January 25, 2014

Bits Bucket for January 25, 2014

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

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Comment by Whac-A-Bubble™
2014-01-25 01:14:17

Would now be a good time to buy the dip?

Comment by Whac-A-Bubble™
2014-01-25 01:16:12

Robert Shiller: I’m still investing in the stock market
Published: Wednesday, 22 Jan 2014 | 12:00 AM ET
By: Matt Clinch | Assistant Producer
Potential for another stock market collapse: Nobel winner
Wednesday, 22 Jan 2014 | 3:05 AM ET
Robert Shiller, professor of economics at Yale and 2013 Economics Nobel Prize Laureate, says there is a potential for another stock market crash similar to the 1930s.

Nobel prize-winning economist Robert Shiller told CNBC at the World Economic Forum that he is still investing in the stock market despite warning of bubble-like conditions.

Shiller said that his own long-term valuation metric for stock markets, which measures price-to-earnings based on average inflation-adjusted earnings over the previous 10 years, was currently high at 25. But it was still well below the record high of 46 reached in 2000.

In December, Shiller warned in an interview with Germany’s Der Spiegel magazine that the sharp rise in U.S. equity prices could be leading to a dangerous bubble.

“I’m not sounding the alarm yet. But in many countries the stock price levels are high, and in many real estate markets prices have risen sharply…that could end badly.” he said.

“I find the boom in the U.S. stock market most concerning.”

U.S. stocks ended 2013 at record highs, with the S&P 500 posting its largest annual jump in 16 years and the Dow its biggest gain in 18 years. While across the Atlantic, the pan-European benchmark STOXX 600 clocked gains of 17 percent, after a year in which faith in a euro zone recovery returned to the markets.

Goldman Sachs analysis this month said that a stock market correction is approaching the level of near certainty, citing a major paradigm shift for Wall Street. The firm’s strategists called the S&P 500 valuation “lofty by almost any measure” and attached a 67 percent probability to the chance that the market would fall by 10 percent or more.

Comment by Anklepants
2014-01-25 07:19:09

Sounds like he’s been whispered to.

Comment by Ben Jones
2014-01-25 07:34:22

In October he says houses are at a 50 year low in affordability. Two months later, it’s a bubble.

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Comment by tom cruz bustamante
2014-01-25 07:56:06

More I listened to him, more he is like Obama.
Must be the Nobel effect….

Comment by Housing Analyst
2014-01-25 10:59:31

It’s called The Liars Club. Gaining entry is every fraudsters crowning achievement. When you’re in, you get to worship the Fraudster In Chief.

No thanks.

Comment by Whac-A-Bubble™
2014-01-25 10:21:55

Sounds like he got whipsawed on his stock market investments over the last couple of days (note the date on that article was Wednesdays!)…

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Comment by azdude02
2014-01-25 08:10:04

why invest in a stock market where the odds are stacked against you?

Its worse than an indian casino.

The people making the money are the ones selling the stock.

Most people cant even read a balance sheet or income statement.

The business could be borrowing money to fund the business and most folks would never know till it was bankrupt.

dont get caught up in the hype.

Comment by Bill, just South of Irvine
2014-01-26 07:52:46

Odds stacked against you? The biggest gamble over the long haul is being mostly in fiat currency. You lose purchasing power. The smallest risk over a twenty year period is being in stocks. I always recommend dollar cost averaging into stock funds, and I have done so since 1989. And you would have advised me to stay in cash?

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Comment by Combotechie
2014-01-25 09:14:11

Here’s a chart of Shiller’s P/E.


A picture is worth a thousand words and all that.

If you followed some sort of life-time rule such as maybe buy when the P/E went below ten, or better yet buy when it goes below eight, then you will probably die rich.

John Mauldin’s book “Bull’s Eye Investing” delves into the consequences of buying markets when P/Es are low and compares these results to buying the market when P/Es are high and - astonishingly! - buying the market when P/Es are low generates much higher returns than buying the market when P/Es are high!

Somehow, in some mysterious and magical way, the price you pay determines your rate of return!

FWIW I suggest that everyone give this book a read.

Comment by Whac-A-Bubble™
2014-01-25 10:30:31

Thanks for the graph.

The ratio is currently at levels never seen before in U.S. market history EXCEPT for the run up to and aftermath of Black Monday (October 19, 1987) and before and after the Dot-com bubble collapse circa 2000. The latter event lasted so long you can’t pin it to a single day. Note that both of these periods were on Alan Greenspan’s tenure at the Fed.

Invest at your own risk, and you’ve been warned.

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Comment by Whac-A-Bubble™
2014-01-25 10:49:39

I just realized I misspoke in a previous post. It was only during the runup to and aftermath of the 1929 Black Tuesday crash and the runup to and aftermath of the Dot-com crash (circa 2000) when the Shiller PE ratio was as high as currently. Guess I didn’t have enough coffee yet to read those dates correctly. The Fed was in control of the economy over both periods.

Black Monday in 1987 appears as a blip in the Shiller PE time series on the way up to the Dot-com peak.

The other take home from the graph is that the previous two long-term bear markets by the Shiller PE measure, which lasted roughly from 1898-1921 (23 years) and from 1929-1949 (20 years), based on a protracted downtrend from the first peak level above 20, both eventually bottomed out at levels below 10. In each case, the final trough below 10 before a clear long-term uptrend was established occurred at least 20 years after the onset of the downtrend. I note the recent experience in the Japanese stock market was similar, though I realize three data points don’t constitute a statistically significant sample. Similar timing for the Dot-com crash suggests no final trough in Shiller PE below 10 until 2019 or so.

Conjecture: The current long-term bear market has yet to bottom out. (Not sure if a fancy econometric analysis is necessary to definitively prove this?)

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Comment by Whac-A-Bubble™
2014-01-25 10:54:37

Further conjecture: The last couple of years offered a similar bear trap to one which developed in the U.S. stock market during the 1930s. Try to avoid getting caught in the bear’s jaws!

Comment by Whac-A-Bubble™
2014-01-25 10:56:44

The bear trap period was roughly from 1933-1937. There could be a couple more good years before the final leg down to a Shiller PE below 10.

Comment by Combotechie
2014-01-25 11:09:57

The message I get from this is one cannot successfully TIME the market but he can successufully PRICE the market.

People often talk of values in terms of time when they should be talking in terms of price.

When the price is right you buy, when the price is not right then you sit tight. People seem to behave this way in most avenues of their financial lives EXCEPT when it comes to investing: When it comes to investing they somehow equate price with value - the higher the rise in price the higher the rise in value.

Opposite this is the sense that as prices fall then values also fall.

So what does this mean? It means that rising prices equate to rising values and rising values lures buyers in, and falling prices equate to falling values and falling values shakes buyers out. So you end up with a lot of people chasing prices up and chasing prices down, and they buy not only during the chase up but mostly they buy AFTER the chase up. Same with the selling: They hold on as the prices are chased down then they sell AFTER the prices are chased down.

People are smart.

Comment by Whac-A-Bubble™
2014-01-25 11:33:16

“The message I get from this is one cannot successfully TIME the market but he can successufully PRICE the market.”

Nicely struck!

Corollary: Don’t buy yet.

Comment by AbsoluteBeginner
2014-01-25 11:35:43

‘The message I get from this is one cannot successfully TIME the market but he can successufully PRICE the market.’

Baruch is quoted as saying he made his money by selling too soon. That is about as concise a market timing axiom as I can find along with buying when others are fearful/selling when others are greedy.

Comment by Whac-A-Bubble™
2014-01-25 10:52:55

“…buying the market when P/Es are low generates much higher returns than buying the market when P/Es are high…”

I wonder if Eddie is on to that investing secret?

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Comment by Janet Felon
2014-01-25 13:58:04

I know what he’s NOT on- this blog anymore. My heart was warmed when Slithers got banned.

Comment by Prime_Is_Contained
2014-01-25 11:27:54

A picture is worth a thousand words and all that.

Yep, it sure is!

The amazing this about the Shiller PE chart, for me at least, is the fact that valuations STAYED above the long-term historical average for the post-tech-bubble crash.

Most people think stocks returned to sanity after the tech bubble, but according to that chart, it never did until the RE bubble popped.

Such apparently is the effect of the easy-money crack cocaine pushed by the Fed to keep the market from getting the shakes.

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Comment by Prime_Is_Contained
2014-01-25 11:29:56

p.s. And the one thing that bothers me about the Shiller data is the question of how accurately he adjusts for inflation; my gut-level feeling is that the tech-bubble peak should have been closely aligned with the 1929 bubble peak—but isn’t, due to errors in the inflation adjustment. If I am correct in that gut-level feeling, then that casts some doubt in my mind over how the current valuation actual compares to historical levels…

Comment by AbsoluteBeginner
2014-01-25 11:49:48

‘my gut-level feeling is that the tech-bubble peak should have been closely aligned with the 1929 bubble peak—but isn’t, due to errors in the inflation adjustment.’

The economies of scale have shifted IMHO. True that the greed of the 1920’s probably closely aligns to that that the 1990’s and beyond fostered, but there are billions of more people on this planet since then and the index factor has shifted. I think buggy whip when I think about the 1920’s. Oh, that and the Marconi radio. Life has gotten easier in so many ways but apparently normalization forgets how much better off we are, market drops or not.

Comment by Bill, just South of Irvine, CA
2014-01-25 21:49:31

Investing in stocks is the most exciting way to invest in the ingenuity of man, to provide capital for businesses to grow - the next Apples, the next Dells, the next Toyotas. It’s a way to be involved and help technological progress while profiting from that progress.

Laugh as much as you want but the decades of evidence dwarfs ones own personal experience of being scared by a few bear markets and staying forever in cash. The Vanguard 500 Index fund gained an average 11% per year since August 1976.

That is a 4600% gain.

Try to get a 4600% gain on a typical house in Dallas in 37 years, especially with section 8 destroying neighborhood after neighborhood.

The key is to not put all your money in at one time. That’s how real estate works. Why make stock investing as risky as real estate? Dollar cost averaging is the most sensible approach in any asset class.

And if you want to take part in Real Estate investing, it is not home ownership - that’s not an investment. Dollar cost average into REITs.

Comment by rms
2014-01-25 23:19:43

“That is a 4600% gain.”

My wife’s spaniel is getting its teeth cleaned next week. Then off to the parlor to trim its coat, an all natural oatmeal shampoo and nails clipped too. Yep…I’m going to miss out on those 4600% gains.

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Comment by Whac-A-Bubble™
2014-01-25 01:19:53

Originally published January 24, 2014 at 7:41 AM | Page modified January 25, 2014 at 12:08 AM
Global markets hit by fears of growth slowdown
Fear is back in the market.
AP Business Writers
Specialist Vincent Surace works on the floor of the New York Stock Exchange on Friday.

