Bits Bucket for January 29, 2014
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
June 2025 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
Joni Mitchell - California
http://www.youtube.com/watch?v=Lm39YkGrHp8
The vocal style is wonderful. And for all its warts, California remains a great place.
yep…
This is true. And nothing forces people go to the inland areas anyway.
“The vocal style is wonderful.”
+1 Listened to Joni for 90-minutes last evening while perusing the HBB and enjoying half a bottle of Napa Valley wine. Pining.
Too bad Joni lost her vocals from a condition. I always thought she was a great lyricist and her voice was so sweet. Boy, does that bring back memories. Thanks.
One of the many artists that lived in Laurel Canyon in their humble beginnings, that made it big. If the canyon could talk, the stories would be rich. When I use the canyon to get into Hollywood or West LA, I think about its past. Amazing rags to riches stories. Us baby boomers we’re the tattoo types, we were a higher class of anti-establishment and creativity.
This is how I like California
http://www.youtube.com/watch?v=GuccUMcsLdQ
I’ll give her a chance, tonight. Thanks!
Realtors® are liars.
The FED has your back do dont worry about home prices falling. Equity is like money in the bank.
Denver Post - Sellers still missing ingredient in Denver home market
“Metro Denver’s housing market started this year with fewer homes for sale than last year, despite a sharp slow down in the fourth quarter that should have boosted supply.
“The big concern right now is: How are we going to get inventory?” said Gary Bauer, an independent real-estate analyst.
Metro Denver started the year with a 2.2-month supply of homes available for sale, down from a super-tight 2.8 months a year ago and 3.6 months in the fall of 2012, according to statistics from the Colorado Association of Realtors.
Six months is considered a balanced market. For homes priced under $100,000, the inventory is measured in days, not months, Bauer said.”
And after Peyton steamrolls the Seahawks 51-10 this Sunday, that supply will be less than a week and median prices per square foot will be over $300. Everybody wants to live here.
yeah buddy peyton will increase home values 5% this weekend.
you should invest in a papa johns franchise. Do you like cardboard pizza?
Put a topping on it!!!!!!!!!!!!!!!!!
They have papa murphys here. Same concept. cheap ingredients, cheap labor and no power involved baking the pizza. there is money to be made.
They have papa murphys here.
Here too.
Somone should open a solar-powered pizza place. That would be cheapest.
Renting is always better. Always.
I have so much money left over after “throwing money away on rent” every month that I don’t know where to throw it.
And now after the wage increases at the Federal level, you will have more and wouldn’t know where to throw it. Min Wage increase would trigger a overall wage increase at all levels.
Never say King Obama doesn’t care about the little people.
I’ m gonna executive order you to death, whether you like it or not in the next three years!
Bachmann plans bill to sue “King Obama”:
http://www.usnews.com/news/articles/2014/01/29/republicans-skeptical-of-obama-enacting-agenda-alone
Hey guys, W Executive Order’d us to death as well. As a recover Republican I see no difference who does it. It’s baked in the cake as “King”. IIRC, W (Bush 43)had the highest number of EOs in history.
It depends on what those executive orders are. Under the new regime they will be much more deleterious to the people of this nation.
“Min Wage increase would trigger a overall wage increase at all levels.”
Wouldn’t that require either shrinkage in the federal work force or an influx of new money to pay for the minimum wage increase?
(Just trying to think through the arithmetic needed to make your statement come true.)
No, they would just need to change a digit or two in a file cabinet in the Cayman Islands. Or maybe somebody’s mistress will get a necklace with only 24 diamonds instead of 26.
But we can’t be havin’ any o’l THAT. So, yeah, more layoffs it is!
Oxide supporting the view that raising the minimum wage raises unemployment, I am stunned.
Ah yes. “If you raise minimum wage, we’ll lay those workers off. If you keep the rate status quo, we’ll generously keep the workers employed but allow inflation to eat away the rate until they practically beg to work for one bowl of rice. Either way, we’ll keep our profits.”
The usual corporate extortion.
Cold hard math Oxide. Why do you think employment has been suffering in the US?
Competition from cheaper overseas competitors, and technology that continues to get better and cheaper.
For every 100 minimum wage jobs that cannot be outsourced, or made obsolete by technology, there will be some where a 40% increase in labor cost will make the alternative attractive enough for the employer to make a change.
Those with jobs that cannot be outsourced/replaced by tech will do better, but there will be some folks laid off in the process. And it’s not extortion, it’s math.
Rental Watch:
Have you ever heard of tariffs? They help prevent deflationary spirals. In the meanwhile, we have imported slavery by allowing the minimum wage to be less than the cost of subsistence.
Tom Perkins = WIN!
So, are the Democrats proposing tariff’s in conjunction with the increased minimum wage? How would such tariffs affect the price of….everything?
For a look back at life with tariffs, check out anything before the mid 1970s. Those were the good ole’ days. Prices weren’t really an issue, man. And just about everyone is suggesting tariffs, except for anyone who gets any real campaign contributions.
I have to weigh in here. As a student of economics, I have performed the calculations demonstrating the tangible benefit of open trade(division of labor, resources, etc).
That said, it only pencils out when there is a relatively level playing field vis-a-vis labor. In this case you have slave labor(relatively) in ChIndexico competing with middle class(ish) labor here in the US, and there is no contest - slave labor wins that economic game every time.
This is why extraordinary measures were taken near the end of the industrial revolution(and after) to raise labor standards, working conditions, etc. We decided as a society that labor should not be a race to the bottome and through the use of offsetting forces such as unions were able to create a modicum of balance.
Now we have foreign slave labor, or rather its product, to compete with, and the few unions that remain have turned into pseudo-extortion rackets and are slowly being worked around, with the notable exception being government unions. They’re still an extortion racket, but nobody seems to be working around them.
This state/cycle will persist until we as a society decide it’s wrong to benefit from slave labor and insist on some basic standards of fair treatment, living wage, safety, environmental impact, etc. in the countries from which we import our goods.
Once way to do this is with a selective tariff. We simply say that if your country doesn’t have a minimum wage equivalent to our own, a tariff is imposed at a level that increases the price of the good to what it would be if said minimum were in force.
Some of our manufactured goods might increase in price, but that would likely only be temporary, at least in terms of purchasing power for the average middle class worker as the thriving job market created when manufacturing starts and returns to the US makes the overall economy healthier.
This isn’t rocket science folks. Please stop believing the jerkoffs who would have you take for granted that there can only be two possible sides in politics and my team is better than your team.
Just stop it. Your wrecking your country.
Yes, but in a post-tariff world, we have gotten the ride of our life with respect to very cheap imported goods.
It’s the only reason things haven’t been worse for folks on the lower end of the wage spectrum…while they’ve been hosed on wages, the wages have gone farther with respect to buying cheap imported goods.
Throw up tariffs, and prices for the goods that we currently import will go up. And we loves us some near-free sh*t. While wages will react over time (as long as companies don’t replace the workers with machines), folks are not going to be happy paying more in the near term.
Personally, my problem with raising the minimum wage is not that I’m overly concerned with lots of folks losing their jobs (although it does make automation more cost effective). I’m concerned that the extra money spent is not going to solve one of our big problems…namely providing the resources to low-skill workers so that they can gain skills necessary for higher paying jobs that might be available right now.
