March 26, 2014

Bits Bucket for March 26, 2014

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




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Comment by Whac-A-Bubble™
2014-03-26 01:00:34

Review: The Financial Crisis and the Free Market Cure
Pierre-Guy Veer March 19, 2014 at 12:08 pm

financial-crisisEspañolGovernment, with its immense coercive and regulatory powers, can (and does force) anyone to act against his self-interest. This is exactly what triggered the lingering economic downturn we have been suffering through since 2008 and the onset of the Great Recession. So unlike what most media outlets parrot, it wasn’t caused by deregulation and unfettered capitalism.

John Allison — chief executive of the Cato Institute and former chief of BB&T Bank — is more than familiar with financial regulations and saw this crisis coming during his BB&T tenure. Like many others in the industry, he had to make subprime loans to could avoid stiff fines from government regulators. Now, in his book — The Financial Crisis and the Free Market Cure — he talks about the causes of the 2008 financial and housing crisis and proposes solutions to avoid another one.

The trigger of this crisis was the housing bubble that inflated during the early and mid 2000s and then popped in 2008. Like the Great Depression of the 1930s, the 2008 crisis can be linked to government intervention, namely an “easy-money policy,” with abnormally low interest rates.

This money was mainly channeled into the housing industry, which, according to Allison, represents the most heavily subsidized domain since the New Deal of the 1930s. These policies include tax credits for low-income housing, that benefit crony developers, and vast, crime-ridden public housing projects paid for by the federal government.

These funds are meant to help every family live in a house, in spite of the fact that this type of acquisition is not for everyone, especially for people who move frequently. Also, officials forget that a house is not necessarily an investment in the economic sense of the term — a good that will be used to produce other goods.

Once the construction is finished, housing can become a consumption good, just like a bag of carrots. In fact, too many houses are a diversion of resources away from more productive allocations and can hinder economic growth in the long run. Further, many jobs directly involved in construction become obsolete during the correction period, once the bubble has popped.

The End of Rule of Law

Comment by rms
2014-03-26 06:42:34

“The trigger of this crisis was the housing bubble that inflated during the early and mid 2000s and then popped in 2008.”

In one version of the story the abrupt end of the dotcom bubble required fresh money, so Greenspan and company sought home equity, IIRC.

 
Comment by LolaLOL
2014-03-26 07:24:43

Ahhhh, I see it all now. Massively subsidize new construction = provide huge incentive attracting illegal labor = permanent democratic supermajority.

All the right wingers whining about the community reinvestment act or whatever are missing the real shot, the long con.

Comment by AmazingRuss
2014-03-26 12:08:05

Don’t leave out the pants-on-head stupidity of the current republican party. With just a modicum of competence they could own congress and the white house.

Comment by Whac-A-Bubble™
2014-03-26 21:52:35

“…pants-on-head stupidity…”

Yep. And to top it off, they pride themselves on it.

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Comment by Albuquerquedan
2014-03-26 15:29:37

The PTB do not care what the parties call themselves or which party is in control since they control the leaders of both. They do care that we continue to move to one global government which they control. Someone asked today why do Chinese pay $500,000 and uneducated illegals from Mexico pay nothing. When the time comes for a merger of the U.S. with Mexico those “illegals” who by then can vote will vote to the merge the two countries and thereby secure free access to United States for all their relatives in Mexico. The PTB will accomplish their goal of reducing American wages to close to the world’s average. As they say the man with a plan beats the man without a plan. While the PTB actually sell amnesty to Democrats by saying it will mean a permanent Democratic majority, the irony is that it really means most of those Democrats will have a much lower standard of living due to this next step. The exception is the billionaires who do tend to be Democrats since they are like the rulers of Rome who controlled the poor to increase their position.

Republicans will offer suffer but they tend to have more white collar skilled jobs and more assets and will suffer less. Think Bill, he will not like the merger but he will have enough gold to hire an army of low paying workers and may even start a business since U.S. wages will be lower enough to compete with any country.