Fear is back in the market.

Investors are worried about slower economic growth in China, a gloomier outlook for U.S. corporate profits and an end to easy-money policies in the United States and Europe. They’re also fretting over country-specific troubles around the world — from economic mismanagement in Argentina to political instability in Turkey.

Those fears converged this week to start a two-day rout in global markets that was capped by a 318-point drop in the Dow Jones industrial average Friday. It was the blue-chip index’s worst day since last June. The Dow plunged almost 500 points over the two days.

The Dow finished down 2 percent at 15,879 Friday. The Standard & Poor’s 500 index fell 38 points, or 2.1 percent, to 1,790. The Nasdaq composite fell 90 points, or 2.2 percent, to 4,128.

As investors shunned risk, small-company stocks fell even more than the rest of the market, and bond prices rose.

Despite the sell-off, U.S. stocks remain near all-time highs after surging 30 percent last year. The S&P 500 is 3 percent below its record high of 1,848 on Jan. 15.

U.S. stocks have not endured a correction — a drop of 10 percent or more over time — since October 2011.

The turbulence coincides with a global economic shift: China and other emerging-market economies appear to be running into trouble just as the developed economies of the United States and Europe finally show signs of renewed strength nearly five years after the end of the Great Recession.

The trouble began Thursday after a January survey showed a drop in Chinese manufacturing activity. Days earlier, China reported that its economic growth last year matched 2012 for the slowest pace since 1999.

“It is interesting how even a mild tremor in China’s growth causes such anxiety around the world,” said Eswar Prasad, professor of trade policy at Cornell University.

Comment by azdude02
2014-01-25 07:41:42

I want to pay my debts back in debased currency.

Comment by albuquerquedan
2014-01-25 08:30:25


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Comment by AbsoluteBeginner
2014-01-25 12:11:45

‘I want to pay my debts back in debased currency.’

I was reading on another board about that exact sentiment and a comment pointed out that banks probably have in the fine print somewhere, in the loan contract, that they can change the terms in case of some currency devaluation.

We are led to believe that our currency is sound. Yeah, OK. As long as others are willing to trade in it at mutual benefit. I don’t put it past the 85 richest people to get out of dodge and leave us with a currency crisis.

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Comment by Bill, just South of Irvine, CA
2014-01-25 21:55:28

Growth will not shut down unless humanity dies off.

Comment by Whac-A-Bubble™
2014-01-25 01:21:43

January 24, 2014, 11:01 am
Economic Shifts in U.S. and China Batter Markets
Traders at the New York Stock Exchange on Friday.Jason Decrow/Associated Press Traders at the New York Stock Exchange on Friday.

Updated, 9:20 p.m. | The ascent of developing countries over the last decade has been fueled by two global trends: the steady rise of China and the willingness of the Federal Reserve to stimulate the economy.

Now, with both trends starting to retreat, investors have been heading for the exits in markets as far removed as Buenos Aires, Istanbul and Beijing, with effects spilling over into the rest of the world.

A decline this week picked up speed and spread around the globe on Friday, leading to the first sustained drop in United States stock indexes in 2014. The Standard & Poor’s 500-stock index fell 2.1 percent on Friday, to end its worst week since June 2012.

But the damage is expected to be worse in places that have relied on demand for raw resources in China, whose economic advance is slowing. An index of Chinese manufacturing growth released on Thursday showed that the most important cog in the country’s economy, the world’s second-largest, was contracting for the first time in six months.

The damage has been particularly severe in countries that are already suffering from political instability, like Turkey and Argentina. Turkey’s currency fell to a record low against the dollar on Friday, a drop that will hit the purchasing power of everyone in the country.

On a street corner in Istanbul, Yilmaz Gok, 51, said, “I’m a retiree making ends meet on a small pension and all I care about is a possible increase in prices.”

“I will need to cut further,” he said. “Maybe I should use my natural gas heater less.”

Comment by Whac-A-Bubble™
2014-01-25 01:23:18

Wall Street falls as emerging-market concerns rise
By Caroline Valetkevitch
NEW YORK Fri Jan 24, 2014 5:49pm EST
A board shows the Dow Jones Industrial Average after the closing bell over the floor of the New York Stock Exchange January 24, 2014. REUTERS-Brendan McDermid

(Reuters) - Stocks dropped for a second day on Friday and the S&P 500 posted its worst week since June 2012 as a selloff in emerging market assets fed through to wholesale pullbacks in equities.

The S&P 500 fell 2.6 percent for the week, closing below its 50-day moving average Friday for the first time since October 9, suggesting more selling may be ahead for the market that closed out 2013 with a 30-percent gain.

The day’s decline was also the biggest percentage drop since June 2013 for the index, while the CBOE Volatility index .VIX rose 32 percent and registered its biggest weekly percentage gain since May 2010.

“There’s definitely some nervousness. The world is suffering from the emerging markets’ flu,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

Emerging market assets were hit by worries about slowing growth in China as well as political problems in Turkey, Argentina and Ukraine.

With many market participants expecting the Federal Reserve to decide next week to shave its stimulus by another $10 billion a month, investors also worried that interest rates will soon begin to rise. Fed policymakers will conclude a two-day meeting on Wednesday.

Comment by Whac-A-Bubble™
2014-01-25 01:25:50

Markets More: Markets
Global Markets Are Getting Rocked — Dow Down 260
Sam Ro
Jan. 24, 2014, 2:26 PM 23,128 29
REUTERS/Marcos Brindicci
Traders work on the Buenos Aires Stock Exchange floor during mid-afternoon trading, May 7, 2004.

: The Emerging Market Currency Bloodbath
Argentina Just Made A Huge Change To Its Currency Policy A Day After Its Peso Crashed

It’s ugly out there.

Even after Thursday’s 175-point (1%) plunge in the Dow Jones Industrial Average, markets continue to tumble.

Currently, the Dow is down 260 points (1.6%) and the S&P 500 is down 31 points (1.7%).

Investors and traders are rapidly moving from risky assets like stocks and emerging market securities to safe assets like U.S. Treasury securities. Indeed, the flood into Treasuries has sent the yield on the 10-year note all the way down to 2.72%. Not long ago, it was above 3%.

Asia got slammed with the Nikkei tanking 1.9% and Hong Kong’s Hang Seng falling 1.2%.

Europe closed deep in the red with Britain’s FTSE 100 down 1.6%, Germany’s DAX down 2.4%, France’s CAC 40 down 2.8%, and Spain’s IBEX down 3.6%.
Emerging Markets

The top concern today seems to be the emerging market economies, where it is a total rout in the currency markets. The Turkish lira tumbled 1.6% to a record low of 2.3360 per dollar. South Africa’s rand is at a 5-1/2 year low.

Meanwhile, it’s continued madness in Argentina where policymakers unexpectedly announced an easing of capital controls a day after the Argentine pesos (ARS) plummeted 13%.

Why are the emerging markets getting slammed?

“There is no single proximate cause, in our view, rather the cumulative impact of a number of events has led to a deterioration in risk sentiment,” said Morgan Stanley’s Rashique Rahman. “Growing concern over China’s macro trajectory and uncertainty over credit risk in China’s trust and wealth management products are probably the main drivers, but contributing factors to the spillover into other markets include Turkey’s ongoing currency volatility and political concerns, weakness of Ukrainian credit markets and the ARS devaluation.”

Comment by Whac-A-Bubble™
2014-01-25 02:08:59
Comment by Whac-A-Bubble™
2014-01-25 10:59:30

I apologize for the F-words in that YouTube. Hopefully the opportunity to split a gut laughing outweighs the offensive language.

Comment by Whac-A-Bubble™
2014-01-25 02:19:07

Matthew Smith, theinvestar.com, LLC (8)
Long/short equity, special situations, momentum, growth
Commodities Today: Commodity Names We Are Buying On The Dip
Jan. 24, 2014 11:58 AM ET
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. FCX and KSU have previously been recommended to clients. (More…)

With what appears to be the beginning of another correction we think that investors should pull out their lists of stocks to buy and begin looking for entry points in those names. We have been crafting our various lists for a period such as this for some time and believe that taking advantage of the dips is key in a rising market.

Yesterday we went bullish on Freeport-McMoRan (FCX) advising a client that adding exposure at this time and at current prices fit their long-term objectives. This morning Kansas City Southern (KSU) caught our eye and we already made a call to an individual with a recommendation to buy; that call took place right around the lows for the day. Long-term one has to like both of those names which are being beaten up over short-term news events.

Natural Gas has topped $5/MMbtu today for the first time in years and is the top commodity in 2014 thus far. We have stated our skepticism regarding the sustainability of a rally through the year, but right now the momentum is to be ridden higher. It is always important to remember that the trend is your friend.

Comment by Whac-A-Bubble™
2014-01-25 06:50:45

Look Out Below, Follow-Through Edition
By Barry Ritholtz Jan 24, 2014 5:07 AM PT
Photographer: Jin Lee/Bloomberg

Keep looking for that correction, folks.

Yesterday, we discussed the likelihood of an equity correction versus the end of the bull market. Today, futures are deep in the red, looking like another 1 percent sell-off or worse awaits us. European stocks are down 1 percent or more, with the IBEX off more than 2 percent. In Asia, it is a 2 percent whackage, although China has (so far) managed to hold on to small gains.

Perhaps on this philosophical Friday, it might be a good time to wonder aloud as to the causes of this change in fortunes. Why the sudden shift, from excess bullishness and exuberant expectations of more double-digit gains, to a recognition that perhaps the party won’t go on forever? You humans seem to desperately search for a simple narrative that explains complex events of unknown causation. An explanatory need not be accurate, only understandable and comforting. This is inherent in a species that has a rich tradition of storytelling. The narrative trumps data almost all of the time. The price action and misbehaviors of markets are certainly no different.

Hence, a correction is not simply the random meanderings of a complex system comprised of the buying and selling activities of millions of participants, but rather must have been caused by stocks that were too pricey, or earnings that have not lived up to expectations, or the development of big trouble in China. The problem with these rationalizations is that all of these things were well understood by markets — and have been for some time. None are surprises, and none reflect information that is new or was especially unknown previously.

Comment by Whac-A-Bubble™
2014-01-25 06:54:12

Wall Street week ahead — bears are waiting in the wings on Fed move on economic stimulus
US stocks may fall again as Fed stays course
Published: 15:01 January 25, 2014
Gulf News
New York: Wall Street managed to avoid major sell-offs in 2013, but bears look ready — and anxious — to take command.