Yes, we make the hamburger flipper a little better off because he makes more flipping burgers, but wouldn’t it be better if he could learn a trade, so that flipping burgers was a temporary job, not a career?
How about something as a hybrid?
The minimum wage is raised to $10.10, but that the workers can opt to take $2.85 per hour tax free to go toward trade schools/continuing education, etc. The problem it that it would take too long to save the money, and folks on minimum wage don’t pay much in taxes, so there isn’t much of an incentive.
Or, the minimum wage is raised to $9.10, but for every hour worked at minimum wage the company must put $1 into a fund for trade schools/continuing education, etc. for minimum wage employees, and they must make available resources for their employees to know that the growing pool of money is available to them (including flexible work schedules around the locally available training). Can the company get around paying the dollar? Sure…pay $10.50/hour (it needs to be more expensive to pay the worker at the expense of the training).
Average income from wages in Shenzhen is $308 US per month per worker. Wage increases are expected to be 15% in 2014.
There is no need to theorize what the US might be like in a posttariff world. One only needs to look back on what it was like in a pretariff world. It was better. Low-wage workers could afford to buy stuff, and the stuff they bought was better. A blender may have cost a week’s pay to a person with a low wage, but that same blender would last literally for an entire lifetime.
This is what ive been saying for years….they cut any training money for welfare food stamp people just at a time we need to spend it….but first we need a war on Ebonics, because what good is job training if they cant speak English?
namely providing the resources to low-skill workers so that they can gain skills necessary for higher paying jobs that might be available right now.
Wait, I didn’t mean to say “pretarrif world”. That makes no sense. I meant to say “tariff world”.
I have been poor and have worked low wage jobs in my youth and young adulthood. I consider a fair minimum wage part of a necessary social safety net and I am on the political right. Those who want it too high are usually your garden variety marxist revolutionary types, those who want no minimum wage or one that is very low are greedy f..ks. Very simple.
“I have so much money left over after “throwing money away on rent” every month that I don’t know where to throw it.”
The NAR suggests a Hail Mary pass.
“Why buy a house today at these grossly inflated asking prices? Buy later after prices crater for 65% less.”
That’s right.
Alameda CA Housing Prices Down 19% Year Over Year
http://www.movoto.com/statistics/ca/alameda.htm
Thousands Oaks CA Housing Prices Crumbling; Down 29% Year Over Year
http://www.movoto.com/statistics/ca/thousand-oaks.htm
Redmond OR Housing Prices Dives 19% on Skyrocketing Inventory
http://www.movoto.com/statistics/or/redmond.htm
New York City Housing Prices Crater 25% Year Over Year
http://www.movoto.com/statistics/ny/new-york-city.htm
New York City could “crater” 90% and you’d still never afford to live there.
HeeHaw!
The key to inventory management? Foreclosure moratoriums in all 50 states.
“So do you really think wages are going to double or triple to meet inflated prices of everything? Of course not. Prices will fall by 50% to meet existing wages as demand continues to collapse.”
Exactly.
Think about it…..The Fed is buying a $1 TRILLION worth of houses every year.
They are making the market. Nobody else. And when they stop, you’ll know it.
They are soaking up the risk, and the already busted paper. I think it is ironic that the moment they stop absorbing the risk, the full risk will be priced in immediately. They aren’t fixing the housing market, they are just delaying discovery. This does us no favors. They longer they continue, the more severe the sucker punch.
http://www.cnbc.com/id/101374459
Buying the debt is not the same as buying the houses.
It’s a distinction without a difference RM.
Housing is never an “investment”. Housing is a depreciating asset and a loss, ALWAYS.
“We’ve established over and over again that housing is always a depreciating asset and results in massive losses at current asking prices of resale housing. Look no further than the millions of underwater loan owners out there.
Always stand with truth no matter how difficult it is.”
Housing is a financial hole that becomes your living grave…. at least at current asking prices of resale housing.
Taxes, interest, depreciation, all losses.
Remember…. houses are depreciating assets, ALWAYS. They never pay you back.
Plus losses to depreciation.
The mere notion that even a new constructed house is somehow worth $300k is laughable.
Never forget this…. We and our competitors build profitably for $55-60/sq foot irrespective of location.
You say this every day. I’m sure there are a lot of lurkers here. Have any of them approached you to take you up on your offer? Becuase it actually doesn’t sound like a bad deal.
I’m picking up a 20 acre ranch in Aspen later today after I hit the Coinstar machine.
flip a property in denver, you simply cannot lose.
People offer to take him up on this all the time. A good part of RAL’s schtick is this type of overreach. It’s a bug that never got worked out in the latest RAL app.
Do you know where this self-proclaimed analyst is? I’ve never seen anything specific, but guessing just outside of reasonable commuting distance to NYC up the Hudson River Valley or in Western CT.
It’s reality bud. Deal with it.
My guess is Rockland County. He’s mentioned using the Tappan Zee Bridge a lot. Western CT is pretty far to NYC… hellish commute. Lower Hudson Valley (something like Nyack) would make sense.
That’s my (blissful) ignorance of the Northeast.
I’m allergic to being east of Longitude 79° W.
He once said Providence RI, but he could be futzing.
No, not the usual “ok then build me one on the corner of 42nd and Broadway.” I mean a serious offer, such as a request to buy a pre-fab house built “on their lot.”
HA lies about a lot, but $55/sq ft cost is within reason. Modular pre-fab is quite the business. Google-fu: Rhode Island Homes, a subsidiary of Connecticut Valley Homes, makes modular homes. According to Modular Today,
http://www.modulartoday.com/Connecticut-Valley-Homes.html
CVH homes are priced at $75-110/sq ft, including site prep(?) but not transportation. [and definitely not including land]
You’re off the reservation my friend. Way off. Go back to the other thread you started with your retail estimating nonsense and discuss. Don’t run from it. And copy and paste ANY single word I’ve said that isn’t truth.
We’ll be waiting.
Well no, that wasn’t me. That building cost calc is pretty visible online; anyone can find it.
And no, materials and labor to build a house at $55/ sq ft and then sell for $75/sq foot isn’t off the reservation. I assume that materials and labor is around $50/sq ft. Add in site prep and overhead and a company could make a fair profit.
Yes you’re off the reservation… way off. But if you insist, why not give us a idea what bid packages are running for the various disciplines.
And tell us what “site prep” is while you’re at it and how to bid it.
I’m not sure what you want me to do.
I don’t know the details of any of the disciplines, except for vague descriptions like “get a bobcat and push dirt around so you can pour a level slab” or “hook up your pipes to the end of the existing sewer system.” But my main point is that if a company like CVH can sell a house, retail, for $75 a square foot and still do some site prep, then yes, their building costs would HAVE to be right around your $55/sq ft.
You’re telling me that I don’t know what I’m talking about, but I’m agreeing with you. Does this mean that you don’t know what you’re talking about either? Why do you couch your real information in opposites and insults?
I dunno. Why don’t you ask my employer who is one of the largest engineering and construction companies on the planet if I know how to bid work and build stuff. I just entered line 1 from my W2 into Turbotax. It was 142k for 52-40 hour weeks.
How much did you earn in the construction biz last year?
Be honest when you answer.
Here’s a building cost estimator:
http://www.building-cost.net/CornersType.asp
Count your corners!
Yes RetailDonkey…. That’s the one we eviscerated back in late 2012. Would you like to revisit it again?
Sure.
