January 30, 2014

Bits Bucket for January 30, 2014

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

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Comment by Whac-A-Bubble™
2014-01-30 00:45:07

The EM situation is not a panic, right?

Comment by Whac-A-Bubble™
2014-01-30 00:50:26

Not to worry. This is merely a shock, not a panic.

Record cash leaves emerging market ETFs on lira drop
More than $7 billion flowed from ETFs investing in developing-nation assets in January, Bloomberg data shows
Lu Wang
Record cash leaves emerging market ETFs on lira drop
Investors accelerated redemptions after data showed Chinese manufacturing contracted and Argentina’s unexpected devaluation of its peso dented confidence in Latin America. Photo: Reuters

New York: Investors are pulling money from exchange-traded funds (ETFs) that track emerging markets at the fastest rate on record, as China’s slowing growth and cuts to central-bank stimulus sink currencies from Turkey to Brazil.

More than $7 billion flowed from ETFs investing in developing-nation assets in January, the most since the securities were created, data compiled by Bloomberg show. The iShares MSCI Emerging Markets ETF has seen its assets shrink by 11%, while the Vanguard FTSE Emerging Markets ETF is poised for the biggest monthly redemption since the fund was started in 2005. The WisdomTree Emerging Markets Local Debt Fund is on track for an eighth straight month of withdrawals.

Investors accelerated redemptions after data showed Chinese manufacturing contracted and Argentina’s unexpected devaluation of its peso dented confidence in Latin America. Surprise rate increases by central banks in Turkey and South Africa failed to boost their currencies, while the US Federal Reserve opted to press on with reductions to its monetary stimulus.

A lot of speculative money has been circulating in the emerging markets and the party seems to be over, at least for now, said Howard Ward, the chief investment officer for growth equity at Rye, New York-based Gamco Investors Inc., which oversees about $40 billion. There is a growing lack of confidence in the economic policies of many emerging markets at a time when growth is slowing and inflation is a real problem.

Cheap money

Emerging economies have benefited from cheap money as three rounds of Fed bond buying pushed capital into their borders in search of higher returns. The central bank began paring the purchases by $10 billion to $75 billion this month and announced on Wednesday plans to reduce the amount by another $10 billion.

The MSCI Emerging Markets Index of equities is off to the worst start to a year since 2008, with about $468 billion erased from stocks this year. Turkey and South Africa followed counterparts from Brazil to India in tightening monetary policy as exchange rates for the lira and the ruble tumbled to record lows.

Withdrawals from the iShares fund and the Vanguard ETF, the largest such products by assets for emerging markets, totalled $1.9 billion on 27 January, the biggest one-day redemption since 2005, data compiled by Bloomberg show. About $58 million has been withdrawn from the WisdomTree debt fund this month, bringing the total redemption since June to $752 million.

A ‘shock’

Obviously that is a shock, and people are panicking much more than we thought,” Julian Rimmer, a broker at London-based CF Global Trading UK, said in an interview. “And then you realize, maybe this is a crisis.”

Comment by Whac-A-Bubble™
2014-01-30 00:58:38

Time to jump to emerging market shares? Maybe not
Date January 30, 2014 - 4:47PM
Sally Rose

Retail investors attracted by discounted emerging market equity valuations should be wary and instead consider investing in locally listed stocks that are poised to benefit from growth in Asia, wealth management experts say.

After a sharp January sell-off emerging market equities appear to be trading at bargain prices creating buying opportunities for institutional and sophisticated investors.

The MSCI Emerging Market shares Index has declined four months in a row and is down 6.6 per cent over January.

Over the past week equity markets in Argentina, Turkey and India moved lower after central banks in those nations instigated dramatic interest rates rises to stabilise their currencies and rein in inflation worries.

Before the local market opened on Thursday, the United Stated Federal Reserve announced it will continue to reduce its monthly stimulus by $US10 billion per month to $US65 billion per month from February. The Fed’s unprecedented quantitative easing program has been supporting a global economic over the past few years.

Leading financial advisers are currently advising wealthy clients with a risk appetite on the best strategies to increase their exposure to emerging market shares over the coming months, but warn average retail investors to remain cautious.

“Opportunities will arise in emerging markets, potentially during the second half of 2014 calendar year, but we remain cautious at this early stage while equity market and currency market volatility plays out,” Macquarie Private Wealth division director Martin Lakos said.

NAB Private Wealth investment strategist Nick Ryder said emerging market equities look cheap but are still too risky. “Investors need to see how the US Federal Reserve’s tapering plays out over next six months before reconsidering their asset allocation,” he said.

Mercer Investments financial adviser George Mileski agrees emerging markets remain too risky for most retail investors, but said “for those clients with significant surplus income that they can afford to invest in high risk options the current volatility does present some good opportunities”.

Comment by Whac-A-Bubble™
2014-01-30 01:02:01

Asia stocks battered by emerging market fears
By Charles Riley @CRrileyCNN
January 30, 2014: 1:28 AM ET
Asia stocks took a sharp dive Thursday as policymakers scrambled to address emerging market problem areas around the world.

Japan’s Nikkei dropped 2.5%, while Hong Kong’s Hang Seng shed 0.5% and Australia ASX All Ordinaries lost 0.8%.

The Shanghai Composite, which often diverges from other Asian markets, advanced 0.6%.

Investors have been rattled in recent weeks by growing fragility in Turkey, India, Brazil, Indonesia and South Africa as the Federal Reserve rolls back the bond-buying program that has supported growth in emerging markets. Weakness in China’s all-important manufacturing sector has only added to worries.

Emerging market currencies have suffered a broad decline, and even drastic efforts to control the situation appear to be falling short.

On Tuesday, Turkey’s central bank increased its key overnight lending rate to 12% from 7.75%.The Turkish lira fell further Wednesday.

In addition to Turkey, India and South Africa have raised rates this week to stabilize shaky currencies. The Argentinian peso has been in free fall since Argentina’s government moved to devalue the currency last week.

Comment by Whac-A-Bubble™
2014-01-30 01:04:05

Emerging Markets Selloff Spreads
Turkey, South Africa Currencies Experience Fresh Declines
By Nicole Hong and Prabha Natarajan
Jan. 29, 2014 9:55 a.m. ET

Turkey’s central bank increased its key interest rate Tuesday in an effort to support the lira. The lira on Wednesday fell against the dollar. A currency-exchange business advertises foreign-exchange rates to passersby in Istanbul. Associated Press

Worries about emerging markets rattled investors anew, causing fresh declines in the currencies of Turkey and South Africa and pushing the U.S. stock market lower.

The Dow Jones Industrial Average recently shed 1% to 15770. Gold futures, meanwhile, rose 1.3% to $1,266.40.

The declines were fueled by concerns that efforts by emerging-market central banks to tighten monetary policy won’t be enough to protect their economies against an exit of investor money.

South Africa’s central bank raised its key interest rate Wednesday by 50 basis points to 5.5%, which sparked a brief rally in the South African rand that quickly reversed. South Africa’s decision follows rate increases in Turkey and India on Tuesday. Turkey was particularly aggressive, raising its benchmark one-week lending rate for banks to 10% from 4.5%.

Although higher rates are supposed to entice investors to continue investing in emerging-market currencies, analysts said the toll the higher interest rates may take on the economic growth of those nations may be too high.

It doesn’t look like investors care if local rates are going up,” said Adam Myers, senior currency strategist at Crédit Agricole. “They just want to get out of emerging markets.”

Comment by Whac-A-Bubble™
2014-01-30 01:05:05

In retrospect, it appears that BRICs can be shat.

Comment by Whac-A-Bubble™
2014-01-30 07:11:41

January 28, 2014
Russia Is Losing Sources of Economic Growth and like Brazil and India has stagflation
Anders Aslund of the Peterson Institute for International Economics has written about the problems that Russia has generating economic growth

The annual Gaidar Forum, held last week in Moscow, is a good occasion to assess the country’s economic state of affairs. Russia’s economy and politics are marked by what optimists call stability and what pessimists call stagnation.

Prime Minister Dmitry Medvedev claimed that Russia’s economic growth sources have been exhausted, and he introduced the idea of Russia being in a “middle-income trap,” drawing on an academic paper by the Berkeley Professor Barry Eichengreen. Medvedev was concerned with the sudden slowdown in economic growth, which is common to countries that have reached middle incomes, such as Russia and Brazil.

Comment by Albuquerquedan
2014-01-30 10:11:05

Prime Minister Dmitry Medvedev claimed that Russia’s economic growth sources have been exhausted, and he introduced the idea of Russia being in a “middle-income trap,” drawing on an academic paper by the Berkeley Professor Barry Eichengreen. Medvedev was concerned with the sudden slowdown in economic growth, which is common to countries that have reached middle incomes, such as Russia and Brazil.

I have read excepts of that paper and have wondered whether China, in addition to Russia, would now qualify as being in the middle income trap. When the paper was written China’s wages were below Brazil’s wages but that is no longer true. Consequently, I think it might just have reached a point where economic growth is difficult.

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Comment by Whac-A-Bubble™
2014-01-30 07:14:47

India raises rates, says further tightening unlikely soon
By Suvashree Dey Choudhury and Tony Munroe
MUMBAI Tue Jan 28, 2014 5:49am EST
The Reserve Bank of India (RBI) seal is pictured on a gate outside the RBI headquarters in Mumbai October 29, 2013. REUTERS/Danish Siddiqui

(Reuters) - India surprisingly raised interest rates on Tuesday to dampen inflation, saying it was now better prepared to deal with the risk of major capital outflows roiling emerging economies.

The Reserve Bank of India (RBI), however, said that if retail inflation eases as projected, it does not foresee further near-term monetary policy tightening.

India’s rupee sank 11 percent last year as emerging markets sold off sharply after the U.S. central bank announced it would taper its aggressive bond-buying program that had fuelled global demand for risk assets.

Expectations the Federal Reserve will further scale back stimulus this week have renewed pressure on emerging economies although the rupee has fared better than other currencies this time. Turkey’s central bank was expected to raise rates to defend the lira at an emergency meeting later on Tuesday.

Comment by Whac-A-Bubble™
2014-01-30 07:17:45

4:08 pm Jan 27, 2014
Emerging-Market Funds Pile Up Losses
By Prabha Natarajan and Nicole Hong

A tumble in stocks and bonds from Turkey to Mexico has spared few funds that invest in emerging markets.

Funds that mainly buy emerging-market stocks are down an average 5.2%, while bond funds are off 1.5%, according to Morningstar Inc.

Losses began to pile up starting on Thursday, after disappointing manufacturing data out of China sparked fears of slower growth across emerging markets. Concerns about rising inflation and political turmoil in Turkey, as well as protests in Ukraine and Thailand and an unexpected devaluation of Argentina’s currency weighed on investors’ nerves.

The worst-hit funds held stocks and bonds denominated in rapidly depreciating currencies like the Turkish lira and South African rand. These assets were hit by a double whammy of falling assets prices and a weakening forex that magnified the losses for investors, who typically gain from the appreciation of these currencies.

Goldman Sachs Group Inc. (GS -1.43%’s) Local Emerging Markets Debt Fund is down 4.2% this year, according to Morningstar. At the end of September the fund held 7.5% of its portfolio in Turkish debt. The broader index of emerging-market local bonds, the J.P. Morgan Government Bond Index-Emerging Markets is down 3.38% year-to-date. It fell 8.97% last year.

Goldman’s BRIC Fund, which held more than 60% of its portfolio in emerging Asian equities at the end of last year, is the worst performing stock fund, down 7.2% this year, according to Morningstar. At the end of 2013, the fund reported large stakes in natural resource firms in Russia and Brazil that have performed poorly this year.

Goldman fund managers did not respond to requests for comment. In an interview last week, Yacov Arnopolin, emerging-market debt portfolio manager at Goldman Sachs Asset Management, said his fund has added positions in Colombian local currency bonds and the Malaysian ringgit. The dollar has gained 4% to the Colombian peso and 1.5% to the ringgit this year.

A few funds have managed to eke out gains this year.

Comment by Whac-A-Bubble™
2014-01-30 01:06:28

More emerging market jitters
Midnight run
Jan 29th 2014, 9:16 by P.F. | MUMBAI

“MONEY no longer had any value in Istanbul,” laments a character in a tale by Orhan Pamuk, the Nobel-prize-winning Turkish novelist. The story is set in the 16th century. But the Turks have not stopped worrying about their money. Hence the latest act in the emerging markets drama. At an emergency meeting in Ankara at midnight late on Tuesday, January 28th, Turkey’s central bank abandoned its policy and jacked interest rates through the roof. The lira had fallen 16% against the dollar since the start of December, making it among the world’s worst-hit currencies, along with those of Argentina and South Africa.

On Monday, January 27th, the boss of Brazil’s central bank, Alexandre Tombini, predicted that the “vacuum cleaner” of rising interest rates in the rich world would force emerging economies to follow suit. A few hours before the Turkish move the Reserve Bank of India (RBI) unexpectedly raised interest rates. By January 29th South Africa had joined the gang, boosting its policy rate. After several years of easy money and booming growth, the emerging world is in struggling. Countries that have been complacent are being picked off one-by-one by markets, even as they scramble to defend themselves.

High on the complacency roster is Turkey. A corruption scandal has engulfed Recep Tayyip Erdogan, the prime minister, who came to power in the aftermath of the last big financial crisis in 2001. The central bank has also pursued a fiddly approach to monetary policy, with multiple benchmark rates. The end result has been very loose policy. Its one-week repo rate (the closest thing it has to a policy rate) stood at 4.5%, and its average lending rate was about 7%. Both were below the inflation rate of 7.4%. Lax policy stokes too much demand, sucking in imports and widening the current-account gap. It also means the real returns investors get are too low to persuade them to own liras.

Many believe that Mr Erdogan, who is prone to attacking the “interest-rate lobby”, has bullied the central bank, which is not fully independent. It had tried to defend the currency by intervening in the foreign-exchange markets—it has blown about $10 billion in the last two months, or about a fifth of its net foreign reserves. As its ammunition runs dangerously low, it has switched weapons. At the midnight meeting it more than doubled the one-week repo rate, to 10%. Its average lending rate could head into the teens.

The RBI’s change of stance is more dignified, but one still hears echoes of Turkey. Its decision to raise its main policy rate from 7.75% to 8% has been presented by Raghuram Rajan, its new boss, as part of a new plan to shift the RBI towards an orthodox inflation-targeting regime, away from the current ad hoc approach. But the rout in financial markets has no doubt played a role too. By most yardsticks Indian rates are still too low—consumer-price inflation is running at 10%. India has managed to control its gaping current-account deficit in the past few months. But it is still vulnerable.

That broad point—that policy is too lax—is true across much of the emerging world. Until it raised rates from 5% to 5.5% on 29th January, South Africa’s policy rate was below inflation. Indonesia is in the same boat, although its inflation jumped after a welcome cut in fuel subsidies. The currency depreciations of the past two months could push up local prices further, widening the gap. Mr Tombini’s prediction, of a wave of interest rate rises across the emerging world, looks right. America’s Federal Reserve is expected to normalise policy very gradually—at its meeting today, January 29th, it is forecast to make only modest cuts to the pace of its bond purchases. But quantitative easing is still an experiment; no one knows how it will end. If the Fed moves faster, emerging economies will have only an instant to adjust from their reclining position to a sprint.

Comment by Whac-A-Bubble™
2014-01-30 01:07:58

Emerging markets
Black Wednesday in Ankara?
Jan 29th 2014, 15:59 by Buttonwood

THE rot has not been stopped. Last week, it seemed as if the Turkish authorities were in denial. Inflation was too high, the current account deficit was too wide but the central bank failed to push up interest rates; the lira was sinking. But the bank acted decisively last night, pushing the rate on 7-day repos to 10% (from a theoretical 5.25%) and overnight rates by more than four percentage points. The initial reaction was positive, with the lira rebounding and Asian equity markets moving higher.

