Bits Bucket for February 19, 2014
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Have you engaged in any fractious monetary policy debates as of late?
ft dot com
February 18, 2014 7:33 pm
Asset purchases to drive fractious group’s debate
By Robin Harding in Washington
Australia has the difficult task of holding together an increasingly fractious G20 as its presidency starts in earnest this weekend with a gathering of global finance ministers in Sydney.
The meeting will kick off with a discussion of the global economy and G20 officials say the main issue will be the recent turmoil in emerging markets as the US Federal Reserve starts to taper its asset purchases.
It promises to be an ill-tempered debate as emerging market concern about the Fed’s tapering is compounded by anger at US failure to ratify an increase in quotas for the International Monetary Fund. That makes it even less likely than usual that the G20 will produce coordinated action to support the global economy.
Douglas Rediker, of the Peterson Institute for International Economics in Washington, said that “clearly the consternation level has been amped up” by failure to push through the IMF quota increase but that it would not change the overall dynamic at the G20.
“More broadly, the current EM fragility is likely to be front and centre,” said Mr Rediker. “There you’ll see some who want to point the finger at the EM countries, and say they didn’t undertake the right domestic actions, while some from emerging markets will point back.”
Joe Hockey, the Australian treasurer, showed how the developed countries are likely to line up. He told the Financial Times that he would not lecture emerging markets but that some had their own domestic issues, while there was no systematic problem in developing countries from tapering.
Janet Yellen, the new Fed chair, will travel to Sydney and hear the complaints from emerging markets first hand. Last month Raghuram Rajan, the governor of the Reserve Bank of India, warned that “international monetary co-operation has broken down”.
…
Want to avoid brain shrinkage? Try exercise.
ft dot com
February 16, 2014 8:40 pm
Moderate exercise ‘reverses brain shrinkage’ in sedentary elderly
By Clive Cookson in Chicago.
Even moderate exercise can reverse brain shrinkage in elderly people who have been living sedentary lives.
Encouragingly for the “silver tsunami” generation now entering old age, research reported to the American Association for the Advancement of Science meeting in Chicago shows that the adult brain is far more malleable than neuroscientists used to think.
Key areas such as the hippocampus – the seat of memory – can grow new cells given the right stimulus, such as exercise.
Kirk Erickson, a neuroscientist at the University of Pittsburgh, told the AAAS that the effect had been proved in a randomised clinical trial. Half the elderly participants were given moderate aerobic exercise three days a week – walking briskly round a track – and half spent the same amount of time undergoing nonaerobic stretching and flexing.
Regular walking over the course of a year increased the volume of the hippocampus by 2 per cent on average, while the control group who did nonaerobic stretching lost 1-2 per cent of hippocampal volume in a year – a decline typical of old age.
To match their brain growth, the exercise group raised their scores in memory tests. “They also made anecdotal comments like ‘the fog has lifted’,” Dr Erickson said.
There has been less rigorous evaluation of brain-training mental exercises that are supposed also to protect against cognitive decline in old age. But Dr Erickson said: “If I were forced to choose between them, I think I would go for walking rather than doing crosswords.”
…
If health care is 18% of USA GDP now, what will it be when 75% of America is obese within a few decades?
that’s something I wonder about. you don’t see many morbidly obese “old” people, so will the effect be a higher mortality rate for the elderly (reducing elderly costs). or will we just become a society of “WALL-E” types riding around in motorized wheelchairs, taking all types of medications?
this is what america’s future looks like:
http://www.picpaste.com/fat-kid-mcdonalds-769134-769471-C1XNFYY4.jpg
I never wanted to be a parade float but the food tastes so good.
Got Cheetos?
“…you don’t see many morbidly obese “old” people…”
+1 The media tends to ignore this salient observation.
Might this have something to do with the mortality rates of pre-age-65 morbidly obese people?
The baby boomer generation, which is getting old now, grew up before the advent of dwarf wheat and HFCS and trans fats, so they never got morbidly obese. Very late boomers and Gen X are the first generations to eat the crap and get fat from it. They’re around age 50 now.
tell that to the 62 year old land whale in my office.
every day, she eats a packaged, processed microwave sausage breakfast sandwich, a can of packaged processed soup for lunch, and drinks at least 3 diet cokes a day.
and she is a fed, not a contractor. i don’t know why, but the feds in this office are fatter than the contractors.
‘every day, she eats a packaged, processed microwave sausage breakfast sandwich, a can of packaged processed soup for lunch, and drinks at least 3 diet cokes a day.’
How many calorie could that be? You have to go over to her house and see what she has for dinner.
“..Gen X are the first generations to eat the crap and get fat from it.”
I think it is more like “Gen X-box are the first generations to eat the crap and get fat from it.” not to mention the internet and 100+ channels of cable TV. When we were bored we went for a bike ride and usually found other bored kids and ended up playing some game.
No one had cable or internet in 1970.
“..Gen X are the first generations to eat the crap and get fat from it.”
My second cousin’s wife, 30 something, posed with about 20 other moms around her age in a Facebook photo.
The sad thing is they mostly obese. I would guess 15 out of 20.
Exercise quickens your reaction time. Even within 20 minutes of waking up at 4:20 a.m. and I am driving to the gym I have quick reaction times and don’t drive like a slug. I notice it is not uncommon for people to drive slow in the morning as if they are groggy.
3200 yard swim this morning in 1:00.26 - not bad for a guy turning 55 in May.
Friend of mine from high school, in impeccable shape, dropped dead from a heart attack last year after playing hockey. He was 43.
1) did he have medical checkups regularly - could he recite his triglyceride levels and LDL and HDL levels? I get my blood work tests three times a year.
2) did he monitor his blood pressure? I do. I go for annual heart ultrasounds and so forth.
3) Did he smoke? I don’t and never have.
4) Did he drink heavy? I don’t. Did a few binge deals 20 years or more ago.
5) Did he eat healthy?
If he followed all the advice it could have been in his genes. Jim Fixx, the runner.
So the lame argument goes “I found an exception. I know ONE person who was in impeccable shape and followed all the rules on health and he dropped dead young.” And the inevitable dimwit conclusion: “Therefore I will eat anything I want and get fatter than Governor Christie and I will live beyond 80!”
Be my guest. Try.
Oh, and I knew a man who died of a heart attack at age 42. Problem is he looked like 62 when I knew him. He ate handfuls of M&Ms during the day.
And yes he died - it was a massive heart attack.
The key is you have to be proactive and regularly get doctor checkups and bloodwork. If you ignore the advice of healthy eating because someone you knew in “impeccable” shape dropped dead of a heart attack - you are a math flunkee.
Statistically there will be a few people who die young anyway regardless of their health.
But if your biochemistry is blessed that only environmental conditions will kill you early, you can postpone death. So Grizzly - you might be one of those people who would die young if you ate handfuls of M&Ms all day and had a gut. But your biochemistry may be such that if you avoided all the environmental conditions you would postpone death much later. And I am willing to bet this is the case with most people.
For my parents their deaths were caused by environmental reasons. My mom at age 65 and my dad at 78.
If you still do not think nutrition matters, I challenge you to do what this man did not for one month but for four months:
http://www.imdb.com/title/tt0390521/
Have you sliced and diced any mortgages recently?
ft dot com
February 18, 2014 11:01 am
US lenders return to securitised mortgages
By Tracy Alloway in New York
As a senior adviser at the Consumer Financial Protection Bureau, the powerful US regulator created in the aftermath of the financial crisis, Chris Haspel helped develop new mortgage rules aimed at preventing a rerun of the subprime boom.
Now, he is part of a growing industry seeking to profit from making loans that fall outside the new “qualified mortgage” regulation he helped author.
The qualified mortgage – or QM – rule, which came into effect last month, is designed to ensure that lenders properly judge the ability of borrowers to repay their mortgage debts when originating new loans – thereby avoiding the kind of loose lending that precipitated the subprime crisis.
Loans that fall under QM criteria come with a range of benefits for lenders, including greater immunity from borrower lawsuits.
At Fenway Summer, founded last year by former CFPB deputy director Raj Date, Mr Haspel and his colleagues are raising money to originate and then bundle together loans that fall outside the QM guidelines.
“Our ultimate goal is to securitise while retaining the risk associated with the loans,” says Mr Haspel. “It’s something new versus the old model where loans got originated and transferred immediately” to mortgage bond investors.
In doing so, Fenway Summer is planning to go where most banks are unwilling to tread.
Many of the largest US lenders have said they do not intend to originate or securitise high numbers of non-QM loans, raising fears that mortgage credit could soon dry up for millions of Americans. At the same time, a crop of new non-bank lenders are stepping in to fill what they see as a gap left by retreating banks.
“There are already potential lenders that are looking to that [non-QM] space,” Steven Abrahams, analyst at Deutsche Bank, said at a recent industry conference. “Whether that will result in securitisations or not is another question.”