US stocks could be set for another sell-off next week as the Federal Reserve is expected to announce it will keep withdrawing its economic stimulus, further pressuring equities already roiled by a flight from emerging markets.

Investor sentiment turned strongly bearish this week as emerging markets were hit by both country-specific problems and the realisation that the Fed’s trimmed bond-buying programme reduces the liquidity that has boosted higher-yielding emerging market assets and put a floor under US stock prices.

The Fed’s plan to gradually withdraw its stimulus has long been expected to lead to a pullout from emerging markets. But the prospect of an economic slowdown in China added to concerns on Friday that emerging markets, particularly those with large current account deficits, may struggle to support their currencies this year.

Comment by Temeculan
2014-01-25 10:18:18

If you are referring to guacamole for the game next week, I’d say wait a few days. This is the only dip I am interested in at this point as the market is turning into an Indiana Jones cavern of snake filled pits,traps,and poison dart shooting walls. F Wall street and F the Fed.

Comment by Whac-A-Bubble™
2014-01-25 11:03:47

“If you are referring to guacamole for the game next week…”

Holy guacamole, thanks for the reminder! Have to stock up on avocados before local supplies dry up.

Comment by AmazingRuss
2014-01-25 13:17:29

Buy now or be priced out forever!

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Comment by Whac-A-Bubble™
2014-01-25 13:20:45

Like houses, avocados depreciate rapidly.

Comment by Janet Felon
2014-01-25 14:00:46

“Like houses, avocados depreciate rapidly.”

True dat. I cut into one a few days ago and it was rotten.

Comment by Whac-A-Bubble™
2014-01-25 13:37:57

Buy the (next) dip in emerging-markets stocks
By Michael Santoli
January 23, 2014 1:11 PM

Shovel ready?

Investors should prepare to scoop up some emerging-markets stocks for cheap, long-term exposure to world growth, especially in the event of one more big dump in the sector.

Faith in the developing-world growth leadership story has already flagged badly. The iShares MSCI Emerging Markets exchange-traded fund (EEM) is down 5% over the past three months and has been thumped by the Standard & Poor’s 500 index by more than 35 percentage points over the past year. On Thursday the index was at its lowest level in almost two weeks amid a broad market selloff following a surprise decline in China manufacturing, with emerging currencies also sinking.

Comment by Bill, just South of Irvine, CA
2014-01-25 18:26:57

Would now be a good time to buy the dip?
Always nice to buy more shares of a stock fund when it is in a dip.

Have you checked your average cost lately? Dips don’t matter.

I started my first nondeductible IRA in T Rowe Price New Asia in the mid 90s. Talk about bad timing? It was flat for two years and I put $4000 in for those two years. Then 1998 happened.

Well that $4000 is now at $13,000 and includes reinvested dividends and capital gains. Over 200%. Not bad, I’ll take it.

Now what’s the problem with emerging markets?

Comment by Whac-A-Bubble™
2014-01-25 01:59:41

Will slowing U.S. home sales in 2014 result in a “race to the exits” among the latest flock of residential real estate investors?

Comment by Whac-A-Bubble™
2014-01-25 02:05:22

U.S. News
Home Sales Expected to Cool After Big Year
By Eric Morath
Updated Jan. 23, 2014 7:33 p.m. ET

Sales of previously owned homes finished 2013 at their highest level in seven years, but a slowdown in recent months suggests the market is cooling after two years of strong gains.

Sales rose 1% in December to a seasonally adjusted annual rate of 4.87 million, the National Association of Realtors said Thursday. But that was the first increase since July and the second-weakest month of the year, behind November.

The trade group said 5.09 million existing homes were sold throughout 2013—up 9% from 2012 and the highest level of sales since 2006.

Though many economists expect the housing market’s improvement to continue, last year’s growth rate is unlikely to be maintained.

The pace is “not sustainable,” said Joel Naroff, chief economist at Naroff Economic Advisors. “With mortgage rates likely to move up this year, sales and price gains will likely be about half of what we saw last year.”

Comment by Whac-A-Bubble™
2014-01-25 02:00:46

Is the stock market correction actually a good thing in disguise?

Comment by Whac-A-Bubble™
2014-01-25 02:03:37

Just how happy are your stock market losses so far this year making you feel this weekend?

You should welcome this stock-market correction
First Take: This week’s downturn is just the reality check the markets need, argues Jonathan Burton.
Jan. 24, 2014, 8:16 p.m. EST
Why a stock market correction should make you happy
Opinion: What’s different about this downturn? Not much
By Jonathan Burton, MarketWatch

SAN FRANCISCO (MarketWatch) — “Excesses in one direction will lead to an opposite excess in the other direction.”

So says rule No. 2 from retired and respected market technician Bob Farrell, whose 10 “Market Rules to Remember” offer investors a reality check on stocks, bonds and their money.

Farrell’s advice is especially timely after the disappointing week stock investors have had, with the S&P 500 (SPX -2.09%) suffering its worst one-week percentage decline since June 2012, and the Dow Jones Industrials (DJIA -1.96%) taking its worst beating since November 2011. So far this year the S&P 500 has lost 3.1% and the Dow is down 4.2%.

Where she stops, nobody knows. But the conviction that stocks are due for a correction – meaning at least a 10% slide – is the worst-kept secret on Wall Street. Pundits have been opining for months about how stocks are overbought and investors are too optimistic.

It’s about time stock prices turned south. Even a year without a meaningful correction is too long a stretch. Investors get comfortable; the market’s proverbial wall of worry breaks down.

Comment by Bill, just South of Irvine, CA
2014-01-25 18:33:46

Is 3.1% a correction? What is Jonathan Burton smoking? Stocks had such a long run up that I would not call anything less than a 20% drop a correction.

Obama has 3 more years still. So his Fed policy of protect the stock market will continue.

Clinton had a great legacy as US president mostly because of the stock boom in the 90s.

Of course these presidents don’t control the economy themselves. They require the help of Congress.

A 20% correction will knock over $200,000 out of my portfolio but that part of the portfolio won’t have to be tapped for over ten years.

Comment by Whac-A-Bubble™
2014-01-25 21:40:02

Obama cannot dictate policy to the Fed. However, nothing precludes the Fed chair from deferring to Obama’s wishes.

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Comment by Whac-A-Bubble™
2014-01-25 02:06:39

WSJ dot com
U.S. Markets Tumble as Fear Spreads
Stocks Post Worst Loss in Seven Months as Investors World-Wide Confront Pullback in Stimulus, Growth Worries
By Prabha Natarajan, Nicole Hong and Chris Dieterich
Updated Jan. 24, 2014 7:24 p.m. ET

U.S. stocks tumbled Friday to their biggest loss in more than seven months, extending a global selloff that investors fear signals turmoil to come as financial markets adjust to a pullback in central-bank stimulus.

The declines extend a dark beginning of the year for equity investors world-wide, a jarring drop for markets that climbed…

Comment by Carl Morris
2014-01-25 04:10:39

Oh man…just got back from a tour of “The Bund” I think they call it? Shanghai’s river front…except they build a whole new city on the other side of the river in the last few years so they make a big deal out of what the new side likes like from the old side. Especially with lots of lights on the new side in the dark.

I don’t even know where to start…it looks like a science fiction set with the full background CGI of crazy huge skycrapers and spires with everything hazy from pollution. Except it’s real. And even on the pre-recorded tour audio they say straight out that they are trying to leave behind manufacturing and become a global financial center. And they talk about how their stock exchange is independent of the PRC govt just like Hong Kong. Problem is, of course, that you can build a new Manhattan from nothing on an unused patch of swampland on the other side of the river with enough money…but can you make it useful for anything? Just saying something is a global financial center and building skyscrapers like a crazed cargo cult with no credit limit doesn’t make it so.

Something isn’t right. But the resources spent on this are breathtaking. You almost can’t believe it’s real until you drive right up to the base of the buildings.

Comment by Blue Skye
2014-01-25 07:25:42

Financial center. Be careful what you wish for. Maybe it will be ground zero for the biggest contraction of credit in history.

Comment by Housing Analyst
2014-01-25 07:32:49

It sounds much like the US on steroids. Huge excess capacity, no organic demand.

At what end is all this?

Comment by azdude02
2014-01-25 07:35:38

bankruptcies for all.

Comment by Housing Analyst
2014-01-25 07:36:52

Yes that is the obvious outcome but what is the intent? The strategy?

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Comment by azdude02
2014-01-25 08:05:26

power and reserve currency status?

Comment by Carl Morris
2014-01-25 17:43:08

Yes that is the obvious outcome but what is the intent? The strategy?

It makes me wonder if maybe they (as a group) aren’t as smart as we think they are. Groups frequently aren’t. Maybe it really is a cargo cult. You can really see how badly they want to be seen as worthy of a seat at the adult table, it might simply all go back to that in the end. Buying their way to respectability. Respectable people have global financial centers. Now we have a global financial center. Therefore…

Comment by Prime_Is_Contained
2014-01-25 19:05:45

You can really see how badly they want to be seen as worthy of a seat at the adult table, it might simply all go back to that in the end.

What’s that quote about pride? Something about a fall… Hmmm…

Comment by Blue Skye
2014-01-25 11:38:22

“at 1,010ft (307 metres) tall. Shanghai Tower will be completed in 2014″

Tallest building in the world. Financial bubbles usually collapse right after the tallest building in the world is erected.

Comment by Whac-A-Bubble™
2014-01-25 11:42:07

Kelsey Campbell-Dollaghan on Gizmodo
8/10/13 2:59pm
Do China’s New Skyscrapers Really Signal an Economic Downturn?

Skyscrapers have been symbols of economic plentitude since Daniel Burnham, the architect behind some of the earliest tall buildings, said “Make no little plans; they have no magic to stir men’s blood.” But is it possible that tall buildings also precipitate crashes? According to one analyst, yes—and China, in particular, is heading for a bust.

The concept is called the Skyscraper Index, and it was named in a 1999 paper by economist Andrew Lawrence, who showed how the construction of record-breaking skyscrapers has long correlated to economic busts. It’s a pretty simple idea, really: As interest rates go down, construction of office space increases to accommodate expanding companies. It gets less expensive to build, so developers push higher and higher. Finally, as the boom peaks, a saturated market and anxiety over a bubble bring the whole thing grinding to a halt.

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Comment by Bill, just South of Irvine, CA
2014-01-25 19:52:10

The tall buildings in honor of their prosperity remind me of Samuel Taylor Coleridge’s work. Of course the first two lines the most obvious - these are all modern variants of “pleasure-domes”

“In Xanadu did Kubla Khan
A stately pleasure-dome decree:
Where Alph, the sacred river, ran
Through caverns measureless to man
Down to a sunless sea. 5
So twice five miles of fertile ground
With walls and towers were girdled round:
And there were gardens bright with sinuous rills
Where blossom’d many an incense-bearing tree;
And here were forests ancient as the hills, 10
Enfolding sunny spots of greenery.