Comment by Albuquerquedan
2014-03-26 15:57:19

paying=paid

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Comment by Bill, just South of Irvine, CA
2014-03-26 07:45:21

“a house is not necessarily an investment in the economic sense of the term — a good that will be used to produce other goods.”

Correct. The author is indicating once you fill the house up with furniture and appliances and toys, it is not a good that will be used to produce other goods.

Contrarily, rentals are goods used to produce other goods - but from the point of view of a renter. The smart people move to their jobs so they don’t have to commute. They rent because of frequent job changes. Just like a car is a way to get you to work at the fastest time. An upscale car is just fluff.

Most of my big ticket items I ever bought outside my investing are tools for my job - nearby apartment, economy car, clothes.

A house in which you pay rent to the bank and to the government is just fluff and very inefficient if you are career-oriented and do not want to be part of the U6 unemployment stats.

Comment by oxide
2014-03-26 08:07:06

Bill, in this respect, how is buying any different from renting? Renters fill apartments with furniture and toys. Ask the Squad to re-post the photo of his spare bedroom full of outdoor gear. Buyers buy economy cars. Hell my beater is almost 7 years old.

One difference is that housing IS an investment in one sense: the mortgage no longer paid on a paid-off house is effectively income as much as any annuity. For example, even if I accounted for taxes and basic maintenance, when measured against rent the owned house will “pay” me about the same as Social Security. This facet of investment is different from price speculation. I still live in the house even if the house value falls to 0.

Comment by Bill, just South of Irvine, CA
2014-03-26 09:07:18

Bill, in this respect, how is buying any different from renting?

Mobility.

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Comment by goon squad
2014-03-26 09:08:03

This message sponsored by the National Association of Realtors®

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Comment by oxide
2014-03-26 09:39:08

In other words, it’s NOT different “in this respect” of producing other goods, which is what the conversation was about.

Mobility is different respect. :roll:

 
 
Comment by Housing Analyst
2014-03-26 09:10:00

“The mortgage no longer paid on a paid-off house is effectively income as much as any annuity”

That income merely serves to partially offset the previous losses to interest and depreciation. And remember, the depreciation is ongoing and it accelerates as the structure ages.

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Comment by Bill, just South of Irvine
2014-03-26 09:31:49

Oxide, Tell me how much that income after that 30 year mortgage matters when your neighborhood becomes a ghetto. And unless you are within a mile from a coast, in San Francisco, or maybe Manhattan, or at a top ski resort it will become a ghetto. It is no annuity. An annuity is portable. When your Eashington D.C. area becomes Detroit and your house value drops to zero I suppose you still need savings for health care, to eat, pay utilities, buy clothes, and buy lots of ammo and maintain good quality firearms to fend yourself from the gangs.

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Comment by Tarara Boomdea
2014-03-26 11:10:33

Comment by Bill, just South of Irvine
2014-03-26 09:31:49

Oxide, Tell me how much that income after that 30 year mortgage matters when your neighborhood becomes a ghetto.

Having spent my childhood moving from place to place in our Manhattan neighborhood as illegal aliens invaded, this is always uppermost in my mind when I consider buying.

We did finally buy in Westchester County (NY). After 13 years, we sold at the peak of the bubble, as did our next door neighbors.

Two houses (ours and next door) changing hands transformed the whole atmosphere in the quiet little cul de sac.

Our neighbors moved first. The new neighbors had about four motorcycles, which seemed to be revving day and night. Their son had a penchant for screaming MF at the top of his lungs.

We moved shortly after and heard the new owners made the house into a day care center, complete with a billboard sign on the lawn. (No clue how they got the permit.)

It must have killed the newer neighbors who paid $500-600K for their houses the year before.