The new QM standard is expected to be followed next month by the “qualified residential mortgage” rule which aims to better align the incentives of those who slice-and-dice loans into mortgage bonds with the interests of the investors who buy the securities.
The rule is expected to follow broadly the same criteria set out by the QM rules and will probably exempt the financial entities that create, or “sponsor,” securitisations of QM loans from having to hold on to a slice of the deal.
That means securitisers of non-QM loans will probably have to hold a piece of the resulting bond. For banks, already beset by new capital rules, that is an onerous requirement and one that is likely to deter them from bundling non-QM loans.
While many of the biggest banks have said they will continue to do some non-QM lending, this will predominantly take the form of “interest-only” loans made to wealthy borrowers. The loans are also likely to remain on banks’ balance sheets, rather than be securitised and sold to investors, bank executives say.
“While they may be non-QM, they clearly fit the test of ‘ability to pay,’ which is really what the rule requires,” says one. “QM is where the action is going to be [for banks].”
That leaves a potentially lucrative opening for specialist performers such as hedge funds and non-bank lenders; non-QM loans comprised about 13 per cent of total loan originations in 2012, and are expected to total some $150bn this year.
“The rules don’t specifically say that if you do something outside these QM requirements then you have originated a mortgage that doesn’t make sense [for the borrower],” says Manish Kapoor, a former Lehman Brothers trader who founded West Wheelock Capital, which plans to originate and securitise non-QM loans.
“There will be a healthy [yield] pick-up that will allow you to get investor interest,” adds Mr Kapoor, who estimates that investors may get an extra 15-20 basis points of returns from purchasing the most senior slice of securitised non-QM loans.
Some banks, reluctant to cede the non-QM space to non-bank lenders completely, are investigating creative ways to repackage these loans.
At least one Wall Street name is exploring the possibility of teaming with non-bank entities to create non-QM securitisations, according to people familiar with the matter.
The plan involves the bank providing financing to real estate investment trusts, known as Reits, which would use the money to buy loans and then act as the sponsor for a resulting securitisation. The structure would allow the bank to avoid having to retain a piece of the securitisation under the incoming QRM rules.
But the road to non-QM securitisations is a long and winding one, and ultimately requires deep pockets and a well-developed capability to scrutinise riskier loans as well as convince investors, many of whom remain too scarred by the subprime crisis, to buy.
Even as a non-bank, says Mr Haspel, “it’s going to be a capital intensive business”.
…
How about we take everyone who wants to go back to the reckless days of finance and tits up profit scalping and put that all on an island? Morons!
Why spend lots of money on college in a tough economy when ragged clothes and a pair of old crutches will haul in the cash?
Bogus Beggars - Fake Crippled Woman
http://www.youtube.com/watch?v=XDy6SsGTB9k
“The Man with the Twisted Lip” had the same question.
“The Man with the Twisted Lip” had the same question.”
Sherlock Holmes fake beggars go way back
They are art performers. They fill the niche of people feeling guilty having too much already. You know, having a car, job, limbs, health. You participate, or not, of clearing your conscience by giving them money or not. I see them lined up near downtown Portland. Young kids most times. I don’t despise them, but the world does me few favors and I will not kick them down any more than they are, but I am not giving them a dime. The state can get them more than I can. In fact, I went to employment office last week and was turned away basically since I have a job. The computers they had on desks there, and maybe employment leads, were not gonna be directly offered to me even though I am a resident. So, the office caters mostly to unemployed people. OK.
“They are art performers.”
I’m not into this form of art. There are always such performers along the center lane divider in tony La Jolla, and plenty of rich La Jollans with pocket change available to pay the performers.
My thought: How can I be sure that any payment to these artists won’t merely serve to fuel their substance abuse habit?
‘My thought: How can I be sure that any payment to these artists won’t merely serve to fuel their substance abuse habit?’
Keith Moon had liquor. Seymour Hoffman had heroin. Performers have needs. I am being about 95% sarcastic, but IDGAF if someone wants to beg but if that means I am reduced on the pecking order of the state’s waiting list of chosen ones who can use state services to find a job or improve my job-searching skills then the beggars have to go somewhere else.
Years ago a major city (NYC?) tried to offer local gift certificates, worth $0.50 to $2.00 or so, which would be accepted at nearby convenience stores or drug stores. Instead of change, passerby could hand these out and at least know that the begger was buying something substantial. It didn’t work out; the homeless got mad because they wanted cash, causing the passerby to be afraid to buy the certificates.
Don’t know if SNAP cards fixed the problem of trade in food stamps for cash to buy hard liquor?
Can’t fix stupid.
You participate, or not, of clearing your conscience by giving them money or not.
So some people get that satisfaction that comes from helping others and you get the good feeling that comes from looking down on people. Those beggars are a national treasure. They provide joy to so many people.
Did the value of your bitcoin investments collapse?
ft dot com
Last updated: February 17, 2014 12:44 pm
Bitcoin price on Mt Gox exchange collapses
By Ben McLannahan in Tokyo
Glasgow-born programmer Kolin Burges (left) flew from London to protest outside Mt Gox’s Shibuya headquarters. He is joined by Tokyo-based systems architect Aaron
The price of Bitcoin on Mt Gox slumped to less than half the rate on other exchanges on Monday as the Tokyo-based hub continued to frustrate users’ attempts to withdraw holdings of the virtual currency.
Concerns over Mt Gox, the world’s oldest venue for trading and storing Bitcoin, have been mounting since mid-January, when reports of delays in withdrawals of Bitcoin and other currencies began to surface.
Last week the company blamed a bug in the Bitcoin software for delays and said it would not allow any withdrawals of coins from its vaults until it could be sure transactions had been completed properly – a statement that prompted many to claim the problem lay with Mt Gox’s own systems rather than with the open-source software itself.
On Monday a two-man protest outside the company’s Shibuya headquarters entered a second day.
“So many things do not make sense. It’s hard to find an innocent explanation,” said Kolin Burges, a Glasgow-born programmer who flew in from London last week in the hope of putting pressure on Mt Gox to return “hundreds” of coins kept in a trading account.
On Monday evening the price of Bitcoin on Mt Gox staged a recovery from its daily low of $220, rising as high as $390 after an announcement from the company that a fix was in hand, and that withdrawals “at a moderated pace” should be resumed “soon.” Still, the price remains a long way short of the $642 rate quoted by CoinDesk, which averages prices across leading global exchanges excluding Mt Gox.
The announcement is “better than doing nothing, but still very much not good,” said Mr Burges, citing a pattern of prolonging delays and the new threat of daily and monthly limits to withdrawals. “We certainly won’t stop protesting.”
…
The only thing worse than a modern central bank is a modern imaginary bank.
Take physical delivery!
Stack copper.
Too bulky.
Didn’t stop pirates from being the swashbuckling romantic ones that we fondly remember them as. Banks with copper on deposit and they issue these small slips of paper……uh oh.
Like Dan says, stack platinum.
Agreed…probably better than gold (too popular) or copper (too bulky).
Food stamps cost taxpayers $80,000,000,000 a year
Government contractors cost taxpayers $500,000,000,000+ a year
And for those of you who can’t count, that’s over half a trillion dollars every year. Government contractors cost taxpayers more than the equivalent of the GDP of many countries. Government contractors do half the work at twice the cost.
So when you click those Drudge Report links about food stamps or disability fraud, and it makes you really, really, really, really angry, think about who is really ripping you off.
Have a nice day
One group is being paid to work though, and to produce something. The other, not so much
‘to produce something’
like the billions spent on the f-35 fighter jets that we need to win the war on terror? because if we don’t fight them over there we will have to fight them over here
Cut all that pork sure, cut it to the bone, but someone is getting up and going to work. When we are paying for the opposite we are subsidizing our downfall. And 3-4 little downfalls more in each subsequent generation.
the majority of people on food stamps have jobs
and the majority of people on food stamps are white
Why bring up race?
You are right, we don’t subsidize anyone not to work.
‘why bring up race?’
because hate of black and brown people on welfare is the most effective way to ‘rally the base’ when it comes to motivating angry old white people to vote
“the majority of people on food stamps have jobs
and the majority of people on food stamps are white”
You conveniently ignore the fact that the majority of people in the US (at present) are white, so obviously they will be the majority of people on food stamps. Try looking at the PERCENTAGE of groups on EBT.
because race baiting is the simplest and laziest way to feel like you won a debate
The New York Post
The Washington Times
The Washington Examiner
CNS news dot com
Cbslocal dot com
The UK Daily Mail
The Weekly Standard
The Daily Caller
Fox News dot com
Be aware that when you click on these links, you are not reading real journalists
“California Senator Dianne Feinstein has proposed an amendment to the Media Shield Law – an irrelevant law ignoring protection already afforded by the First Amendment – that would limit the law’s protection only to “real reporters,” not bloggers and other upstart alternative media types.