But O, that deep romantic chasm which slanted
Down the green hill athwart a cedarn cover!
A savage place! as holy and enchanted
As e’er beneath a waning moon was haunted 15
By woman wailing for her demon-lover!
And from this chasm, with ceaseless turmoil seething,
As if this earth in fast thick pants were breathing,
A mighty fountain momently was forced;
Amid whose swift half-intermitted burst 20
Huge fragments vaulted like rebounding hail,
Or chaffy grain beneath the thresher’s flail:
And ‘mid these dancing rocks at once and ever
It flung up momently the sacred river.
Five miles meandering with a mazy motion 25
Through wood and dale the sacred river ran,
Then reach’d the caverns measureless to man,
And sank in tumult to a lifeless ocean:
And ‘mid this tumult Kubla heard from far
Ancestral voices prophesying war! 30

The shadow of the dome of pleasure
Floated midway on the waves;
Where was heard the mingled measure
From the fountain and the caves.
It was a miracle of rare device, 35
A sunny pleasure-dome with caves of ice!

A damsel with a dulcimer
In a vision once I saw:
It was an Abyssinian maid,
And on her dulcimer she play’d, 40
Singing of Mount Abora.
Could I revive within me,
Her symphony and song,
To such a deep delight ‘twould win me,
That with music loud and long, 45
I would build that dome in air,
That sunny dome! those caves of ice!
And all who heard should see them there,
And all should cry, Beware! Beware!
His flashing eyes, his floating hair! 50
Weave a circle round him thrice,
And close your eyes with holy dread,
For he on honey-dew hath fed,
And drunk the milk of Paradise.”

Comment by scdave
2014-01-25 08:57:10

Are the buildings pretty much occupied Carl ??

Comment by Carl Morris
2014-01-25 17:45:11

I don’t know for sure. But I think at least some of these are the suspiciously dark ones you hear about. I haven’t been over there at night. I’ve only seen the empty apartment buildings.

Comment by ibbots
2014-01-25 09:53:35

Looks pretty cool from the pics on the net.

Comment by AbsoluteBeginner
2014-01-25 12:34:01

‘Just saying something is a global financial center and building skyscrapers like a crazed cargo cult with no credit limit doesn’t make it so.’

Where is Mr. Banker lately, btw?

Comment by 2banana
2014-01-25 13:33:31

Oh man…just got back from a tour of “The Bund”

Named after the US Pro-Nazi Organization in the 1930s?

Comment by Carl Morris
2014-01-25 17:46:28

No idea. Apparently the river front area has had that name for a very long time. It’s possible the Nazis named their organization after this?

Comment by Housing Analyst
2014-01-25 06:35:17

Germantown, MD Housing Prices Crater 18%; Inventory Grows


Comment by Whac-A-Bubble™
2014-01-25 06:45:42

I wonder how well those gathered for the global economics conclave in Davos are able to concentrate on their meeting, given the global economy seems to have suddenly started to go up in flames?

Comment by Whac-A-Bubble™
2014-01-25 06:47:38

Perhaps economists should not hold such meetings in the future, as they seem to imperil global economic stability.

Angst Over Argentina Upends Alpine Complacency in Davos

By Jesse Westbrook, Simon Kennedy and Elisa Martinuzzi
Jan 24, 2014 9:37 AM PT

Over a three-hour lunch in Davos yesterday, Carlyle Group LP (CG) co-founder David Rubenstein told a group of investors and bankers his biggest worry: nobody appeared to be worried about anything at all.

Less than 24 hours later, the devaluation of the Argentine peso accelerated the worst selloff in emerging market stocks in five years, unnerving delegates at the World Economic Forum in Switzerland. As they shuttled from meetings to meals, losses were piling up by the minute as developing nation currencies slid with equities.

“I don’t want to look,” Daniel Loeb, billionaire founder of hedge fund Third Point LLC, said of the financial markets as he walked between meetings at the Congress center in Davos.

After recent gatherings were dominated by crises from Lehman Brothers Holdings Inc. to Greece, this year’s had begun to reflect a mood of optimism as economies and stock markets recovered. That enthusiasm waned today as the rout in emerging markets exacerbated concern that the engines of global growth since the crisis have now stalled.

Comment by Whac-A-Bubble™
2014-01-25 06:49:05

Contagion Spreads in Emerging Markets as Crises Grow
By Ye Xie and John Detrixhe Jan 24, 2014 10:08 AM PT
Photographer: Sergei Supinsky/AFP via Getty Images
A bus decorated with Ukrainian hryvnia notes in Kiev.

The worst selloff in emerging-market currencies in five years is beginning to reveal the extent of the fallout from the Federal Reserve’s tapering of monetary stimulus, compounded by political and financial instability.

The Turkish lira plunged to a record and South Africa’s rand fell yesterday to a level weaker than 11 per dollar for the first time since 2008. Argentine policy makers devalued the peso by reducing support in the foreign-exchange market, allowing the currency to drop the most in 12 years to an unprecedented low.

Investors are losing confidence in some of the biggest developing nations, extending the currency-market rout triggered last year when the Fed first signaled it would scale back stimulus. While Brazil, Russia, India, China and South Africa were the engines of global growth following the financial crisis in 2008, emerging markets now pose a threat to world financial stability.

Comment by Housing Analyst
2014-01-25 06:49:24

The entire charade seems like a huge security risk having every countrys’ Exalted Cyclops in one place at the same time.

Comment by Whac-A-Bubble™
2014-01-25 06:55:12

How is the U.S. retail sector shaping up in the post-holiday season?

Comment by Whac-A-Bubble™
2014-01-25 06:58:31

Sam’s Club lays off 2% of workers
Posted on: 7:19 am, January 25, 2014, by CNN Wire Service, updated on: 07:26am, January 25, 2014

NEW YORK (CNNMoney) — Walmart plans to lay off 2,300 workers at its Sam’s Clubs, the company said Friday.

That’s 2% of the workforce for the wholesale club chain, which has nearly 600 locations in the United States.

A little less than half of the employees affected are assistant managers, according to Sam’s Club spokesman Bill Durling. Before the layoff, each club’s fresh section — which sells meat, poultry, seafood, dairy, produce and baked goods — had six managers. Half of those jobs have been eliminated. Instead there will be three fresh section managers, who will be paid more, Durling said.

The company eliminated some hourly positions too.

Comment by Anklepants
2014-01-25 07:27:34

To infinity and beyond!

Comment by azdude02
2014-01-25 08:02:38

a lot of the times prices are cheaper at walmart than sams club. now i think the membership is going up to 45.

The prices are not that good at sams.

Comment by Whac-A-Bubble™
2014-01-25 11:12:25

But at Sam’s, you don’t have to shop elbow-to-elbow with Walmart rabble who are too poor or cheap to pony up the price of two Applebee’s dinners to purchase a membership.

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Comment by In Colorado
2014-01-25 11:33:44

The prices are not that good at sams.

We’ve noticed that as well. We buy a lot less there than we used to just a few years ago.

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Comment by Whac-A-Bubble™
2014-01-25 07:00:25

Five years after the onset of quantitative easing, is it safe to say the deflation scare is behind the global economy at this point?

Comment by Whac-A-Bubble™
2014-01-25 07:02:50

IMF’s Lagarde sees eurozone inflation ‘way below target’
Published on Jan 25, 2014 9:46 PM

DAVOS (REUTERS) - Euro zone inflation is “way below target” and deflation is a potential risk for the bloc, International Monetary Fund Managing Director Christine Lagarde told the World Economic Forum in Davos on Saturday.

In response, European Central Bank President Mario Draghi said the ECB stood ready to act if inflation went lower than forecast and reaffirmed that interest rates would remain low or go lower for an extended period of time.

Asked about the possiblity of the ECB adopting quantitative easing policies such as the US, British and Japanese central banks had done, Mr Draghi said: “I’m not saying it should be done or it shouldn’t be done.”

The EU treaty prevented monetary financing of governments, he said. The ECB might be able to buy securitised bank loans if they could be packaged as asset backed securities in a transparent manner, which would require regulatory change, Mr Draghi added.

Comment by azdude02
2014-01-25 07:36:53

yeah right.deflation destroys leveraged banksters.

Comment by Whac-A-Bubble™
2014-01-25 11:16:01

deflation destroys leveraged banksters.

That’s exactly why deflation is an “ogre that must be fought decisively.”

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Comment by Prime_Is_Contained
2014-01-25 11:52:49

yeah right.deflation destroys leveraged banksters.

Hm, I thought deflation destroyed the borrower, as the debts that they hold become harder and harder to pay off, as they have to make payments with currency that is more and more valuable.

To the extent that the borrowers continue to make payments, the lenders should be in the cat-bird seat—they payments that they receive are worth more and more.

Of course, this falls apart if/when the borrowers stop making payments.

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Comment by Combotechie
2014-01-25 12:12:03

“Of course, this fall apart if/when the borrowers stop making payments.”

Keep their hopes alive and maybe they’ll stay, and if they stay they just may pay.

Comment by Whac-A-Bubble™
2014-01-25 12:22:50

“Hm, I thought deflation destroyed the borrower, as the debts that they hold become harder and harder to pay off, as they have to make payments with currency that is more and more valuable.”

Overleveraged borrowers and bankers alike suffer under deflation, while savers who avoided leveraging themselves into penury (cf. Mrs. Watanabe) prosper.

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

– Shakespeare’s Pollonius

Comment by Whac-A-Bubble™
2014-01-25 07:04:33

Abe’s Yen Exporting Deflation Risks Davos Tension: Currencies
By Anchalee Worrachate and Simon Kennedy
Jan 22, 2014 6:21 AM PT

Shinzo Abe’s debased yen is leaving other nations to pay the price for faster Japanese inflation.

As Japan’s prime minister addresses the global financial elite today in Davos, Switzerland, the yen is within 3 percent of a five-year low against both the euro and dollar, with analysts forecasting further declines. Its drop is one of the reasons why inflation in the euro area and the U.S. is undershooting central-bank targets, even as their recoveries gather pace, according to Barclays Plc and Societe Generale SA.

When your currency falls heavily like the yen did, you create inflation for yourself but disinflation for others,” David Bloom, the global head of currency strategy at HSBC Holdings Plc in London, said in a Jan. 20 phone interview. “If we get to the point where inflation falls and growth looks like it’s going to be incredibly weak again, then the background for a currency war is growing.”

