of-staters. Please keep it illegal in your states and send all the money here.
Please keep it illegal in your states and send all the money here ??
And lets not stop with MJ….Lets move to state autonomy in most arena’s…If North Carolina wants to ban abortion in their state let them do it…Get the FED’s out of the states lives…
Legality has absolutely no effect on supply. Tourism will be minimal.
The guy may have a point about a pot-friendly realtor. Here in central Florida we have nude-friendly realtors that specialize in selling houses in our nudist resorts. There is now a reality television series about one such woman:
“Pasco County’s nudists are going national this week with a reality television show titled “Buying Naked,” which follows the exploits of real estate agent Jackie Youngblood, who specializes in selling homes in clothing-optional communities.
The show debuts at 10 p.m. Wednesday on TLC, and viewers will see two back-to-back half-hour episodes as Youngblood helps couples find their dream homes and offers safety tips for avoiding the household hazards inherent with naked living.
Some clever camera work keeps the show from becoming too revealing, said Joey Skladany, a publicist for TLC.
“No blurring at all,” he said. “Just great camera angles and (strategically placed) objects around the house.”
…
“It’s a big market,” Youngblood said. “We have a lot of nudists. They are great people and so easy to work with and they have nothing to hide.”
http://tinyurl.com/n46ck3x
and they have nothing to hide
Rimshot!
‘There is no bubble out there which you can tell when it was going burst.’
That statement points to the beauty of stopped-clock predictions: If you happen to notice a ginormous bubble forming in some asset class, say housing, then you can take measures to position yourself for when it eventually blows up, without concern about getting the timing exactly right.
There’s no fool like an old fool. How do they let him get away with spouting that tripe. He should be in jail.
No, it was extremely rational. From those orchestrating the scam of generating junk mortgages to the credit rating agencies putting a triple A rating on them. They made out like bandits. They sold them and washed their hands of them. It was tremendously profitable for those orchestrating the scheme.
People on the ground seeing prices going up exponentially and thinking they could get in and make a quick buck, or had to get in or be priced out forever.
Extremely rational.
So many of the crooks who orchestrated the financially engineered crisis got off lightly compared to financial gains or even Scot free, it’s almost guaranteed to recur in a few years.
With a physical asset, when large number of end buyers start buying it not to use it but to sell it for a profit, that’s a pretty good indication of a bubble. When demand outstrips supply and there is no shortage of the product for actual use.
One difficulty these bubble-blind policy makers have is conflating financial products with physical goods. Separate the two, and at least in physical goods, one can get a reliable indicator of a bubble.
If these people could not see a fraud-driven housing bubble, it’s not the phenomenon that doesn’t exist, but rather their taxonomy that needs to be improved.
If these people protest their ignorance… if they are ignorant, they have no business making economic policy. It’s hard to believe the ignorance angle. Politicians and CEOs protest their ignorance in the face of discovered malfeasance. It’s interesting they’re trumpeting their ignorance. Because it seems that complicity now seems like the worse choice. Interesting.
“Real estate agents are hoping to capitalize on Colorado’s marijuana industry”
For the first time ever I think I’m going to have to say; “Good for them”. I hope CO sees a massive increase in tourism and people taking up residence in the state. In fact, I hope that house prices rise 300% in the state because of all the demand. The more marked the increase, the most quickly other states will have to follow suit with what CO did. And, frankly, it can’t come soon enough to the rest of the country.
No, I don’t use MJ (although I have), and likely wouldn’t if it was legal (although, I’d probably try it again, just to enjoy it legally for the first time ever). However, drug prohibition is a scourge on this country (and, by proxy, on most of the world) that needs to end immediately. If it takes housing prices going through the roof in CO to achieve that goal, so be it.
Once things settle down in CO and it gets a bit warmer, I’m sure I’ll make at least one trip out there to survey the landscape. I’m expecting to see nothing but OD victims lying in the streets coupled with a shocking amount of Cheech and Chong vans. And, of course, non-stop murder of wives and families by out of control psychopaths. Anything less and I’d have to wonder why we arrested close to a million citizens last year in the pursuit of this war. A war which, in case nobody noticed, is against our own people.
Has there ever been a time since the Civil War when we’ve had laws so diametrically opposed as they are today? In CO, you can walk around with an ounce of MJ in your pocket legally. In FL, being caught with that same amount could land you in prison for 5 years with a felony conviction. That’s quite a disparity, I’m not aware of anything else that’s legal in one state but is a felony in another. At least nothing else that people are actually arrested for.
“… I’m not aware of anything else that’s legal in one state but is a felony in another.”
Prostitution? Legal in parts of Nevada but illegal everywhere else?