A real reporter, declared Madame Feinstein during a Senate Judiciary Committee hearing, is “a salaried agent” of a media company like the New York Times or ABC News, not a shoestring operation with volunteers and writers who are not paid.
Feinstein voiced her concern “that the current version of the bill would grant a special privilege to people who aren’t really reporters at all, who have no professional qualifications,” like bloggers and citizen journalists.
http://www.infowars.com/feinstein-youre-not-a-real-journalist-unless-you-draw-a-salary/
an irrelevant law ignoring protection already afforded by the First Amendment
Since when the does a “real” journalist inject an opinion without labeling it as such? Infowars states that journalistic privilege is constitutionally protected as if it were a fact. In reality, Branzburg vs. Hayes (1972) established that a reporter’s claim to not reveal confidential sources is NOT Constitutionally protected, and at best is a privilege to be invoked on a case-by-case basis. The notes of Justice Powell, concurring with the majority in the 1972 ruling, show that he also questioned how to define a newsman.
It took me five minutes to look this up on Wikipedia. Does that make me a real journalist?
For interested parties, here is some more journalism: http://www.nytimes.com/2007/10/07/weekinreview/07liptak.html?_r=2&ex=1349496000&en=f6d6ce9bcf534225&ei=5088&partner=rssnyt&emc=rss&oref=slogin&
wikipedia is not real journalism
real journalists live in new york, washington, los angeles
real journalists write for new york times and washington post
real journalists work for network and cable teevee networks (except fox news)
real journalists only say doubleplusgood things about Dear Leader
Real plumbers have licenses.
Real stunt car drivers pay union dues and have insurance.
Real prostitutes do it for the money/drugs.
Real chefs work in restaurants.
Real citizens vote.
‘A real reporter, declared Madame Feinstein during a Senate Judiciary Committee hearing, is “a salaried agent” of a media company like the New York Times or ABC News, not a shoestring operation with volunteers and writers who are not paid.’
Isn’t there a real risk that many of those who are paid to write will be easily manipulated by corporate owners into spewing a steady stream of lies intended to manipulate the populace?
what would you say to your child if they told you they wanted to be a real journalist when they grow up?
I’d encourage them, but also caution them against the risk of becoming a bought-and-sold MSM prostitute.
I’d also loan them my copy of the book I recently purchased:
On Politics: A Carnival of Buncombe
H. L. Mencken
I would also encourage anyone considering journalism as a career to view these photos and carefully consider what the photographer experienced in taking them.
Photographs that stunned the world: vintage Pulitzer winners
From toddlers disrupting street parades to plane crash near-misses, JFK and a Fidel Castro firing squad, these historic award-winning images capture moments of beauty, horror and despair. Here’s a selection of the vintage prints on show at Daniel Blau gallery in London until 29 March
theguardian.com, Wednesday 12 February 2014 11.19 EST
I’d encourage them, but also caution them against the risk of becoming a bought-and-sold MSM prostitute.
Sounds like very confusing advice.
When you get down to it, almost every profession I can think of (not just journalism) offers the choice between prostitution and integrity.
China Sold Second-Largest Amount Ever Of US Treasurys In December:
http://www.zerohedge.com/news/2014-02-18/china-sells-second-largest-amount-us-treasurys-december-and-guess-who-comes-rescue
What will happen if China continues to divest itself from our debt?
Chaos?
If they sold it than someone bought it. What chaos? Durden is not a real reporter.
“What will happen if China continues to divest itself from our debt?”
1. Asset price collapse.
2. Flight-to-quality into Treasurys.
“Even in the absence of the excess empty housing inventory estimated in the tens of millions, historically housing prices fall. Why? Because houses depreciate. ALWAYS.”
Are realtors the genesis of this lie that houses are “investments” and that they somehow “appreciate”?
Stealtors serve the kool-aid that people want to drink.
Never mind the pile of bodies swarming with flies and foaming at the mouth and dead hands still clutching the pen they signed their financial suicide pact mortgage note with.
Snow doesn’t stop real estate agent:
http://www.washingtonpost.com/blogs/where-we-live/wp/2014/02/13/snow-doesnt-stop-real-estate-agent/?tid=hpModule_6032d2d6-919e-11e2-bdea-e32ad90da239
Hope and change from the Washington Post
“The Department of Homeland Security wants a private company (Jesus loves government contractors) to provide a national license-plate tracking system that would give the agency access to vast amounts of information from commercial and law enforcement tag readers, according to a government proposal that does not specify what privacy safeguards would be put in place.”
Forward
real journalists report on socialist utopia rio de janeiro
http://www.washingtonpost.com/world/the_americas/rios-police-occupied-slums-see-an-increase-in-drug-related-violence/2014/02/19/e164d2ea-9356-11e3-b46a-5a3d0d2130da_story.html?tid=hpModule_949fa2be-8691-11e2-9d71-f0feafdd1394
photo gallery of socialist utopia rio de janeiro
http://m.washingtonpost.com/world/slum-pacification-under-pressure-in-rio-de-janeiro/2014/02/19/a4cd993a-98fa-11e3-b88d-f36c07223d88_gallery.html
FWIW, the children look happy, playing with friends, unlike those “more better” Chinese kids, always studying.
Real journalists report on the “dream of gun-control advocates”
http://www.washingtonpost.com/local/we-need-the-iphone-of-guns-will-smart-guns-transform-the-gun-industry/2014/02/17/6ebe76da-8f58-11e3-b227-12a45d109e03_story.html
Wolfgang Halbig
Heh heh! They can dream on, because thousands of companies all over the U.S. build guns. In Phoenix alone, there must be two dozen companies manufacturing custom AR-15s. Why I love Phoenix!
Hey Billy Boy, when Queen Dianne and King Mikey Bloomberg say it’s time to turn in all of your weapons, because it’s “for the children” and making USA a safer and happier place, don’t think you can hide out in Galt Gulch.
We will find you, and we will take all of your gunz, all of your gold, and all of your rare Beanie Babies away to make ‘Merica like more equal and stuff.
It won’t be so bad. I heard they give free refills at the FEMA Camp.
Gross and Fine Motor Skills
Students with Asperger’s Syndrome often have poor balance and poor gross motor skills. This can become exaggerated as they grow older because they often prefer watching television or using the computer to athletic activities. The preference may come from poor over all coordination rather than a learned preference.
Just please god don’t take away his speedo.
I assume you are referring to my speedo hydrocity eye protection. Yeah don’t take that away - I have three pairs of those.
“don’t think you can hide out in Galt Gulch.”
But many many people will not get caught and be under the radar.
if you like your plan, you can keep your plan
wall street journal - some small firms see little relief in latest health-law delay
http://online.wsj.com/news/articles/SB10001424052702303874504579377310751131626
forward
Sacramento Foothills Rental Inventory Report:
I track available rental inventory in the market where I invest. It is interesting to note available inventory of SFR homes for rent is down about 50% from the 3rd Qtr 2013.
I don’t know why this is happening, but suspect the growth in new household formation is exceeding the growth in supply. Even more curious, rental prices are down from 2012 (which spiked upward that year).
With Sacramento rents down 6% YoY and housing demand falling for 5 years running, I’d say Sacramento has an oversupply of housing.
See for yourself.
http://www.zillow.com/local-info/CA-Sacramento-home-value/r_20288/#metric=mt%3D30%26dt%3D1%26tp%3D5%26rt%3D8%26r%3D20288%26el%3D0
HA, your graph shows sales trends not rents…and shows sales will increase 6% this year. The only “down” trend is they decreased from a 7% gain last year, so they will be increasing in value at a slower rate in the coming year.
Oh heavens, I better sell now, before the values go UP some more? Not so great analysis from the “Housing Analyst”. HA, HA, HA, Ahhhh…..more Burdbrain thinking.
If you look at the RENT estimates, you will see Zillow says rents are up 3.5% YoY.
Sacramento Rental Rates Fall 6.4%
http://www.zillow.com/local-info/CA-Sacramento-home-value/r_20288/#metric=mt%3D48%26dt%3D1%26tp%3D4%26rt%3D8%26r%3D20288%26el%3D0
Sacramento Housing Demand Down Every Year; 5 Years Running
http://www.zillow.com/local-info/CA-Sacramento-home-value/r_20288/#metric=mt%3D30%26dt%3D1%26tp%3D5%26rt%3D8%26r%3D20288%26el%3D0
If you continue lying you’ll never speak with any authority here.
Graph 1: Rents are up 6% from 2011…..you have no credibility because you cherry pick your data in meaningless ways! 30 days does not make a trend.
Graph 2: Sales are still increasing, just at a slower rate. If like is so bad, why have prices gone from $160,000 to $230,000 in the last 3 years? More cherry picking of meaningless data.
Typical HA, HA moment. Burdbrain.