Here’s your painful reminder.
http://picpaste.com/pics/iMsBlGz5.1391007146.png
But your link is to a home made markup of the calculator.
And you provide no mark ups because you don’t know what you’re looking at.
Maybe the link that doesn’t work is the problem. The other is just to some homemade thing.
Review it.
Review what?
Your link. Go ahead and develop your own. Don’t forget to substantiate your construction experience.
I don’t understand your point. I should develop my own link?
Just as we thought.
I think it’s your missing link that’s causing the confusion. Was it to a better calculator?
Now go ahead and review it.
Review what? Your missing link?
Don’t forget to substantiate your construction experience.
California Housing Demand Sinks To 4-Year Low
http://www.zillow.com/local-info/CA-home-value/r_9/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D14%26r%3D9%26el%3D0
Trying to figure out what the % means in that graphic. Is it the percent of existing homes that sold?
Land is an extremely risky proposition if it’s priced much more than $500-$1,000 an acre. Highly speculative and volatile.
That’s why land is better known as worthless dirt.
I’ve got a couple winning scratch off lotto tickets I’ll trade you for a pile of worthless dirt in Telluride.
Historical mining union goon town. To hell you ride. Seriously great town for dogs as long as you keep them out of the beaver pond.
Check out the Wall Street Journal piece “Elks Lodge Turned Loft in Colorado”, 6,200 square feet for $18,000,000. That’s some pretty worthless dirt there, eh?
I think you need to buy the house where your car will have its own elevator.
Bake me a pie cherry Pickin Potsy!
http://antville.org/static/videos/images/cooking%20with%20potsy.jpg
I got my checkbook and pen in hand, Mr. so-called “analyst”.
Show me one lot for $1000/acre or house for $55/square foot in ZIP 80210 and I’ll buy it today.
I can appreciate the shortsighted perspective… You’re young, construction and contract admin isn’t your stock in trade and your observations are founded on bubblemania. I can’t help you there but the HBB can.
Yup.
http://denver.craigslist.org/search/rea?zoomToPosting=&catAbb=rea&query=80210&minAsk=&maxAsk=&bedrooms=&housing_type=&excats=
“I think you need to buy the house where your car will have its own elevator.”
I once repossessed a debtor’s car from a San Francisco dealership. It was “up” several floors in a shop bay. All the cars there being worked on had exhaust suction hoses attached to the tail pipe. A large platform elevator lowered us to street level. A different experience for me having been raised in the suburbs.
Yes, that is how that garage in Telluride works. The house looks over the town but there was not room on the lot for a garage. So the land below the house was apparently bought and the owner rides the elevator down to the road below. In a major city, I might see it but it appears over the top in Telluride. Fascinating bit of engineering though.
Meanwhile it is 0 F. with a wind chill of -20F. It’s still different in Canada. At least in Toronto.
http://www.thestar.com/business/real_estate/2014/01/28/roncesvalles_house_is_among_the_best_and_worst_on_market.html
How many HBBers are going with the obama “MyRA” retirement accounts?
Yes, yes, I know.
Government can not manage the first retirement system they invented - Social Security.
Government can not manage obamacare.
But I promise it will be different this time!
The FSA is NOT happy. What do you mean I have to put in MY OWN MONEY into these accounts???
Expect this to change. Along with confiscation of your private 401k to help fund the MyRAs in the future.
It is only fair. And it is for the children.
they will eventually force you to buy it so they can sell more treasuries.
Ding, ding, ding, we have a winner!
What’s all this? Something from SOTU? I didn’t watch it, because I didn’t build that.
2Brony is crying socialism when it’s really all about the 0.1%
From Bloomberg:
“President Barack Obama urged Congress to back two priorities for U.S. multinational corporations: broader authority for his administration to negotiate trade deals, and changes to immigration laws.”
You can click Drudge links all day long to keep your blood pressure elevated, but corporate crony capitalism rules the roost.
Of the 0.1%, by the 0.1%, for the 0.1%
The .1% own our Congress and, at this point, the Exec. Branch as well.
“The .1% own our Congress and, at this point, the Exec. Branch as well.”
Why own went renting is cheaper? That is why the .01% did away with slavery. They lease us to be thrown aside when we are no longer of use.
POS from POTUS.
http://money.cnn.com/2014/01/28/retirement/savings-retirement-myra/
jeez people can already do that on their own. I did before my co got 401k and kept on with the ira too.
A lot of company 401k plans are actually not that good. Weak/limited options, high fees, little or no match. I also think that 401k balances are going to subject people to means testing for Medicare or SS at some point (could be 4 decades from now, but that’s still relevant to younger workers). It’s just too easy for the gov’t to get their hands on that money since it is declared.
This is hardly ground breaking. Paraphrase from USA Today: MyRA is a sort of RothTreasury fund, available through employers. Optional, can contribute as little as $5/month, $15K/year contribution limit, available up to $191K income.
Anyone can walk into Fidelity or Vanguard TODAY and do the exact same thing: set up a personal Roth and stock it with Treasuries. Or you can choose the RothIRA from you employer and do the same thing. Big whoop. If the US needs to raid 401Ks to backstop MyRA, then they will also backstop anyone else with a Treasury bond.
Metaphysical question: If my Roth IRA is stocked with Treasuries, then will the gov raid my 401K to bail out my 401K, or will the system faint from the circular logic?
Except that personal IRAs max out at $5500, so if you could contribute to a 410k (~$15,500), IRA ($5,500) and MYRA($15000), that would be considerable individual savings.
I think the Roth 401K from employers also maxes out at $15K, but I don’t know that for sure. And I thought that the $15K was a limit for the total — you can’t contribute $15K of each. So it really isn’t all that different. If anything, looks like MyRA competes with existing funds.
Yes, company 401ks do max out at $15k, but they don’t mention this only being available to those without 401ks, but maybe it will be.
And I agree the ridiculously low max amount you can contribute to an IRA should be changed instead of starting something new.
I think it’s atrocious that IRA limits are NOT equal to 401k limits.
Why is this the case?
I think they assume that someone with means has access to both a personal IRA and a 401K. That’s $20K+ of tax-advantaged funds. I’m not sure that government can afford to give away any more taxes than that. Or, maybe they figure that if you can put away $20K each year, you probably make enough money that you’re not contributing more to SS so that’s taxes you’re not paying, and you’re rich enough that you don’t need any more tax help.
Anyone can walk into Fidelity or Vanguard TODAY and do the exact same thing: set up a personal Roth and stock it with Treasuries. ”
Not 19K a year you can’t
“Underwater mortgages Are a Bigger Problem Than The National Average Suggests”
http://finance.yahoo.com/blogs/breakout/underwater-mortgages-are-a-bigger-problem-than-the-national-average-suggests-132242644.html
This is stating the obvious but we’ll revisit once again.
As of today, if you bought a house anytime since 2004, you’re underwater. As housing demand at 1997 levels continues to sink and sales truly grind to a halt, the the underwater cohort will grow to anyone who bought a house 1999-current.
Good luck.
The financial institutions, incluning Fannie, Freddie and FHA, plus walllst firms are using the account tactics to hide the loss of their assets, such as MBS, backed by these underwater mortgages. Do you remember those toxic assets? they are still alive and sitting somewhere waiting to be taken by some less informed investors one way or the other, most of which will be smaller ones.
Precisely.