Comment by scdave
2014-01-25 09:12:19

then the background for a currency war is growing ??

Which could be exactly where we are headed…

Comment by In Colorado
2014-01-25 11:34:45

The race to the bottom can be thrilling, until you reach the bottom and go splat.

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Comment by Whac-A-Bubble™
2014-01-25 11:37:47

It’s great to know that before the bottom is reached, the Fed is likely to replace the taper with QE4 and once again buoy the value of your stock investments.

Comment by Combotechie
2014-01-25 12:17:16

And the Fed will do this because they at the Fed will feel that they will have no other choice.

It’s all they know.

Comment by Whac-A-Bubble™
2014-01-25 12:23:50

The trick will be timing your stock purchases to heavily concentrate them before the next big surge in Fed-sponsored bailouts.

Comment by scdave
2014-01-25 12:56:43

the Fed will feel that they will have no other choice ??

I am scared because they are scared….

Comment by Combotechie
2014-01-25 15:03:02

It used to be (during the days when we enjoyed an Earned Money Economy) the feeling at the Fed was their job was to remove the punch bowl after the party got started.

Now (since our economy has morphed into a Borrowed Money Economy) the feeling at the Fed is they cannot take away the punch bowl because if they did the party would grind to a halt.

Comment by Housing Analyst
2014-01-25 15:05:41

That’s a gross overstatement.

Pull the DebtDonkey plug and watch prices of everything fall to dramatically lower and more affordable levels and watch the economy accelerate.

Comment by measton
2014-01-25 21:36:47

They can create money until the cows come home, but unless the consumer can earn it or borrow it you won’t see inflation. Stick to food and fuel a currency war and automation will destroy everything else.

Comment by Whac-A-Bubble™
2014-01-25 07:06:51

ft dot com
January 24, 2014 4:08 pm
Investors wrestle with spectre of deflation
By Ralph Atkins in London

Politicians conjure up imagery seemingly out of a Harry Potter book when discussing deflation. The phenomenon of sustained price falls is a monster that can wreck economies. It is an “ogre that must be fought decisively”, says Christine Lagarde, the International Monetary Fund’s managing director.

So far financial markets have refused to be spooked. For investors deflation is a beast that, like Harry Potter characters, takes many forms – some not so scary and others benign. If deflation became dangerous, there is confidence it would be combated by fresh central bank wizardry.

But bond markets at least have been swayed since the start of the year by unexpectedly weak inflation globally, which has sent US and UK government bond yields tumbling. Investors may misunderstand disinflationary forces at work as the world emerges from the financial crisis years, analysts warn.

“Central banks have not done enough to explain the disinflation and deflation of last year – let alone what is happening this year,” says Steven Major, head of fixed income research at HSBC. “Policy makers have to be very careful. If the sign changes on inflation numbers, and growth rates do not improve, debt sustainability will become a real challenge in the eurozone.”

Comment by Anklepants
2014-01-25 07:29:34

God forbid anything should get cheaper because of productivity and technology gains.

An Ipad must cost $500 in inflation adjusted dollars at all times.

Comment by Whac-A-Bubble™
2014-01-25 11:18:16

And a house must cost at least $500,000 or else it cannot be located within 50 miles of the California coast.

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Comment by Whac-A-Bubble™
2014-01-25 07:08:40

ft dot com
January 23, 2014 9:18 am
Mortgage bankers face the fear in Las Vegas
By Tracy Alloway and Mike Mackenzie in Las Vegas

Bankers, analysts and investors partied this week in a chandelier-shaped bar suspended precariously above the ground floor of a Las Vegas hotel, celebrating an annual industry gathering of securitisation professionals.

Lost in the grandeur of the occasion, however, was any hint of the fractured nature of the mortgage-backed securities market, as – like the giant crystal-encased chandelier – a large swath of the industry remains in limbo.

While sales of bundled commercial mortgages, leveraged loans and some consumer loans have soared to post-crisis highs, issuance of residential mortgage-backed securities (RMBS) that are not backed by the US government remain far below their pre-2008 levels, underscoring the uncertainty still hanging over the structured finance industry as Washington grapples with housing reform.

Chief among these reforms is the prospect of winding down the government-sponsored enterprises (GSEs) that were taken into conservatorship during the depths of the financial crisis but still guarantee the vast majority of US mortgages.

“We’re kind of stuck somewhere in limbo until we know where the GSEs are going and until we can get more private capital,” Steven Abrahams, head of securitisation at Deutsche Bank, told the 5,000 conference attendees.

The cautious attitude on display at the Vegas conference is a far cry from the exuberance on show at a similar industry event held in Miami last week.

Comment by Whac-A-Bubble™
2014-01-25 11:20:59

“Bankers, analysts and investors partied this week in a chandelier-shaped bar suspended precariously above the ground floor of a Las Vegas hotel, celebrating an annual industry gathering of securitisation professionals.”

Sounds like the banksters’ version of the Sword of Damocles was poised and ready to crash onto the unsuspecting bystanders on the ground floor below.

Comment by Housing Analyst
2014-01-25 07:12:37

Palm Beach Fl Housing Prices Collapse 24% Year Over Year


Comment by Housing Analyst
2014-01-25 07:17:02

Bend, OR Housing Craters A Whopping 23% In 2013


Comment by rms
2014-01-25 10:06:15

Bend, OR reminds me of San Luis Obispo, CA since they both have unrealistically high home prices and a lack of industry with family supporting employment.

Comment by Whac-A-Bubble™
2014-01-25 11:21:59

Time to rename the town Bendover?

Comment by jane
2014-01-26 13:10:21

$300K neighborhood is still nutz given that there are no jobz.

Comment by Ben Jones
2014-01-25 07:37:17

More false dualism:

‘A member of President Barack Obama’s hand-picked surveillance review group said Friday the White House was swayed by U.S. intelligence officials sympathetic to the National Security Agency and ultimately viewed the group’s findings “as a liberal report.”

University of Chicago law professor Geoffrey Stone said that, after receiving the surveillance group’s report, Obama spent a month meeting “with many of the same people we had met with at great length, members of the intelligence community, members of the intelligence committees from Congress largely on one side of the picture.”

“And instead of our report being truly understood as a middle ground, based upon taking into account all of those perspectives on both sides of the spectrum, I think the White House got moved by thinking of our report as a liberal report,” Stone said.’

‘Stone, speaking during a panel discussion at the National Press Club in Washington, said intelligence officials were “pushing [Obama] and the White House generally more to what we can call the right.”


Comment by real journalists
2014-01-25 08:09:36

Video clip of Obama declaring his is “the most transparent administration in history”



Comment by Ben Jones
2014-01-25 07:40:39

‘Speaking at the United States Conference of Mayors on Friday, Homeland Security Secretary Jeh Johnson said the approximately 11 million people who are in the country illegally have “earned the right to be citizens.”

‘Johnson, who had earlier served as general counsel for the Department of Defense under Obama from 2009 to 2012, told the more than 270 mayors in attendance that enforcing immigration law was one of the main missions of DHS.’

“The five core missions of the Department of Homeland Security are guarding against terrorism, securing our borders, enforcing our nation’s immigration laws, safeguarding cyberspace and critical infrastructure in partnership with the private sector, and supporting emergency preparedness and response efforts at every level,” Johnson said.’


Comment by tom cruz bustamante
2014-01-25 08:01:57

Only racis tea party people oppose immigration.

Comment by albuquerquedan
2014-01-25 08:16:19

Full court press by the millionaires on immigration:


Comment by Whac-A-Bubble™
2014-01-25 11:25:19

For the record, I’m fine with legal immigration to the U.S.

Comment by Bill, just South of Irvine, CA
2014-01-25 19:58:56

I would be fine with illegal immigration to the U.S., provided first all welfare, housing subsidies, health care, education to their children, and food subsidies are abolished. In countries such as New Zealand and Australia, you have to have a certain minim net worth before you are allowed to immigrate there. The line ‘give me your tired, your poor” should be changed to “give me your self-sufficient and most brilliant.” But the “tired, your poor” thing was during the onset of the mental disease known as “progressivism” that affected our country in the late 1800s.

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Comment by Carl Morris
2014-01-26 00:58:32

Isn’t everyone? I thought the only argument was how much legal immigration to allow and how tough to be on illegal immigration. With a few evil folks out there wanting to use just the right combination of the two to create a separate subclass of near-slaves who won’t be prosecuted but also won’t be given the rights of citizenship.

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Comment by Whac-A-Bubble™
2014-01-25 11:24:19

“earned the right to be citizens.”

How does entering the country illegally confer the rights of citizenship? Seems like we are creating perverse incentives.

Comment by Prime_Is_Contained
2014-01-25 12:02:07

How does entering the country illegally confer the rights of citizenship? Seems like we are creating perverse incentives.


I would prefer that we simplify and liberalize the methods for entering the country _legally_, rather than giving millions the incentive to do so illegally, or rewarding them for having done it illegally in the past.

Comment by Anklepants
2014-01-25 13:46:55

” in partnership with the private sector”

Border Industrial Complex alive and well.

Comment by albuquerquedan
2014-01-25 07:56:57

So with chain migration, we can have thirty million more people to rent the houses that Blackrock bought. It is all good unless you are not part of the .01%.

Comment by Overtaxed
2014-01-25 07:59:06

So sorry I missed the big conversation yesterday on Gen X/Y. There was one thing I wanted to add to the discussion that I personally am living and see more and more in my generation (X) that has a material impact on housing moving forward:

“For those that don’t understand, let me tell you what the world of gen x / y is like right now…

First off, we never ever settle down because jobs don’t last forever and no one can afford that “70s show” type lifestyle. So the renting lifestyle kind of works anyway. No one works anywhere for 20 years anymore. The smarter people know that the way our parents lived either: barely exists anymore, or soon won’t, so we have to be prepared. Fact of that matter is, if you go into debt to buy a house, you are chained to it. You are chained to the jobs in the area and the region. If you need to move across town to get a better / different job (or say another state) you are either stuck with a horrible commute and your life sucks, or you can’t move to that other state. ”

Gen X is the first generation to have the option to work virtually. Gen Y is going to see this even more. I’ve been working for the past 8 years or so from home/the road and will probably never go back to an office job. This has a significant impact on the trends buying a house, you can live where you want to live (as long as an airport is nearby) and be pretty confident that you won’t have to sell unless there a massive shift in employment away from work-from-home/telecommuting (unlikely, IMHO, in fact, it seems to be more and more common today). This is going to be good for housing in areas that have a desirable climate that aren’t necessarily near employment centers, and bad for the former major employment centers (NYC being a good example). In my neighborhood (about 20 miles from a 2nd tier airport, most houses in the 400-600K range) most of my neighbors are either telecommuters, lawyers, doctors or accountants. A lot of the telecommuters are in sales, and, like me, travel quite a bit. I don’t know a single household here who has the main income earner working in a typical “office drone job”.