Graph #1 shows rents down 6.4% year over year.
Graph #2 shows demand going straight down, 10% in 2013 and falling every year before that.
Are you experiencing another $90k water meter moment?
Sell now for what you can get, you are paying for your current hubris with future tears.
You keep saying that Ronnie. All the while, values go up, rents go up, ROI is increasing, cash flow is very nice.
You just keep hanging on to your left mango. That will at least give you some comfort.
In the meantime, you go ever deeper underwater.
…….
You seem obsessed with my level of success. Very flattering. Get used to it! HA!
Your claims of success are as legitimate as your $90k water meter claim.
You’ve been had.
Sacramento is your Waterloo. You are bankrupt and don’t even know it.
Why would anyone want to rent in Sacramento, or even live there for that matter?
Affordable housing, of course. You could buy a nice place here Whac using the money you pay for rent in San Diego. You would probably have enough left over to go on vacation in San Diego a few times a year.
“Affordable housing, of course.”
You get what you pay for, of course.
Maybe they are pulling the rentals to SELL NOW.
sad panda boo hoo
who knew that renting money from a bank to finance a depreciating asset could be so complicated?
http://dealbook.nytimes.com/2014/02/18/loan-complaints-by-homeowners-rise-once-more/
suck my lease, loosers!
everybody wants to live in manhattan, until they don’t
‘rents have steadily declined in manhattan over the past few months, according to data from several top brokerages and industry experts, while vacancy rates have predictably swung in the other direction, posting their highest rates in almost a decade.’
http://mobile.nytimes.com/2014/02/16/realestate/manhattan-rents-down-incentives-are-up.html?_r=0&referrer=
sad panda boo hoo
obamacare door to door canvassers FAIL
http://www.nytimes.com/2014/02/19/us/proven-models-break-down-in-search-for-the-uninsured.html
but dear leader said signing up for obamacare is ‘just part of growing up’
LOLZ
Russian money is heading back to Cyprus:
http://qz.com/178114/what-russian-money-sloshing-back-to-cyprus-teaches-us-about-tax-havens/
The Russians are saying “thank you sir, may I have another?”
No, the Russians have invested in Cyprus’ mob infrastructure and now have enough guns-n-money sloshing around the island to feel in control. It’s rubles or rounds downrange for the banksters. Makes for more predictable monetary policy development.
Is the weather messing up the housing market now?
Bulletin Steeper-than-expected drop in housing starts weighs down U.S. stocks early »
Feb. 19, 2014, 9:33 a.m. EST
U.S. stocks weighed down by weak housing data
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Crash of 2014: Like 1929, you’ll never hear it coming
By Anora Mahmudova
NEW YORK (MarketWatch) — The U.S. stock market began Wednesday on a sour note after a bigger-than-expected fall in housing starts in January, though severe weather contributed to the decline in construction. Wholesale prices nudged up above expectations. Investors are awaiting minutes from the Federal Reserve’s policy-setting meeting in January, due to be released at 2 p.m. Eastern. The Dow Jones Industrial Average began the session 16.63 points, or 0.1%, lower at 16,114.70. The S&P 500 opened 3.48 points, or 0.1%, lower at 1,837.32. The Nasdaq Composite opened down 6.77 points, or 0.2%, at 4,265.45, after recording eight consecutive session of gains.
In looking at the granular data, the really big drop appears to be in the midwest (155k total annual rate to 50k total annual rate from December to January).
For comparative purposes:
NE was UP from 84k to 136k
South was DOWN from 522k to 457k
West was DOWN from 287k to 237k
However, the West weakness appears to be entirely due to a decrease in multi-family starts. Single family starts there increased from 140k to 155k, the highest level (seasonally adjusted) in at least the last 12 months.
NE both multi and single family were up
MW both multi and single family were down (multi almost to 0)
South both multi and single family were down
West multi was down, single family was up
However, it is important to recognize that all these numbers are seasonally adjusted. The nominal total in the US was about 60k. A delay in a few thousand starts is amplified to get to the seasonal number.
The next few months will be telling. Subdivisions and apartment complexes take time to plan, so if the down numbers were weather related, this dip will be temporary, since the starts would have been delayed, not canceled. If the dip was demand related, then the decreased level of development will continue.
Is the 1929 stock chart scaring you?
Feb. 19, 2014, 8:31 a.m. EST
1929 stock market chart doesn’t scare investors — yet
Opinion: Apocalypse not now, but day of reckoning is inevitable
By Mark Hulbert, MarketWatch
Library of Congress Enlarge Image
Crowds gather outside the New York Stock Exchange following the Crash of 1929.
CHAPEL HILL, N.C. (MarketWatch) — News flash: The stock market didn’t crash.
Of course, you might not think last week’s impressive strength deserves to be characterized as a “news flash.” Yet it might be if you were following a chart that I featured in my column a week ago, which highlighted “eerie” parallels between the recent stock market and its behavior leading up to the 1929 Crash.
…
Did you decide to throw caution to the wind and go all-in to stocks?
Markets
Stocks Near Records as Caution Ebbs
By E.S. Browning
Updated Feb. 18, 2014 1:02 a.m. ET
Don’t look now, but after all that January anxiety, investors have pushed the S&P 500 stock index back almost to a record.
Both the Dow Jones Industrial Average and the S&P 500 last week recorded their strongest weekly gains since December, albeit in light trading. The rally left the S&P 0.5% from a record and the Dow 2.6% away.
The reason: All the things people worried about in January, including troubled developing-country economies, uncertain U.S. corporate earnings and cuts in Federal Reserve stimulus, seem less worrisome today.
And as had been widely predicted, some money managers are shifting out of developing-country stocks and into the U.S., Europe and Japan.
“People realized a Lehman event wasn’t coming,” said Jeff Mortimer, director of investment strategy at BNY Mellon Wealth Management, which oversees $185 billion. He was referring to the 2008 collapse of Lehman Brothers Holdings Inc.
“The market is looking through near-term economic softness and looking forward to a stronger second half,” he said.
Investors who feared a 10% stock-market pullback now have decided that the path of least resistance is upward again. They are putting money back into U.S. stocks.
“Concerns about weak Chinese growth and a tighter Fed, which spurred recent volatility, have eased after recent data and statements from central bank officials,” said Barclays economist Michael Gapen in a report last week.
The problem, of course, is that U.S. stocks still haven’t had a 10% pullback since 2011, and many analysts still think one is coming.
…
The problem, of course, is that U.S. stocks still haven’t had a 10% pullback since 2011, and many analysts still think one is coming.”
If the stock market goes up another 20% and then has a 10% pullback will the above writer think he got it right ?
Given how much the weather has messed up the economy, should the Fed put QE3 on hold until it warms up?
Feb. 18, 2014, 8:31 a.m. EST
The Fed can’t do everything
Commentary: Tightening should be on hold until Old Man Winter departs
By Irwin Kellner, MarketWatch
PORT WASHINGTON, N.Y. (MarketWatch) — When it comes to boosting economic activity, monetary policy has its limits.
To hear people ranging from Fed chief Janet Yellen, to politicians on both sides of the aisle, to pundits of all persuasions, the Federal Reserve’s ability to fix whatever breaks in this economy is virtually unlimited.
I’m talking about such things as reducing joblessness, increasing employment, supporting housing and boosting the stock market — not to mention regulating the financial system at the same time.
Nice work if you can get it, but it ain’t necessarily so.
…
At present, both monetary and fiscal policies are in a delicate transition.
Fiscal policy is tightening. The past combination of spending cuts and tax increases is shrinking Washington’s budget deficit. Measured against the gross domestic product (GDP) the government’s debt outstanding is falling as well.
Meanwhile, the Fed has begun to cut back the rate at which it is pumping money into the financial markets. Policy is still easy, but not as much as it used to be.
What makes these maneuvers delicate is that the economy has begun to slow down after a pickup in the second half of last year. Employment growth has dropped, as have retail sales. Manufacturing has slowed while construction is off as well.
It could be due to the extremely cold and snowy weather that has affected most of the country since the beginning of the year. If true, some lost sales and output will be recouped, once things thaw out.
…
Is it safe to assume the EM crisis is already history?
Economic eyes again turn to the Baltic Dry Index
Carlos Carrion/AFP/Getty Images
A cargo ship being loaded with wheat in 2008, when freight shipping prices for transporting dry raw materials were languishing close to their lowest level in 25 years. The Baltic Dry Index, a key barometer which tracks the cost of renting ships to move goods, such as coal, iron ore and grain, across the oceans, tumbled then to 647 points.
by Stephen Beard
February 18, 2014 - 3:39pm
Remember the Baltic Dry Index? It’s a key shipping market index that leapt to prominence five years ago in the wake of the Lehman Brothers collapse. Then, the Index dropped like a stone, presaging that world trade would fall off a cliff.