As of the end of 2013, the Fed was buying $1 Trillion in mortgages per year.
False. Roughly half of the QE purchases were flowing into Treasuries, not MBS.
But you already know that—as I have already corrected you multiple times on this point.
Which begs the question: why do you continue lying about this?
A distinction without a difference in the same way your pathology is that of a grammar cop.
A distinction without a difference
You really can’t see the different between $1T flowing into mortgages, vs $500B flowing into mortgages?
Wow…
You really think there is a difference between winning a $50 million Powerball and $100 million Powerball?
Wow…
“False. Roughly half of the QE purchases were flowing into Treasuries, not MBS.”
Since Treasurys and MBS in 30-year mortgages are close subsititutes with about 99% correlation between their interest rates, what’s the difference?
Of possible interest to HBB readers and posters who want to lift their understanding of fundamental economic principles:
14.01 Principles of Microeconomics is an introductory undergraduate course that teaches the fundamentals of microeconomics. At MIT, this is the first course that undergraduates take in economics. For some, it may be the only course they take in the subject, and it provides a solid foundation for economic analysis and thinking that can last throughout their education and subsequent professional careers. For other students, it may provide a foundation for many years of study in economics, business, or related fields.
It’s offered as a MOOC.
But if HBB readers were to take this course, then some of us might not be able to contort our minds into believing whatever makes us feel better about money.
I was just hoping to elevate the level of future economics discussion here above the cesspool of wild-eyed conjecture.
Bloomberg News
U.S. Debt Little Changed Before Fed; Emerging-Markets Gain Fades
By Susanne Walker and David Goodman January 29, 2014
Treasuries were little changed before a Federal Reserve policy announcement projected to include further cuts to bond purchases and after Turkey’s central bank took steps to stabilize the lira.
The securities pared declines as an interest-rate increase in Turkey failed to support the currencies of other emerging markets. Government data tomorrow will show growth in the world’s largest economy slowed in the fourth quarter, analysts forecast. The U.S. holds its first sale of floating-rate debt with a $15 billion two-year auction.
“It all comes down to the Fed,” said Tom Tucci, managing director and head of Treasury trading in New York at CIBC World Markets Corp. “I don’t think at these levels there are significant amount of buyers in the long end until we get new news here.”
…
Does anyone have estimates of how much of the “gains” due to QE1, QE2 and QE3 leaked out of the U.S. into the greedy hands of foreign real estate investors?
Fed Officials Saw Declining Benefits From QE
Jan. 8 (Bloomberg) — Federal Reserve officials saw diminishing economic benefits from the central bank’s bond buying program and voiced concern about risks to financial stability, according to minutes of their last meeting, when they took the first step to cut the pace of purchases. Peter Cook reports on Bloomberg Television’s “Money Moves.” (Source: Bloomberg)
Turkey pulled a Volcker.
1 HR ago MoneyBeat
Macro Horizons: Turkey Stuns, But Coast Won’t be Clear Until Fed Decision
Markets everywhere were buoyed overnight by the stunning, bold move taken by Turkey’s central bank to hike its benchmark interest rates by more than four percentage points.
By Michael J. Casey, Alen Mattich and Michael Arnold
Macro Horizons covers the main macroeconomic and policy news events affecting foreign-exchange, fixed income and equity markets around the world, as selected by editors in New York, London and Hong Kong.
WRAP: Markets everywhere were buoyed overnight by the stunning, bold move taken by Turkey’s central bank to hike its benchmark interest rates by more than four percentage points. The decision, which came at midnight Ankara time/5 p.m. EST, even drove up U.S. stock futures. But markets have since eased, with the lira having lost some of the very sharp gains it posted overnight and stock futures pointing to only a modest high. Two reasons: doubts about whether Turkey’s central bank can withstand political pressure from the government and hold the line and, more importantly, uncertainty over what the Fed will say at its 2 p.m. EST announcement upon conclusion of a two-day meeting that is Ben Bernanke’s last as Fed chairman.
…
Emerging markets scare go bye-bye?
Gold Climbs on Speculation of Emerging Markets Safe-Haven Demand
By Claudia Carpenter
Jan 29, 2014 4:38 AM PT
Gold advanced in London and New York on speculation a global rout of emerging markets will spur demand for precious metals as a safe haven.
Turkey’s financial markets have plunged since news of a corruption scandal broke last month. That coincided with a flow of money out of emerging economies that weakened currencies from Brazil to South Africa. Gold fell earlier today amid expectations the Federal Reserve will cut stimulus more today.
“Gold should be in demand as long as the turmoil persists,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said by e-mail today. “That’s why gold has recovered its early losses.”
Gold for immediate delivery rose 0.2 percent to $1,259.81 an ounce by 12:37 p.m. in London, after falling as much as 0.6 percent. April futures climbed 0.7 percent to $1,259.40 an ounce on the Comex in New York. Trading on Comex was 62 percent higher than the average for the past 100 days for this time of day, according to data compiled by Bloomberg.
…
Also, there are times when interest rates go up and precious metals go up. Safe haven? Bonds are not when interest rate go up. Just cash or gold.
Economy
Who will pay the price for the emerging market mess?
Tuesday, 28 Jan 2014 | 11:25 PM ET
By: Katie Holliday | Writer for CNBC.com
Renewed fears of a crisis in emerging markets have come to a head in recent weeks, interrupting chatter about a pick-up in global growth, but which parts of the world are most exposed to further trouble in the region?
Last week, sharp declines in the value of the Argentine peso triggered a fallout across emerging market currencies, while worries over China’s growth and credit issues and ongoing concerns over further tapering by the Federal Reserve exacerbated the selloff.
The selloff prompted Turkey’s central bank to hike interest rates in response on Tuesday, in what some have described as a panic move to try and restore anxious investors.
..
South Africa Follows Emerging Markets in Raising Benchmark Rate
By Rene Vollgraaff and Amogelang Mbatha
Jan 29, 2014 5:23 AM PT
The South Africa Reserve Bank unexpectedly increased its benchmark interest rate, following central banks in emerging markets from Turkey to Brazil that have tightened monetary policy to bolster their currencies.
The Monetary Policy Committee lifted the repurchase rate to 5.5 percent from 5 percent, Governor Gill Marcus told reporters in Pretoria today. It was the first increase since June 2008.
All 25 economists surveyed by Bloomberg last week predicted the rate will stay unchanged as the central bank focuses on supporting an economy that’s been buffeted by slower global demand and mining strikes. Those concerns are being overtaken by a weaker rand that’s fueling inflation and threatening the bank’s 3 percent to 6 percent target. Turkey raised borrowing costs after a late-night emergency meeting, while India unexpectedly increased its key rate yesterday.
“Like these countries, South Africa has lived beyond its means over the past few years and a weaker currency and higher interest rates are necessary for a rebalancing of the economy,” Theuns de Wet, head of global markets research at FirstRand Ltd.’s Rand Merchant Bank unit, said in a note to clients before the rate decision.
…
Realtors on the way to “rescue” South Africa:
http://www.fin24.com/Companies/Property/Fast-growth-in-SA-for-US-estate-agent-group-20140124
Developed Economies Seen Fighting Off Emerging-Market Contagion
By Simon Kennedy Jan 27, 2014 2:48 PM PT
Emerging markets aren’t yet sneezing enough for the rest of the world to catch a cold.