But the initial reaction was short-lived and the Turkish lira is now lower than it was before the move. My mind is inevitably drawn back to Black Wednesday (September 16, 1992), when the British authorities raised rates by five percentage points in a matter of hours in a doomed effort to keep the pound within the Exchange Rate Mechanism. I was in a bank dealing room when the second rate rise was announced and was a bit surprised to see equity markets rally; the explanation from dealers was that the policy was so self-evidently bad for the economy that it would never be sustained. Their cynicism was right; by the end of the day, the rate rise was cancelled and Britain dropped out of the ERM. The reputation of the then Conservative government did not recover but the economy did; some dubbed the day “White Wednesday” in consequence.

Comment by Whac-A-Bubble™
2014-01-30 01:10:19

Silver lining: U.S. markets, especially housing, are fully decoupled from EMs. So this little EM kerfuffle will quickly die down, and U.S. homeowners will be able to continue tapping into their accumulated home equity gains without fail.

Comment by Suite Joey Blue Eyes
2014-01-30 07:06:46

^^ I wonder if anyone would actually make that argument these days.

Comment by Whac-A-Bubble™
2014-01-30 07:34:35

I just did.

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Comment by Whac-A-Bubble™
2014-01-30 07:35:35

Albeit my intent was derisive.

Comment by Suite Joey Blue Eyes
2014-01-30 08:05:53

Which is why I didn’t consider it a serious argument on your part.

Comment by In Colorado
2014-01-30 08:40:51

A memory I have from Mexico in the 70’s and early 80’s was that those with cash capital did their best to get it out of Mexico. I suspect that we will see a capital flight from the EMs into the USA. Just where that money will get parked remains to be seen.

Comment by oxide
2014-01-30 12:33:53

Is China an emerging market?

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Comment by Ben Jones
2014-01-30 13:01:21

‘Is China an emerging market’

I think we can call them submerging markets now.

Comment by Whac-A-Bubble™
2014-01-30 20:56:48

I call them shat BRICs.

Comment by Whac-A-Bubble™
2014-01-30 01:12:29

ft dot com
Last updated: January 29, 2014 7:55 pm
Sell-off in EM currencies continues
By Jonathan Wheatley and Delphine Strauss
South African Rand Notes And Coins©Bloomberg

The sell-off in emerging market currencies intensified on Wednesday despite a string of surprise rate rises by central banks as investors warned policy makers would need to take tougher action to restore confidence.

The rally that followed the dramatic midnight rate hikes by Turkey’s central bank fizzled out as analysts said monetary policy had not been tightened as much as initially thought. South Africa’s central bank also shocked markets by raising rates – but the rand continued to plunge after policy makers presented it as a one-off move that would not change its overall stance on inflation.

Turkey’s lira swung sharply and ended the day at TL2.2445 to the dollar, little changed from the level it reached before the rate rise. The South African rand fell around 2 per cent to R11.29 against the dollar in volatile trade, despite the 50 basis point increase in the central bank’s base rate to 5.5 per cent.

Investors signalled they wanted to see more aggressive and sustained action from central banks before they regained their appetite for emerging markets assets. Despite concerns over the impact of a Chinese slowdown while the US Federal Reserve is scaling back its stimulus, real interest rates remain negative in many emerging markets.

It is possible that investors fear that the emerging markets central banks have fired their last shot, and will be unable to follow through with more tightening,” wrote Steve Englander, strategist at Citibank. “However much the Fed insists that other countries are not its table, the evidence of the last two days is that the Fed is the only waiter in the room.”

Comment by Whac-A-Bubble™
2014-01-30 01:14:46

ft dot com
January 16, 2014 6:31 pm
Storms gather over emerging markets
Fear of taper turmoil should lead to structural reforms

Since the financial crisis, emerging markets have enjoyed some indirect benefit from the sluggish recovery of the developed world. The unprecedented stimulus unleashed by the largest central banks has depressed yields on safe assets, pushing investors to search for higher rates in ever more exotic locations. Between 2010 and 2013, private capital inflows to developing countries jumped to about 6 per cent of their combined gross domestic product.

This bonanza of funds is likely to slow down this year. The decision by the US Federal Reserve to taper its $85bn-a-month asset purchases will push up interest rates in the rich world, leading asset managers in the City of London and on Wall Street to rebalance their portfolios towards securities that are closer to home. While the prolonged monetary largesse by the European Central Bank and the Bank of Japan will reduce this exodus, companies and governments in emerging markets are expected to face higher borrowing costs. When the Fed threatened to begin unwinding quantitative easing last May, spreads on sovereign bonds of the likes of India and Brazil rose by 80 basis points in four months.

The key question for policy makers in low- and middle-income countries is just how sudden the “great reversal” will be. A report by the World Bank out this week offers ground for optimism. The World Bank predicts that the transition to higher interest rates in the rich world is likely to be smooth. Between 2013 and 2016, the slowdown in capital inflows to all emerging markets is predicted to amount to a mere 0.6 per cent of their combined national income. Indeed, the relatively quiet market reaction to the December taper seems to vindicate this optimism.

Comment by Whac-A-Bubble™
2014-01-30 01:16:48

ft dot com
Global Market Overview
Last updated: January 29, 2014 9:31 pm
Wall St falls amid EM currency concerns
By Dave Shellock

Wednesday 21:15 GMT. A fresh wave of turbulence swept through global markets as participants digested further efforts by emerging market central banks to stem currency losses and the Federal Reserve’s decision to continue scaling back its stimulus programme.

The US central bank said it would reduce its monthly asset purchases by another $10bn to $65bn, split evenly between Treasury bonds and mortgage-backed securities, as had been widely expected.

The Fed made no reference to recent market turmoil, which has seen global equities slide amid intensifying pressure on EM currencies.

That isn’t really a surprise,” said Paul Ashworth at Capital Economics. “Even after the drop back over the past couple of weeks, the S&P 500 stock index is still up by more than 25 per cent over the past 12 months.

The US has even benefited from the increase in safe haven flows, which has pushed the 10-year Treasury yield down to a three-month low.

Comment by Whac-A-Bubble™
2014-01-30 01:21:00

Bonds Rally as Focus Shifts to Emerging Markets
Published January 29, 2014

U.S. Treasuries prices rose on Wednesday, with benchmark yields hitting two-month lows after the U.S. Federal Reserve’s expected decision to trim its asset purchases as investors retrained their focus on weakness in emerging market economies.

The Fed announced a further $10 billion cut in its monthly bond purchases in a statement after its two-day policy meeting, reducing its monthly bond-buying to $65 billion per month starting in February.

“The FOMC decision to taper came in as expected, so investors returned to the recent focus, which is the risk-off move,” said Dion Chu, Treasury trader at Jefferies & Co. In New York.

In December, the Fed shrank its monthly purchases of Treasuries and mortgage-backed securities by $10 billion to $75 billion.

Weakness in emerging markets returned to investors’ minds after the Fed statement, driving safe-haven bids for Treasuries. Turkey’s interest rate hike during a midnight policy meeting to defend its battered lira currency did little to calm fears.

“I would be very hesitant to say that the worries in the emerging market economies have now dissipated,” said Heather Loomis, West Coast director of fixed income at JP Morgan Private Bank in San Francisco.

Treasuries prices rose earlier in the day after investors sold riskier emerging market assets and bought safe-haven bonds in anticipation of a further Fed pullback.

A reduction in the Fed’s bond-buying removes support from emerging market assets, which have benefited from investors’ greater risk appetite in the face of low U.S. interest rates.

Treasury prices also rose despite incoming supply. The U.S. Treasury Department debuted $15 billion in two-year floating-rate notes to strong demand on Wednesday, and will sell $35 billion in five-year notes and $29 billion in seven-year debt on Thursday.

Benchmark 10-year Treasury notes were last up 17/32 in price to yield 2.69 percent. The yield hit a session low of 2.66 percent, the lowest in over two months. Bond yields move inversely to their prices.

The 30-year Treasury bond was last up 26/32 in price to yield 3.63 percent. The yield touched a session low of 3.61 percent, its lowest since late October.

Comment by Whac-A-Bubble™
2014-01-30 07:01:48

The Opinion Pages|Editorial
Argentina on the Brink
JAN. 28, 2014

More than a decade after it defaulted on its foreign debts, Argentina is again facing a financial crisis caused largely by misguided government policies.

The administration of President Cristina Fernández de Kirchner recently devalued the peso and relaxed some capital controls in an effort to preserve the country’s dwindling foreign reserves. The government is hoping that these steps will ease some of the pressure on the currency, which does not float freely against the dollar. But Argentina needs to do a lot more to address inflation and other underlying economic problems that have led investors and ordinary citizens to bet against the peso.

In the years after its painful default in 2002, which wiped out the savings of millions of people, Argentina enjoyed a fast-growing economy thanks in part to the booming world demand for soybeans and other commodities the country exports. But Mrs. Kirchner squandered the recovery in recent years by increasing spending on wasteful subsidies and financing the government partly by printing pesos. As a result, inflation has shot up; independent economists estimate that consumer prices jumped 28 percent last year. The official inflation rate was only 10.9 percent but few economists or the International Monetary Fund find that data credible.

Comment by Whac-A-Bubble™
2014-01-30 07:03:24

1/29/2014 @ 2:28PM
How Argentina’s Currency Crisis Will Hurt Brazil

On January 22, the Argentina peso, already one of the weakest currencies on the planet, went from 6 to one to the dollar to over 7 to one the next day. It’s now 8.01 to the dollar as foreign reserves dwindle, and another commodity-led economy struggles in Latin America.

The country’s rainy day fund, the ubiquitous foreign cash reserves held by nearly every foreign nation, has declined by 20% in the last month and now stand at around $34 billion. Compare that to their rival Brazil’s foreign currency reserves, which are well over $300 billion. Argentina’s Central Bank has less foreign reserves today than it had six years ago. If the Central Bank needs to tap into those reserves to save its ever-weakening peso, then Buenos Aires could be faced without enough cash on hand to service its debts or import oil. This is not a good time, again, for the Argentines.

Brazilian businesses can’t be all that happy. The two countries might be cultural rivals, but when it comes to the economy, they’re partners. They are the biggest players in the Mercosul trade bloc. But without Argentina, Mercosul is basically Brazil. Brazil suffers when Argentina is struggling.

Comment by In Colorado
2014-01-30 10:38:28

On January 22, the Argentina peso, already one of the weakest currencies on the planet, went from 6 to one to the dollar to over 7 to one the next day. It’s now 8.01 to the dollar as foreign reserves dwindle, and another commodity-led economy struggles in Latin America.

That’s nothing. In 1976, the Mexican peso, overnight, went from 12.50 to a dollar to 22 to a dollar, where it stayed for a few years, until 1982 when over the course of a few months it collapsed to 100 pesos to a dollar. At that point it became illegal to possess USD in Mexico and it was illegal to take money out of the country.

Comment by Whac-A-Bubble™
2014-01-30 07:05:50

As China’s Economy Slows, the Pain Hits Home
JAN. 29, 2014
Steel coils at a market in Hainan Province. Growth in steel production has stalled. China Daily, via Reuters

HONG KONG — Piles of unsold coal line rural roads in north-central China. Some iron ore mines near Beijing are operating at a fraction of capacity. Chinese farm products are even increasingly scorned by the Chinese consumer.

While China remains nearly self-sufficient in all these categories, it is importing more from other emerging markets. Economists and investors around the world have been fretting in recent days about the effects on smaller emerging markets if China’s economic slowdown worsens. Those concerns have driven down share prices and currencies from Jakarta to Istanbul to Buenos Aires, although emerging markets staged a partial recovery on Wednesday. They helped to prod the central banks of Turkey and India to raise benchmark interest rates unexpectedly on Tuesday.

Comment by "Uncle Fed, why won't you love ME?"
2014-01-30 16:59:19

I wonder why there are so many articles these days that seem to frantically call for me to chill out about the stock market. In a panicky tone, the authors of these articles exhort me not to panic. The plaintive entreaty to remain calm is very …calming?

Comment by Whac-A-Bubble™
2014-01-30 00:46:07

How’s the backyard skiing around Atlanta, Georgia these days?

Comment by Whac-A-Bubble™
2014-01-30 00:51:32

UPDATE 3-Deadly U.S. ice storm turns Atlanta into parking lot, strands thousands
Thu Jan 30, 2014 5:13am IST
(Adds comments from Atlanta residents, stranded drivers)
By David Beasley

Jan 29 (Reuters) - A rare ice storm turned Atlanta into a slippery mess on Wednesday, stranding thousands for hours on frozen roadways and raising questions about how city leaders prepared for and handled the cold snap that slammed the U.S. South.

The storm, which has killed at least seven people, on Tuesday swept over a region of about 60 million largely unaccustomed to ice and snow - stretching from Texas through Georgia and into the Carolinas - and forecasts called for more freezing weather on Thursday.

Atlanta Mayor Kasim Reed came under fire for his response to a storm that trapped hundreds of children in schools overnight, some without provisions, and created traffic jams stretching for miles on roads coated with two inches of snow.

“Folks are angry with the mayor of Atlanta, with the governor,” said Flavia DiCesare, 54, who spent the night in her office at Cox Enterprises in Atlanta, about 30 miles from home.

The mayor said schools, businesses and government offices were partly to blame for sending all the workers home just as the storm was rolling in.

“During the day, we have a million to 1.2 million people in this city and all those people were out in very bad weather. It hampered our ability to get our equipment on the ground and to prepare our roads for that,” Reed told a news conference.

“The error - and we have shared responsibility for the error - the error was letting everybody out at once,” he said.

Comment by real journalists
2014-01-30 03:49:17

Wank-A-Bubble™, the backyard skier and troll was Smithers, who lives near Spokane, WA.

Eddie was in Atlanta, and as far as I know, they are not the same person.

Comment by Overtaxed
2014-01-30 06:02:15

I heard they are going to close some of the bikini coffee shops in Spokane. Smithers is gonna be p((ssed. I know I would be! ;)

Comment by Housing Analyst
2014-01-30 06:06:57

They’re another distinction without a difference.

Comment by Whac-A-Bubble™
2014-01-30 06:46:49

As far as I know, they are the same person.

Comment by real journalists
2014-01-30 06:58:42

When was Eddie active here? 2006-2007? And I can’t recall posts from Smithers before 2012-2013 or so.

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Comment by Whac-A-Bubble™
2014-01-30 07:37:15

The names were changed to fool the gullible.

Comment by real journalists
2014-01-30 08:01:25

As I recall, Eddie’s posts were 99% pro-housing, and he didn’t get into political or social topics.

Whereas Smithers had an opinion about everything (albeit sometimes self-contradicting) and made a point to share it.

And yes, I have been reading this blog since 2006, but did not post prior to 2010. I know who all of you are/were.

Comment by Whac-A-Bubble™
2014-01-30 08:42:28

“…and he didn’t get into political or social topics.”


Comment by real journalists
2014-01-30 09:05:10

Perhaps I stand corrected, will have to peruse the archives.

Comment by ibbots
2014-01-30 11:43:29

Smithers is not Eddie, it is pretty obvious for the open minded.

Comment by Northeastener
2014-01-30 12:08:58

And yes, I have been reading this blog since 2006, but did not post prior to 2010. I know who all of you are/were.

I have always been me…

Comment by In Colorado
2014-01-30 08:42:23

Eddie was in Atlanta, and as far as I know, they are not the same person.

Two brothers from different mothers?

Comment by "Uncle Fed, why won't you love ME?"
2014-01-30 17:01:31

At first I thought they were different people, but then SmithieTard started to use some of the EXACT same phrases that Eddie used to use, so I began to suspect that they were the same person.