But should we be fretting that the Baltic Dry Index is tanking again today?
“In theory, we should be quite worried,” says David Osler, Financial Editor of the Lloyd’s List maritime business newspaper. “The Index has halved since the end of last year — the sharpest January fall for 30 years. This could be telling us something unpleasant about the world economy.”
…
“In theory, we should be quite worried,”
But in practice the Fed has our back so it doesn’t matter.
I heard this has to do with a massive over building of dry bulk cargo ships so this index is worthless now ?
I think I heard it on NPR not sure of they are real journalists ?
I’m not seeing an insane drop in the charts.
https://www.google.com/search?hl=en&gl=us&tbm=&authuser=0&q=baltic+dry+index+chart&oq=baltic+dry+index+chart&gs_l=news-cc.1.1.43j43i53.6983.12728.0.14814.22.5.0.17.17.0.176.663.0j5.5.0…0.0…1ac.1.Q2CzTV1SKOQ
Bloomberg News
Ukrainian Bonds Slide With Stocks as Civil War Threat Escalates
By Andras Gergely and Krystof Chamonikolas
February 19, 2014
Ukraine Clashes
An anti-government protester stands on Independence Square in Kiev during clashes with the police. Photographer: Sergei Supinsky/AFP via Getty Images
Ukrainian bonds suffered the worst selloff on record and stocks dropped as Poland warned its eastern neighbor is on the brink of a civil war after clashes in Kiev killed at least 25 people.
The yield on the government’s $1 billion of notes maturing in June increased 11.35 percentage points to 34.27 percent, an all-time high, at 4:26 p.m. in Kiev. The rate on bonds due in 2023 rose 93 basis points to 11.45 percent. Ukraine’s stock index lost 2.8 percent and the hryvnia, which is managed by the central bank, weakened 1 percent to 8.95 per dollar.
Investors are ditching assets of Europe’s riskiest borrower after President Viktor Yanukovych’s regime yesterday banned protests, vowing to use “all means” necessary to restore order. U.S. and European Union officials condemned the violence, while Poland, among nations calling for sanctions against Ukraine officials, said it had begun to accept refugees.
“The violent escalation of the political standoff brings nothing good to external debt, especially in the short term,” Vladimir Osakovskiy, a Moscow-based economist at Bank of America Corp., said in an e-mailed research note today. “In the absence of clarity in politics in the next few months, we see escalating risks for Ukraine to service its debt.”
…
Looks like its go time in Ukraine and Venezuela.
http://www.slate.com/blogs/the_world_/2014/02/19/turmoil_in_ukraine_is_talk_of_a_civil_war_realistic.html
News / Economy
No Quick Rebound as Clouds Gather Over Thai Economy
February 18, 2014
FILE - A sign indicating the closure of a main touristic road can be seen next to barricades of anti-government protesters near a main stage of the protest in Bangkok, Feb. 5, 2014.
BANGKOK — Any comfort investors in Thailand draw from what happened four years ago, when economic growth, the stock market and foreign investment all surged despite deadly unrest in Bangkok, may be sorely misplaced.
The latest bout of political strife will delay major government spending projects and damage a lucrative tourism industry. And, even if Thailand’s politics calm down, its economy will remain handicapped by weak private investment and rising household debt.
“If you look at the channels through which politics impacts real economic activity, it’s virtually every demand side component of GDP,” said Euben Paracuelles, senior economist at Nomura. “But, where I have a bigger worry is on private consumption and private investment.”
…
SocGen: We See A 20% Probability That China’s Economy Lands Hard This Year
Sam Ro Feb 17 2014, 12:55 PM
China eastern airlines aeroplane
China’s policymakers have been making moves to cool off its debt-fuelled economy.
Economists believe growth will slow to around 7.4% in 2014 from 7.7% in 2013.
Societe Generale’s Wei Yao sees 6.9% growth in her base case scenario. But she warns that there is a risk that China’s transition could prove disorderly, causing the economy to slow much more than anyone expects.
With China slowdown concerns making news lately, SocGen clients’ top question in the past week was “How likely is China hard-landing?”
Yao assigns a 20% probability of a hard-landing, which she considers to be growth of 5% or less. Here’s SocGen’s Michaela Marcussen telegraphing Yao’s commentary:
…
Latin America News
Brazil’s Economy Seen in a Major Downturn
New Data Suggest Growth Weakened Over Past Two Quarters
By Paulo Trevisani in Brasilia and Loretta Chao in São Paulo
Feb. 14, 2014 8:11 p.m. ET
Brazilian President Dilma Rousseff giving a speech on Monday Agence France-Presse/Getty Images
Brazilian data released Friday suggest economic growth has weakened over the past two quarters, illustrating how far a country once considered the darling of emerging-market investors has fallen.
The central bank’s economic activity index fell 1.35% in December from November, dented by a drop in industrial production and weak retail sales. Economists say the data mean the government is likely to declare that economic growth declined in the year’s last quarter after contracting 0.5% in the third period, suggesting the country had entered a technical recession.
Although preliminary data suggest the economy will grow again in the first quarter, a dip into a recession would be a major turnaround for an economy that grew 7.5% in 2010. As China’s growth has slowed and prices for commodities like the soy and iron ore that Brazil exports have cooled down, the country has found itself without an external engine for its economy.
Brazil’s economic performance today is a far cry from its emerging-market peers China and India, which are still growing strongly despite their slowdowns. The collective cooling of the markets has been an unexpected setback for many, particularly consumer companies that invested heavily in these countries in recent years, relying on them as a cushion as demand slowed in developed markets.
…
Russia News
Russia’s Central Bank Doesn’t Expect Economic Growth Recovery This Year
But It Isn’t Considering Monetary Easing
By Andrey Ostroukh
Updated Feb. 18, 2014 9:04 a.m. ET
MOSCOW—Russia’s economic growth is unlikely to recover this year as previously expected due to high volatility in global markets and the possible decline of commodity prices, the Bank of Russia said Tuesday.
In a quarterly report on monetary policy the central bank noted that external factors continue to limit Russia’s economic growth, which it now sees at 1.5%-1.8% this year compared with the government’s forecast of 2.5%.
…
The tragedy of Argentina
A century of decline
One hundred years ago Argentina was the future. What went wrong?
Feb 15th 2014 | BUENOS AIRES | From the print edition
WHEN the residents of Buenos Aires want to change the pesos they do not trust into the dollars they do, they go to a cueva, or “cave”, an office that acts as a front for a thriving illegal exchange market. In one cueva near Florida Street, a pedestrian thoroughfare in the centre of the city, piles of pesos from previous transactions lie on a table. A courier is getting ready to carry the notes to safety-deposit boxes.
…
As the couriers carry their bundles around Buenos Aires, they pass grand buildings like the Teatro Colón, an opera house that opened in 1908, and the Retiro railway station, completed in 1915. These are emblems of Argentina’s Belle Époque, the period before the outbreak of the first world war when the country could claim to be the world’s true land of opportunity. In the 43 years leading up to 1914, GDP had grown at an annual rate of 6%, the fastest recorded in the world. The country was a magnet for European immigrants, who flocked to find work on the fertile pampas, where crops and cattle were propelling Argentina’s expansion. In 1914 half of Buenos Aires’s population was foreign-born.
The country ranked among the ten richest in the world, after the likes of Australia, Britain and the United States, but ahead of France, Germany and Italy. Its income per head was 92% of the average of 16 rich economies. From this vantage point, it looked down its nose at its neighbours: Brazil’s population was less than a quarter as well-off.
It never got better than this. Although Argentina has had periods of robust growth in the past century—not least during the commodity boom of the past ten years—and its people remain wealthier than most Latin Americans, its standing as one of the world’s most vibrant economies is a distant memory (see chart 1). Its income per head is now 43% of those same 16 rich economies; it trails Chile and Uruguay in its own back yard.
…
Buenos Aires Exposed as Debt Balloons on Peso Devaluation
By Camila Russo
Feb 13, 2014 8:20 AM PT
A pedestrian walks past a sign displaying currency exchange rates in Buenos Aires on Feb. 12, 2014.
The city of Buenos Aires, which had been rated more solvent than the federal government since September, is being exposed by the peso’s devaluation because almost all its debt is denominated in dollars.
The Argentine capital has 98 percent of its debt in dollars or dollar-linked securities, versus 57 percent for Cordoba, the province with the second-most highest proportion of dollar debt, according to Moody’s Investors Service. Yields on the city’s 2015 notes soared to a high of 18.2 percent last month after the peso plunged 15 percent in the week ended Jan. 24. That pushed the city’s borrowing costs relative to Chubut, the province with the least foreign-currency debt, to the highest since June 2012.