“No one works anywhere for 20 years anymore.”

I’ve had 4 jobs in the past 10 years. And left each of the previous voluntarily. My salary is ~3X what it was 10 years ago, mostly because I was willing to hop from one job to another to explore new opportunities. My current employer’s closest office location is ~500 miles away; I’ve been there twice since I started (about a year ago). My employer before that, a major multinational, had it’s HQ about 1000 miles away. I went there 3 times in the ~3 years that I worked for them. I typically clock about 75-100K miles per year by air; traveling from 0-4 times per month (but typically far away, I’ve been going to Brazil for the past few months; WOW that’s a long flight). I work in IT, so I spend a lot of time in the Bay area too; heading out there in a few weeks for a big conference in San Francisco.

What does this all mean for housing? Well, IMHO, we’re going to see more and more flight from high cost living areas that are high cost because of jobs. Those that are high cost because of climate (Hawaii being the easiest example, but also CA and FL) are going to see growth and higher costs. More and more people in the information economy are going to stop going to offices, causing a drop in overall commercial RE rates. Couple this with the Amazon phenomenon, commercial RE is going to suffer a lot over the next 10-20 years.

Socially? People are going to become more and more isolated. I’m to the point where I hate even talking on the phone to people because it’s so slow compared to e-mail; forget about in person meetings. I’ve met my direct supervisor a grand total of 2 times (once during the interview process) since taking this job. Not only in work, people are going to become more isolated in matters of love and life. I’ve lived in my neighborhood for 3 years. I talk with my neighbors all the time; but I couldn’t identify 1 out of 10 of them. We talk on e-mail and message boards for the community because none of us have the time/inclination to get together. I’m sure that many of my neighbors know my name (because of e-mail) and have seen me in the community (riding my bike) but have no idea that my name and face go together. I know the few times that I’ve met people I was shocked when I heard their names; “Oh man, you’re Thomas! Remember that conversation we had last month about the pool cleaning!”.

Our connections to one another, in many ways, are loosening. However, in other ways, they are much tighter. Call it the Facebook effect. I know all kinds of things about my neighbors because of our discussions, but nothing “deep” like I would if we actually spent time together. Same thing with the folks I work with; I know 100’s of people that I correspond with on a regular basis. I know what they are good at, what time they are likely to respond to inquiries, and what they are working on (what customers). Of these (call it 100) people that I deal with on a regular basis, I could maybe tell you the marital status of 10. Probably the same number I have some idea (the state) that they live in. The rest, they are voices/names at the end of phone or e-mail. And yet, if I wanted to, I could log in to Facebook right now and read intimate details about someone who I went to school with 20 years ago; get totally caught up on their lives in 30 minutes, and see pictures of them from the past decade without so much as a “Hello”.

It’s a very different world today. I can not see another person (other than my wife) for days on end and, at the same time, I don’t feel lonely or isolated because, while not seeing them, I’m talking/corresponding with them non-stop. I feel connected and as if I have 100’s of friends; while, at the same time, in reality, I’m not connected at all and have almost no “true friends”. It’s a crazy thing; it’s like “virtual friends” and “virtual colleagues” have replaced the real thing.

Comment by ibbots
2014-01-25 08:46:42

I was born in ‘67 and generally agree with many of the notions put forth in that discussion re: mobility and careers.

When I think about my circle of friends however, of the four of us, three of us all bought houses, raised families, etc. in the same geographic area. Two of those people are going on 20 years of working for the same company. Maybe they are the exceptions.

If I expand my observations to include acquaintances, I can think of several people who share the same traits. Maybe it is because we are on the leading edge of the X generation.

Comment by AbsoluteBeginner
2014-01-25 12:46:49

At my company, promotions that incur transfers are being balked at by workers at other locations because they are offered the promotion to a higher COL area w/o a sufficient salary % delta. I think I might of added that anecdote here a while back. Point is, they could transfer if maybe they were not anchored to a house? I do not know. I would think a promotion is good, period, but not if the P&L of it is not.

Thing is, the generational attitudes are changing. My father was the old school type that thought corporations are the key to employment. He was an engineer and laid off many times. Lesson I learned is that companies use people.

Comment by scdave
2014-01-25 09:53:06

That was a interesting read Overtaxed…Just a couple of questions if you don’t mind;

How old are you ??

What zip do you live in ??

Comment by Housing Analyst
2014-01-25 10:02:15

Frankly you talk about yourself too much.

Comment by Blue Skye
2014-01-25 10:18:53

“I can not see another person…”

Self isolation is something that you do, not something that “the world” does to you.

Comment by Whac-A-Bubble™
2014-01-25 11:27:33

‘…it’s like “virtual friends” and “virtual colleagues” have replaced the real thing.’

What kind of friends you have is a lifestyle choice. (I have friends both virtual and otherwise…)

Comment by Markab
2014-01-25 08:17:39

I have to admit, I really loved seeing the Wall Street meltdown the last two days. Even though I lost a tiny amount of money, I have gotten frustrated that many peoples’ barometer of the economic health of our country is tied specifically and uniquely to the S&P500. Boots on the streets tell me that the economy remains horrible, and these senses—along with this blog—is what compelled me to sell my California house in 2005 and start renting.

But, I don’t necessarily think this is the beginning of the much-anticipated correction. Too many people have suddenly decided this is it, after many years of largely interrupted and huge stock gains. I wouldn’t be surprised to see a largish rally next week, with multiple attempts to new highs over the course of the next several months with finally a breakdown sometime later. At least, that is what I’m hoping.

Hey, who doesn’t want to buy assets at reasonable rather than inflated prices? Always interesting to me that most people pray for lower prices for most things…except housing and stocks.

Comment by tom cruz bustamante
2014-01-25 08:25:01

Yellin would be better off letting it collapse a little and blame everything on Bernanke.

Comment by albuquerquedan
2014-01-25 08:32:48

Straight from the Obama playbook, I love it.

Comment by Whac-A-Bubble™
2014-01-25 11:34:16

It seems to have already begun before she took office!

Comment by measton
2014-01-25 21:44:14

Yes they have to show the proles that taking away the bankers punch bowl would be bad for them.

I say a a few weeks of consolidation followed by the central bankers riding to the rescue on white horses and a tidal wave of money.

Comment by Whac-A-Bubble™
2014-01-25 21:48:39

“I say a a few weeks of consolidation followed by the central bankers riding to the rescue on white horses and a tidal wave of money.”

That’s my guess as well. There is no better way to encourage the proles to beg for more plunge protection than by allowing the market to plunge for a few weeks without protection.

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Comment by scdave
2014-01-25 09:55:34

Boots on the streets tell me that the economy remains horrible ??

Which is always the best indicator…

Comment by oxide
2014-01-25 11:18:41

“Always interesting to me that most people pray for lower prices for most things…except housing and stocks.”

No mystery here. Houses and stocks are the only things that people plan to re-sell. Maybe cars or antiques. Everything else is a consumable.

Comment by Whac-A-Bubble™
2014-01-25 11:36:31

We plan to resell our Japanese automobiles and musical instruments, in the second case either if I ever reach the point of too deaf or decrepit to enjoy playing any longer or when I check out of the planet.

Comment by Bill, just South of Irvine, CA
2014-01-25 20:32:47

I want to strategically locate myself to where I can get around without a car, but maybe a bike in my later years, while having low taxes. The best I could find is in central Scottsdale. Nice greenbelt for biking, walking, blading. All sorts of nice things within walking and biking distance. If not for the California taxes, I would pick Davis near Sacramento for its decades of being bike-friendly.

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Comment by Whac-A-Bubble™
2014-01-25 11:28:51

“I have gotten frustrated that many peoples’ barometer of the economic health of our country is tied specifically and uniquely to the S&P500.”

The MSM peddles that nonsense night and day.

Comment by Bill, just South of Irvine, CA
2014-01-25 20:29:52

Be more aware of economic health of the world. Is the US in decline, due to its decades of subsidizing stupidity and encouraging people to make excuses for laziness? Are there still hundreds of millions of Chinese and Indians who want the “two cars, 4 TVs, Michael Jordan shoes, 7 smart phones, 3 iPads, daily Starbucks, 400 channels on TV, 84 inch TVs, and granite countertops?”

Investing in stocks is at the very least, making a bet on the creativity of the human mind. So yes the world stock markets are the barometer of our economic health. You provide capital to companies that market those great products.

30 years ago the Macintosh was delivered by Apple. Lots of hoopla. But it really was radical. I had one. The graphics and mouse were unmatched for years from the IBM compatibles. I never realized the signficance of the various products until years later. But maybe together they were really radical. My dentist in Irvine has his office all digitized and big screen video, special cameras to help him do his work to be more precise. I was not surprised that the fillings I got felt natural right away and not much more griding was needed. Incremental things like better dental health have a ripple effect. We just do not appreciate it.

Comment by Whac-A-Bubble™
2014-01-25 21:42:52

I totally appreciate innovation to better dental practice!

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Comment by Bill, just South of Irvine, CA
2014-01-25 20:36:47

My company in Irvine does commercial software security and we are busier than heck. The CEO is a left wing guy but he is great at digging up new contracts for us. I’m so busy and basically my life is revolving around my job. I started working extra on weekends (free labor).

But of course my motive is in five years to go back consulting and earning at least 33% more than what I’m earning now, but working primarily in the OC, Los Angeles, the Bay area, and the PNW. With the big tax breaks of course.

Comment by Housing Analyst
2014-01-25 08:31:05

“Number of U.S. Mortgages Going Unpaid = 4,594,000″



Don’t Be A Debt Donkey®

Comment by oxide
2014-01-25 11:20:42

Isn’t the lesson to actually BE a debt donkey? Why buy when you can rent for half the cost… but why rent if you can squat for free?

Comment by Whac-A-Bubble™
2014-01-25 11:39:29

At the end of the day, the question is whether the years of free rent the squatters enjoy more than offset the loss of their principle asset when the bank finally forecloses.

I’d love to see an analysis of this question if anyone knows of any.

Comment by Prime_Is_Contained
2014-01-25 12:18:25

At the end of the day, the question is whether the years of free rent the squatters enjoy more than offset the loss of their principle asset when the bank finally forecloses.

I toyed with the idea of becoming a squatter at the beginning of the downturn—there were obvious properties being “offered” (e.g. empty) in my neighborhood, and I thought it would be quite an adventure.