 
Comment by tresho
2014-03-26 11:19:52

complete with a billboard sign on the lawn.
The tackiest sign I ever saw was a neon one flashing “SEPTIC TANKS” along a state highway somewhere in Ohio. Owner was probably paid for installing a tank with that sign, as it made no sense otherwise. After a few decades, it disappeared.

 
Comment by oxide
2014-03-26 11:36:27

In 30 years I might be wishing for some gangsta to shoot me anyway. :razz:

 
Comment by Bill, just South of Irvine, CA
2014-03-26 13:28:45

Tresho, I’ve seen similar things happening in Phoenix. A 20-something engineer and his girlfriend bought a $200,000 house together in North Phoenix. Without casing the neighborhood to see if there were nuisances. Well the next door neighbor kid was a nuisance, with a motorized skooter revving up and down the street at 11:00 pm.

The young couple I knew were some of the first FBs I heard of in the last decade.

People forget the most important thing about when you buy a house is not if it has your amenities, but if it is in a neighborhood of decent and considerate people with other people’s peace and quiet in mind. Those who want party houses move to places such as Hermosa Beach in L.A.

Funny thing about HB. I would go bar hopping there over the years. I would walk through a neighborhood of $900,000 houses between Pacific Coast Highway and Hermosa ave. Even some of the expensive houses had loud people. Trust fund brats. And then people coming up the pier avenue from the bars staggering through the neighborhoods. Beautiful! You don’t want to be in a drunken neighborhood unless you like to drink and not drive.

50 years ago my family lived in a small community near Yosemite Park in central California. We used to go on vacations to other states and leave the house unlocked. You cannot do that anywhere in California these days and not get robbed.

 
Comment by Avocado99
2014-03-27 00:05:44

Lots of people leave their doors unlocked in cool towns. But we wont tell you where they are.

I am now a renter. But as an owner of 3 props. I always made money on the sale. Must have been luck.

 
Comment by Housing Analyst
2014-03-27 02:49:02

Houses are a loss.

 
 
 
 
 
Comment by Whac-A-Bubble™
2014-03-26 01:01:48

Which U.S. housing markets are currently the most “bubble”-y?

Comment by Whac-A-Bubble™
2014-03-26 01:03:34

Report: Southland housing markets most “bubble”-y in U.S.
An open house is held at a three-bedroom home for sale in Garden Grove in January; home prices are 16% higher than they ought to be in Orange County, according to Trulia chief economist Jed Kolko. (Bryan Chan / Los Angeles Times)
By Tim Logan
March 25, 2014, 7:41 a.m.

Is the housing bubble back?

In Southern California, it just might be.

A report out Tuesday morning from real estate website Trulia ranks three Southland regions among the five most overvalued housing markets in the nation right now, warning a new housing bubble — at least locally — could be in the making.

Compared to incomes here and past trends, home prices are 16% higher than they ought to be in Orange County, 13% higher in Los Angeles County and 10% higher in the Inland Empire, according to Trulia chief economist Jed Kolko. Not coincidentally, asking prices are up by 16% or more year over year in all three of those places too. In some parts of the region, sales prices have returned to pre-crash levels. And they have climbed sharply over the last year almost everywhere, though those gains have stalled lately.

Kolko is not yet worried about a national housing bubble such as the one that tanked the economy in 2008. In most places, home prices are still in line with economic fundamentals. He found only 19 markets, of the 100 biggest metro areas, where housing is overvalued, compared to early 2008 when it was overvalued everywhere.

But of those 19 overvalued markets, eight are in California. So if there is a new bubble, expect it to be starting right here.

Comment by j-j-j-joe
2014-03-26 06:27:29

Are MFH or Brooklyn on the list of bubbly places?

Six castles that cost less than an NYC apartment:

http://i.imgur.com/R0c7bJT.jpg

Comment by Housing Analyst
2014-03-26 06:32:13

Liberace!

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Comment by goon squad
2014-03-26 06:34:11

hey j-j-j-joe do you have a s-s-s-stutter?