Organized political corruption? Legal in Washington D.C. but illegal everywhere else?
(Ah, you say, but D.C. is not a state.)
LOL. Organized political corruption is, apparently, legal everywhere.
Prostitution isn’t a felony AFAIK in most of the country. People in FL go to jail for years for possession of MJ or decades for growing it, something that’s now entirely legal in another state. While prostitution is a good example, I’m not aware of any state having penalties for that like they do for MJ possession/usage.
Booze is like this, legal in some states or counties but illegal in others. Or, legal so sell on some days but not legal to sell on others.
Sales, yes, but not possession. You could have 10 cases of JD in your trunk driving into a dry town and not get his with a felony charge.
Both of these suggestions are reasonable, but, IMHO, not directly comparable. This is like slavery right before the CW, legal in the south, illegal in the north. A slave brought from GA to NY would, somewhere along the way, become “illegal” (or, more correctly, free) at some arbitrary border crossing. And, a man and his black friend driving south, at some point, his friend would become his property. That’s the closest analogy that I can think of (except, of course, for the end of liquor prohibition). But we’re so far apart on laws between states that I think the slavery analogy is more apt; legal in one state, years in prison in another.
Interesting to see how it plays out, that’s for sure. Especially to see if it causes any migration to “freer” states from those that still practice prohibition.
You comment about slave states and free states reminded me of what Mark Twain once wrote about the issue in his book “Life On The Mississippi”:
If the Mississippi river defines the border that seperates two states (and it does) and there is a major shift in the course of the river (which sometimes happens) then there may end up being a shift in what state you happen to be living in if the river decides to make a shift in its course.
Which means a slave could go to sleep one night in a slave state and wake up the next morning in a free state - and, according to Mark Twain, this has actually happened.
the Mississippi river defines the border that separates two states….Which means a slave could go to sleep one night in a slave state and wake up the next morning in a free state -(if the river shifts) and, according to Mark Twain, this has actually happened.
Pop Quiz Friday!
There are only two states on the Mississippi River where a slave could have theoretically woken up the next morning in a free state if the Mississippi changed course. (creating an ox-bow lake)
One is Illinois. What is the only other state where this could have happened?
Iowa? I’m guessing the state has to border Missouri.
Iowa? I’m guessing the state has to border Missouri.
Yes!
An attorney friend of mine here told me that if you go to jail in Colorado the police will take the weed in your possession and put it in an envelope with your keys, phone, etc and give it back to you when you leave jail.
Cheech and Chong vans
I rode in a public transportation one last month.
Long, strange trip ending for VW’s hippie van
http://www.usatoday.com/story/money/cars/2013/09/23/vw-van-brazil/2854119/
SAO PAULO (AP) — It carried hippies through the 1960s, hauled surfers in search of killer waves during endless summers and serves as a workhorse across the developing world, but the long, strange trip of the Volkswagen van is ending.
Brazil is the last place in the world still producing the iconic vehicle, or “bus” as it’s known by aficionados, but VW says production will end Dec. 31. Safety regulations mandate that every vehicle in Brazil must have air bags and anti-lock braking systems starting in 2014, and the company says it cannot change production to meet the law.
Although output will halt in Brazil, there should be plenty of VW vans rolling along for decades if only because there are so many, and they are so durable. VW produced more than 10 million Volkswagen Transporter vans globally since the model was introduced 63 years ago in Germany, though not all resemble the classic hippie machine. More than 1.5 million have been produced in Brazil since 1957.
The VW van is so deeply embedded in popular culture, it will likely live on even longer in the imagination.
We had a “Combi” when I was a teen in Mexico City. Roomy, but what a dog!
Gambling.
True, but you can’t “possess” gambling (much like you can’t “posses” prostitution). Of course, the entire idea of an illegal “plant” is, on the face, ridiculous, but…
Gam
bling+1 Overtaxed…..
In fact, I hope that house prices rise 300% in the state because of all the demand.
If it does, I’ll sell, save the profit and move somewhere else.
That said, I don’t think that is going to happen.
“Sellers have been holding their homes off the market until after the holidays, agents say. One challenge in January will be helping sellers price their home according to the current market, instead of the expectation that values will rise, said Diane Busch, a Coldwell Banker agent in Indian Wells.”
Check out the bevy of Indian Wells homes on the market, and it’s only early January. Just imagine how many could show up by the time of the red-hot spring sales season!
game on after the super bowl!!!
2014 will be a breakout year for home prices. Buy now or be priced out forever!
It’s True! Housing is an investment! Honestly!