I ended deciding against it, primarily for the reasons of:

1) risk of physical harm: e.g. an absentee owner might show up armed,

2) instability: e.g. having to live ready to move on any given day, and

3) hassle: e.g. having to store elsewhere anything that I care enough about to not want to risk losing it.

That ended up outweighing “adventure” at least for me.

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Comment by Whac-A-Bubble™
2014-01-25 12:29:55

“1) risk of physical harm: e.g. an absentee owner might show up armed,…”

Reminds me of the movie I stumbled across on cable TV during a 2am bout of insomnia last night: Foreclosed

It was so terrifying that I soon changed the channel. Take home lesson: NEVER, EVER BUY A FORECLOSURE HOME, IN THIS LIFE OR THE NEXT.

Comment by Whac-A-Bubble™
2014-01-25 12:47:38

Dang! I accidentally posted the wrong foreclosure movie trailer; not to suggest the one I already posted is any less horrifying than this one:


Comment by Whac-A-Bubble™
2014-01-25 13:09:17

There are so many recent movies out there about foreclosure that it is quite easy to confuse them.

Comment by Tarara Boomdea
2014-01-25 13:57:21

the idea of becoming a squatter

We lived rent free for a year; I did worry a bit, but was more PO’d than anything else.

LL told us to get out - just like that - two months into a three year lease; he wanted to sell. That started two years of showings (briefly), rent reductions, squabbling. Finally he told us not to send the rent anymore. After one year of silence, his RE agent showed up at the door and was surprised to see us there. We negotiated a month to month lease (bargained down $200.) Packed up and left two months later.

Comment by Whac-A-Bubble™
2014-01-25 21:47:05

“LL told us to get out - just like that - two months into a three year lease; he wanted to sell. That started two years of showings (briefly), rent reductions, squabbling. Finally he told us not to send the rent anymore. After one year of silence, his RE agent showed up at the door and was surprised to see us there. We negotiated a month to month lease (bargained down $200.) Packed up and left two months later.”

Thanks for sharing. Our single divorced mom neighbor has been given sixty day notice to leave so the Florida investors / landlords can fix the place up to sell. I’m hoping and praying that the market weakness we have recently noted in our posts morphs into such a nasty tumble in the San Diego market that our neighbor gets to keep on renting, and perhaps even gains some bargaining power as you apparently did.

Comment by Housing Analyst
2014-01-25 13:01:41

“why rent if you can squat for free?”

You’re not. You’re paying 2x rental rates.

Comment by phony scandals
2014-01-25 15:18:23

Shadow Beats.

Comment by phony scandals
2014-01-25 16:02:01

“Number of U.S. Mortgages Going Unpaid = 4,594,000″

Hey hey, my my
Took a big cash out refi
There’s more to the picture
Than meets the eye.
Hey hey, my my.

My my, hey hey
That Deadbeat is here to stay
It’s better to squat here
Than it is to pay
My my, hey hey.

Out of the blue
and into the black
The Beat won’t pay,
for his refied shack
He knows once he’ gone,
He never can come back
So the Beat won’t pay,
for his refied shack.

The Beat ain’t gone
and he’s not forgotten
This is the story
of Johnny Squatin
It’s better to dine out
than it is to pay
The Beat ain’t gone
and he’s not forgotten.

Hey hey, my my
Took a big cash out refi
There’s more to the picture
Than meets the eye.
Hey hey, my my.

Neil Young- My My, Hey Hey (Out Of The Blue) - YouTube
http://www.youtube.com/watch?v=cawk2cMTnGo - 134k -

Comment by Prime_Is_Contained
2014-01-26 09:07:47

Hey hey, my my
Took a big cash out refi

That one was AWESOME, jeff!

Comment by Housing Analyst
2014-01-25 08:43:11

Alexandria, VA Housing Prices Sink 12% Year Over Year


Falling housing prices is not a surprise considering new housing can be built for 40% less than current asking prices.

Comment by Housing Analyst
2014-01-25 08:47:18

Comment by Blue Skye
2013-11-12 07:21:33

Buying a used house is an adventure in depreciation discovery.

…. and slavery.

Comment by AbsoluteBeginner
2014-01-25 08:49:50

I forgot about this guy. Twenty five years ago I was fascinated by him. He is more a founder of the Internet than Gore, IMHO:


Comment by phony scandals
2014-01-25 09:26:15

Eric Holder: US still a nation of cowards on race

1 day ago

Attorney General Eric Holder reiterated his 2009 claim that Americans are a “nation of cowards” on racial issues on Thursday.

Holder’s effort to profile the entire nation as cowards came during a friendly interview with the University of Virginia’s Miller Center, where was asked if he would take back his 2009 remarks.

“I would not take that back,” he replied.

As usual, Holder did not brave questions from the audience or from other reporters in the room.

In 2009, Holder claimed that “though this nation has proudly thought of itself as an ethnic melting pot, in things racial, we have always been and we — I believe continue to be, in too many ways, essentially a nation of cowards.”

During his tenure, Holder has greatly expanded the range of race-related lawsuits filed against companies, schools and governments.

For example, his department recently threatened to sue schools where African Americans are disciplined differently than Asian or white students. His agency has extracted billions of dollars in payments from banks after unintentional racial differences were detected in their lending patterns. He has also rolled back drug penalties imposed on African Americans.

Holder’s boss, President Barack Obama, recently told The New Yorker that he supported a reform of marijuana laws, partly because many Africans Americans have been jailed for violating those laws.

During the interview, Holder also threatened to sue states if his deputies see a racial purpose behind voter-identification laws that have already been approved by the Supreme Court.

Holder also hinted at a wave of new lawsuits amid the growing diversity caused by immigration.

“We have demographic changes in this nation the likes of which we have never seen before,” he said. “That could be a very divisive thing… on the other hand, if we do accept the new nation that we are about to become, that could be a very positive force.”

Holder’s office has not publicly pushed back against the president’s decision to reduce enforcement of immigration laws.

The looser enforcement has boosted Obama’s support among Latinos, but has also increased job-competition for young African Americans.

Only about half of young black men who have not completed high school have full-time jobs.

Throughout the Miller Center interview, Holder described his legal decisions as based on his political vision.

http://dailycaller.com/2014/01/24/eric-holder-us-still-a-nation-of-cowards-on-race/ - 90k -

Comment by 2banana
2014-01-25 13:43:10

A nation where black panther in full “uniforms” can hang out side polling stations with clubs and shout racial statements will bring a big yawn from the US Justice Department.

A nation where a “white-hispanic” can defend himself from a thug beating him to death (or maybe just playing the knock-out game a little too roughly) and have the entire weight of the administration come down on his head.

A nation of cowards?

A nation race pimping hustlers who care only about power.

Comment by phony scandals
2014-01-25 09:40:13

Bank-Run Fears Continue; HSBC Restricts Large Cash Withdrawals

Zero Hedge
January 25, 2014

Following research last week suggesting that HSBC has a major capital shortfall, the fact that several farmer’s co-ops were unable to pay back depositors in China, and, of course, the liquidity crisis in China itself, news from The BBC that HSBC is imposing restrictions on large cash withdrawals raising a number of red flags. The BBC reports that some HSBC customers have been prevented from withdrawing large amounts of cash because they could not provide evidence of why they wanted it. HSBC admitted it has not informed customers of the change in policy, which was implemented in November for their own good: “We ask our customers about the purpose of large cash withdrawals when they are unusual… the reason being we have an obligation to protect our customers, and to minimise the opportunity for financial crime.” As one customer responded: “you shouldn’t have to explain to your bank why you want that money. It’s not theirs, it’s yours.”

Via The BBC,

Some HSBC customers have been prevented from withdrawing large amounts of cash because they could not provide evidence of why they wanted it, the BBC has learnt.
Listeners have told Radio 4′s Money Box they were stopped from withdrawing amounts ranging from £5,000 to £10,000.

HSBC admitted it has not informed customers of the change in policy, which was implemented in November.

The bank says it has now changed its guidance to staff.

“When we presented them with the withdrawal slip, they declined to give us the money because we could not provide them with a satisfactory explanation for what the money was for. They wanted a letter from the person involved.”

The arrogance is incredible…

This article was posted: Saturday, January 25, 2014 at 5:45 am

Tags: financial, money

Comment by Whac-A-Bubble™
2014-01-25 12:30:55

“Bank-Run Fears Continue; HSBC Restricts Large Cash Withdrawals”

Not to worry: What transpires in China, stays in China.

Comment by Carl Morris
2014-01-26 01:09:11

After all the HSBC news over the last 6 years or so it is weird to actually see that sign on banks here.

Comment by phony scandals
2014-01-25 09:52:26

CEO Billionaires Defend NSA
Posted on January 24, 2014 by E.O.R

CEO Billionaires Defend NSA – Eyes Open Report
http://eyesopenreport.com/ceo-billionaires-defend-nsa/ - 53k - Cached - Similar pages
17 hours ago … US

Comment by Muggy
2014-01-25 10:01:33

Even my left-leaning self is a little tripped up by this:

“Florida Legislature may back in-state tuition for undocumented immigrants”


I get holding children of illegals harmless, but it’s a little odd that, say, a teenager from Ohio would pay out-of-state, and a teenager from Peru would pay in-state.

Comment by Blue Skye
2014-01-25 10:22:23

There is a town in Ohio called Peru.

Comment by Muggy
2014-01-25 12:59:30

>>>>> Head Explodes <<<<<

Comment by AbsoluteBeginner
2014-01-25 10:35:26

‘I get holding children of illegals harmless, but it’s a little odd that, say, a teenager from Ohio would pay out-of-state, and a teenager from Peru would pay in-state.’

I am contacting Eric Holder about that comment.

Comment by In Colorado
2014-01-25 11:58:46

“Florida Legislature may back in-state tuition for undocumented immigrants”

Keep in mind that this is posturing. The overwhelming majority of illegals are both unfit (due to poor K-12 education) and unwilling to go to college. Few will attend and of those who do, many will flunk out. Also, unlike with K-12, there is no bilingual ed in college. It is possible to complete K-12 in California entirely in Spanish. I don’t know where those kids expect to go to college.

Comment by Muggy
2014-01-25 13:07:23


Roro Kewule · Top Commenter

I’m a Democrat, but for the life of me I don’t know why we should subsidize non citizens over citizens from out of state who pay the higher tuition. Undocumented should be grateful they are not deported. Give me a break.

Comment by Bill, just South of Irvine, CA
2014-01-25 20:01:41

But you would get a great deal Muggy. You would get 11 million more voters for your Democrap party and more socialism. That is what the RINOs and Democraps want.

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Comment by "Uncle Fed, why won't you love ME?"
2014-01-25 13:54:25


why do you hope that i dont work in robotic surgery

Comment by In Colorado
2014-01-25 14:48:47

I believe it’s because there have been some major problems with the DaVinci robot.