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Comment by j-j-j-joe
2014-03-26 06:37:02

the j-j-j-j thing is my impression of how RAL sounds when he’s stammering out my name

 
Comment by Housing Analyst
2014-03-26 06:48:28

Now why would anyone fear a harmless harpsichordist Liberace?

 
Comment by Ben Jones
2014-03-26 06:48:58

‘hey j-j-j-joe’

If you keep changing screen names I’m going to stop saving you from the spam bucket.

 
Comment by j-j-j-joe
2014-03-26 06:57:47

If you keep changing screen names I’m going to stop saving you from the spam bucket.
——————-

OK, noted, I’m sure keeping goon out of there is taking up enough time.

 
Comment by In Colorado
2014-03-26 07:14:17

If you keep changing screen names I’m going to stop saving you from the spam bucket.

Come on Ben, it’s not like he’s pretending to be someone else. We all know it’s him.

 
Comment by Albuquerquedan
2014-03-26 07:19:26

I think Ben is objecting for technological reasons. Apparently it places a burden of Ben to sort through the spam files. Easy way to solve, anyone that changes his her name should send Ben an additional check for the inconvenience it cause him.

 
Comment by scdave
2014-03-26 07:30:44

+1 Adan…I agree…

 
Comment by Ben Jones
2014-03-26 07:41:06

I’ll go over this again. The software that runs this blog is freeware, so there is no manual or support. The plug-in I use for spam is the same. I can only guess as to how it works. Spam comes in with (usually) computer generated text. Lots of it looks like gibberish, like j-j-j, etc. Spam is also created using multiple screen names from the same IP address. If a poster is changing screen names a lot, the plug-in thinks it’s spam. It puts it in a folder. I have to go through this folder and look at this before I delete it forever. A couple of times of being identified as spam and being deleted and the source no longer shows up; the software deletes it automatically. When that happens, it’s irreversible.

 
Comment by Ben Jones
2014-03-26 07:46:22

I should mention links. The most obvious reason spam exists is to put links all over the web. So if you post several links, or a link to a known spam site, or just a kooky made-up URL, it will be flagged as well.

 
Comment by oxide
2014-03-26 07:47:57

Ben, if it’s a time or technical problem, shouldn’t it apply to all the multiple handles? They know who they are.

 
Comment by Ben Jones
2014-03-26 08:00:26

It does apply. Joe likes to play around with screen names more.

 
Comment by j-j-j-joe
2014-03-26 08:35:57

I’ll stop doing it, I’ll stick with this screen name. I’m surprised I change more often than goon. Must be my “yummie” tendencies lurking beneath the surface.

 
Comment by Housing Analyst
2014-03-26 08:38:07

Why not “Liberace”? It’s fitting, you like it and we all know you by it.

 
Comment by Albuquerquedan
2014-03-26 08:47:48

Must be my “yummie” tendencies lurking beneath the surface.

Not too far below the surface.

 
Comment by oxide
2014-03-26 09:02:09

+1 A-dan. Not too sure about the “lurking” either. :grin:

 
Comment by MightyMike
2014-03-26 09:22:01

I thought that the screen name had to do with Joe’s interest in the music of the ’60s and ’70s. It reminded me of the Who song My Generation which was sung with a stutter. It would fit as well because Joe’s a big cheerleader for his generation.

 
Comment by j-j-j-joe
2014-03-26 10:26:23

OK RAL, I’ll make a deal with you. I’ll become “Liberace” if you will become “BabyBoomer Esiason”.

 
Comment by Housing Analyst
2014-03-26 10:29:11

Great idea but we’re only allowed one username and our current name is fundamental to our mission.

 
Comment by oxide
2014-03-26 12:47:11

Joe’s too young for The Who. Maybe Billy Joel and his heart attack-ack-ack-ack-ack-ack?