Amy….mortgages will only go up from here, buyers better take advantage in the next four months of under 5% fixed rates. Those who believe prices take a wholesale drop are in for a big disappointment.
Sellers can now wait out buyers (although a leveling of prices will occur) , eventually people have to own a own.
Actually, they don’t. At the end of the game it might turn out that buying was cheaper than renting, but everyone is free to take the opposing bet.
Prices resumed falling back in May.
enjoy your losses.
“…mortgages will only go up from here, buyers better take advantage in the next four months of under 5% fixed rates.”
And prices will move inversely to rising mortgage rates. If you have a positive networth and plan to make a sizable downpayment when you buy, keep your powder dry, as your best opportunities lie in the future when HowMuchaMonthCharlie is sidelined by rising rates.
The weathers fine out in Indian Wells, same as in Az, no reason for them to not be selling.
Right — there has never been a better time to sell a foreclosure home!
Those prices are nutz. What the h*ll are they thinking?
“Those prices are nuts.”
I know what you mean. How crazy is it to think you can buy a home in a desirable part of California with a $237/mo mortgage payment?
Ya gotta love how the Zestimate® comes in at exactly $10 above list price!
49305 State Hwy 74SPC 25, Palm Desert, CA 92260
For Sale: $59,866
Zestimate®: $59,876
Est. Mortgage:
$237/mo
See current rates on Zillow
Bedrooms:2 beds
Bathrooms:2 baths
Mobile / Manufactured:1,560 sq ft
Lot:8,712 sqft
Year Built:1972
Heating Type:Forced air, Other
jobs report- is ADP totally useless?
all the jobs reports are useless unless you count all the people out of work regardless if they have ran out of unemployment checks.
“The total U.S. population age 16 and over is at least 243 million. Subtracting the nearly 156 million Americans in the labor force in June 2013 — that is, those who were either working or looking for work — leaves 87 million Americans, which is close to 90 million.”
91.8 million currently not in labor force / 243 million = ~38% of people> age 16 are out of work.
91.8 million currently not in labor force / 243 million = ~38% of people> age 16 are out of work.
Of course we need to subtract the retired, and those who choose not to work. I’ll bet that it’s still a hefty number though and much greater than the official U3 numbers would suggest.
kids hiding in grad school- add them back
http://finance.yahoo.com/news/banks-cut-mortgage-boom-ends-001400127.html
‘John Cannon had a simple strategy for making money: answering the phone. Mr. Cannon, who works for Absolute Mortgage Banking, a mortgage brokerage in Palo Alto, Calif., benefited for most of his 12-year career from a strong refinancing business spurred by a seemingly endless series of interest-rate drops. New customers would seek him out when rates dropped, and drumming up business mostly meant calling old clients to see if they wanted to refinance, he said.’
‘That changed when mortgage rates began rising last year. Mr. Cannon realized he needed to start attending open houses so he could meet real-estate agents who might deliver clients looking to purchase homes, as refinancings dwindle.’
“Much to my detriment, I’ve been a ‘refi’ guy pretty much my whole career,” said Mr. Cannon.
And then my business went south and I couldn’t afford the mortgage payment. Heelp! Heelp!
‘Starting Friday, it will be a little bit harder to get a home mortgage. Or more precisely, banks and lenders will have to work a little bit harder to make sure borrowers can afford to buy a house, leaving some number of would-be homeowners out in the cold. And that’s because Jan. 10, 2014, is the day that the new Consumer Financial Protection Bureau (CFPB) steps in to oversee the mortgage industry.’
‘CFPB chief Richard Cordray calls the new rules “common-sense” solutions to the kind of risky lending that landed the U.S. in the 2007-08 housing crisis.’
That’s some swift action! So what happens to the people who took out loans from 2009 to 2013?
“So what happens to the people who took out loans from 2009 to 2013?”
Their problem. Nobody put guns to their heads and made them sign the papers, right Oxy?
what happens to the people who took out loans from 2009 to 2013 ??
I think barring something that forces their hand they will stay put with their 3-4% loans…
Affordable mortgage payments + perpetual underwaterness = renters in perpetuity.
renters in perpetuity
While a very, very long time, 30 years is not “perpetuity”
It is if you only have 20 years to live.
‘they will stay put with their 3-4% loans’
Your probably right, seeing as they didn’t pay too much. Prices weren’t going up double digits, there were no flippers, bidding wars. Plus, the government wouldn’t allow that to happen. We now have a debt cap, an ability to pay rule. If the people who borrowed under the old rules the last few years were experiencing supply manipulation, artificially low interest rates, etc, that would almost be like foaming the runway for the banks! The government would never do that.