Comment by Whac-A-Bubble™
2014-01-30 20:58:13

“…SmithieTard started to use some of the EXACT same phrases that Eddie used to use…”

Ding! Ding! Ding!

We have a winner!!!

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Comment by Suite Joey Blue Eyes
2014-01-30 06:51:50

Was slithers really banned? I picture him drooling at his keyboard, rationalizing his RE consumption, and crying.

Comment by Housing Analyst
2014-01-30 07:45:59

This should help cement the mental imagery of our current and banned TrollDonkeys.


Comment by "Uncle Fed, why won't you love ME?"
2014-01-30 17:07:23


I used to have that gif on my work computer, and I would play it for entertainment. It ALWAYS makes me laugh. Unfortunately, it made some of my coworkers think that I was truly crazy. People are so touchy.

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Comment by real journalists
2014-01-30 08:51:46

I miss turkey lurkey, his negativity was always so uplifting.

Comment by Whac-A-Bubble™
2014-01-30 00:52:53

How many of you got caught surprised that the Fed is following through on announced plans to taper away the QE3 punch bowl?

Comment by Whac-A-Bubble™
2014-01-30 00:54:10

Asian shares dive as Fed cut sparks emerging market fears
(AFP) – 26 minutes ago

Hong Kong — Asian markets slumped on Thursday, extending a global rout on renewed fears about emerging economies after the US Federal Reserve pressed ahead with its stimulus reduction and central banks in Turkey and South Africa jacked up interest rates.

The dollar and euro sank against the yen as dealers scurried into safer investments after the Fed decision, while Asian sentiment took a further blow from data showing Chinese manufacturing contracted in January.

Tokyo dived 3.33 percent by the break, Sydney shed 1.00 percent, Hong Kong fell 1.42 percent and Shanghai lost 0.20 percent. Singapore was down by 1.02 percent, Manila by 1.37 percent and Jakarta 1.15 percent.

Taipei and Seoul were closed for public holidays.

Wall Street sank on Wednesday after the Fed said it would reduce its bond-buying programme by $10 billion a month to $65 billion, citing a pick-up in the US economy. The move followed a similar announcement in December.

Investors took flight after the announcement, which stoked fears of huge capital flows from emerging markets that have benefited from the Fed’s cheap money policies, as dealers look for safer investments back home.

In New York the Dow dived 1.15 percent, the S&P 500 fell 1.01 percent and the Nasdaq shed 1.14 percent. London, Frankfurt and Paris were all down too ahead of the Fed announcement.

Global equity and forex markets have been in turmoil since the end of last week after a plunge in the Argentine peso sparked fresh worries about developing economies.

Anxiety about economic growth has been exacerbated by preliminary data from HSBC indicating manufacturing activity in China — the world’s second-biggest economy — had contracted in January.

On Thursday the banking group confirmed that its purchasing managers’ index for China had fallen to 49.5 this month, the lowest figure since July.

Sharp rate hikes by Turkey and South Africa on Wednesday failed to stem heavy losses in their currencies as developing economies around the world battle against foreign traders repatriating their cash.

Russia, Brazil and Argentina also faced further drops in their units, despite the International Monetary Fund stressing there was not a general panic and that each faces specific challenges.

Despite the global jitters, Fed policymakers made no mention of emerging markets, leaving investors with little comfort, analysts said.

“The market was discouraged by the fact that they did not refer to emerging economies,” said Hirokazu Kabeya, senior strategist at Daiwa Securities.

Investors are “wary that authorities may be a bit too optimistic… They could have said something like they would be ‘watching the situation closely’,” Kabeya added.

“With that, the market atmosphere would be very different now.”

Comment by Mr. Banker
2014-01-30 07:31:27

Love the Fed, love the king.

It’s good to be the king; Merely utter a few words and everybody on the planet goes a bit crazy.

We bankers can either make you or we can break you. And our actions are accountable to … well, just who are our actions accountable to, hmmmmmm?

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

Comment by Whac-A-Bubble™
2014-01-30 00:55:30

Emerging markets sway under weight of Fed tapering
The World Today
By business reporter Pat McGrath
Updated 1 hour 51 minutes ago
Janet Yellen announced as Fed chair Photo: Economists expect Janet Yellen to keep winding back the Fed’s stimulus program over 2014. (AFP: Jewel Samad)

As the US Fed met overnight to decide the next step for its economic stimulus, another central bank on the other side of the world was preparing for the impact.

South Africa’s currency, the rand, has been battered in recent days, as have currencies of other emerging economies including Turkey, Argentina and Russia.

The South African Reserve Bank governor Gill Marcus summarised the situation at a press conference in Pretoria.

“The expectation of tapering by the Fed since May 2013 resulted in significant outflows from emerging economies, domestic bond and equity markets, putting pressure on exchange rates and long term bond yields, particularly in those countries with sizeable current account deficits,” he observed.

In other words, much of the cheap money pumped into the system through the Fed’s quantitative easing found its way to emerging economies where demand for credit is high.

Cutting back the stimulus is not only causing that cheap cash to dry up, but it is also sending what is left back to the United States where the economic outlook is improving.

Now South Africa’s central bank has joined Turkey in acting aggressively to fight off the impact of the capital flight by raising interest rates for the first time in six years.

“Exchange rate pressures are expected to intensify as markets adjust to the new pattern of global capital flows,” Mr Marcus said.

“In the light of these circumstances, and taking account of policy trade-offs, the NPC has decided to increase the repo rate by 50 basis points to 5.5 per cent per annum as of the 30th of January, 2014.”

It is hoped the higher interest rates will make South Africa a more attractive place to invest and, in the process, help push the rand higher.

“We will continue to monitor developments closely and will not hesitate to act as required in keeping with our mandate,” he concluded.

The Fed was widely expected to cut its monthly bond purchasing program by $US10 billion to $US65 billion at the meeting overnight, but financial markets nevertheless had a strong reaction.

Comment by Whac-A-Bubble™
2014-01-30 00:56:29

Something tells me that media conjecture about Janet Yellen’s status as a taper dove is already over.

Comment by Anklepants
2014-01-30 06:28:14

Stock market keeps going down and you’ll see what a huge taper dove she is.

Comment by Whac-A-Bubble™
2014-01-30 06:47:52

In due time, but not after a period of bloodletting. (Reference period: September 2008 - March 2009.)

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Comment by Whac-A-Bubble™
2014-01-30 07:38:32

“…not until after…”

Comment by Whac-A-Bubble™
2014-01-30 07:00:48

Tried to post this (maybe too quickly):

It seems likely there will be a few months of bloodletting first (reference period September 2008 — March 2009 = seven months of stock market plunge before protection).

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Comment by Anklepants
2014-01-30 07:55:52

No that ain’t gonna be it. Anther fall would be too devastating to the market psychologically. They need to keep it up this time. It all hinges on that and the wealth effect they are hoping takes hold.

There is getting cancer, and there is being told you are no longer in remission.

2014-01-30 03:14:32

A wise man once said “Where there is no appreciation, a paid off property still brings in income.”

Comment by real journalists
2014-01-30 03:45:44

My middle name is Equity.

Comment by Anklepants
2014-01-30 06:35:56

A wiser an once said get the heck out of the IE, it is a sad state. All the bad things about SoCal without much else. I recall going to one of the nicer reservoir parks in Yucaipa, a nice little man made lake with a soft beach slope for the little ones. Physically very nice and Yucaipa isn’t exactly downtown Riverside. Anyway after about an hour the crowd starts showing up. Many Sureno “13″ tattoos covering the crowd who seemed to have been let in for free. Within an hour not worth being there or going back. Too crowded and too crowded with sketch.

See that is a post from someone who actually isn’t a troll and has some real world experience.

A tip for debt donkey trolls: Specificity is the soul of credibility.

Comment by real journalists
2014-01-30 07:12:55

“Many Sureno “13″ tattoos”

Diversity is our strength.

Our differences only make us stronger.

You need some kind of Diversity™ training, let us know how we can help.

Comment by Anklepants
2014-01-30 07:31:12

“Sureno 13″ tattooed stop sign sized on some dude’s torso is great for property values.

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Comment by jose canusi
2014-01-30 07:35:45

Yeah, don’t worry, we’re getting plenty of diversity training. At the parks, in the stores, on the roads, etc.

This is happening all over the country. The ex and I had a similar experience at a park here on Tampa Bay. When I went up to CT to visit family, and wanted to go to Candlewood Lake, where I used to have a blast in my yout, my sis warned against it, as it is now packed with turd world refuse on summer days. Same thing in other public places in CT and NY. It’s not like the fairy tale immigrant family outing scenes in the movie Avalon.

Never underestimate the ability of these folks to turn formerly pleasant spots into sh*tholes.

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Comment by real journalists
2014-01-30 08:10:48

“turd world refuse”

Twenty years from now, language like this will be illegal. You could probably get arrested in Western Europe today for publicly saying something like this.

Comment by In Colorado
2014-01-30 08:49:33

The ex and I had a similar experience at a park here on Tampa Bay. When I went up to CT to visit family, and wanted to go to Candlewood Lake, where I used to have a blast in my yout, my sis warned against it, as it is now packed with turd world refuse on summer days.

I’m guessing this is why Disney is packed to the rafters year round in both FL and CA, even though it has become ludicrously expensive. From what I hear (I haven’t been there since 2008) the Anaheim parks are basically wall to wall people year round, even though tickets and annual passes have shot up in price.

Comment by In Colorado
2014-01-30 11:00:08

Twenty years from now, language like this will be illegal.

Even if you say it in Spanish?

Comment by Albuquerquedan
2014-01-30 11:55:59


Comment by In Colorado
2014-01-30 10:43:49

Many Sureno “13″ tattoos covering the crowd who seemed to have been let in for free.

That cheap labor sure was worth it.

Comment by In Colorado
2014-01-30 11:01:29

Of course, these young immigrant man were the only ones willing to commit the crimes that Americans refused to do.

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Comment by real journalists
2014-01-30 11:28:01


The first post wasn’t racis enough, so now you’re replying to yourself with an even more racis post.

And being 1/32 Mexican and having lived in Mexico for three weeks sometime back in the 1970’s does not give you a “get out of jail free card” for making racis posts about Mexican people.

Comment by In Colorado
2014-01-30 13:10:23

Esos crees tu, pendejo.

Comment by In Colorado
2014-01-30 13:13:03

Si quieres sufrir de tus complejos gringos de ser racista, alla tu, gavacho baboso.

Comment by "Uncle Fed, why won't you love ME?"
2014-01-30 17:14:22

I hate climbers.

Comment by real journalists
2014-01-30 18:22:51

“I hate climbers”

And we love you.

The Rolling Stones perform “We Love You”


Comment by MightyMike
2014-01-30 11:51:27

Many Sureno “13″ tattoos covering the crowd who seemed to have been let in for free.

Were these people misbehaving or was it the tattoos alone that ruined your day?

I hate to be trite, but I imagine that statements like this were made about the great-grandparents of some of the white posters on this blog. If you’re Irish, Italian, Polish, Jewish, etc., similar comments were made about your people 100 - 150 years ago.

Comment by Albuquerquedan
2014-01-30 12:42:46

Many Sureno “13″ tattoos covering the crowd who seemed to have been let in for free.

There is a big difference between a culture and a subculture. A tattoo with Sureno 13 denotes belonging to a dangerous subculture. I am white but would not like to be hanging around with a group of people that had Aryan Brotherhood prison tats.

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Comment by jose canusi
2014-01-30 13:05:02

“I am white but would not like to be hanging around with a group of people that had Aryan Brotherhood prison tats.”

Amen, brothah! Nor did I want to hang around with a couple of the blonde-haired, blue-eyed Russian immigrants that I used to live next door to. Every conversation I had with them, I felt I was being sized up for prey. Those blue eyes were dead cold.

Comment by Albuquerquedan
2014-01-30 13:05:39

To add to that comment,that subculture actually makes it very difficult for Hispanics and Native American children within New Mexico. I work with professionals from both ethnic groups and some are my friends. They have had the unfortunate experience either of personally being taunted or their children being taunted or even physically assaulted for “acting white”. The “crime” was being a good student and law abiding. There is certainly nothing in the Native American culture or Spanish culture to discourage such behavior but sometimes the tail wags the dog and subcultures start to define a culture. When I criticize such subcultures, I am sometimes accused of being racist and not in the joking way of Goon. However, I respect other cultures/races but not the subcultures that you often see in the inner cities that have unfortunately become more mainstream thought. I am sorry if I have not made this distinction more clearly.

Comment by In Colorado
2014-01-30 13:11:23

I am white but would not like to be hanging around with a group of people that had Aryan Brotherhood prison tats.


Comment by jose canusi
2014-01-30 13:46:43

“They have had the unfortunate experience either of personally being taunted or their children being taunted or even physically assaulted for “acting white”. The “crime” was being a good student and law abiding.”

I got a bit of this in school myself, though. Not for “acting white”, but for being a good student. And it came from other white kids. One kid followed me all the way home one day yelling “Teacher’s Pet” and “Four Eyes” and other assorted taunts.

I think we’re sort of talking around the issue, which in the end, is really about freedom of association.

Comment by jose canusi
2014-01-30 13:50:41

“I think we’re sort of talking around the issue, which in the end, is really about freedom of association.”

That’s what I’m talking about, anyway. Freedom from that which one finds disturbing, repulsive, dangerous, unhealthy, threatening, etc. I prefer to be around others of like mind.

Comment by Anklepants
2014-01-30 17:41:45

You need an education into what a Sureno 13 tattoo means. It means they are a criminal. Surenos are the foot soldiers of the Mexican Mafia in prisons. So they are criminals who self branded. I don’t care if they were putting out doilies for their lunches. Get out of your ivory tower for a second.

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Comment by Whac-A-Bubble™
2014-01-30 06:51:30

An even wiser man said, “Even with a paid off property that brings in income, there are taxes, insurance, repair bills, HOA and Mello Roos that need to be paid. And negative appreciation still brings loss of net worth.”

Comment by oxide
2014-01-30 07:15:26

Oh, but all that costs a mere fraction of renting. :razz:

Comment by Whac-A-Bubble™
2014-01-30 07:39:32

Doesn’t that depend upon the size of the home equity losses?

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Comment by Blue Skye
2014-01-30 07:41:35

Only in Wonderland.

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Comment by chilidoggg
2014-01-30 03:40:02

What if we changed the tax code to disallow depreciation on rentals of single family homes? That would cause prices of houses to decline, less debt, less lucre for the FIRE shmucks.

Don’t get me wrong. Depreciation is a real expense. Stuff deteriorates. But what happens in the real world is that the structure itself is depreciated over a shorter period of time than it will actually last, then upon sale or death it gets new life, even if all the costs have already been depreciated. Furthermore, the IRS never questions the allocation of land and structure for depreciation purposes: you buy a POS house built in the 1950’s for $500k, you can say the land is $100k and the 60-year-old structure is $400k.

IMO that’s just wasteful spending like the MID.

Comment by Overtaxed
2014-01-30 06:04:23

If we wanted to do something to help people, we should allow some kind of deduction for paying extra on your mortgage (instead of the MID). As a homeowner, let me tell you, the thought of paying extra on the house when my effective rate is something like 2.25% (3.5% interest rate) is pretty hard to financially justify.

We should encourage people to get out of debt, not into it (or maintain it).

Comment by MightyMike
2014-01-30 14:02:11

Simply phasing out the MID would have that effect.

Comment by Rental Watch
2014-01-30 06:16:38

So, do you take away depreciation for commercial buildings?

Apartment buildings?

The same argument applies. Apartment buildings are depreciated over what, 29 years? Commercial buildings over 39 years? Clearly they last longer than that.