Local governments increased their reliance on dollar-linked bonds, which pay investors in pesos at the official rate, after funding costs abroad jumped as President Cristina Fernandez de Kirchner nationalized YPF SA in 2012 and tightened currency controls. Buenos Aires, which has $760 million of dollar-linked notes, was cut by Standard & Poor’s to CCC+, or seven levels into junk, on Feb. 10. The city’s obligations rose 53 percent because of the devaluation, according to Standard & Poor’s.
“The city’s main negative characteristic is having an elevated percentage of foreign-currency debt that exposes it to fluctuations in the exchange rate,” Delfina Cavanagh, an analyst at S&P, said in a telephone interview from Buenos Aires. “Its FX exposure made its debt stock almost double after the devaluation so we see it as an important risk.”
…
Does a smaller-than-expected decline in output really herald recovery, especially when other EM country economies are blowing up?
Greek economy contracts less than expected, points to 2014 recovery
ATHENS Fri Feb 14, 2014 5:43pm GMT
(Reuters) - Greece’s economy shrank by a smaller-than-expected 3.7 percent last year, marking the first time it has outperformed expectations since a debt crisis took hold and boosting hopes for a recovery this year.
Greece’s gross domestic product has consistently missed targets set under its EU/IMF bailout partly due to a greater-than-expected impact from austerity cuts, making it ever harder for the country to reach fiscal goals set by the lenders and raising the pressure for additional austerity measures.
The flash estimate of a 2.6 percent decline in gross domestic product in the fourth quarter marked the smallest fall in economic output since the second quarter of 2010 on an annual basis.
…
Take homes, based on the above-posted articles:
1) The EM crisis is a dormant volcano.
2) Stand clear or get burned to a crisp in the next eruption.
The Washington Post sends me links to articles.
‘President Obama, in trouble at home, is quite literally heading for the border. His approval rating is in the 40s, vulnerable Democratic candidates don’t want to be seen with him and Republicans think his unpopularity could win them the Senate. So it’s likely no coincidence that Obama is making himself scarce in these parts.’
‘On Wednesday, he flies to Mexico. Next month, he visits the Netherlands, Belgium, Italy and Saudi Arabia. In April, he travels to Japan, Malaysia, South Korea and the Philippines. Last Tuesday morning, French President François Hollande invited Obama to France for the 70th anniversary of D-Day; Obama accepted before lunchtime.’
‘On Tuesday he was back in Maryland, at a Safeway distribution hub in Upper Marlboro “where delivery trucks get everything from Doritos to diapers where they need to go.”
‘Obama gave an on-the-one-hand, on-the-other-hand update on the economy: “The unemployment rate’s actually the lowest it’s been in over five years. But the trends, the long-term trends that have hurt middle-class families for decades, have continued.” He then spent the next 15 minutes talking about higher fuel-economy standards for trucks.’
‘It’s a worthy cause, no doubt. But diapers, Doritos and diesel won’t deliver Democrats from a drubbing in November.’
Yet we have posters here who tell us that we are on the verge of permanent one party rule by these guys. Out here in the fields, with the economy how it is and this disaster of Obamacare, I don’t see it.
“But diapers, Doritos and diesel won’t deliver Democrats from a drubbing in November.”
Gotta love the alliterative campaign slogan!
“permanent one party rule”
How exactly is the GOP going to stop the Permanent Democrat Supermajority when the majority of its voters are now or will be soon in diapers?
LOLZ
‘How exactly is the GOP going to stop…’
See, this is the disconnect. It isn’t about the GOP. It’s a clumsy, unpopular, ineffective Democrat party. Most voters these days are independents. They don’t like this spying, for instance. You can say, “oh the Democrats will make illegals citizens.” That’s all you’ve got? Throw 20 million workers into this unemployment mess and that’s going to keep you in office? It’ll be a disaster, on top of this horrible situation we’re in.
At some point Democrats have to actually do something voters want, and stop doing things they don’t want. It’s not that hard to understand. The “Romney BAHH!” thing only goes so far.
The proper name for the party is Democratic Party. A member of that party is a Democrat.
http://en.wikipedia.org/wiki/Democrat_Party_(epithet)
“Democratic”
It’s a misnomer.
Here is a litmus test for whether you lean Democrat or Republican: Which side of this story do you care about? (Personally, I am relatively more concerned about killing half a million jobs when labor force participation is at the lowest level since the 1970s. Wouldn’t it be better to keep more low-wage workers working, and subsidize them through EIC?)
Minimum-wage hike would help alleviate poverty, but could kill jobs, CBO reports
Video: Democrats are making a midterm election year push to raise the federal minimum wage.The Post’s Reid Wilson takes a look at what that would mean for two cities.
By Zachary A. Goldfarb, Published: February 18 E-mail the writers
President Obama’s proposal to raise the minimum wage to $10.10 an hour would increase earnings for 16.5 million low-wage Americans but cost the nation about 500,000 jobs, congressional budget analysts said Tuesday.
…
Here’s another point a view:
The CBO projections imply that 500,000 fewer people will be employed at low wage jobs. It did not say that 500,000 people would lose their jobs. This is an important distinction. These jobs tend to be high turnover jobs, with workers often staying at their jobs for just a few months. While there will undoubtedly be cases where companies go out of business due to the minimum wage hike (many small businesses are always at the edge, so anything can push them over) the vast majority of the lost jobs are likely to be in a situations where businesses don’t replace a person who leaves or don’t hire additional workers as quickly in response to an uptick in demand.
This means that we are not going to see 500,000 designated losers who are permanently unemployed as a result of this policy. Rather, the projection implies that workers are likely to find it more difficult to find new jobs when they leave an old job or when they first enter the workforce. With 25 million people projected to be in the pool of beneficiaries from a higher minimum wage, this means that we can expect affected workers to put in on average about 2 percent fewer hours a year. However when they do work, those at the bottom will see a 39.3 percent increase in pay.
http://www.cepr.net/index.php/blogs/beat-the-press/cbo-projects-employment-loss-from-minimum-wage-hike-would-be-comparable-to-impact-of-iraq-war-size-increase-in-military-spending
Who can fault Obama for being generous with our money? Raising the minimum wage is just another tax. Taxation benefits everyone, right?
I’ve asked this here before, and nobody can answer:
Why would the Free Sh*t Army vote for candidates who promise to take their free sh*t away?
As I have correctly predicted, after the GOP croaks, we will have the “choice” between voting for the Free Sh*t Party or the More Free Sh*t Party.
‘Why would the Free Sh*t Army vote for candidates who promise to take their free sh*t away’
IMO these sweeping generalizations are views of the two party system’s facade, and not what exists upon closer scrutiny. What are the things that both parties are united upon? Globalism, which means the US is a nation of borrowers and consumers. And at the same time we can somehow afford to be the worlds policeman, nanny and general babysitter. The red versus blue game is what we are given as a substitute to any debate on these core beliefs of the two party dictatorship.
We’ve been on this road for decades, and as a result we are broke and don’t have a healthy job base. As we’ve discussed before, one reason the PTB are promoting bubbles is to mask the poor condition of the economy. There isn’t any free sh*t anymore, really. It’s borrowed sh*t. And the cracks are everywhere to be seen. Pensions in doubt. Student loans that can’t possibly be repaid. Government debt that can’t possibly be paid off. Just look at what’s happened the past few years. We hit a wall, and what’s the governments policy to address it? Let’s print a bunch of money and drive house prices up! I think these people in DC don’t have a clue about how the real world functions.
‘globalism’
at some point the 0.1% will just pull the plug and walk away.
the u.s.a. economy doesn’t need u.s.a. consumers any more.
what will life be like here when we have a working age population of 200 million but an economy that only needs 50 million jobs?
yugoslavia civil war? the former republics of the u.s.s.r? zimbabwe?
The problem that the Democratic Party has is in the ACA, and Dodd Frank. I know some independents that are (finally) seriously questioning the wisdom of 2,000+ page laws that reach so deeply into healthcare and capital investment.
Romneycare was something like 70 pages. Glass-Steagal was what, 34 pages?
And since the ACA and Dodd Frank were passed with near universal objection from the GOP, the Dems have nowhere to hide.
The ACA so far doesn’t appear to be drawing enough “young invincibles” to work.
Dodd Frank so far has done nothing but slow investment (which slows job creation), and make the big entities even bigger. We are no safer.
Last Tuesday President Obama got off the helicopter in front of The White House - carrying a baby piglet under each arm.
The squared-away Marine guard snapped to attention, saluted and said: “Nice pigs, sir.”
The President replied: “These are not pigs. These are Authentic Arkansas Razorback Hogs. I got one for Secretary of State Hillary Clinton, and I got one for Speaker of the House Nancy Pelosi.”
The squared-away Marine again snapped to attention, salutes and said, “Excellent trade, sir.”
That was a joke, son.
How is your household debt load these days?
American debt explosion: The good, the bad, and the ugly
By Christopher Matthews
February 18, 2014: 3:55 PM ET
Americans are taking on significantly more debt than they have in recent years. A look at what this means for the U.S. economy.