That’s the diagnosis of economists from Deutsche Bank AG to Nomura International Plc after the stocks of developing nations suffered their worst start to a year in five, raising concerns they are turning from the driver of global growth to a drag.
The optimistic take is the pain will be limited to a few unbalanced economies — including Turkey and Argentina — with little heft abroad, and developed countries now have domestic sources of growth and support from central banks. The risk is that slowdowns and sell-offs deepen in bigger economies, such as China, infecting the financial markets of industrial nations and depriving them of demand for exports and commodities.
“We view the past week as more a warning” about what could happen “should contagion become more entrenched and broad-based across emerging markets,” said Jacques Cailloux, chief European economist at Nomura in London.
…
Emerging markets
Don’t panic
Jan 28th 2014, 10:37 by R.A. | LONDON
QUICK on the heels of any emerging-market financial wobbles comes public fretting that it is the Asian crisis all over again. As my colleague pointed out yesterday, current financial developments do not really resemble those in 1997-8, for several reasons. Exchange rates are more flexible now. Debt levels are far smaller, relative to reserves, than they were in the 1990s. And the crisis, if it amounts to that, is so far focused on economies that are experiencing acute political difficulties. I think this post from last August still stands up.
But there are probably a few more things that can usefully be said about the current financial situation. The first is that it shouldn’t come as a surprise to anyone, and not simply because the rich world has been pursuing “ultra-loose” monetary policy. In fact, Fed tightening cycles have consistently generated capital flow reversals over the past 30 years—the era of financial globalisation. The IMF’s World Economic Outlook from spring of 2011 noted:
In other words, if one wishes to tap into global capital markets, one must understand the associated risk: that when the world’s monetary hegemon changes tack it will dramatically affect the level of capital flows into one’s economy. Emerging markets have mostly learned this lesson and developed a strategy that looks reasonably effective at mitigating the worst effects. First, they have discovered it is a bad idea to peg one’s exchange rate. And second, lightly managing one’s exchange rate by intervening in foreign exchange markets to dampen appreciation looks like a good idea; it leans against inflows and yields a pile of foreign exchange reserves that can be deployed to cushion the economy against outflows on the other side of the cycle.
…
EMERGING MARKETS-Turkish rate hike boost starts to fade, S.Africa faces pressure
By Sujata Rao
LONDON Wed Jan 29, 2014 4:51am EST
Jan 29 (Reuters) - Turkey’s lira posted its biggest one-day gain in more than five years on Wednesday after huge interest rate hikes, but the impact was already starting to fade, while South Africa now also faces pressure to tighten policy.
Turkish debt insurance costs slumped and its sovereign bond yield premia to U.S. Treasuries fell 20 basis points.
But the biggest immediate impact was on the lira, which rose more than 3 percent against the dollar after the central bank jacked up all of its interest rates late on Tuesday.
The currency relief also pushed up Turkish lira bonds, with 10-year yields dropping almost 40 basis points, but the lira eased off session highs of 2.16 per dollar to stand at 2.24 by 0921 GMT.
The central bank is trying to counter a massive lira selloff caused by the prospect of a reduction in U.S. stimulus that is sucking investor cash out of the most vulnerable emerging economies, where real interest rates were deemed too low to compensate for growing economic and political risks.
The hike follows similar moves across the developing world, with India unexpectedly raising interest rates this week, and Brazil and Indonesia already in policy-tightening mode.
But with the U.S. Federal Reserve expected to announce later in the day plans to shave another $10 billion off monthly bond buying, any emerging market rallies may be short-lived.
Ilan Solot, a strategist at Brown Brothers Harriman, said the lira moves were down to investors covering short positions against the dollar.
“The most a move like this can achieve is to bring emerging markets back a high-beta type of status, (meaning) it will perform in line with developed markets,” Solot said.
“Before this, EM was underperforming. The idea, if this move gets traction in the market, after moves by Brazil, India and Turkey, you can take the edge off EM.”
…
Investor’s Guide 2014
Is this an emerging markets crisis or not?
By Jesse Solomon @JesseSolomonCNN
January 28, 2014: 12:29 AM ET
NEW YORK (CNNMoney)
The time of reckoning is here for emerging markets. After benefiting from ultra-low interest rates and sluggish growth in developed economies in the wake of the 2008 financial crisis, these markets are no longer looking so hot.
Many market strategists fear the spigot of cheap money to emerging nations will dry up now that the Federal Reserve, Bank of England and Bank of Japan appear set to scale back on stimulating their own economies.
The Turkish lira, Argentinian peso, Indian rupee and South African rand have all tanked in recent days, bringing down with them the currencies of less troubled nations such as Mexico and South Korea.
A weak manufacturing report from China last week only exacerbated investors’ concerns. The already anemic prices of commodities have hurt countries like Brazil, which rely on China’s appetite for raw materials.
Some economists are invoking the emerging markets crisis of the late 1990s, when the financial systems of less-developed countries collapsed like dominoes.
“We think this is the most severe period of under-performance by emerging markets since 1998,” said Michael Shaoul, chairman and Chief Executive Officer of Marketfield Asset Management, which oversees more than $20 billion.
Shaoul cites years of poor economic policy, mixed with unstable and sometimes corrupt local governments.
“Investors are getting out of emerging markets, and the more they look at reasons to get out, the more obvious the reasons are,” he said.
…
Wifey gonna be po-d at me when she gets her next EM stock mutual fund statement…
You may need to move to an EM for your own safety.
Heh! Problem is my overall portfolio is fine, but I got her into an EM stock fund years ago which seems to only bob up and down, up and down over time — never goes up like stock funds are always supposed to! And the complaining is correlated with down moves…
That was a mean thing to do, Pbear.
I am still dollar cost averaging into EMs in my Roth 401k and my nonretirement
Oh bugger…the futures ain’t looking so bright again!
Time to figure out how to go long in Turkish bonds?
Futures: S&P 500 -1.0% DOW -1.0% NASDAQ -1.1%
Dow futures off 100 points as Turkey effect fades
Jan. 29, 2014, 9:16 a.m. EST
Stocks sour after Turkey; Dow futures off 100
Yahoo shares fall after disappointing earnings; Dow Chemical, Electronic Arts rise
By Barbara Kollmeyer and Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) — Stock futures tumbled on Wednesday ahead of the Federal Reserve decision and as the effects of an aggressive Turkish rate hike faded. Shares of Yahoo Inc. and AT&T Inc. were among the premarket losers.
“I think this just highlights the fact that we’re still in a short-term bear market and those who were long as a result of the Turkish rate hike have locked in profits quite early,” said Craig Erlam, market analyst at Alpari U.K., in emailed comments. “The problems over the last month have been bigger than just the emerging-market crisis.”
After a gain of some 83 points futures for the Dow industrials (DJH4 -0.77%) were down 127 points at 15,749. Those for the S&P 500 index (SPH4 -1.05%) lost 14 points to 1,774.30, while futures for the Nasdaq-100 index (NDH4 -1.09%) fell 29.75 points to 3,471.25.
Boeing (BA -4.19%) reported better-than-expected fourth-quarter earnings, as profits rose from the same period a year ago. However, the company’s outlook for 2014 was below expectations. Shares sold off in premarket and last were 4.1% lower.