Want to have real fun? Start monkeying with component depreciation (where if you track the cost of specific components of a property, you can depreciate over even shorter periods of time).

How about taking away the magic of the 1031 exchange (which allows you to depreciate a building to $0, then sell, and trade all the money to another property without paying any tax–on gain or depreciation recapture)?

The tax code is ripe with this kind of stuff…we don’t need nibbling at the edges (impacting one type of real estate), we need wholesale tax reform.

Comment by chilidoggg
2014-01-30 09:58:27

Well, I agree with you (and Bill) that we need wholesale tax reform, and we should not attempt to influence behaviors through the tax code. Taxation should be simple, logical and unchanging/predictable. You can have the Congress monkey with the spending side of the ledger to get the things you want.

Having said that, the most logical, simple, predictable way of taxation is taxing net worth, more specifically real property, which you can find, defend, and improve. Abolish all taxes and levy 5% per annum on net worth. Today we are spending more than 5% of our total net worth every year.

Comment by Rental Watch
2014-01-30 10:08:08

They try to tax net worth in France…it has spawned massive hiding of wealth.

If you want to go that route, a VAT would be harder to dodge.

Or, we can spend less.

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Comment by mathguy
2014-01-30 15:52:16

If there were a 5% net worth tax, I would go 1 trillion in debt and ask for my refund…

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Comment by polly
2014-01-30 06:18:14

Do you want to get rid of the depreciation deduction for all capital assets that are used in small businesses, or just single family houses? Why do you think that that particular type of business should be treated so differently than other businesses, rather than, say, just fixing the method used to allocate the value between the land and the structure?

Comment by chilidoggg
2014-01-30 09:52:08

I’m just talking here about single family residences. All businesses, incomes, behaviors are treated differently under the tax code. You could hire armies of Revenue Agents to pry into the particulars of when the structure was built, how much it cost to build, what improvements were made, etc. Or you could just eliminate the issue altogether. It’s not economically logical to expense something for multiple times its cost. Therefore, it’s wasteful government spending, and correcting such could lead to more productive government spending or lower taxes.

Comment by Blue Skye
2014-01-30 06:35:19

Why do you hate renters?

Comment by Whac-A-Bubble™
2014-01-30 06:54:35

“That would cause prices of houses to decline, less debt, less lucre for the FIRE shmucks.”

Ergo housing would become more affordable, young families would find themselves able to relocate and lay down roots where their best opportunities are found, and the seeds for a new long-term upswing in American prosperity would be planted.

Great plan!

Comment by Housing Analyst
2014-01-30 06:58:46

And that’s what is warped about the Housing Debacle.

But the reality falling housing prices to dramatically lower and more affordable levels will accelerate the economy like nothing else.

Comment by oxide
2014-01-30 07:24:39

A house price decline would make houses more affordable for private equity to snap up for cash and rent out.

Comment by Housing Analyst
2014-01-30 07:26:39

And where are these tenants?


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Comment by oxide
2014-01-30 09:22:53


Comment by Housing Analyst
2014-01-30 12:10:58

All 70 of them.

Comment by ibbots
2014-01-30 07:22:54

“The IRS never questions…” Clearly, you’ve never been audited.

Comment by chilidoggg
2014-01-30 08:38:44

There’s a reason the IRS doesn’t question this. Any depreciation you take just increases your gain when you sell, so it balances out. However, most people don’t sell, they’ll do a like-kind exchange and hold the property until they die, where there is no estate tax if it’s under $5 million.

Comment by ibbots
2014-01-30 11:49:58

I’ve been in audits when indeed the IRS did examine how a taxpayer arrived at the allocation between land / improvements. One safe route is to use the allocation that the central appraisal district uses.

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Comment by Bill, just South of Irvine
2014-01-30 08:24:03

I can’t stand it when the social engineers get wet dreams about how to manipulate people with the tax code.

Level the playing field and kill off social engineers. Abolish all taxes.

Comment by chilidoggg
2014-01-30 08:40:05

Good call on your market timing.

Comment by Bill, just south of Irvine
2014-01-30 13:18:37


I do not market time mutual funds, as a rule. I am buying more shares of emerging market - VEMAX at lower NAV prices.

I do try to time with individual stocks though.

Staffing industry seems to be peaked.

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Comment by oxide
2014-01-30 09:27:43

Abolish all taxes… sure, but only after you give up all the salary you made from taxes (employee and contractor), and all the market gains from investing those taxes.

Comment by real journalists
2014-01-30 10:24:29

Commie talk.

Bill and I are bootstrappers. You feds are just parasites.

Today I get to spend another two hours “training” one of my federal colleagues who has been here ten years longer than I have. Except that contractors are expressly forbidden from training, supervising, or assigning work to feds. So we’ll just call it “shadowing” or some other nonsense.

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Comment by Bill, just south of Irvine
2014-01-30 13:14:59

So Oxide,

let me get this straight. Your constitution mandates “provide for the common defense.”

Do you propose that national defense be free? That all defense must be done through slavery, including forcing people to develop weapons?

I bet you will not answer. Or if you do, since you are a “progressive” you will evade. That is what “progressives” do. Cheats.

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Comment by MightyMike
2014-01-30 14:11:20

Do you propose that national defense be free?

You’re the one who wants to abolish all taxes, Bill. You should answer this question yourself.

Comment by Bill, just south of Irvine
2014-01-30 14:13:29

I propose private insurance companies provide defense through people’s purchased policies. That is the way proposed in Morris and Linda Tannehill’s “The Market for Liberty.”

Comment by mathguy
2014-01-30 15:55:26

Doesn’t the constitution expressly prohibit a standing army in times that an active war is not declared by congress… Weird how that is ignored.

Comment by MightyMike
2014-01-30 16:11:06

I don’t think so. I think that it was just the practice way back when to have very tiny army during peacetime.

Comment by Albuquerquedan
2014-01-30 16:25:13

Article 1, Section 8 just limits appropriations for the Army to two year time periods and it explicitly talks about a permanent Navy. That being said calling up the state militias was considered the main way an army for war would be created with just a minimum amount of standing troops.

Comment by Bill, just south of Irvine
2014-01-30 13:20:10

Here’s one for you “progressive” Oxide,

Pay back the MID you are getting for your house.

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Comment by Oxide
2014-01-30 20:00:21

Why? I’m not the one who asked to abolish taxes. As for playing the constitution card, show me which article has computers and missiles in it. My section of government was established by an act of Congress, which makes the laws. It is as legit as any of the original text.

Comment by "Uncle Fed, why won't you love ME?"
2014-01-30 17:25:39

The depreciation on your taxes is a deduction of the expense to actually buy the house. It’s not the deterioration of the house. If I paid $100k to get a house, then I haven’t actually made a profit until I collect $100k in rent, plus the carrying costs.

Comment by Housing Analyst
2014-01-30 03:49:13

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

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

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

Don’t Be A Debt Donkey®

Comment by Housing Analyst
2014-01-30 03:55:53

“Remember… Housing is a depreciating asset and always a loss. Your losses are magnified tremendously if you paid more than $35/sqft for a used house. Your losses are irrecoverable in your lifetime if you financed it.”

That’s right.

Comment by azdude02
2014-01-30 07:10:22

how long will one of you shanties provide shelter before it is condemned?

A car typically reaches the end of it usable life @ 200k miles these days. I have a car with 170k on it. I know once it gets to 200k I will be lucky to get 500.00 for it. It is a 2000 yr model. didnt buy it new but based on our price new the car was probably 25000.00 including interest on loan. Based on my mileage it would probably last till 2015. So the lifespan of the car is technically 15 years in this case. Take the 25k purchase price and subtract the 500 residual value at 200k miles and you have 24500. 24500/15 year lifespan is 1633.00/ year or 136.00/ month of depreciation. Then you can add all the other stuff such as insurance, maintenance, registration etc. I can imagine all of it comes up to 250-300/ month.

For all intensive purposes how long will a house last before it is unusable? It has to be a lot longer than 30 yrs for things to pencil out according to you, correct?

Comment by Housing Analyst
2014-01-30 07:33:32

And worse yet, the losses to depreciation on a house are far greater than any other manufactured item and they last a lifetime.

Comment by Blue Skye
2014-01-30 07:53:48

“For all intensive purposes….”

Can you explain what that means?

Regarding the house, just keep it flooded with money and it will stay up until you are exhausted.

Comment by jose canusi
2014-01-30 14:35:37

“For all intensive purposes….”

One of my fave malapropisms. I also enjoy “would of, could of, should of”.

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Comment by Tarara Boomdea
2014-01-30 14:50:08

fave malapropisms

I’ve been seeing a lot of “weary” for “wary” lately.

Comment by Housing Analyst
2014-01-30 16:19:15

A $hitHouse Poets intensive purposes

Comment by 2banana
2014-01-30 13:27:28

My 1969 Convertible Shelby Mustang Boss 351 has gone up in value EVERY year…

Just saying.


Comment by Muggy
2014-01-30 04:45:11

“”It was like something you would see if they told you the plague broke out and you had to run for your life,” she said.”


Wow, three inches of snow and Atlantans are comparing it to the plague.

Comment by real journalists
2014-01-30 06:08:59

Another reason why living in a neighborhood with a high walk score is better.

See also below article written by real journalists that discusses the development of Atlanta’s transit infrastructure.

Clown car driving is for loosers.

Comment by In Colorado
2014-01-30 09:05:24

Another reason why living in a neighborhood with a high walk score is better.

See also below article written by real journalists that discusses the development of Atlanta’s transit infrastructure.

FWIW, Denver’s public transportation isn’t all that, but it takes a bona fide 2ft+ blizzard with white out conditions to shut car dependent Denver down.

Comment by real journalists
2014-01-30 10:05:32

Ex-Californians (and there are ALOT of them, especially in Jefferson, Arapahoe, Douglas Counties) cannot drive.

They need to stay off the roads and get out of the way of the ex-Midwesterners who are the real Winter Warriors of Denver driving.

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Comment by In Colorado
2014-01-30 10:47:42

Ex-Californians (and there are ALOT of them, especially in Jefferson, Arapahoe, Douglas Counties) cannot drive.

I know, they are the ones sitting in the upside down SUV’s and Subies in the ditches along I25 and I70 on snow days.

Comment by real journalists
2014-01-30 05:03:11

Politico - The Day We Lost Atlanta

“What happened in Atlanta this week is not a matter of Southerners blindsided by unpredictable weather. More than any event I’ve witnessed in two decades of living in and writing about this city, this snowstorm underscores the horrible history of suburban sprawl in the United States and the bad political decisions that drive it. It tells us something not just about what’s wrong with one city in America today but what can happen when disaster strikes many places across the country. As with famines in foreign lands, it’s important to understand: It’s not an act of nature or God—this fiasco is manmade from start to finish. But to truly get what’s wrong with Atlanta today, you have to look at these four factors, decades in the making.”


Comment by jose canusi
2014-01-30 06:39:33

Haven’t read the article yet, but it was interesting to hear both the mayor of Atlanta and the governor of Georgia blame the weather services for not enough advance warning, when there was plenty of warning. Really. You can’t make this stuff up.

Personal responsibility? Bah! We don’t need no stinkin’ personal responsibility.

It was fun watching the video clip of Jim Cantore giving a knee to the groin of a heckler, without missing a beat in his reporting.

Comment by Anklepants
2014-01-30 07:27:41

BliZzard Katrina in Hotlanta

Comment by jose canusi
2014-01-30 06:46:16

Just read the article. Summed up: white flight, not enough transit. Yawn.

Comment by Whac-A-Bubble™
2014-01-30 06:57:35

Reading between the lines: Hell hole, where those who made real estate investments during the bubble years are soon to be burned.

Comment by azdude02
2014-01-30 07:11:30

real estate is way to important to the economy so the leaders will prop it up at any cost.

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Comment by Housing Analyst
2014-01-30 07:13:10

When it reality, real estate is a drag on the economy.

Comment by Ethan in Norfolk VA
2014-01-30 11:51:02

A friend left Norfolk and moved the family to Atlanta. Job paid more, stock options and all that. He is doing well! He picked up a 3900 square foot house with inground pool and 900sqft pool house for something like $300K-$340K.

Housing is cheaper there, in some industries jobs are better.

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Comment by real journalists
2014-01-30 07:02:45


You don’t get the purpose of real journalism, do you?

Comment by Albuquerquedan
2014-01-30 10:44:34

You don’t get the purpose of real journalism, do you?

To be so clueless that you do not even see that you are about to get laid-off. They must have had some “great” business journalists on staff.


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Comment by real journalists
2014-01-30 11:17:15

what exactly is a real journalist?

according to senator dianne feinstein, democrat of california, a real journalist under the protection of shield laws is one that works as a ’salaried employee, independent contractor, or agen of an entity that disseminates news or information.’


and a three minute video of senator feinstein’s comments:


Comment by real journalists
2014-01-30 06:26:57

Current Drudge Report headline is an Ann Coulter piece titled “Republicans on Suicide Watch” under a racis picture of John Boehner wearing a sombrero (Ann Coulter is not a real journalist).

And below that, an article from some website called “National Journal” which according to Wikipedia has a print circulation of 15,000 titled “Obama’s Love of Elites”. From the article:

“A National Journal survey last year of 250 decision makers in the Obama administration found that no fewer than 40 percent of them held Ivy League degrees. Moreover, just one-quarter of those officials held graduate degrees from a public university. In fact, more Obama administration secured advanced degrees from Oxford — you know, in England — than from any American public school. And more than 60 either attended Harvard as an undergrad or a grad student.

The survey also found that an overwhelming majority of administration officials hailed from the Northeast, with the West and South severely underrepresented. Just 18 percent came from a state that voted for Mitt Romney in 2012. As the survey noted, “You’re more likely to find someone who grew up overseas working in the top ranks of the administration than someone who grew up in Texas.”


Comment by Albuquerquedan
2014-01-30 11:10:22

You need to believe in globalization and to be properly indoctrinated to ignore your oath of loyalty to the constitution. The identified schools create “citizens of the world” and treat nationalism as a vice not a virtue.

Comment by Northeastener
2014-01-30 12:26:49

The Commies are strong in Europe and the UK…

Comment by Housing Analyst
2014-01-30 06:27:34

How did Fannie, Freddie and FHA become so corrupt?

Comment by real journalists
2014-01-30 06:34:19

Real journalists construct the narrative with the following top stories on the Washington Post website:

Poll: Clinton has big Democratic lead in 2016 field

“A Post-ABC News poll finds that she is favored 6 to 1 over potential party rivals.”

GOP races to prove it has plan to help the middle class

“Voters have told pollsters that they view Republicans as being generally indifferent to middle-class interests.”


Comment by Anklepants
2014-01-30 06:42:15

Bring Hillary on. I can’t believe they are being so foolish.

Comment by Suite Joey Blue Eyes
2014-01-30 06:55:32

There are 3 years to go. We better hope someone comes out of nowhere for both parties. Right now, 3rd party is looking like the only respectable choice. Hillary is a sad moment for America and the GOP looks like they’re still going to rely on drooling geezers in the south to get out the vote for their candidate. They need to win 4-5 purple states that they didn’t take in 08/12. And with Christie looking finished, it ain’t looking good.

Also Lindsey Graham took a Duck Dynasty douche as his date to SOTU. WTF — the level of pandering is nuts. A closeted GOP senator took a guy from a family that made anti-gay comments… so he could stave of a primary challenge from the Neanderthals in his teabilly-infested s-hole of a state. LOL. YOu can’t make this stuff up!!!

Comment by real journalists
2014-01-30 07:40:03

You are one of the only people here who actually “gets it”.

For this, we can partially forgive your affinity for the I-95 corridor.