FORTUNE — Americans are busting out their credit cards again in a big way. According to the Federal Reserve Bank of New York’s Household Debt and Credit Report, consumers took on $241 billion in new debt in the fourth quarter of 2013, the largest quarterly increase since 2007.
Though overall debt levels remain below their 2008 peak, the jump in debt is further evidence that consumers have largely shaken off the effects of the recession and that their appetite for debt will help fuel economic growth.
But wasn’t it too much debt that helped create the financial crisis? Well, yes, but debt is complicated. There’s good debt, there’s bad debt, and then there’s downright ugly debt.
So, what does the Federal Reserve’s data say about the state of the economy in 2014?
The good
While we often focus on the dangers of too much debt, debt is necessary for a modern economy to grow. Economist Richard Koo of the Nomura Research Institute has explained how debt factors into a normal, healthy economy:
But following a financial crisis, the economy doesn’t behave this way. After the real estate bubble burst, for instance, the value of assets for both businesses and individuals fell considerably. In response to this, both businesses and individuals used what income they had to pay down debt, rather than taking out debt at all. Continues Koo:
It takes years for individuals and businesses to repair their finances following a financial crisis, so this dynamic can continue for many years, with the economy growing steadily worse all the while. That’s why the recent increase in consumer debt is a good thing. It means that individuals have finally repaired their personal finances (at least in the aggregate) and feel like they can start borrowing again. In this situation, the economy can really begin to grow again.
…
America has forever lost it’s “big boy pants”
“debt is necessary for a modern economy to grow…”
Circular logic cannot fix this error. We have lots of examples of debt based “growth” leading to destruction. More will be at hand shortly.
Wasn’t too much debt what resulted in the collapse that led into the Great Depression?
Debt is necessary for a modern economy to collapse into a depression.
The other way to look at that is: the majority of Americans simply do not have enough cash to meet their daily needs. In a desperate attempt to fend off living on rice and beans; in a desperate attempt to fend off having to send l’il Janey off to school with holes in her shoes and a three year old lunch box; in a desperate attempt to keep gas in the car and buy a new fan belt; in a desperate attempt to keep the house above 55 degrees during one of the tougher winters in recent memory - they will max out their credit cards.
I live in one of the most corrupt, bureaucratically bloated, congested, and overpaid areas of the country. There are tent developments even here.
Most people don’t see them, because they are focused on making a beeline from the parking lot to the supermarket and back in the shortest possible time. There are hour-long traffic penalties for taking too long, anywhere.
It is a hellish environment.
Zero.
Unless you want to count the $2.1 million in residential real estate loans. Before you get too excited about that, please note the tenants make all the loan payments, so it is really tenant debt, I am just a steward for the banker.
“Unless you want to count the $2.1 million in residential real estate loans.”
LOL — got leverage?
Aren’t you seriously concerned about the potential for your household balance sheet to capsize when interest rates increase and asset prices decrease in lockstep?
It’s OPM. I didn’t sign up to bail out the banker or steward if this sucker goes down and tenants can’t pay.
I’m sure most of the guys who stormed the beaches in Normandy didn’t sign up either (they were drafted), but they still got their azzes shot off.
Moral of the story: don’t be one of the “little people”.
Boy you screwed up letting that slip! With that kind of incentive for wishful thinking you have about as much credibility here as a turkey on thanksgiving eve.
Got liquidity?
Wall Street freak-out alert: The Fed has offered a short timeline to tightening. Fasten your seat belts, folks!
Feb. 19, 2014, 12:26 p.m. EST
Fed’s Lockhart: First rate hike likely in mid-2015
By Greg Robb
WASHINGTON (MarketWatch)– Dennis Lockhart, the president of the Atlanta Federal Reserve, said Wednesday that he still thinks the central bank will first hike short-term interest rates in the second half of 2015. In a speech at Mercer University, Lockhart said the central policy question facing the Fed is the “timing of the liftoff.” He said only dramatic developments would cause the Fed to alter the pace of its steady reduction in asset purchases. The Fed has cut its asset purchases by $10 billion at each of the last two meetings and economists expect a similar move next month. Lockhart said the Fed’s forward guidance was a work in progress. “The key criteria for a liftoff decision are a firming of inflation to near the FOMC’s target of 2% and both a quantitative and qualitative closing of the employment gap,” he said. Lockhart said he was “looking through” the spate of weak data since the beginning of the year and still expected sustained higher growth in 2014 as a whole.
Wells Fargo edges back into subprime as U.S. mortgage … - Reuters
http://www.reuters.com/article/2014/02/14/us-banks-subprime-insight-idUSBREA1D07820140214 - 105k - Cached - Similar pages
5 days ago
Burke, VA(DC outer) Housing Prices Cave 21%; Inventory Up A Third
http://www.movoto.com/burke-va/market-trends/
MUSIC TO MY EARS!!! I actually went out with a real-t-whore several months ago to see what there was to see.
You would not believe the bag of tricks. I ran commentary on the POS finish here, the out of code quarters there ( - places that had “finished” basements with sleeping quarters and no egress windows. Wooden stairs. Death traps). Counting stairwells in the square footage. Counting below grade unfinished basements and garages as square footage. Most real-t-whores are not prepared for a customer who verifies anything or who knows how to multiply LxW several times and add it up.
She couldn’t dismiss me (I heard the gears turning in her head). I had on the correct signifiers.
She resorted to how much I’d save on taxes. I responded, excitedly, that my best move, then, would be to bid $100K over asking, to save on taxes, like?
In a desperation move, she finally resorted to the ol’ “elicit sympathy” ploy. A well-rehearsed and tale about her recent miscarriage, recounted with a dainty sniff.
As long as it doesn’t take longer than a minute or two, I’ll pretend to listen with interest on matters that are not based on facts. I frankly do not give a sh*t about what a hired hand thinks.
The real-t-whore attempted to get me to sign a contract in which she would extract a commission from anything I bought, anywhere, for three months. I changed the wording to ‘anything I buy within the town limits of Burke’. She pulled out trump card (I guess) saying she would not “work” with me if I didn’t sign. I told her I felt threatened, and asked if she was threatening me, while pulling out my cell phone. As a Christian, I really should not have derived that much pleasure from seeing how quickly her face turned white.
Had decided years ago that I’m not sinking cash into an area I don’t like. As for Burke in particular - like Reston, it is planned and bland and reeks of smugness. Plus, there are too many Lun-GEYE-lund (phonetic spelling) accents screeching about.
“It’s like we’re a second-class citizen,” she said. “We can’t get the coverage we need.”
Man’s Back Surgery On Hold As Doctors Deny Covered California Coverage
Nick Janes
February 18, 2014 11:43 PM
SONORA (CBS13) — A Sonora mechanic is in so much pain that he can barely walk, but he can’t seem to find a doctor to fix his ailing back after he and his wife switched their insurance coverage through Covered California.
“I can’t sleep on my back,” he said. “I roll around all night, because I can’t lay flat. I can’t lay anywhere for more than five, 10 minutes.”
He’s still working, despite the pain. But finding a surgeon to fix his back has turned into a full-time job of its own.
“We get this coverage and go to the best doctor to fix Chris, and they tell us we’re out of network,” said his wife Tammy.
In January, they transitioned from an Anthem Blue Cross Plan over to Blue Cross Covered California. She says they had to switch to avoid the premium skyrocketing, but didn’t realize their provider network would be smaller.
In January, they transitioned from an Anthem Blue Cross Plan over to Blue Cross Covered California. She says they had to switch to avoid the premium skyrocketing, but didn’t realize their provider network would be smaller.
“It’s like we’re a second-class citizen,” she said. “We can’t get the coverage we need.”
http://sacramento.cbslocal.com/2014/02/18/mans-back-surgery-on-hold-as-doctors-deny-covered-california-coverage/ - 103k
Our family policy costs almost $18,000 a year.
he should go on disability if he can. His back may recover in time on its own. Surgery may make it worse .
I want height, weight and chest and waist measurement on all bad back claims.
Great analysis from the FT about long-term affordability in housing in high interest/high inflation (then) vs. low interest/low inflation (now) environments:
http://ftalphaville.ft.com/2014/02/19/1776182/affordability-backwards/
“In a low inflation world then, money illusion is that a mortgage is cheap when its initial payment is low. Without higher earnings growth, repaying the total debt will consume a far greater share of career earnings. With that pattern repeated across the economy, the question for a housing led recovery is similar to that facing buyers – are today’s mortgages short term cheap but long term expensive?”
So how lucky were our parents in the 70s - fixed mortgage payments were increasingly affordable as wages rose with high inflation, plus they could refinance to ever-lower interest rates. So anyone buying housing right now is betting that the same thing will somehow magically happen again, despite low inflation and near-negative rates? Good luck…
“So how lucky were our parents in the 70s - fixed mortgage payments were increasingly affordable as wages rose with high inflation”
70s is the close to end of the crisis. but right now, we are more likely to be in the 60s, which is the start of the crisis. What should you do at the start of a crisis?