…
No mention here of Argentina. I guess their currency problems are contained?
ft dot com
3:11pm MARKETS
Rate rises fail to halt EM currency sell-off
South Africa follows India and Turkey by tightening monetary policy
Global Market Overview Wall St down as EM woes return
beyondbrics South Africa hikes rates but rand weakens
What Turkey’s dramatic rate rise means
Smart Money Turkey’s rate rise fails to dispel dangers
One advantage turkey has over Greece is that it’s currency can depreciate making it cheaper for vacations and production.
Or not…
Jan. 29, 2014, 9:55 a.m. EST
Crisis in Argentina sparks new gold rush
Why now’s the time to be bullish on gold-mining stocks
By Brett Arends
Several weeks ago I bought the one asset that all investors seem to hate.
I bought some stock in gold mining companies.
…
Because it’s different in D.C.
Rent now or be priced out forever!
http://www.washingtonpost.com/blogs/where-we-live/wp/2014/01/29/how-to-land-a-great-rental-in-the-competitive-d-c-market/
A truly laughable % of 20- and early-30-somethings in DC get their rent paid by their parents. Among females in N.W. Wash. (the nice part), I’d guess it’s nearly 50%. Among men, I just see a lot of roommate situations or living in N. VA. Good ways to cut costs and save money to dominate the May-October rooftop bar scene*. DC has significantly more young women than men (opposite of SF/SV) so women can’t be choosey anyway.
* Yes that’s a real thing and a really douchey thing .The advantage of the height restrictions in DC is that, unlike other east coast cities, you get unparalleled views. A high % of the buildings in town are 10-12 stories so a rooftop bar scene has developed and serves to reinforce the stupid DC hierarchy. It’s pretty much the worst thing you could imagine, a di*k-measuring contest between Booz consultants, K Street d-bags, Hill staffers, etc.
We have the rooftop patio scene here too, although our beer selection is much better. Wear a pair of trail runners, black North Face fleece pullover, and three day beard stubble.
And it’s not enough to talk about climbing 14,000 foot mountains in Colorado. You need to talk about how you just got back from climbing Orizaba in Mexico or how you’re planning for your trip to climb Denali this spring. Nobody talks about their jobs here.
Bring a cute Australian shepherd / border collie mix puppy and you can’t not get laid.
But do your bars have yoga pants contests for the womyn?
http://m.brobible.com/life/article/bar-dc-throwing-yoga-pants-party
Liberace,
I can only imagine the costume you’ll be wearing to that gig.
Would I be racis if I told you that I hate climbers?
“The higher we soar, the smaller we appear to those who cannot fly” — Friedrich Nietzsche
Ah yes, the anti-hipsters hipster. You’re there, but soo over it.
I’m guessing then that you are both (Goon/Joe) between 30-35. I say this because the other day when Brett asked what to do with his half mil, I said wait until you’re at least 35… something magical happens in your late 30’s that I cannot describe.
Maybe it’s all the things you’re not, combined with completely understanding who you are, ending on never feeling compelled to be anything but this combination.
It’s why I don’t dance when my colleague says, “this meeting is boring, let’s dance!” Let me spell it out like this:
20’s = Hipster
Early 30’s = Anti-hipster
Late 30’s = not thinking about any of it
Here’s Brett’s scenario
20’s = buy a condo!
Early 30’s = should I buy a condo?
Late 30’s = what’s the best way to protect and invest $500k
’soo over it’
http://m.youtube.com/watch?v=YlGqN3AKOsA
Anybody else craving one of these this morning?:
http://www.hotpockets.com/products/lean-pockets/chicken-jalapeo-cheddar/pretzel-bread
Gotta be better than breadsticks.
Got Cheetos?
No.
Almond milk and quinoa in this household.
There’s nothing better than heading for the chuckwagon for can of Coke and a supersized bag of Cheetos for break.
SunChips® and wheatgrass juice
Cow’s milk is healthier than almond milk, and Taco Bell is the best thing to grace the surface of this planet ever.
Some actual good news, as reported by Bloomberg:
“Edward Snowden was nominated for the Nobel Peace Prize by Norwegian politicians, including a former government minister, for contributing to transparency and global stability by exposing a U.S. surveillance program.”
Transparency? Where have we heard that before?
Oh right, straight from the teleprompter and through the mouth of King Obama.
Sigh, forward.
I don’t get it.
Does Edward Snowden have a kill list?
Goon, here’s another thing to add to your roster of Obama/Nobel Peace Prize comments:
http://shoebat.com/2014/01/28/obamas-brother-joins-hamas-says-jerusalem-coming/
(Obama’s half-brother has LITERALLY joined HAMAS.)
not sure if this is fiction or the blueprint for the rest of obama’s second term
http://westernrifleshooters.wordpress.com/2014/01/28/sotu-encore-presentation-brackens-what-i-saw-at-the-coup/
Anybody planning to ski today in their Atlanta backyard?
Snow, ice strand Atlanta commuters, school kids
Commuters abandoned cars along the highway to seek shelter in churches and fire stations after a rare snowstorm has left thousands of unaccustomed Southerners frozen in their tracks. VPC
Larry Copeland, Doug Stanglin and Doyle Rice, USA TODAY 10:39 a.m. EST January 29, 2014
Just a few inches of snow brings Atlanta-area to a halt.
ATLANTA — The Georgia National Guard was out in force Wednesday to rescue motorists trapped all night in their cars on Atlanta’s icebound freeways from a harsh winter storm that forced many drivers to abandon their cars outright and left children to camp out in their schools.
Some commuters pleaded for help via cellphones while still holed up in their cars, while others gave up and trudged miles home.
Highways around the nation’s ninth largest metropolitan area were littered with abandoned cars as commuters bailed out, some seeking warmth at shelter at 17 Home Depot that opened their doors to take in wayward motorists.
…
Just a few inches of snow brings Atlanta-area to a halt.
More than the snow, I think the problem is the ice. Lots of ice forms in these high humidity locales when it gets really cold, something that doesn’t happen that much in the arid Rocky Mountain West, even though it is routinely colder here and we get a lot more snow.
Although I’m sure that the lack of snowplows has to hurt. I wouldn’t be surprised if there are more snowplows in my little burg than in all of Atlanta. Our city garbage trucks are fitted to be easily converted into snow plows, should the need arise.
“More than the snow, I think the problem is the ice. Lots of ice forms in these high humidity locales when it gets really cold, something that doesn’t happen that much in the arid Rocky Mountain West, even though it is routinely colder here and we get a lot more snow.”
+1 On the humidity/ice.
Our humidity has been roughly 80% for the past three weeks, inversion layer, gray overcast sky, really bad air for older folks or kids with breathing issues. Last night, freezing rain, likely 1/2-inch of ice. Early this morning, 2-inches of snow, our first real snow this winter.
Not today. We’re fixin’ to sit under the palm trees on the Providence riverwalk.
Maybe the Atlanta area ski resorts can make it through another year with this stimulus.
The backyard ski areas are doing well.
That’s exactly what I was thinking!
Skagen AS, the Norwegian fund manager who has outperformed some of Wall Street’s biggest banks over the past decade, is urging clients to sit out the turmoil gripping developing nations.
Kristoffer Stensrud, whose 50 billion-krone ($8 billion) Kon-Tiki A (STKONTI) emerging market fund has returned an annualized 14 percent over the past 10 years, said there’s “nothing new really” in the recent turbulence, in an e-mailed reply to questions. He characterized the moves as “some contagion” in Latin America from Argentina, while reactions in the east remained “calm.”