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Comment by Suite Joey Blue Eyes
2014-01-30 08:31:24

Congress has the most potential to make change but they’re the most reactive of the branches. At least in the Exec and Judicial branches you have a majority of grown adults who could get from point A to point B when needed. (Note: this doesn’t mean the president or even his political appointees, but rather the people who hear cases or run departments.) We could elect a president as pure as fresh snow in the Alps and it might not make much difference.

Comment by MightyMike
2014-01-30 13:25:44

The amount of fuss that will be made about Hillary if she decides to run will be laughable. At this point, she’s really just the generic Democrat. During the 2008 campaign, there were almost zero significant policy differences between her and Obama. I think that she wanted some sort of health care public option, which Obama didn’t. Besides that, there probably aren’t even a few identifiable policy differences of any significane separating her from the Al Gore, John Kerry or her husband.

Nevertheless, her candidacy, if it comes to pass, will arouse tremendous brouhaha, both for her and against her. It will be comical.

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Comment by real journalists
2014-01-30 07:08:57

Who is the “they” you are referring to?

Real journalists have effectively crucified Chris Christie over some phony scandal. You think the other 2016 GOP hopefuls will fare any better.

Bill and Hillary are covered in blood and have left a trail of bodies from Arkansas to Washington to New York. But real journalists will never touch that story.

Comment by Suite Joey Blue Eyes
2014-01-30 07:20:05

The problem with Christie is, he was going to win by a large margin, there was no need for running up the score. I’m not saying he should’ve ignored Essex/Bergen/Hudson counties (which have money but are pretty blue). He ended up winning by 30% or so in a state that Obama and Booker won by double digits. But he went into press conferences even after the bridge closure and validated a lot of what the reporters said–he actually used the phrase “running up the score”. If you know there’s a perception that you are overconfident, why play into that?

That said, he’d still be an improvement on Obama admin and he’d be about 10x better than the names the teatards want to see on the ballot. I wouldn’t bet on him clearing his name by 2 yrs from now, but it would be interesting if he did. I wonder if W could help him at all in the south. W nominated him to be US Attorney for NJ in his 1st term.

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Comment by Albuquerquedan
2014-01-30 10:20:07

The problem with Christie is, he was going to win by a large margin, there was no need for running up the score.

He wanted to run up the score for the same reason college sport teams run up the score to get ranked higher in polls. More Republican support due to his winning a blue state by a more convincing amount. It wasn’t about just winning, it had to be a big win.

Comment by Suite Joey Blue Eyes
2014-01-30 10:34:19

Vanity had a lot to do with this incident… even if getting an endorsement was a solid upside, the downside of enforcing his control by a bridge closing was a huge risk. He could be the perfect candidate (no one is) but still the inability to see the risk in something like that raises flags.

In other words, if something has an upside of 1-2% increase in election margin but creates a paper trail or human intelligence trail that could scuttle your future… it’s smart not to do it.

Comment by Anklepants
2014-01-30 07:41:25

They are the liberal powers that be. Hillary machine has them captured but they all have mission blindness. She isn’t Obama who was a blank slate and had race helping him in many ways.

Focusing on Christie is a distraction, they need to worry about torpedoes and who they will be stuck with when she gets tanked.

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Comment by Mr. Banker
2014-01-30 07:35:59

“Bring Hillary on.”

Bring on whomever you want, it makes no difference to me.

My win is already locked in.

Comment by real journalists
2014-01-30 09:59:39

We work for you, sir. Let us know how we can be of greater assistance.

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Comment by oxide
2014-01-30 07:38:08

22 months before is just too soon. 22 months before Nov 2008, Obama hadn’t even announced yet… and he was a very early announcer. This year I suspect we’ll see lots of unknown governors who “look Presidential.”

Comment by real journalists
2014-01-30 08:20:49

“look Presidential”

I felt like a piece of me died inside when Tim Pawlenty cut off his mullet.

Comment by Bill, just South of Irvine
2014-01-30 08:21:43

Hitlary don’t affect me. I have movable hidable wealth.

Comment by real journalists
2014-01-30 08:37:03

See Bloomberg piece below about “paranoid libertarians”.

You are the type of person that real journalists, and more importantly, the statists that they serve, despise. And your “movable hidable wealth” will be confiscated and redistributed to enact Social Justice.

You can’t run. You can’t hide. You will PAY.

Comment by Bill, just South of Irvine, CA
2014-01-30 19:31:42

And your “movable hidable wealth” will be confiscated and redistributed to enact Social Justice.

Not before your tax deferred retirement accounts (401ks and IRAS) will be confiscated. Probably several years after since yours is electronically easy to confiscate at the speed of electricity.
So why should you feel any more secure? Why should you be more smug?

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Comment by Bill, just South of Irvine, CA
2014-01-30 19:37:31

Particularly with $8.6 trillion (November 2012 http://www.examiner.com/article/401k-plans-and-ira-eyed-to-alleviate-fiscal-cliff) in 401ks and IRAs.

Do you really think government will bother with the paltry amount people have in precious metals when the fat purse of $8.6 trillion in electronic assets can be confiscated in the blink of an eye?

Do you think Americans own even $10 billion worth of gold?

I have a bridge to sell you. Precious metals are far more safe from confiscation than you hope for.

Comment by Housing Analyst
2014-01-30 20:27:27

“Not before your tax deferred retirement accounts (401ks and IRAS) will be confiscated.”


Comment by Bill, just South of Irvine, CA
2014-01-30 20:28:52

When you add up all retirement accounts it’s over $18 trillion.

Boom! Magic number. Hey what is the current federal debt?

$18 trillion.

How much do Americans own in retirement.

$18.5 trillion.

“Let’s see, let’s steal the less than $10 billion in gold and pay down the $18 billion in debt” - You won’t hear that. “Progressives” are very, very dumb but not dumb enough to go for a paltry amount of gold when they can wipe out the deficit and call victory.


Comment by Bill, just South of Irvine, CA
2014-01-30 20:55:04

10 billion in gold and pay down the $18 trillion in debt”

Comment by In Colorado
2014-01-30 09:25:15

Hitlary don’t affect me. I have movable hidable wealth.

Make sure it’s in vault in Switzerland. I seem to recall reading how FDR confiscated plenty of gold.

Comment by Bill, just South of Irvine, CA
2014-01-30 19:41:23

I seem to recall reading how FDR confiscated plenty of gold.

FDR did not confiscate gold. People voluntarily gave him gold at the threat of severe penalty. Other people did not.

Many people forgot they owned gold.

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Comment by Bill, just South of Irvine, CA
2014-01-30 19:43:24

Giving something to a thief is not patriotic.

Keeping something from a thief is not unpatriotic.

Lysander Spooner: “No Treason: The Constitution of No Authority”

Comment by Apathy
2014-01-30 08:50:30

I think Jeb Bush will run. He is more electable than Christie.

Comment by Albuquerquedan
2014-01-30 10:21:51

I think I saw the Bush vs. Clinton movie, it is not only Hollywood that has no originality.

Comment by HBB_Rocks
2014-01-30 12:13:06

If it’s Jeb vs Hillary, we might as well bestow a crown upon the winner.

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Comment by Albuquerquedan
2014-01-30 11:46:46

Voters have told pollsters that they view Republicans as being generally indifferent to middle-class interests.”

Exactly, and how does passing amnesty show that they care about middle-class interests? The Republican party does not need to run a Christy, it needs to run someone like Reagan that can convince people that he or she cares about the middle-class. The PTB have convinced many people both within and outside the Republican party that the problem is that they need to run a more “moderate” candidate but that is not the problem, they need to run someone not controlled by the banks and neither Romney or McCain could convince people of that for obvious reasons.

Comment by MiddleCoaster
2014-01-30 12:31:48

No way will either party run a candidate who is not controlled by lords of finance.

Comment by Housing Analyst
2014-01-30 06:41:18

Fairfax, VA Housing Prices Begin Their Descent; Down 15% Year over Year


Comment by phony scandals
2014-01-30 06:49:01

‘Have An Exit Plan’.

Comment by Housing Analyst
2014-01-30 06:56:32

And that plan must include no debt.

Comment by Housing Analyst
2014-01-30 06:51:26

Germantown, MD Housing Prices Crumble 15% on Skyrocketing Inventory


Comment by real journalists
2014-01-30 06:55:54

Real journalists at the New York Times reluctantly discuss Democrat gubernatorial hopeful in piece titled “Life Story of Wendy Davis Swings From Strength to Flash Point in Texas Campaign” and refer to a previous article from the Dallas Morning News.

“Wendy Davis is learning the perils of campaigning on her personal biography.

The controversy has turned her underdog campaign to become Texas’ first Democratic governor in 20 years into a hotbed of second-guessing over her omissions and has prompted a debate over culturally charged questions about a woman’s balance of work, ambition and parenthood.

Supporters of Ms. Davis and some analysts of gender issues (analysts of gender issues speak with the same authority as real journalists) in politics said the scrutiny of her choices as a working wife and mother was something no male candidate would be subject to.”

Democrat family values:

“Nor had she focused on the role of her second husband, Jeff Davis, whom she divorced after a nearly 17-year marriage. He told the Dallas Morning News that she left him the day after the final payment was made on the loan for Harvard. She has denied the claim.”


Comment by phony scandals
2014-01-30 06:57:03

Forget Metadata … The NSA Is Spying On EVERYTHING

Washington’s Blog
January 30th, 2014

The NSA’s spying on everyone’s metadata can tell them just about everything about us … and it violates our Constitutional right to freedom of association.

But people are getting distracted from the big picture by focusing on metadata.

As security expert Bruce Schneier wrote yesterday:

What frustrates me about all of this — [the Privacy and Civil Liberties Oversight Board] report, the president’s speech, and so many other things — is that they focus on the bulk collection of cell phone call records. There’s so much more bulk collection going on —phone calls, e-mails, address books, buddy lists, text messages, cell phone location data,financial documents, calendars, [smartphone apps] etc. — and we really need legislation and court opinions on it all. But because cell phone call records were the first disclosure, they’re what gets the attention.

Indeed, Schneier confirmed last October what we’ve been saying for years … don’t get too distracted by the details, because the government is spying on everything:

Honestly, I think the details matter less and less. We have to assume that the NSA has EVERYONE who uses electronic communications under CONSTANT surveillance. New details about hows and whys will continue to emerge …but the big picture will remain the same.

He’s right.

As just one example, there is substantial evidence from top NSA and FBI whistleblowers that the government is recording the content of our calls and emails … word-for-word.

So what should we make of the government’s denials that it records content?

Given that the government has been caught lying about spying again and again, I’m not sure how much weight we should give to such denials.

NSA whistleblower Russ Tice notes:

They’re collecting content … word-for-word.

You can’t trust these people. They lie, and they lie a lot.

This article was posted: Thursday, January 30, 2014 at 5:40 am

Tags: constitution, domestic news, domestic spying, government corruption, police state, technology

Comment by real journalists
2014-01-30 07:48:41

We saw this piece linked from the Infowars website.

Why would real journalists be reading that, you wonder?

Because we need to effectively counter that in any way possible. Although we are 99% Democrats, we are 110% statists and badge lickers. When was the last time NPR reported something remotely critical of King Obama? The New York Times, Washington Post, NPR, MSNBC will shape the narrative. One of these days, Infowars’ Alex Jones will be walking across a parking lot to his car and take a bullet in the back of the head. Same fate for Glenn Greenwald, he has betrayed real journalism.

Comment by spook
2014-01-30 07:06:36

In honor of black history month, Im presenting the REAL black history. Too many times what gets presented as black history is anything that if done by a white person, would not even register as significant.


Therefore, today, I present to you,

Grimaldi Man ( but it may be a woman and a child that was found)

Grimaldi man was a name given in the early 20th century to an Italian find of two paleolithic skeletons, supposedly showing negroid traits. When found, the skeletons were the subject of dubious scientific theories on human evolution, partly fueled by biased reconstruction of the skulls by the scientists involved.

In the 1960s, the Grimaldi find, together with various other European finds of early modern humans, was classified as Cro-Magnon (in the wider sense), though the term “European Early Modern Humans” is today preferred for this assemblage. The true nature of Grimaldi man is still a subject of controversy.


See how they are trying to write the G man out of history by saying he wasn’t “a real brotha?”

They even found several of those carved “Venus” statues with huge boobs and fat asses near him ( Im not joking) but the white man is now saying they belong to some other cave man at a different time.

Would they do this if they found a crack pipe and some dice next to him?

You see how they do a brotha wrong?

He din do nuffin, he was tryin too turn his life around.

Comment by "Uncle Fed, why won't you love ME?"
2014-01-30 17:37:27

He can’t be black with a Venus statue. Cro-black men had BEYONCE statues.

Comment by Whac-A-Bubble™
2014-01-30 07:09:11

Debt-laden Canadians becoming more ‘fragile’ to economic shocks, warns TD CEO Ed Clark
Doug Alexander, Bloomberg News | January 28, 2014 | Last Updated: Jan 28 12:16 PM ET

Toronto-Dominion Bank Chief Executive Officer Ed Clark said Canada’s economy is in danger of underperforming the U.S. as consumers become increasingly “fragile” amid rising household debt and home prices.

“Canada could well undergrow the United States for the next three or four years, which means we’re going to have lower interest rates for longer,” Clark, 66, said this week in an interview at the bank’s Toronto headquarters. “There’s a risk that people are going to keep borrowing.”

Comment by Suite Joey Blue Eyes
2014-01-30 07:10:01

“Wall Street’s Newest Housing Bonanza”

LOL, I didn’t realize Blackstone had already securitized its rental properties and sold the bonds off. They are geniuses. Looks like it’s going to be profitable for large law firms too… much more profitable than anything related to mortgages or traditional landlord/tenant junk. On a $479MM issue, Sibley (law firm) probably pocketed a cool 10 mil.

The private equity giant Blackstone Group sold the first single-family rental securitization of its kind last fall, a $479 million bond, attracting six times as many investors as the private equity firm could accept, a person involved in the deal said.

Investors like mutual funds and insurance companies bought slices of the bond, which are backed by the rental homes owned by Blackstone’s company, Invitation Homes.

The rental business is still dominated by landlords who own and manage only a handful of properties. Wall Street has found a way to finance them, too. Cerberus Capital Management and Blackstone have started businesses that lend to small-time and medium-size investors.

And there are discussions about bundling many of these small loans and securitizing them also.

“That’s the part of the business that will take off,” said Stephen D. Blevit, a lawyer at Sidley Austin. “Providing cheap financing to mom-and-pop investors who save their pennies, buy a few properties and do all the maintenance themselves.”

Comment by Whac-A-Bubble™
2014-01-30 07:42:25

“LOL, I didn’t realize Blackstone had already securitized its rental properties and sold the bonds off.”

Securitizing your future investment losses and selling the securities to greater fools is financial innovation at its best!

Comment by Suite Joey Blue Eyes
2014-01-30 08:36:38

I was going to make a joke about “how is this an innovation?” but thank you for doing it for me.

Comment by oxide
2014-01-30 08:06:02

Nice article, Joey. But… who’s the last bagholder, ultimate fool, buyer of last resort etc? Can’t imagine Fannie/Freddie or FHA getting involved…

Comment by Housing Analyst
2014-01-30 08:14:15

jeeziz…. Look in the mirror! lolz

Comment by Suite Joey Blue Eyes
2014-01-30 08:39:29

Oxy, they bought the houses to rent, they securitized them, and then sold off the bonds. The bondholders are bagholders. It’s most likely other hedge funds, as I can’t imagine pension funds want to fall down that vortex again and there’s no way any commercial banks would touch this stuff.

Freddie and Fannie aren’t at play at all in this scenario. Blackstone obviously pays cash for the houses. And they aren’t selling the houses to investors, they’re selling bonds backed by the revenues from the rental houses.