Anyway, along with those 3-4% loans, most only put 3%, or less down payment. In such a stable housing market as the past 4 years, it’s almost impossible to think of prices falling more than what they put down.
most only put 3%, or less down payment ?? it’s almost impossible to think of prices falling more than what they put down ??
Prices don’t need to fall…These folks were underwater “Day-1″.
Rough rule of thumb is it cost you 1-2% going through the door…Its 7-8% going out the door…So, they are likely 7% + -
underwater when they take their first shower…
I am still of the opinion that the excessively low mortgage rates, on long term loan that are in place both through purchase and maybe even bigger refinances, will have impacts in the housing market that we may not quite understand at this point…
At a 4% mortgage rate, they would have paid off about 10% of the loan after 5 years.
Not only that, but they bought at a 3% interest rate. How the hell are they going to sell that house for enough money to get out of it when interest rates are at 6% and incomes have continued to stagnate or decline?
‘they would have paid off about 10% of the loan’
A lot of markets are already down that much, especially in California. In 5 years they’ll be down a lot more. Of course, many of these buyers will have walked away by then.
Starve the corrupt bloated beast.
How the hell are they going to sell that house for enough money to get out of it when interest rates are at 6% and incomes have continued to stagnate or decline ??
Thats the whole point I was trying to make…Will they walk like Ben suggests ?? Will it be a trickle or in mass ?? Where will they go, become renters ??
With a $500,000. loan @ 3% the payment is $2,000….That probably buys you a decent townhome in a decent area around here…That same townhome would likely rent for $2500.+
I just don’t know….I think if the down leg some expect is large enough then the 3%er’s may walk in large numbers…If not, they may stick with it given that they have such a low interest rate…
How the hell are they going to sell that house for enough money to get out of it when interest rates are at 6% and incomes have continued to stagnate or decline ??
Lower the price now and get what you can get for it or take even less later. This is why we need to get rates back up to reasonable levels at 10-15%.
Good luck.
“Prices don’t need to fall…These folks were underwater “Day-1″.”
Especially after factoring in the 6% (2X the downpayment) that went into the Realtor®’s pocket.
I appreciate the bold call, Ben. It will be quite interesting to see if fundamentals trump ongoing efforts by the likes of Janet Yellen & company and Mel Watt to make further U.S. residential real estate price declines unpossible.*
* ‘Unpossible’ is a term I use in distinction with ‘impossible.’ The latter describes something which by fundamental nature can never occur; the former describes something that fundamentals dictate would occur were it not for policy intervention to deliberately prevent it.
‘I had not expected political reactions to this. Can you imagine a president or state leader going out in the public to declare that there aren’t any bubbles in the market? That can quickly end in humiliation,’
There should be plenty of humiliation to go around, as central bankers and top politicians alike routinely deny the existence of housing bubbles.
Correct. Haven’t Canadian and Australian officials been publicly denying a housing bubble for years? I thought that was the point — that asset prices are a political issue for those who hold the assets.
Frankly, Krugman needs to be quiet on this. Following the tech stock crash in 2000, he openly encouraged Greenspan to juice a housing bubble.
Humiliation requires some form of conscience.
The Fed (aka “The Keystone Cops of High Finance”) is searching vigilantly for bubbles.
Are they likely to detect any?
U.S. News
Fed Eyes Bubble Risks, Minutes Show
By Jon Hilsenrath and Victoria McGrane
Updated Jan. 8, 2014 2:58 p.m. ET
Federal Reserve officials in December turned their attention to the risk of dangerous financial bubbles emerging as they scanned a brightening economic outlook and formulated a plan to gradually wind down their bond-buying program this year.
While officials agreed that threats to financial stability were modest, the issue was at the center of wide-ranging discussions about emerging threats to the economy, according to minutes of the central bank’s Dec. 17-18 policy meeting, which were released Wednesday with the traditional three-week lag.
Watching for bubble threats could become one of the first big issues on the plate of Fed Vice Chairwoman Janet Yellen, who takes the reins as chairwoman on Feb. 1 after Ben Bernanke’s term as the Fed’s leader ends.
The Fed decided last month to reduce its monthly bond purchases to $75 billion from $85 billion. Barring a surprise in the economic data, the Fed is expected to shrink the size of its bond-buying again at its next policy meeting Jan. 28-29.
“The Fed is looking for evidence that they may be creating asset bubbles,” said Dan Greenhaus, chief global strategist at brokerage firm BTIG LLC. “That’s better than not looking.”
…
Yet another puff piece, designed to preserve institutional credibility when this all blows up again. The next meeting of Fed governors needs to be in Colorado.