“Emerging market economies hit by currency falls will probably be more competitive going forward,” according to 60-year-old Stensrud, who started Skagen in 1993. A lack of inflationary pressure from commodities will also be “positive,” giving a longer period with “low inflation and low interest rates in developed markets than generally perceived presently,” he said.
Emerging market currencies initially rose today, as the Turkish central bank raised rates after an emergency meeting. The rally later fizzled, and the South African rand also sank even after the country’s central bank boosted rates to protect the currency.
11,000′ in the mountains of eastern Afghanistan having made the mistake of eating what I learned later was fish (caught in the same river in which they empty their sewers, wash their cars, clothes, etc) while on a KLE drinking tea with some elders. I had the “bubble guts” before we even started off on the 2 hour convoy back to the COP. Afghanistan isn’t a place where you can just pull over on the side of the road and drop a deuce. Luckily my sphincter held its ground and I made it back to camp, soaked in sweat, pale as a ghost and shaking uncontrollably. We had just established our COP earlier in the week on top of a former police station that our Afghan ‘allies’ had recently abandoned, so the latrine was a shack with a series of holes in the ground with some rocks you use to wipe your azz laying in a pile next to the holes. Long, messy story but I ended up cutting a bottle of washer fluid in half and using the top half as a funnel because of the overspray. Used every piece of paper I could find, traded pretty much everything I had for “white gold” (TP), and still ended up using an unserviceable pair of DCU pants as TP by the end of the week. Doc said amoebic dysentery. Couldn’t help but chuckle when I got back to my hooch and one of my teammates had taped a piece of paper with “You have died of dysentery” in Oregon Trail script on my rack. Of course, that chuckle was followed by the immediate need to sprint for the crapper again. Meds came in the next logpac, by then I was camped out on a cot next to the latrine entrance with an IV bag.
More poo stories today, Van Man?
It’s a good thing Peyton’s last game is this weekend because eating all these 50% off regular price Papa John’s pizzas and cheese sticks on a weekly basis is wreaking havoc on my digestion.
Nonsense, all that cheese does nothing but constipate.
MREs are your friend
Unless Potsy is in the kitchen.
pull my finger and smell the equity
Will it smell like cherries?
The Housing Slowdown Has Already Begun. (This article has some good data/graphs.)
————————–
http://advisorperspectives.com/dshort/guest/NDD-140128-Housing-Slowdown.php
(excerpt)
“After being up over 10% in each of 2011 and 2012 (over 20% as to permits), permits, starts, and new home sales finished 2013 up 10% or less for the year, and existing home sales are actually negative for the year.”
“The past history is that a 1% increase in interest rates typically is consistent with a 100,000 decline in permits and starts. The data that we have seen in December confirms that in 2013 we already have seen a slowdown, and is in accord with my forecast that at some point this year, we will see a YoY change of -100,000 in permits and/or starts. Could it be different this time? Of course, but history is on my side.”
Correlation or causation?
Coming off of construction numbers that are the lowest on record, I’m not sure historical “norms” will hold.
And the “lowest on record” production numbers came of a period that was the largest overproduction of housing in history.
Here’s the raw data. Draw your own conclusions.
http://www.census.gov/construction/nrc/pdf/startssa.pdf
They may be building a little more, but they are still only selling 400,000 of those new SFHs per year. Five years and counting. Set up for new “lowest on record” is in place.
Drawing conclusions from graphs that only go back to 2011 doesn’t make any sense… you need to see the bigger picture (which would require looking back decades).
Corelogic released their December Foreclosure report.
The data shows a continued split between judicial and non-judicial states in terms of where the distress is located. The difference is crazy big…
36 states have an inventory of foreclosed homes lower than the national average (distress is fairly concentrated).
The national average is 2.1%.
Florida’s foreclosure rate is 6.7%, NJ is 6.5%, NY is 4.9% (the three highest)
CA is at 0.7%, AZ at 0.8%, CO at 0.6% (3 of the lowest 11).
It seems like the foreclosure moratoriums are quite effective in non-juidicial states no?
… and when those moratoriums are over?
Keyyy-rasshh.
If there were such moratoriums then you would expect to see the percentage of loans that are seriously delinquent at a pretty high level (loans are not getting pushed through the process, but stuck at the stage of serious delinquency), and the number of completed foreclosures being very low.
California completed 39k foreclosures during the past 12 months (tied for third place), and has a seriously delinquent loan rate of 2.8% (as compared to FL at 11.2%, for example).
Your “foreclosure moratoriums” don’t exist.
There are simply slow processes (judicial) and faster processes (non-judicial).
Sure they exist and you’ve been show how they work. Frankly you talk like an egghead living in a perfect world.
Maybe you’re not the deceptive housing pimp I thought you were.
If moratoriums exist in CA, there should be evidence (no foreclosures occurring, a clogged up foreclosure pipeline–like what we see with FL/NY/NJ, etc.). I have yet to see any such evidence of the moratoriums.
But I’ve seen plenty of evidence to the contrary.
Convince me with data.
As I’ve said before, I’m data driven–I would love to be convinced that I’m wrong about my views, but it will take more than unfounded statements.
If the problems are as glaring as you say, the data should be easy to find.
You really think the banks holding inventory is everyone’s imagination and you’re “right”?
Trust me when I say this… I work with data-driven guys in my office. You’re not one of them.
‘Convince me with data’
When was the California homeowner bill of rights enacted? When did foreclosures begin to plummet in California?
Fed eases 10 B less.
This reminds me of a runaway horse I rode when I was a kid picking tobacco. For all you Virginians I speak of Ontario tobacco country !
The boat horse (big, strong) was to be taken back to the barn and my buddies decided I would be forced to ride him back. Once on the horse they encouraged him to run ! I kept yelling Gee, Ha, Whoaa (lots of whoas) but he wouldn’t stop.
That bloody animal ran straight into a deep pond and I could hardly swim.
His free ride put me into deeper trouble, but I survived - no thanks to Ben Bernanke.
It’s not over yet.
Yellin will give you a “ride” of your life. Count me on that.
53%
Hmm…taper talk today (TTT) and mining stocks take off while regular stocks crater! If that is not a strong signal of a gold rally ahead I don’t know what is!
Weather is fine in San Jose. Just a day trip for work. I had my nose to the grindstone on a project and had to do a face-to-face with another partner business. Heading back to the OC
Marc Faber Warns “Insiders Are Selling Like Crazy… Short US Stocks, Buy Treasuries & Gold”
Zero Hedge
January 29, 2014
Which stocks are you recommending?
Faber: I recommend the Market Vectors Junior Gold Miners ETF [GDXJ], although I don’t own it. I own physical gold because the old system will implode. Those who own paper assets are doomed.
Zulauf: Can you put the time frame on the implosion?
Faber: Let’s enjoy dinner tonight. Maybe it will happen tomorrow.
Yep cash and precious. Sell the shares of stock you won’t miss. By that the shares you bought at the highest cost. You may want to hang onto the shares you bought cheap, like March 2009. For me it was 1700 shares at $2. Now the price is $30.
You don’t want to caught at low tide.
Hopefully Brett in Austin moves his big windfall to cash
Why Are Banking Executives In London Killing Themselves?