Comment by Ben Jones
2014-01-30 09:26:48

Oh dear.

‘Dealer bids for some of the first-ever securities backed by U.S. rental homes have fallen below face value, according to two people with knowledge of trading in the market.’

‘JPMorgan Chase & Co. offered 99.3 cents on the dollar today to buy the lowest-ranked portion of a deal issued in November at par by Blackstone Group LP’s Invitation Homes, said the people, who asked not to be identified because they aren’t authorized to speak publicly.’

‘The riskier pieces have declined with bankers planning more offerings of debt tied to homes snapped up during the housing recovery by private-equity firms, hedge funds and others that turned them into rental properties. American Homes 4 Rent (AMH), the second-largest single-family landlord in the U.S. after Invitation Homes, selected Goldman Sachs Group Inc. to underwrite its planned sale of as much as $500 million of the bonds, people with knowledge of the transaction said this week.’

‘The Blackstone deal should have helped create “a good market, but I think it’s been mispriced terribly,” Vincent Fiorillo, global sales manager at investment firm DoubleLine Capital LP, said last week.’

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Comment by Suite Joey Blue Eyes
2014-01-30 09:44:52

Banks and lawyers still get to keep fees.

Even if the bonds sell below par, you have to remember that the banker/lawyer fees are already priced into that offering price. Blackstone’s work is done. Sure they’d rather make more than less on the sale, but what they care about most is fees. I doubt they’re holding onto any of this junk by themselves. And using a big lawfirm means investors would have a very hard time proving that Blackstone screwed them. Although it’s interesting Blackstone didn’t use Simpson Thacher (their usual lawfirm and where Schwartzman got his start). Perhaps Simpson was conflicted out. I guess there is also a possibility that Simpson smelled a stench and wanted to stay away.

Comment by cactus
2014-01-30 09:57:19

And on the same page you might be interested in..

“According to the latest Bureau of Labor and Statistics Report, the rent index is rising at an annualized rate of 3.6%. Is it time to raise your rents?

Probably. But generating increased rental income without suffering significant tenant loss can be a tough balancing act. It doesn’t have to be if you follow these common sense ABC’s.

Step one is to do your homework on two fronts: the current rental market in your area and the value of your specific tenants. Ask these questions as you develop your plan.

Market – How do your current rates compare to other similar properties? If you have generally higher rates already, do the amenities you provide justify the difference? What is the demand for rental units? What are the current vacancy rates? What are you personally seeing for requests for rental units? Should you increase rates only on units more in demand than others (one bedroom vs. two bedroom, for example)?
Tenants – When was the last time you raised rents? Which of your tenants are most valuable? Are you willing to risk losing them? Would you consider excluding these high-value tenants from the increase to ensure that you keep them?
Back Up
Once you’ve announced your increase, be prepared to address negative feedback with legitimate justification for your action.

Understandable reasons include increased property taxes and fees, higher utility costs, and an increase in janitorial, repair and maintenance costs. You might also be planning capital improvement projects for the property that will enhance your tenants’ living spaces.

Also note the length of time since the last increase, especially if you haven’t raised rents for an extended period.

This is the most important component of your plan. No tenant is happy with a rent increase, but you can reduce the potential conflict with clear, professional communication.

Make sure you adhere to the specified advance notice requirements in your leases. Announce the increase in a typed notice on company letterhead using concise, understandable language. Consider including some of the backup justification to address complaints before they occur.

Finally, no one likes surprises. Plan ahead for your next increase by building it into your leases. You can tie increases to a generally accepted measurement like the consumer price index to make them more predictable. This gives your tenants significant notice and allows them to budget for the increase well in advance.”


Comment by real journalists
2014-01-30 10:15:16

I’ve done some contract work as a property accountant for a Big Corporate Property Managment company who shall remain unnamed (hint: its name begins with Arch and ends with Stone). We used MRI software to calculate asking rents and rent increases. Learn more about it here:


Comment by Whac-A-Bubble™
2014-01-30 21:01:29

‘Dealer bids for some of the first-ever securities backed by U.S. rental homes have fallen below face value, according to two people with knowledge of trading in the market.’

Reminds me of the Markit ABX Index for subprime securities circa December 2006. There was an article in The Economist showing their prices just starting to dip off par.

Two years later, they were priced at pennies on the dollar (literally under $0.10).

Comment by oxide
2014-01-30 10:09:48

Joey, I knew all that. I am referring back to how the housing bubble inflated in 2003-2006. Without the taxpayer as ultimate bagholder, the secondary market would have done more due diligence and bought fewer loans, so in turn the origination market would have done more due diligence and originated fewer loans.

There appears to be NO implicit taxpayer backing of RBS whatsoever. So if the private money on the secondary market wants to risk their own shirts on renters, turnovers, slum conditions et all, well have at it.

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Comment by Hi-Z
2014-01-30 10:44:08

“There appears to be NO implicit taxpayer backing of RBS whatsoever. So if the private money on the secondary market wants to risk their own shirts on renters, turnovers, slum conditions et all, well have at it.”

I think if this deal goes sour, the Feds will come up with some ingenious way to backstop it and bail out the players; after all it’s for the children (and the campaign contributions).

Comment by Suite Joey Blue Eyes
2014-01-30 13:28:06

I think if this deal goes sour, the Feds will come up with some ingenious way to backstop it and bail out the players; after all it’s for the children

If that happens, it would be disgusting, considering that the buyers for this Blackstone bond issue are almost certainly hedge funds playing around with accredited investors’ cash. Quite a bit different than bailing out something like a commercial bank or a hedge fund like LTCM which sold primarily to pension funds. (The world has changed a LOT since LTCM. Not to mention Continental Bank back in the 80s)

Comment by Neuromance
2014-01-30 17:00:46

Hi-Z: I think if this deal goes sour, the Feds will come up with some ingenious way to backstop it and bail out the players; after all it’s for the children

Suite Joey Blue Eyes: If that happens, it would be disgusting, considering that the buyers for this Blackstone bond issue are almost certainly hedge funds playing around with accredited investors’ cash.

• Politicians require two things to keep their jobs: money and votes.

• Every move the government and Fed have made during the past five years, regardless of the “debate”, ultimately serves to advantage the FIRE sector, funneling money to them or shielding them from liability. This is not an accident, see next bullet point.

• “The financial sector is far and away the largest source of campaign contributions to federal candidates and parties, with insurance companies, securities and investment firms, real estate interests and commercial banks providing the bulk of that money.” — OpenSecrets.org

The votes keep rolling in so there is no impetus to change the modus operandi.

• Thus it shouldn’t be surprising in the least that a taxpayer guarantee would be put in place by politicians somewhere in this RBS pipeline.

Comment by phony scandals
2014-01-30 07:10:29

FL Hardest Hit mortgage reduction money going fast

by Kim Miller

Florida’s $1 billion Hardest Hit program has been criticized for not getting its money to struggling homeowners fast enough, but one of the newest programs that cuts the amount of debt owed on a loan is going fast.

Announced in September, the Hardest Hit Principal Reduction program accepted a cap of 25,000 applications on a first-come, first-served basis. The process closed a week after opening.

Already, $41 million of the $350 million set aside for the program has either been disbursed to borrowers or set aside for those still finalizing their applications.

Cecak Green, the spokeswoman for the Florida Housing Finance Corp., said Tuesday the group’s board of directors hasn’t decided yet whether to reopen the application process or approve more funding for the principal reduction plan.

Florida Housing oversees the Hardest Hit program. The Principal Reduction program was announced with much fanfare and accepted enthusiastically by homeowners who have remained current on their mortgage payments, but are stuck in underwater loans.

Borrowers late on payments cannot get the loan reduction money.

The Hardest Hit’s two main programs, which help homeowners pay up to a year of mortgage payments and bring a mortgage current, has committed $305.6 million for nearly 13,800 borrowers since Florida began getting money in 2010. Hardest Hit funds come from the federal government and were awarded to states most affected by the housing crash.

Applications for the two main programs are still being accepted at http://www.flhardesthithelp.org.

Still, a report released today by the Inspector General of the Troubled Asset Relief Program complained that Florida remains behind on doling out its Hardest Hit money. The most recent data available when the report was written was through Sept. 30, 2013, before the principal reduction program began accepting applications.

“Even though Treasury obligated $1,057,839,126 of HHF Funds to Florida, Florida is not getting a significant amount of these funds out the door to help homeowners,” the report says. “As of Sept. 30, Florida had spent $169.8 million (16 percent of its obligated funds) to help 12, 129 individual homeowners with HHF programs The remaining $31.5 million was spent on administrative expenses, and $69.9 million is held as cash-on-hand.”

Tags: bnblogs, hardest hit

This entry was posted on Wednesday, January 29th, 2014 at 9:48 am and is filed under Florida economy, Foreclosures. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Comment by real journalists
2014-01-30 07:22:58

Real journalists are not sure how they feel about this yet. The Wall Street Journal reports:

“Print and broadcast news have long been the world’s gatekeepers on information. Now, Facebook wants a turn.

On Thursday, Facebook introduced a long-awaited mobile app, called Paper, that offers users a personalized stream of news.

Instead of editors and reporters, Facebook’s publication is staffed by a computer algorithm and human “curators.”

Considering that Mark Zuckerberg has the *correct* attitude about immigration reform, this will probably be acceptable to real journalists.

Comment by real journalists
2014-01-30 07:34:18

*THIS* is real journalism.

“In a recent essay in the New Republic, Princeton University historian Sean Wilentz contends that Edward Snowden, Glenn Greenwald and Julian Assange reflect a political impulse he calls “paranoid libertarianism.” Wilentz claims that far from being “truth-telling comrades intent on protecting the state and the Constitution from authoritarian malefactors,” they “despise the modern liberal state, and they want to wound it.”

Consider these words: “despise the liberal state”. If you disagree with the most transparent administration in history, expect to get snuffed in a drone strike.


Comment by my failure to respect is unacceptable
2014-01-30 08:15:14

Princeton University historian Sean Wilentz

There you go!

Comment by Suite Joey Blue Eyes
2014-01-30 10:39:57

Wilentz’s best work is actually about American music (rock, folk, etc.). But he’s the shitlib of the faculty for sure.

Robert George is his adversary (convervative) and is much better. Somehow he co-teaches with Cornel West which makes no sense to me.

Comment by Albuquerquedan
2014-01-30 10:29:19

In the Soviet Union history was very fluid, and people would be edited out of pictures because they have fallen out of favor. This historian would fit in under that system, his interpretations of history seem to be driven by political expediency. I cannot see how Snowden’s revelations are that different from the Pentagon Papers and that release was celebrated among the left.

Comment by Albuquerquedan
Comment by real journalists
2014-01-30 11:00:21

Bush = bad statist

Obama = good statist

And Hillary = doubleplusgood statist

Comment by "Uncle Fed, why won't you love ME?"
2014-01-30 17:44:07

Sure, lots of people despise the liberal state, or the conservative state, or the new world order, blah blah blah. However, that does not excuse the behavior of would-be tyrants who IGNORE the Constitution, which is the law of the land.

Comment by Housing Analyst
2014-01-30 07:36:49

25 MILLION excess, empty and defaulted houses CHECK

Housing demand at 14 year lows and falling CHECK

Housing prices inflated by 250% CHECK

Household formation at multi decade lows CHECK

Rampant housing fraud CHECK

Public denial formed and supported by a corrupt media CHECK

Population growth the lowest in US history CHECK

Immigration flat to slightly negative CHECK

Oh my word……

Comment by Whac-A-Bubble™
2014-01-30 07:46:25

Bulletin U.S. stocks climb as Facebook leaps to new all-time high »
Investor Alert

Jan. 30, 2014, 8:43 a.m. EST
Treasurys extend losses after economic data

NEW YORK (MarketWatch) — Treasury prices extended losses Thursday after a round of economic data. The U.S. economy expanded at 3.2% in the fourth-quarter. Jobless claims jumped by 19,000 to 348,000. The PCE inflation index climbed 0.7%. After the data, the 10-year Treasury note (10_YEAR +1.19%) yield, which rises as prices fall, was up 3.5 basis points on the day at 2.710%. The 30-year bond (30_YEAR +0.77%) yield rose 2 basis points to 3.643%, and the 5-year note (5_YEAR +1.99%) yield rose 4.5 basis point to 1.535%. The Treasury Department will sell $35 billion of 5-year notes at 11:30 a.m. Eastern and $29 billion of 7-year notes (7_YEAR +1.69%) at 1 p.m.

Comment by "Uncle Fed, why won't you love ME?"
Comment by In Colorado
2014-01-30 09:20:50

Now you can grow your own Peyton in a test tube! Or better yet, improve on him! Make him 8 feet tall and capable of throwing 100 yard passes!

Of course, the linebackers will now be 10 feet tall.

Souper Bowl, baby!

Comment by real journalists
2014-01-30 09:42:47

it’s spirit week in our office. business casual is out, broncos gear is in.

today we had 4 dozen broncos theme colored cupcakes in the coffee room :)

Comment by In Colorado
2014-01-30 10:57:05

At my office, not so much. I guess we don’t have the team spirit at the big O.

I went to King Soopers the Saturday before the New England game to pick up a few things. I’d say about have the shoppers were wearing Broncos jerseys.

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Comment by tgun
2014-01-30 12:23:16

Same here. Although with all the ahhhem, non anglo non Christian work-visa carrying staff, I am not surprised. What sport do these folks track in Chindia?

Comment by oxide
2014-01-30 11:00:59

How goes the Paleo?

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Comment by real journalists
2014-01-30 11:41:52

Fell off the wagon in less than a month (although consumption of refined flour, refined sugar, and dairy is greatly reduced). I can’t live in a world without flavor. But the reason for attempting it remains, and that is to *WIN* the Pikes Peak Ascent half marathon on August 16, 2014.

And there is a webcam on the summit of Pikes Peak, so you’ll be able to watch live as I cross the finish line (first, obviously) with a bong in one hand and a pimp cup full of purple drank in the other hand.

Comment by In Colorado
2014-01-30 10:54:45

Of course, the linebackers will now be 10 feet tall.

With a single eye in the middle of their forehead.

Comment by Albuquerquedan
2014-01-30 10:32:58

Interesting. However, judging from what we see on reality shows people have been devolving for generations so it is going to take a lot of work just to undo the damage.

Comment by Suite Joey Blue Eyes
2014-01-30 08:44:15

Another example of financial reporting getting things wrong or at least missing very important details. A lot of outlets are reporting that Google will have lost a lot of money when it sells of Motorola Mobility to Lenovo. But the reason GOOG bought M in the first place was for its patents and some trade secrets/know-how, maybe for some of its key execs. It didn’t want (or need) its actual manufacturing facilities or materials. Google makes its own phones and other devices now and it makes them in the U.S. So it can just resell the hard assets of M and keep the important stuff. The sale price, therefore, doesn’t really represent much of a comparison to what it paid to acquire M.

Comment by In Colorado
2014-01-30 09:18:23

Did it really get $10B worth of IPand patents out of the deal? I’ve always been under the impression that the real mobile IP belongs to Qualcomm.

Comment by Suite Joey Blue Eyes
2014-01-30 10:04:07

Patents are a revenue source. As you know, in tech, someone can go ahead and infringe you patent (if it would be a blocking patent) and then pay you fees for that infringement later. So Goog acquired the right to use patents without paying fees AND the right to collect on those fees from other tech companies.

I think the way GOOG looked at it is, they now own the patents so they eliminated their own fees and they can now receive payments from others. As for the dollar amount, it’s hard to say, the people in the deal would know those assumptions though. Saying they lost 10BB is way off the mark, though. It looks to me like GOOG stripped off the parts most relevant to them (most profitable) and sold the rest. Makes a lot of sense.