Great idea: Relocate the annual Fed confab from Jackson Hole to Aspen, and put on a Rocky Mountain High to stimulate thinking on financial innovation!
I am not a marijuana smoker, but the intellectual bankruptcy of Western leadership is so profound that we really have nothing to lose at this point. It wouldn’t be unprecedented. I have read a theory that Romanticism in European poetry and literature stemmed from authors’ opium use. And I once saw a television special that suggested that the Delphic oracle of antiquity stood above a fissure in the earth that periodically emitted an intoxicating gas.
‘we really have nothing to lose at this point’
Seeing as how we have a president who has admitted to smoking pot and “doing a little blow”, who then continues a drug war that puts people in prison for actions he took, what do we have to lose?
what do we have to lose ??
Money in the pockets of the entrenched that benefit from it…From police all the way through the process to private prisons and probation officers thereafter…
I suspect that that in a few years many other states will follow the Centennial State’s example, and when a critical mass is reached the Federal laws will be repealed.
A thought: in future episodes of “Cops” where will they get those shirtless stoned guys they used to arrest all the time on camera? I guess they’ll just play reruns.
where will they get those shirtless stoned guys they used to arrest all the time on camera?
It occurs to me that in places like the south, that weed will remain illegal even after federal bans are lifted, so “Cops” will have plenty of scrawny, shirtless tattoo covered dudes to chase into people’s back yards for the time being.
Is ‘blow’ the same as or different from ‘purple drank’?
“Everybody assumed a substantial part of human beings were rational. There are big disagreements on what proportion of it was not only irrational, but systematically so. Economists would essentially say if it were random, you could just forget it. But it’s not, it’s systematic.”
Actually irrationality is sort of rational. If you are ignorant about something, and not too bright, the low-effort way to figure out what to do is to follow what other people who seem to know better are doing. Right over the cliff.
Especially when those who say otherwise are considered nutcases.
‘India’s industrial output unexpectedly declined in November on sluggish consumer spending. ‘Industrial production data will continue to remain weak,’ said Tirthankar Patnaik, a strategist at Religare Capital Markets Ltd. in Mumbai. ‘Even though we have bottomed out, it is the recovery that we are worried about.’
Bottoming out is the easy part. Here in the US we’ve solved the recovery part by propping up house prices and encouraging everyone to go deep into debt to buy a house.
“…encouraging everyone to go deep into debt to buy a house.”
But luckily, here in America we also have the economic freedom to ignore such encouragement and rent. Nobody can force Americans to buy anything, save medical, old-age, crop, mortgage, survivor’s and disability insurance, against their will.
Forgot about flood insurance subsidies for people who live in flood-prone coastal zones!
cold-Bush
‘China’s second-biggest brokerage said record debt threatens to trigger a financial crisis as borrowing costs jump to unprecedented highs despite a cooling economy. ‘If the current model of blindly borrowing money and spending in low-efficient industries continues, there will be a debt crisis sooner or later,’ said China Merchants’ Liu.’
‘Credit default swaps on China have raced to a three-month high as investors brace for a surge in global bond supplies from the world’s second largest economy even as liquidity conditions tighten at home. ‘The rise in borrowing costs comes at a time overall corporate profitability is on the decline in China,’ said the head of trading at a macro hedge fund in Hong Kong. ‘Some of these companies are staring at tough times ahead.’
‘China’s banking system suffered another credit crunch at the end of 2013. On December 19, trading in the high-value payment system was extended by an extra half an hour, followed by rumors of breaches of contract among banks. Although relevant departments clarified the rumors, interbank lending rates, which measure the cost at which Chinese banks lend to one another, shot up, with overnight, seven-day and 21-day lending rates all soaring to over 10 percent, and the 14-day rate even rocketing to 12 percent.’
‘Yi said a cash injection can’t solve the problem. ‘Frequent occurrences of credit crunches mean there’s something wrong with China’s lending system. If the central bank only pushes money into the markets and doesn’t launch reforms accordingly, the Chinese-style credit crunch is bound to happen again in 2014.’
‘China’s second-biggest brokerage said record debt threatens to trigger a financial crisis as borrowing costs jump to unprecedented highs despite a cooling economy.’
Luckily, thanks to decoupling, we can rest assured that what happens in China’s economy will stay in China.
So Mr Greenspan says how could he have known - !
The Conference Board of Canada directly issued warning statements to him, and published them, for over a year before kaboom.
I don’t think RAL are the only ones.
They all say the same thing ” they never know nothing when it turns bad”
IE: Gov Christie, Pres Clinton,Sec Hillary Clinton,Pres Nixon,Cong Anthony Wiener,Gen Custer (if he lived), and the list goes on and on?