Comment by Muggy
2014-01-25 16:20:13

What CO said:

They concluded that adverse events associated with the da Vinci were “vastly underreported.”


There’s a reason why Lamborghinis are made by people holding tools. Not every twist is the same.

Comment by "Uncle Fed, why won't you love ME?"
2014-01-25 16:47:37

Oh yeah, I heard about that. Adverse events of everything are severely under-reported though. Doctors have a tendency to not follow the rules about reporting. It’s, like, filling out paperwork, and they are too important for that.

Comment by phony scandals
2014-01-25 10:11:03

Santelli Slams Central Bank Policies: “The Market Is Rapidly Realizing That They Can’t Go On Forever”

Submitted by Tyler Durden on 01/24/2014 19:01 -0500

While the world’s talking heads are desperately opening their global financial crisis fire-extinguishing mouths that this time is different, Rick Santelli takes 4 minutes to highlight the problems associated with liquidity that is always leveraged to the max and the problems that now await us. “For a while,” Santelli calmly explains, the fairy-dust commercial planners (Central banks) “at least for a while, made everything seem like it could work.” However, with “no excess margin in the system,” emerging-market-cannonball-driven ripples in the global pool of liquidity are a major problem. Slamming those who argue ‘taper is small’ or ‘Argentina doesn’t matter’; the ever-increasing central-bank-inspired interconnectedness means “the market is realizing in a hurry,” as we have warned numerous times, “these [central bank] programs can’t go on forever,”

Add to this, Santelli notes, that even the central bank architects of the (faux market) buildings (e.g. BoE’s Carney) no longer want to live in these buildings… and problems lie ahead…

http://www.zerohedge.com/news/2014-01-24/santelli-slams-central-bank-policies-market-rapidly-realizing-they-cant-go-forever - 119k -

Comment by phony scandals
2014-01-25 11:53:56

Ukraine crisis: Yanukovych ‘concessions’ fail to end unrest

25 January 2014 Last updated at 01:20 ET

Violence has continued in the Ukrainian capital Kiev, after President Viktor Yanukovych promised to make concessions to try to end the country’s crisis.

As dawn broke on Saturday, fires still burned in the city centre. Overnight, protesters threw rocks and petrol bombs at police, who responded with tear gas.

Mr Yanukovych pledged to amend anti-protest laws and reshuffle the cabinet.

But opposition leader Vitaly Klitschko said the protesters now wanted the president to resign.

On Friday night, protesters burned tyres on barricades on Hrushevskyy Street - the scene of recent deadly clashes near the main protest camp on the capital’s Independence Square.

Fireballs lit up the sky. Witnesses said several arrests were made.

Activists seized a number of government offices across Ukraine.

The crisis escalated this week with the first deaths since the unrest started two months ago. Two protesters were shot dead during clashes on Hrushevskyy Street.

The opposition says they were killed by riot police or snipers - the government denies the claim.

And an activist was found dead in woods near Kiev after apparently being abducted, tortured and left to die in the snow.

The demonstrations were initially triggered by the last-minute decision of Mr Yanukovych’s government to ditch a proposed association and free trade deal with the EU in November - under heavy pressure from neighbouring Russia.

But the protests later widened their demand to include the fight against what activists say are widespread government corruption and abuse of power.

http://www.bbc.co.uk/news/world-europe-25881563 - 112k -

Comment by Whac-A-Bubble™
2014-01-25 11:56:29

Here is some great news for the San Diego economy: At 6.4%, the unemployment rate has dropped to the lowest level since September 2008, at the cusp of the Great Recession!

Comment by Whac-A-Bubble™
2014-01-25 12:02:35

I love the economists’ commentary in this article.

Time will tell if the weather was really a significant factor at the national level!

Decline fueled largely by thousands of workers leaving county’s labor force
By Jonathan Horn
12:01a.m. Jan 25, 2014

Thousands of San Diegans dropped out of the labor force in December, pushing the county’s unemployment rate to its lowest point since September 2008.

The state Employment Development Department reported on Friday that San Diego County’s jobless rate was 6.4 percent in December, down from a revised 6.9 percent in November. The rate fell largely because 7,800 people dropped out of the labor force in December, either by retiring or giving up looking for work. That means they are no longer counted as unemployed.

“The drop in the labor force is really puzzling all of the economists,” said Esmael Adibi, economist at Chapman University. “Typically the labor force drops during a recession because people lose their job, they go back to school or stay home for a while, but as the economy improves you expect people to come back and this is a phenomenon we don’t see happening.”

County employers added a net 600 payroll jobs in December. In December 2012, when the jobless rate was 8.2 percent, the county lost 1,400 jobs from November.

San Diego’s jobs report comes two weeks after the Bureau of Labor Statistics reported that the nation added a disappointing 74,000 payroll jobs in December, the lowest since 69,000 were added in January 2011.

A lot of people were blaming that on the weather nationally, but obviously we weren’t impacted by that here,” said Alan Gin, economist at the University of San Diego.

Comment by Whac-A-Bubble™
2014-01-25 13:40:28

“Typically the labor force drops during a recession…”

Hmmm…very puzzling indeed!

Comment by "Uncle Fed, why won't you love ME?"
2014-01-26 09:54:54

They should report the number of people who went on welfare, alongside the number of people who are no longer unemployed. If a would-be housewife decides it’s not worth it to work for extra money as a part-time secretary anymore, then I don’t care. If a person stops looking for a job because they are resigned to welfare, then I do care.

Comment by Whac-A-Bubble™
2014-01-26 12:31:32

Don’t forget about healthy, fit people otherwise qualified to work, besides having no job, ‘going on disability.’

I guess it’s no big deal unless the funding completely dries up due to excessive payments on fraudulent claims.

10:58 am
Jan 7, 2014
Social Security
Disability Fraud Bust Comes as Social Security Agency Is in Flux
By Damian Paletta

The arrest of more than 100 people on Tuesday as part of the latest fraud bust involving Social Security disability benefits comes as the agency is under growing pressure from Congress to rework the system for deciding who gets benefits and who doesn’t.

Roughly 11 million Americans collected Social Security disability benefits in 2012, with the government paying them close to $140 billion. Both figures are up sharply from prior years. The program is spending so much money that it is projected to exhaust its trust fund reserves by 2016, making it the government’s most financially insecure entitlement program.

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Comment by AbsoluteBeginner
2014-01-25 12:26:16

City-data is a sober forum if you want to have your head explode sometimes with the regular posters on it:


That and BogleHeads makes me think that everybody is from Lake Wobegon that posts on those forums.

Hey, how is Brett doing? Hopefully he is studying this market and seeing how things change.on.a.dime if it is in the monied class’s best interest.

Comment by Muggy
2014-01-25 13:05:38

“Hey, how is Brett doing?”

Shaking… sweating… looking at condos.

Comment by Whac-A-Bubble™
2014-01-25 13:13:06

I’m looking forward to a report on whether he went with Smither’s recommendation to park 70% of his $500K inheritance windfall in the stock market.

Comment by 2banana
2014-01-25 13:39:33

Did he say which stock market? :-)

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Comment by Whac-A-Bubble™
2014-01-25 13:42:08

They pretty much all crashed this week, but I believe the recommendation was a 70% immediate allocation to a low-expense S&P500 index fund.

Comment by Bill, just South of Irvine, CA
2014-01-25 20:05:01

“City-data is a sober forum if you want to have your head explode sometimes with the regular posters on it:”

I’ve been TOSed a few times for my dissenting posts about RE on Phoenix’s City-Data. It’s all run by Realtards. Only Realtards are appointed moderators.

Comment by "Uncle Fed, why won't you love ME?"
2014-01-26 10:01:35

How can people not realize that they are throwing out the SAME excuses for overpriced houses that turned out to be wrong last time? I can’t handle the stress of that thread.

Comment by Housing Analyst
2014-01-25 14:45:40

There won’t be any realtor metastasis here.

realtors are liars.

Comment by Muggy
2014-01-25 16:26:23

Craterton Falls
Craterton Pines
Craterton Acres
Craterton Ranch

Comment by Housing Analyst
2014-01-25 20:32:57

I love it.

Don’t forget Mz. Craterton.

Comment by "Uncle Fed, why won't you love ME?"
2014-01-26 09:57:48

That would be a good name for a pet.

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Comment by azdude02
2014-01-25 17:30:52

back to this question again:

Is there any difference adding base metals to coins compared to printing more fiat currency?

Comment by phony scandals
2014-01-26 14:19:38

Florida to get most relief from $2B mortgage case

December 19, 2013|
By Donna Gehrke-White,
Sun Sentinel

Floridians are expected to get the “highest principal reduction relief in the country,” after the nation’s largest non-bank mortgage loan servicer agreed to a $2.1 billion settlement to resolve misconduct allegations, Florida Attorney General Pam Bondi announced Thursday.

http://articles.sun-sentinel.com/2013-12-19/business/sfl-florida-highest-relief-mortgage-settlement-20131219_1_mortgage-settlement-oversight-bondi-reduction-relief - 39k -

Foreclosed homeowners to get less than $1,500

by Kim Miller
January 24th, 2014

More than 1,700 Floridians who lost their home to foreclosure will start receiving $1,480 reparation checks next week as part of the landmark National Mortgage Settlement negotiated in 2012.

Florida Attorney General Pam Bondi announced the check distribution this afternoon, noting that the total payout is $2.5 million.

Borrowers had to apply to receive the money, and were only eligible if their homes were repossessed between 2008 and 2011 and they were clients of one of the five banks named in the settlement.

The banks include Bank of America, Ally Financial, Wells Fargo, JPMorgan Chase and Citi.

The amount of the checks and number of recipients was first announced in June of last year, but are just now making their way to homeowners.

How much borrowers received was based on how many applied for the money. Based on the number of eligible borrowers, it was initially thought just $850 would be awarded.

In Florida, about 53 percent of the 167,400 borrowers who were mailed letters applied. Nationwide, 55 percent of the more than 1.7 million borrowers applied.

But ultimately, not all borrowers met eligibility requirements, which included that the home foreclosed on was a primary residence.

Some consumer advocates have questioned the $1,480 payments, saying they are an admission of the fraud committed by the banks and do little to offset the loss of a home taken in a challengeable foreclosure.

“These checks are a joke,” said South Florida real estate attorney Roy Oppenheim last year. “If homeowners sued the banks for the fraud, forgery and perjury they committed, they could be getting more.”

Tags: bnblogs

This entry was posted on Friday, January 24th, 2014 at 4:55 pm and is filed under Foreclosures, Real estate bust. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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