Michael Snyder
Economic Collapse
January 29, 2014
Bankers committing suicide by jumping from the rooftops of their own banks is something that we think of when we think of the Great Depression. Well, it just happened in London, England. A vice president at JPMorgan’s European headquarters in London plunged to his death after jumping from the top of the 33rd floor.
Image: JP Morgan Building (Wikimedia Commons).
He fell more than 500 feet, and it is being reported by an eyewitness that “there was quite a lot of blood“. This comes on the heels of news that a former Deutsche Bank executive was found hanged in his home in London on Sunday. So why is this happening? Yes, the markets have gone down a little bit recently but they certainly have not crashed yet. Could there be more to these deaths than meets the eye? You never know. And as I will discuss below, there have been a lot of other really strange things happening around the world lately as well.
But before we get to any of that, let’s take a closer look at some of these banker deaths. The JPMorgan executive that jumped to his death on Tuesday was named Gabriel Magee. He was 39 years old, and his suicide has the city of London in shock…
A bank executive who died after jumping 500ft from the top of JP Morgan’s European headquarters in London this morning has been named as Gabriel Magee.
The American senior manager, 39, fell from the 33-story skyscraper and was found on the ninth floor roof, which surrounds the Canary Wharf skyscraper.
He was a vice president in the corporate and investment bank technology department having joined in 2004, moving to Britain from the United States in 2007.
What would cause a man in his prime working years who is making huge amounts of money to do something like that?
The death on Sunday of former Deutsche Bank executive Bill Broeksmit is also a mystery. According to the Daily Mail, police consider his death to be “non-suspicious”, which means that they believe that it was a suicide and not a murder…
A former Deutsche Bank executive has been found dead at a house in London, it emerged today.
The body of William ‘Bill’ Broeksmit, 58, was discovered at his home in South Kensington on Sunday shortly after midday by police, who had been called to reports of a man found hanging at a house.
Mr Broeksmit – who retired last February – was a former senior manager with close ties to co-chief executive Anshu Jain. Metropolitan Police officers said his death was declared as non-suspicious.
On top of that, Business Insider is reporting that a communications director at another bank in London was found dead last week…
Last week, a U.K.-based communications director at Swiss Re AG died last week. The cause of death has not been made public.
Perhaps it is just a coincidence that these deaths have all come so close to one another. After all, people die all the time.
And London is rather dreary this time of the year. It is easy for people to get depressed if they are not accustomed to endless gloomy weather.
If the stock market was already crashing, it would be easy to blame the suicides on that. The world certainly remembers what happened during the crash of 1929…
Historically, bankers have been stereotyped as the most likely to commit suicide. This has a lot to do with the famous 1929 stock market crash, which resulted in 1,616 banks failing and more than 20,000 businesses going bankrupt. The number of bankers committing suicide directly after the crash is thought to have been only around 20, with another 100 people connected to the financial industry dying at their own hand within the year.
But the market isn’t crashing just yet. We definitely appear to be at a “turning point“, but things are still at least somewhat stable.
So why are bankers killing themselves?
That is a good question.
As I mentioned above, there have also been quite a few other strange things that have happened lately that seem to be “out of place”.
For example, Matt Drudge of the Drudge Report posted the following cryptic message on Twitter the other day…
“Have an exit plan…”
What in the world does he mean by that?
Maybe that is just a case of Drudge being Drudge.
Then again, maybe not.
And on Tuesday we learned that a prominent Russian Bank has banned all cash withdrawals until next week…
Bloomberg reports that ‘My Bank’ – one of Russia’s top 200 lenders by assets – has introduced a complete ban on cash withdrawals until next week. While the Ruble has been losing ground rapidly recently, we suspect few have been expecting bank runs in Russia.
Yes, we have heard some reports of people having difficulty getting money out of their banks around the world lately, but this news out of Russia really surprised me.
Yet another story that seemed rather odd was a report in the Wall Street Journal earlier this week that stated that Germany’s central bank is advocating “a one-time wealth tax” for European nations that need a bailout…
Germany’s central bank Monday proposed a one-time wealth tax as an option for euro-zone countries facing bankruptcy, reviving a idea that has circled for years in Europe but has so far gained little traction.
Why would they be suggesting such a thing if “economic recovery” was just around the corner?
According to that same article, the IMF has recommended a similar thing…
The International Monetary Fund in October also floated the idea of a one-time “capital levy,” amid a sharp deterioration of public finances in many countries. A 10% tax would bring the debt levels of a sample of 15 euro-zone member countries back to pre-crisis levels of 2007, the IMF said.
So what does all of this mean?
I am not exactly sure, but I have got a bad feeling about this – especially considering the financial chaos that we are witnessing in emerging markets all over the globe right now.
This is going to be linked to the same people who trained that crow and the seagull to attack those doves.
“Bankers committing suicide by jumping from the rooftops of their own banks is something that we think of when we think of the Great Depression.”
If they perform a double gainer on the way down then I’ll take that as a signal that they’re bound for heaven. If not, well at least they demonstrated the decency to jump and save society the cost of a lengthy trial.
I was impressed mostly not by Ayn Rand or Robert Ringer or Lysander Spooner - those people wrote very important books that had an impression on. But I was mostly impressed by John B. Calhoun’s study on overpopulation.
I think most of the social ills these days are from overpopulation, The effects you see are that our jobs are outsourced to nations that decided to free up their economies and allow American corporations to hire workers. The effects also are lots of people driven into severe psychological problems doing random shootings. The Maryland mall shooter who killed two people and himself wrote in a note he needed psychological help.
Chalk that one up with the likes of Holmes in Aurora, Laughner in Tucson, Dahmer, The kid in Connecticut, and who else? All had either been under prescribed psychological drugs or in need of pshychological help.
Just think if Roe V. Wade had not been ruled, there would be 50 million unwanted children, over half adults, and roaming around. There would be severe violence in America.
Freakonomics showed that the crime rate has actually decreased since Roe V Wade and the reason was far less unwanted children.
BTW how come you never see social conservative people adopt babies?
It looks as though all the ‘experts’ were wrong about the effect of the QE3 taper on interest rates. Instead of rising, long-term Treasury yields have cratered this year, thanks to a flood of money pulled out of EM stock funds and dumped into U.S. Treasury purchases.
You have been alluding this entire time that somehow the Federal Reserve would pull this off without causing long-term interest rates to rise. You were right. You could knock me over with a feather, but what do I care?
I just visited the Sotheby’s website, curtesy of an ad that I found interesting near the top of this page. Mansions in beautiful Phoenix are $3MM. Is that a lot for a big box in the desert? Since I moved here, I have noticed three different people at stores who were talking to themselves. One at Walgreens, One at Basha’s (where I got food poisoning from a roasted chicken), and one at Albertson’s. I haven’t seen any schizophrenic people at Sprouts, but I think a lot of people dress funny around here. It’s like they’re trying to look really, really shiny and smooth.
Maybe people make themselves feel better about the fact that they live here by buying very large boxes, surrounded by gates. I just wanted to move here for a cheeeeeeeeeep house. I didn’t actually want to stay here for the rest of my life and make it, like, my destiny. I figured if I had a crater house, I would save all my dough and move to some beach paradise at a young age and leave my troubles behind me.
But no. Housing bubble number two. Me no like.
Maybe I will continue to increase my fortunes by buying crater stocks, and then maybe another crater house will await later. It seems like a reasonable expectation to me.