Comment by In Colorado
2014-01-30 10:34:22

Patents are a revenue source.

I understand that, what I’m wondering is, just how valuable are Moto’s patents? My understanding is that it’s Qualcomm who owns the truly valuable mobile tech patents.

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Comment by Northeastener
2014-01-30 13:45:56

Google overpaid, which is par for the course with Google. What Joe is glossing over is that Google can afford to overpay. Did they lose money on the deal? Absolutely, even with the patent licensing deal with Lenovo… yeah, they kept the Moto patents, but also licensed a portion of the Moto patent portfolio to Lenovo.

Bottom line is Google is like the Yankees… they can afford to overpay for things, from top talent to corporate acquisitions. At least, they can do that until their Ad Sense revenues dry up from some new competitor ala every other commercial search engine that ever went mainstream. Google is suffering from the same fate as Microsoft. They haven’t been able to diversify from their most profitable lines of business into other profitable areas. A one trick pony…

Comment by rms
2014-01-30 19:29:30

Patents are a revenue source. As you know, in tech, someone can go ahead and infringe you patent (if it would be a blocking patent) and then pay you fees for that infringement later.

+1 Google: “Intellectual Ventures”

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Comment by Rental Watch
2014-01-30 10:22:28

I think in round numbers it goes something like this:

Purchase price: $12.5B
LESS Cash M had on the books: ($3B)
LESS sale of M set-top business: ($2.4B)
LESS sale of M handset business: ($2.9B)
Net Purchase Price of Patent Portfolio: $4.2B

Was $4.2B worth the patent protection for Android?

Note that there is no Apple/Google lawsuit for IP yet…Apple seems to be focusing on Samsung. I’m willing to bet they don’t want to push Google to open the Pandora’s Box of the Motorola patent portfolio.

And Facebook just reported strong growth in their mobile ad selling, which helped push their market cap up by about $20B…in a day. Is protecting GOOGs main avenue to the mobile ad market worth $4.2B?


Comment by Suite Joey Blue Eyes
2014-01-30 11:23:18

GOOG and Samsung are trying to build an ecosystem together–devices that interact seamlessly across a person’s entire range of activities. I think a lot of the value is there. Not sure what value it has for consumers, but it would be a nice rival for apple.

To answer In Colorado, I don’t know what the patents are worth, but if they’re worth “X” and GOOG figured out they’d be able to buy for a net price that is less than “X”, then it’s of value to them.

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Comment by Rental Watch
2014-01-30 11:59:21

My understanding is that M had hardware patents (for the most part), and Apple’s biggest beef with Google would be for software patents.

My understanding is that software patents are fuzzier than hardware (ie. more subjective). Making Google’s counter-suits against Apple potentially very damaging (especially since in terms of value, Apple makes major $ from hardware sales, Google makes $0 from providing Android).

Even if Google gets $0 in royalties for the patent portfolio, the defensive benefit of the patent portfolio is probably worth Billions alone (not just saving any awards, but legal costs, and lost productivity, etc.).

Comment by Apathy
2014-01-30 09:58:15

CoreLogic reported these numbers of shadow inventory:

Jan 2010 3.0M Peak
Oct 2012 2.3M
Jan 2013 2.2M
Apr 2013 2.0M Completed foreclosures for the month 52k
Jul 2013 1.9M Completed foreclosures for the month 48k
Oct 2013 1.7M Completed foreclosures for the month 46k

The total shadow inventory is down from 3M at the peak. Per historical data, expect to have 650k in the shadow inventory at “normal” rates. That’s about 18-20 months away if current trend continues. The shadow inventory story line doesn’t seem to have had any impact.

Comment by Rental Watch
2014-01-30 10:24:41

Not to mention that the bulk of that excess shadow inventory is being held in fewer and fewer locations (primarily judicial foreclosure states). If there is going to be an impact from the release of that inventory, it will likely be concentrated in those places.

Comment by Housing Analyst
2014-01-30 12:22:17

Hiding 25 MILLION excess empty houses isn’t easy is it?

Comment by sfhomowner
2014-01-30 10:44:02

Woke up this morning ever so glad to no longer be a renter in this city.

S.F. rents up more than 3 times higher than national average: http://blog.sfgate.com/ontheblock/2014/01/30/s-f-rents-up-more-than-3-times-higher-than-national-average/#20080101=0&20081103=0&20082105=0

Comment by Ben Jones
2014-01-30 10:49:35

Median Sold Price of Existing Single-Family Homes

S.F. Bay Area

Dec. 2013 $666,890

Nov. 2013 $700,980


Comment by In Colorado
2014-01-30 10:59:08

Google and FB need to hire more people.

Comment by Albuquerquedan
2014-01-30 11:14:04

Dec. 2013 $666,890

Those devil worshiping Bay area folks just love that number.

Comment by Housing Analyst
2014-01-30 12:20:00

So the cratering rages on.

Comment by real journalists
2014-01-30 10:52:50

I’ve been posting numerous articles about SF / Bay Area rental rates and home prices in your absence, the pace of increases has been truly incalculable for a non bubble coast dweller.

Any impact from the Google buses in your neighborhood?

Comment by Ben Jones
2014-01-30 10:55:33

“Any impact from the Google buses”

An alarming increase in the amount of spit on meals served at local dining facilities.

Comment by MiddleCoaster
2014-01-30 12:22:06

Good to ’see’ you, SFH. Be prepared for HA to flame you for buying (because renting is always cheaper, facts be damned!). Hope life is treating you well.

Comment by Housing Analyst
2014-01-30 12:32:50

We’ve seen your “facts”. heh.

Comment by MiddleCoaster
2014-01-30 14:00:16

That old John Hughes movie The Breakfast Club was on teevee the other night. You remind me of Bender, the kid who had a miserable abusive father and overcompensated for his lack of self esteem by insulting and demeaning everyone around him.

No charge for the therapy session, HA. :)

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Comment by Suite Joey Blue Eyes
2014-01-30 10:46:17

Hard to believe this is a real story. I would love to see some reptile here defend this.



Up to 40 kids at Uintah Elementary in Salt Lake City picked up their lunches Tuesday, then watched as the meals were taken and thrown away because of outstanding balances on their accounts — a move that shocked and angered parents.

“It was pretty traumatic and humiliating,” said Erica Lukes, whose 11-year-old daughter had her cafeteria lunch taken from her as she stood in line Tuesday at Uintah Elementary School, 1571 E. 1300 South.

Lukes said as far as she knew, she was all paid up. “I think it’s despicable,” she said. “These are young children that shouldn’t be punished or humiliated for something the parents obviously need to clear up.”

Jason Olsen, a Salt Lake City District spokesman, said the district’s child-nutrition department became aware that Uintah had a large number of students who owed money for lunches.

As a result, the child-nutrition manager visited the school and decided to withhold lunches to deal with the issue, he said.

But cafeteria workers weren’t able to see which children owed money until they had already received lunches, Olsen explained.

Comment by real journalists
2014-01-30 10:55:29

“some reptile here defend this”

Smithers would have, had he not been banned.

Wonder if he still reads the blog, maybe Ben has logs of his IP address.

Comment by Albuquerquedan
2014-01-30 11:18:15

It is interesting because SLC is the most liberal city in Utah. It is a democratic stronghold. In the magazine Sunset, a district in SLC was just named as one of the best places to live in the West, Flagstaff also made the list. Sugarhouse the district in SLC, was cited for its diversity including being gay friendly. BTW, it is a sanctuary city with a substantial population of illegals.

Comment by Albuquerquedan
2014-01-30 11:40:41

PS. I do think it is reprehensible to take food from children and I think that providing food directly to children is one of the best programs that we have since it minimizes fraud. It is difficult for the parents to sell the child’s food unlike SNAP fraud. However, I think it points out once again that the public schools which have the obligation of teaching children how to think as opposed to what to think, are staffed with numerous people that seem to have no common sense and ability to think. They cannot weigh the consequences of taking food from a child against what the fact that they have not paid for the food. How does the district even save money, are they going to serve the food to people that are paying once the children have eaten part of it?

Comment by Suite Joey Blue Eyes
2014-01-30 13:40:01

I should point out that when I say “reptile” I mean it the way neuroscientists or evolutionary biologists use it — there are parts of the brain that correspond to a time in evolution where those traits were paramount. Like, it’s a reptile thing to do if you draw a connection between parents not paying the food bill (which is only a small portion of the money needed to supply school lunches anyway) and teaching them a lesson via their kids. The reptile brain is still useful but needs to be used in conjunction with the parts of our brains that arose in mammals/primates.

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Comment by Albuquerquedan
2014-01-30 14:34:55

I should point out that when I say “reptile” I mean it the way neuroscientists or evolutionary biologists use it — there are parts of the brain that correspond to a time in evolution where those traits were paramount.

O.K. as a Catholic I have always found it interesting that the evolutionary biologists talk in terms of reptilian. If one takes the story of Adam and Eve not literal but as attempting to teach a scientific backward people an important lesson on biology, the concept that it is the snake part of our brain that gets us into trouble by tempting us to satisfy our instincts without weighing the moral and ethical consequences, it appears to be knowledge four thousand years ahead of the population’s knowledge.

Comment by 2banana
2014-01-30 13:30:17

“If you like your lunches - you can keep your lunches!”

Comment by Albuquerquedan
2014-01-30 13:46:52

If they were Michelle Obama approved lunches, the children may have looked at their removal as an act of mercy.

Comment by Northeastener
2014-01-30 13:52:20

Why do “reptiles”, your derogatory term for Republicans I assume, have to defend this? It’s obviously an improper response to families with unpaid lunch bills.

A much more appropriate response would have been to exclude those children from receiving school lunch the following day, once the school manager knew who had unpaid bills…

Unless of course, you’re arguing for free lunches. Did your parents not teach you there is no free lunch?

Comment by Albuquerquedan
2014-01-30 14:07:00

Why do “reptiles”, your derogatory term for Republicans I assume, have to defend this? It’s obviously an improper response to families with unpaid lunch bills.

Now, to be fair I think he meant Tea Party Republicans, too bad Salt Lake City is a very politically correct city and the story does not fit the narrative of Tea Party being made up of evil narrow minded people.

Comment by Albuquerquedan
2014-01-30 14:13:37

The last Republican mayor held office in the early 1970’s:


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Comment by MightyMike
2014-01-30 16:07:22

Now, to be fair I think he meant Tea Party Republicans, too bad Salt Lake City is a very politically correct city and the story does not fit the narrative of Tea Party being made up of evil narrow minded people.

I didn’t read the article, just Joe’s excerpt, but the decision appears to have been that of a single individual, not the collective will of an entire city.

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Comment by Albuquerquedan
2014-01-30 16:19:46

I didn’t read the article, just Joe’s excerpt, but the decision appears to have been that of a single individual, not the collective will of an entire city.

I honestly do not think that distinction would be made had it been a “red” city. It would have been used to demonstrate how heartless all conservatives are.

Comment by spook
2014-01-30 16:10:02

“the meals were taken and thrown away because of outstanding balances on their accounts”

This event has a funny smell to it; almost as if it was planned and/or staged?

Why allow the children to collect the lunches only to have them snatched back and thrown away?


What is the name of the person who made that decision?

I smell a rat.

Comment by Housing Analyst
2014-01-30 12:30:51

Paso Robles, CA Housing Prices Crumble 34%


Comment by Housing Analyst
2014-01-30 12:34:04

Ventura, CA Housing Prices Crater 38% Year Over Year


Comment by Housing Analyst
2014-01-30 12:39:16

“The massive inventory problem grows by the day as the boomer demographic continues to age out permanently.

And being the depreciating asset housing has always been, combined with massive and growing inventory means falling prices for the next two decades or more.

Housing is still massively overpriced.”

Let’em crater.

Comment by azdude02
2014-01-30 17:40:30

more bs today? when are you going to get a job? your shanties cant sell out here in the west.

you just keeping fighting the trend and losing money constantly. you simply cnt figure this game out can you?

Comment by Housing Analyst
2014-01-30 17:42:50

IntensivePurposedPoet LOLZ

Comment by Albuquerquedan
2014-01-30 13:58:10

From the EIA, these prices in the NE are insane for natural gas, spiking about 18 times the national average, the forecast for weather out 14 days still shows abnormally cold although more in the Midwest then the NE:

The Northeast was also cold. Transcontinental Pipeline (Transco), a major interstate pipeline running from the Gulf Coast to Pennsylvania and New York, declared a system wide operational flow order on Monday in order to manage system imbalances and handle intraday volatility. At Transco’s Zone 6 trading point serving New York City customers, prices rose above $90/MMBtu on Monday before dropping back to $27.86/MMBtu the following day and to $14.26/MMBtu yesterday. Similarly, prices at Boston trading locations reached into $70/MMBtu range Monday before retreating. Double-digit prices were common at Northeast trading points through the report week, with the highest prices occurring on Monday. Yesterday, prices at the major northeastern trading points were all less than $15/MMBtu.

Comment by Albuquerquedan
2014-01-30 14:01:53

then=than for grammar police.

Comment by Northeastener
2014-01-30 15:12:17

Zerohedge thought someone got “Amaranth’d”… still waiting to here what the real reason was for the abnormal price spikes. I mean, you have a cold snap for days, it’s not like all of a sudden someone realizes it’s cold and there is more demand for NG.

Comment by cactus
2014-01-30 15:18:31

Sir James called it correct, as did Roger Milliken. They predicted that the working and middle classes in the US and Europe would be ruined by the greed of Wall Street and corporations, who would boost corporate earnings by replacing their domestic work forces with foreign labor, which could be paid a fraction of labor’s productivity as a result of the foreign country’s low living standard and large excess supply of labor. Anytime there is an excess supply of labor, or the ability of corporations to pay labor less than its productivity, the corporations bank the difference, share prices rise, and Wall Street and shareholders are happy.”

“All of this was over the heads of ‘free trade’ ideologues, who threw accusations such as ‘protectionist’ at Goldsmith, Milliken, Daly, Gomory, McMillion, and myself. These ‘free trade’ ideologues are economically incompetent. They do not know that the justification for free trade is based on the principle of comparative advantage, which means that a country specializes in those economic activities in which it performs best and trades for those goods that other countries do best. Instead, the ideologues think that free trade means the freedom of capital to seek absolute advantage abroad in lowest factor cost. In other words, the free trade incompetents have never read David Ricardo, who formalized the case for free trade.”

Comment by "Uncle Fed, why won't you love ME?"
2014-01-30 17:51:37

The United States was founded on protectionism.

Comment by Neuromance
2014-01-30 19:27:50

Here’s the missing point which fierce advocates for one side or another ignore: Every policy has costs and benefits.

• Free trade has costs and benefits.
• Free trade with protectionists has costs and benefits.
• Inflation has costs and benefits.
• Deflation has costs and benefits.

Individuals are virtually never going to advocate for things which are against their own interests.

Comment by phony scandals
2014-01-30 15:49:09

So if Amanda Knox was trying to by a gun in the U.S. would her murder conviction in Italy show up on her background check?

Amanda Knox convicted of murder in Italian retrial

By Tracy Connor, Staff Writer, NBC News

American student Amanda Knox said Thursday that she is “frightened and saddened” after being re-convicted in the stabbing death of her roommate when they were students in Italy in 2007.

A panel of judges and jurors set a sentence of 28 years and six months for Knox, who returned to the United States after an earlier conviction was reversed. They also convicted her Italian ex-boyfriend, Raffaele Sollecito, sentenced him to 25 years and banned him from traveling.

“I am frightened and saddened by this unjust verdict,” the 26-year-old said in a written statement from her home in Seattle, where she returned after spending four years in prison.

“Having been found innocent before, I expected better from the Italian justice system.”