Rents Used to Pay Leased-Home Bonds Fall 7.6%, Morningstar Says
Rents collected on the collateral for the first U.S. rental-home securities declined by 7.6 percent from October to January, according to Morningstar Inc.
Payments declined as expiring leases and early tenant departures left residences backing the bonds of Blackstone (BX) Group LP’s Invitation Homes vacant, Becky Cao and Brian Alan, analysts at Morningstar’s credit-ratings unit, said in a report. While 8.3 percent of the properties were vacant or occupied by delinquent renters in January, renewals on 78.5 percent of leases that expired the prior month exceeded the analysts’ expected rate of 66.7 percent.
The deal’s performance is being watched as Wall Street bankers and institutional property investors seek to follow Blackstone’s $479.1 million transaction in November with additional offerings. Initial lease expirations for the 3,207 homes are scheduled to peak from January through March, Morningstar said.
“As the number of lease expirations decline throughout 2014, and the vacant properties are filled, we expect the vacancy rate to stabilize and to potentially decline,” the analysts wrote in the report sent by e-mail today.
One dealer was offering to sell top-rated notes from the Blackstone transaction for about face value today, according to Empirasign Strategies LLC, which tracks securitization-market trading. Some riskier slices were being offered by JPMorgan Chase & Co. for less than par last month, people with knowledge of trading said then.
http://www.bloomberg.com/news/2014-02-19/rents-used-to-pay-leased-home-bonds-fall-7-6-morningstar-says.html?cmpid=yhoo
Snowing again, like a mudder, today. Called work. Found out they had some layoffs on my day off today. Don’t know if I should be exuberant tomorrow if they give me a pink slip or be ticked if they do not. I’ve been trying to find another job, or at least getting in gear to. Would not surprise me if I get the axe tomorrow. Whatever is good for the company.
Good luck beginner. There is always life after the pink slip. I used to say; “Hell, I was looking for a job when I came here!”
May your pantry be full.
Good luck. I was just recalling in conversation less than an hour ago how the year and a half between my one and only pink slip and my next full-time job was one of my best ever educations, in how to quickly fill your schedule with work by seeking and finding opportunities to use your talent.
You can do it too if you put your mind to it, whether or not you get the axe. We are generally more in control of our own destinies and opportunities than most realize, and I learned this out of necessity.
Beginner, best wishes. Now that you know the way the wind is blowing (sounds like you knew it already, from your experience at the Employment Office) just make it work for you.
Repackage the experience (even if it is ongoing) as a way to get your hands on whatever puts marks up on the scoreboard. Take everything up one layer of abstraction. If it doesn’t sound better from there, take it up another level. Eventually you touch on a core business problem.
That’s how you frame your resume. Best to you.
PS - I agree with Blue. Whatever “it” is, you can’t take it personally. This era is marked by tectonic shifts, over which we have no control as individuals.
“Whatever is good for the company.”
+1 At least you’re lucid.
I was trying to come up with a good metaphor for QE, and this is what I came up with… Please critique/improve as you will:
A lake has a water level… During the summer time the lake water slowly lowers. During the spring, the melting snow refills the lake. What we are doing now is pumping water into the lake during the summer because we don’t want the level to lower. We pump and pump and pump, and the level stays flat. However when spring comes, the water will rush into the lake again, but the lake will already be full and the water will overflow the spillway, and perhaps burst the dam.
So you’re entering the doom and gloom prediction competition. We’ve seen dozens of these kinds of predictions on this blog over the past few years. I don’t know if any of them have actually panned out.
Is the bursting of the dam supposed to represent high inflation? If so, when will this happen? If not, what is it supposed to represent and when will that happen?
Yes, now that deflation is being discussed again, FPSS should be returning any day!
Get this through your heads right now….. the deflationary spiral never went away… it’s still raging, growing and enlarging by theday.
It never left my head, especially when I was at the grocery store or gas station.
Muggy, when you get an idea how groceries are going up while we all have less money to spend, you might be pretty pissed at some persons!
“I don’t know if any of them have actually panned out.”
I do. I participated in the prediction exercise.
TUESDAY, JUN 13, 2006 04:12 PM CDT
The man behind the Housing Bubble Blog
Harvard says: No housing crash. The Internet disagrees.
ANDREW LEONARD
Last week, Harvard University’s Joint Center for Housing Studies released a comprehensive report on the U.S. housing market. Although it made some nods to the sorry — and worsening — state of affordable housing, overall, the report was bullish. There’s been some softness in the market of late, it noted, but fundamentals are strong, and the next decade should see a renewed boom.
The money quote: “The most immediate risks to the housing market now come from the rise in interest rates, the erosion of affordability after years of strong house price appreciation, and the growing inventory of both new and existing homes for sale. But unless the broader economy stumbles and job losses mount, home sales and construction activity will likely dip only modestly.”
At the Housing Bubble Blog, run by Ben Jones, readers were quick to point out a possible flaw in the Harvard analysis. What if the housing boom itself has been one of the main forces supporting the broader economy? Many economists have suggested that the American consumption binge of the past half-decade has been fueled by easy money extracted from housing via refinancing or home equity loans. Couldn’t a slowdown in housing precipitate a wider economic downturn?
It’s a question very much on the minds of economic observers, not least those in government with the power to actually steer the economy.
…
I’m looking at a couple of main things over the next 3-5 years.
1. Rents for commercial REITs over the coming few years. Rents will rise faster than 2% per year. Seemingly perversely (but actually not), as interest rates rise, there will be further pressure on rents to go up.
2. Wage inflation as unemployment falls from weaker and weaker labor participation rates on the heels of demographic forces.
I’m not predicting doom and gloom, but my bet is that there is more than one dove at the Fed who would like to see higher than 2% inflation to make up for the years of below 2% inflation. I heard an ex-Fed economist note that secretly, the Fed would like to see 4% inflation for a while…I don’t know if he has any particular insight other than seeing how these folks think for a time.
The Fed just loaded the gun with all the QE. These two items could be sparks.
1) In the meantime, commercial rents continue to fall as a result of the excess capacity in every sector of the economy.
2) There is no “wage inflation”, thus no overall inflation. The US and Europe are both in a deflationary spiral.
There is inflation(the genesis of which is rising wages) and there is price fixing by the Fed and Fed proxies. Learn the difference.
OK Mathguy, let’s say it isn’t water in a lake but rather steam. Steam is water expanded 1000 times in volume. All it takes is to make the molecules hot. Steam is very dangerous in a closed system. Take away just a little of that energy and KABAM! Back to the tiny volume.
Every government in the world is trying to prevent defaults by pumping steam, because the whole “sucker” is so fragile. There is no lake of water, there is a teacup. The rest is vapors.
nice.
QE3 taper = drain the water out of the lake before the dam bursts
That isn’t draining the lake. It’s just decreasing the flow into the lake.
The Fed is planning on evaporation working fast enough (allowing the debt they bought to mature without replacement).
Washington Orchestrated Protests Are Destabilizing Ukraine
Paul Craig Roberts
February 12, 2014
http://www.paulcraigroberts.org/2014/02/12/washington-orchestrated-protests-destabilizing-ukraine/ - 102k -
The United States has become a proxy for jöö-ish meddling and financial overthrow around the world. Democracy and freedom have little to do with it, IMHO.
We hammered this one out of the park! And it wasn’t “the internet.” It was the folks who have posted here since 2005 who made a mockery out of the experts’ predictions, which history showed was fully justified.
TUESDAY, JUN 13, 2006 04:12 PM CDT
The man behind the Housing Bubble Blog
Harvard says: No housing crash. The Internet disagrees.
ANDREW LEONARD
Last week, Harvard University’s Joint Center for Housing Studies released a comprehensive report on the U.S. housing market. Although it made some nods to the sorry — and worsening — state of affordable housing, overall, the report was bullish. There’s been some softness in the market of late, it noted, but fundamentals are strong, and the next decade should see a renewed boom.
The money quote: “The most immediate risks to the housing market now come from the rise in interest rates, the erosion of affordability after years of strong house price appreciation, and the growing inventory of both new and existing homes for sale. But unless the broader economy stumbles and job losses mount, home sales and construction activity will likely dip only modestly.”
At the Housing Bubble Blog, run by Ben Jones, readers were quick to point out a possible flaw in the Harvard analysis. What if the housing boom itself has been one of the main forces supporting the broader economy? Many economists have suggested that the American consumption binge of the past half-decade has been fueled by easy money extracted from housing via refinancing or home equity loans. Couldn’t a slowdown in housing precipitate a wider economic downturn?
It’s a question very much on the minds of economic observers, not least those in government with the power to actually steer the economy.
…