It’s unclear what will happen to Knox, who is certain to appeal — a process that could take a year or longer. Even if the high court confirms the new conviction, Italy still would have to seek her extradition. She has vowed not to return.

Comment by spook
2014-01-30 16:12:00

Does Italy have any drones?

Comment by Muggy
2014-01-30 17:36:32

Jeff, I am pretty sure if you’re not already holed up in your house with an arsenal, nobody is going to give a flying frick if you do.

Do you sit around and pet your guns?

Comment by phony scandals
2014-01-30 18:41:00

Actually the people who work for me wouldn’t get paid so I guess some people would care.

Comment by phony scandals
2014-01-30 16:06:54

Connecticut Gun Owners Revolt; Refuse to Register Firearms & Magazines

Just 38,000 of 2.4 million magazines registered after passage of new law

Paul Joseph Watson
January 30, 2014

Gun owners in Connecticut have revolted against a new gun control law, with just 38,000 out of 2.4 million high capacity magazines being registered with authorities.

Following the Sandy Hook shooting in December 2012, Connecticut passed a law which banned ammunition magazines capable of carrying more than 10 rounds. Residents who had acquired such magazines before the law came into effect were mandated to register them with state police by January 1, 2014. The law also banned assault rifles manufactured after 1994, requiring them to be declared to authorities.

Weeks after the deadline expired, authorities revealed that 50,016 assault weapons and 38,290 ammunition magazines had been registered.

CT News Junkie reported that it is, “unclear how many gun owners own the banned weapons and magazines, but chose not to comply with the registration requirement.”

However, a 2011 Office of Legislative Research study found that, “there are over 2.4 million large capacity magazines in Connecticut that originated at the retail level.” This number didn’t even include those not purchased at the retail level.

This means that the vast majority of high capacity magazines were not reported to authorities by gun owners in Connecticut.

It’s a similar story when it comes to firearms. Just over 50,000 assault weapons were registered after the law came into effect. However, the 2011 study found that there were over 370,000 assault rifles in the hands of Connecticut gun owners. This means that just 13% of assault rifles were registered.

“So, where did these millions of magazines go?” asks Warner Todd Huston. “All that can be said is that it appears that gun owners in Connecticut are not quite the sheep that jackbooted government officials may have imagined they were. After all, if there really were millions of high capacity magazines in the state–and it is very likely that there are–and they have now gone unregistered, that means that thousands of gun owners have refused to bow to this un-constitutional, anti-Second Amendment law.”

These figures once again illustrate how gun registration is pointless unless it is used by authorities as a precursor to confiscation.

The issue also serves to highlight the fact that gun control advocates are not anti-gun at all, they are pro-gun so long as the state has a monopoly on the possession of firearms. If people like “turn em all in” Feinstein want to see Americans disarmed in places like Connecticut, we’re going to witness a tragic bloodbath since the vast majority of gun owners will refuse to hand over their weapons.

Comment by phony scandals
2014-01-30 16:11:45

Chief of Police Harassed by Feds, Placed on Leave After Signing Pledge to Uphold Constitution

Sheriff orders Shane Harger to disband entire police department due to “political affiliations”

Paul Joseph Watson
January 30, 2014

A police chief was detained and harassed by federal agents while traveling to a constitutional convention before returning home to be told he was being placed on administrative leave and ordered to disband his police department after signing a pledge to uphold the bill of rights.

Police Chief Shane Harger of the Jemez Springs, NM Police Department was flying out of Albuquerque Airport last week on his way to a Constitutional Sheriffs and Peace Officers Association (CSPOA) convention taking place in Las Vegas. CSPOA is an organization headed up by Sheriff Richard Mack under which law enforcement officers gather to re-affirm their commitment to uphold and defend the Constitution.

Before passing security, Harger was approached by a TSA agent who asked the police chief to show his credentials. Moments later, a man claiming to be a “federal agent” also asked to see Harger’s credentials before telling him he was a “person of interest.” The federal agent then demanded to know where Harger was traveling to and why.

When Harger told the federal agent he was attending the Constitutional Sheriffs and Peace Officers Association Convention in Las Vegas, he was detained for 35 minutes before finally being allowed to board the airplane.

On Tuesday January 28, a day after his return, Harger was placed on administrative leave and ordered by Sandoval County, NM, Sheriff Douglas C. Wood to disband his entire police department due to his “political affiliations”.

What were his political affiliations? While attending the convention, Harger, along with 38 other police officers, signed a declaration affirming their pledge to “obey and observe” the U.S. Constitution, in addition to refusing to carry out unconstitutional orders such as gun confiscation without constitutionally compliant warrants, violations of the 4th amendment without probable cause, detainment or incarceration of citizens without probable cause, or working with the military for domestic law enforcement.

In other words, Harger was targeted for federal harassment and subsequently suspended for re-affirming his belief in the very Constitution he took an oath to uphold and protect in order to become a police officer in the first place.

“Despite having received a meritorious commendation from the Mayor of Jemez Springs on January 22, 2014, it seems that no one in the village government is willing to come to the assistance of Harger. It appears that Harger’s stance to defend and uphold the Constitution has put him and his entire department of ten part-time and volunteers out of business,” writes Vincent Finelli.

“I was at the convention and I never saw nor heard anyone say nor do anything that was a violation of any law. The CSPOA convention was an assembly of peace-loving Americans who just wanted to uphold their oath of office, that being to support and defend the US Constitution and Bill of Rights for all of us, We The People,” adds Finelli.

Harger’s treatment is yet another disturbing indication that the federal government, in addition to law enforcement authorities, view Americans who support the bill of rights as domestic extremists. Harger’s position as Chief of Police also shows that they are desperate to prevent citizens who identify as constitutionalists, tea partiers or libertarians from holding any position of influence within law enforcement or society in general.

Harger’s potential dismissal for his patriotic and constitutional “political affiliations” is a chilling reminder that such positions are not only not welcomed but actively discriminated against by the federal government.

Comment by Rental Watch
2014-01-30 16:58:32

I posted this in the wrong place…

“PLD announced earnings today (ProLogis–industrial REIT). Main news is that their occupancy is now over 95% (up over 1% from last quarter), and that new leases are on average 5.9% higher than the prior lease on the same space (ie. rents are rising).

This is consistent with the view that in-place rents today generally are below levels necessary to justify new development. This kind of rent growth is expected to continue for a while. I’ll be reading the earnings transcript…I’m wondering what management will be saying about the strength of this trend.

The market seemed to like the announcement…stock is up about 5% today. I’m sure some of this was because the market was up, other industrial REITs were up also, but not as much (FR up 2.8%, TRNO up 3%).

Perhaps I should be re-allocating my wife’s 401k heavier to the REIT fund earlier in the year than I previously was planning…more REITs will be announcing soon…”

Comment by Housing Analyst
2014-01-30 16:59:48

And Blackstones vacancy rate for SFR’s is 50%+.

Relevance RentalPimp….. relevance.

Comment by Whac-A-Bubble™
2014-01-30 21:03:06

Those who were concerned about the EM correction need worry no longer, as U.S. stocks started going up again today, and are sure to continue the pattern from here on out.

Comment by Whac-A-Bubble™
2014-01-30 21:07:05

Markets Live: Window dressers arrive
January 31, 2014 - 12:50PM
Jens Meyer, Patrick Commins

Local stocks are moving higher, as Asian market post gains and Wall Street rallied overnight, with David Jones jumping after news the retailer rejected a bid from Myer.

3:03pm: Self-managed super funds and global oil giants are just some of the potential investors licking their lips at the prospect of Shell’s high-profile petrol station properties being put on the market, a move that could also bring back more independent, family run petrol businesses.

Shell gave the clearest sign yet overnight that it wants to reduce its exposure to the Australian petrol station scene, when it said it was; “considering its options for divestment, subject to achieving satisfactory commercial terms for these positions”.

While the likes of Glencore, the world’s biggest commodities trader, are likely to play in Shell’s global asset sell-off, history shows that there can be opportunities for the little guys to grab some of the crumbs.

Colin Long from the Service Station Association points to the events of 2010, when 7-Eleven bought most of Mobil’s 295 Australian petrol stations.

‘‘When they bought the Mobil sites, 7-Eleven did discard some, so there could be opportunities for independent people to buy up if that happens again,’’ he said.

‘‘They offered a couple of sites to the operators and a couple of our members were able to buy some Mobil sites from 7–Eleven when they didn’t want them.

‘‘The sites are too valuable and in very good locations, so they are not going to disappear off the face of the earth’’.

However, the reality is, given ongoing EM nerves, a sub-50 print for the PMI tomorrow will be again lumped into a “China is slowing” risk-off panic, and the Monday open will be busy with the trifecta of (1) AUD underperforms (currently $US0.88); (2) Asia-Pac equities slide; and (3) Australian government bonds rally.”

PMI under 50 means contraction. Got it yet?

Date and time
January 31, 2014, 2:44PM

Comment by Whac-A-Bubble™
2014-01-30 21:11:11

Investors Look Toward Safer Options as Ground Shifts
By Tom Lauricella, Katie Martin and Tommy Stubbington
Updated Jan. 29, 2014 10:37 p.m. ET

Just one month into 2014, investors from Illinois to Istanbul are finding the tide going out fast for stocks and other riskier investments.

The excitement over the Super Bowl is coming in sharp contrast to the fear in the market. U.S. stocks are rebounding this morning, but the selling pressure is hitting in waves across the globe. Tom Lauricella reports on MoneyBeat.

After years of unprecedented monetary stimulus propping up the world’s financial markets, investors are now confronting the reality of an end to the Federal Reserve’s bond-buying program, which, as expected, the central bank reduced by another $10 billion on Wednesday.

The Fed’s moves are exacerbating the currency declines faced by a number of emerging-market countries already struggling with domestic economic and political woes of their own making. Several emerging-market central banks in recent days have tried—and failed—to stem slides in their currencies.

As investors flee those markets, they also have moved out of U.S. stocks, which are seen as more risky than some other assets. The Dow Jones Industrial Average sank for the sixth out of seven sessions, losing 1.2% to 15738.79. The blue-chip index has fallen 5% since hitting a record high at the close of 2013.

At the same time, the U.S. bond market has surprised many investors by staging a strong rally. Fueled in part by investors seeking the relative safety of U.S. government bonds, the yield on the 10-year U.S. Treasury note, which declines as prices rise, dropped below 2.7% for the first time since November.

Asian markets slid in early trading Thursday, with Japan down 3%. Australia fell 1.8%, Hong Kong was down 1.4% and South Korea dropped 1.3%.

Many investors remain bullish on the prospects for U.S. stocks, thanks to the relative health of U.S. companies.

Some even argue that the long-simmering troubles in emerging markets will draw global investors to U.S. stocks.
Currency Watch

Investors are keeping a close eye on five emerging-market currencies in the wake of a recent market rout.

But the landscape seems to have shifted from one where unprecedented central-bank stimulus enabled markets to steamroll past issues that might have otherwise spooked investors.

Now, investors are facing markets that appear at greater risk of hitting potholes.

“There were a lot of rose-colored glasses in the market,” said Michael Fredericks, portfolio manager of BlackRock Inc.’s $6 billion Multi-Asset Income Fund.

Many investors had come into 2014 expecting an easy year for U.S. stocks, Mr. Fredericks said. While sentiment doesn’t appear to be turning bearish, “what we’re seeing now is some questioning of that confidence.”

In the Markets
Fed Sticks to Script on Paring Bond Buys
As Currencies Fall, Leaders Cast Blame Abroad
As Stocks Decline, Optimists Hold Line
U.S. Stocks Drop as Investors Retreat From Risk
Heard on the Street: Emerging Markets Fight the Fed
Commentary: Fed Erred in Ignoring Emerging Markets
Russia Prepared to Let Ruble Slide
Hungary Hints at Further Rate Cuts
Some U.S. Financial Advisers Keep Emerging-Market Faith
South Africa Raises Key Rate

Comment by Whac-A-Bubble™
2014-01-30 21:13:11

Every asset price crash has a silver lining for someone.

The bond market short-squeeze is making it cheaper to get a mortgage

January 30, 2014, 1:27 PM

Bonds have staged an incredible rally this month, pushing Treasury prices higher. Yields on the benchmark 10-year note 10_YEAR are down from over 3% at the beginning of the year, to 2.7% on Thursday. As yields fall this month, you may have noticed it’s getting cheaper to take out a mortgage.

But a good portion of the bond rally can be explained by the way investors positioned their holdings going into 2014, and a resulting short-squeeze as they unwind their positions.

As we rang in the new year, investors celebrated by betting that rates would continue to rise — a sentiment shared by nearly everyone, from Wall Street traders to your grandmother. Investors get short if they think rates are going to rise, and the CFTC Commitments of Traders report showed that investor net positioning was among its most short in recent years at the end of 2013.

Comment by Bill, just South of Irvine, CA
2014-01-30 21:18:43

With no more 30% drop in stock index values per year…ever.

And I also have a bridge to sell.

Comment by Whac-A-Bubble™
2014-01-30 22:42:54

One thing is for certain: The next time there is a 30% drop in stock prices, nobody will have seen it coming.

Comment by Whac-A-Bubble™
2014-01-30 22:49:15

3:14 pm Jan 27, 2014
Janet Yellen Inherits ‘Another Nice Mess’
By Paul Vigna

Currencies from South Africa to Turkey to the Ukraine to Argentina are plunging, roiling not just investors but the lives of millions of people. U.S. stock markets just had their worst week in a couple of years. Ben Bernanke, the architect of the Federal Reserve’s unprecedented stimulus program, is stepping down at the end of the month.

It’s a delicate moment. Stepping into it is Janet Yellen, who takes over the Fed’s big seat and already is getting her a first test: Will the Fed buckle on the tapering while overseas markets are nose diving? It is the key question this week.

“As Janet Yellen takes over the helm of the global economy this week, she could be tempted to quote Oliver Hardy at ‘Stan’ Bernanke,” Societe Generale forex strategist Kit Juckes wrote to clients, referencing the classic line “this is another nice mess you’ve gotten me into” from old Laurel and Hardy films. ”The FOMC’s first decision under new management will be whether to press ahead with a further reduction in the pace of bond-buying amid emerging market turmoil,” he said.

Her task is certainly more complicated than trying to impersonate Colonel Wilburforce Buckshot and his butler: unwind a $3-trillion plus stimulus program (over the course of years), while continuing to support the U.S. economy. Oh, and figure out just how badly that reversal will rack markets overseas – even though the markets aren’t the Fed’s responsibility in the first place. This week’s FOMC meeting tomorrow and Wednesday — the last over which Mr. Bernanke will preside — will be, as they all are really, keenly watched.

“Market confidence crises don’t often just blow over quickly on their own without policy action. Absent help from the Fed, and in the run-up to the Chinese New Year, any respite will probably be temporary,” Mr. Juckes wrote.

To be sure, the fate of the South African rand or Turkish lira is not the Fed’s responsibility. This situation played out to a lesser extent last summer, when the Fed’s initial hints about tapering drove investors out of emerging market currencies. The Indian rupee, the hardest hit, plummeted 20% in a matter of weeks. Investors can’t just expect the hot money to prop things up if the Fed is draining liquidity. But they also just can’t expect the Fed to buckle under market pressure.

“”This [tapering] is a new risk on the horizon and really needs to be watched,” Christine Lagarde, the managing director of the IMF, said at Davos over the weekend.

If the Fed acts as expected, it’s “unlikely to be enough to reassure investors unless the FOMC sends a clear signal that it sees the turmoil in [emerging markets] and asset markets as a risk to the U.S. recovery,” said Steven Englander, managing director and global head of G10 FX strategy at CitiFX. “Despite last week’s EM turmoil, investors’ big fear is a further policy-induced tightening of liquidity.”

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