 
Comment by Albuquerquedan
2014-03-26 13:13:25

No, its his love song to Lola. :grin:

I ain’t usually lost for words
This has got to be a first
And I’m tryna find the reason why I’m
Stu- stu- stu- stuttering

Something funny’s happening
I’m at a place I’ve never been
And there’s got to be a reason why I’m
Stu- stu- stu- stuttering

Every time you look my way
Something in me feels so strange
And I’m starting to think you are why I’m
Stu- stu- stuttering

I said hel, hel, hel, hello
And my, my, my, my, my name is
And it’s so frustrating ’cause I don’t wanna let you down
My mind is racing, but it won’t come out

Can’t believe that I can’t talk
But it’s not my fault
‘Cause there’s something that you do that’s got me
Stu- stu- stu- stuttering

There’s so much that I wanna say
But something’s getting in my way
And I gotta figure out how to stop
Stu- stu- stuttering

I said hel, hel, hel, hello
And my, my, my, my, my name is
And it’s so frustrating ’cause I don’t wanna let you down
My mind is racing, but it won’t come out

Try to breathe but I’m suffocating
Just be me but it’s complicated
I wanna tell you who I am, where I’m from
Where I go when I wanna be alone

I want you to know me better
Once I get my thoughts together
It should be so easy to tell you how I’m feeling
But I can’t stop stuttering

Stuttering, stuttering
Stu- doo doo doo doo doo
Stuttering

I ain’t usually lost for words
This has got to be a first
And I’m starting to think you are why I’m
Stu- stu- stu- stuttering

Songwriters
SULLIVAN, JAZMINE / GAD, TOBY

Published by
Lyrics © Universal Music Publishing Group, EMI Music Publishing

Read more: Jazmine Sullivan - Stuttering Lyrics | MetroLyrics

 
Comment by Housing Analyst
2014-03-26 14:29:44

That’s it~~ Good catch ABQdan.

 
 
 
 
Comment by Whac-A-Bubble™
2014-03-26 01:06:26

10:34 am Mar 25, 2014
Housing
There’s No Housing Bubble, but Places Like California Starting to Look Frothy
By Conor Dougherty

Have the nation’s rapidly rising home prices thrown us back into a housing bubble? Fortunately for the economy — if unfortunately for buyers who’ve been frustrated by the rebound in home prices – the answer is no. But some of coastal markets are starting to look frothy. California: We’re looking at you (you too, Florida).

A recent Trulia report gauges whether home prices are over or undervalued, and where. Nationally, home prices are still undervalued by about 5%, Trulia estimates. Home prices aren’t as cheap as they were, and interest rates aren’t as low, but both are still low by historical standards. So U.S. housing markets are for the most part affordable — even for middle class buyers.

At the same time, the Homes-Are-Crazy-Affordable era has come to a close. When home prices hit their bottom at the end of 2011, national home prices were about 15% undervalued. That’s no longer the case, and in some select markets rising prices are coming unchained from their long-term fundamentals.

California is one. There, gains in some of the hottest markets are looking unsustainable. The Orange County metro area is about 16% overvalued, Trulia says. Nearby Los Angeles is 13% overvalued. Six of the nation’s ten most overvalued cities were in California, according to Trulia.

What’s in a bubble? Trulia tries to gauge an area’s “fundamental value” through a combination of historical prices, local wages and income streams like rent. So rising prices, even rapidly rising prices, don’t necessarily mean bubble. Things get sketchy when prices rise fast enough to become disconnected from local incomes and rental rates.

“The key is that each metro has its own normal. And bubble is not the same as lack of affordability. Detroit was affordable even at the height of the bubble, while San Francisco was out of reach to many even at the worst of the bust,” notes Jed Kolko, Trulia’s chief economist.

Comment by Bill, just South of Irvine, CA
2014-03-26 08:02:48

It’s all been bubbly here in Southern California since 2003. I survived seven years of working here by renting far cheaper than the PITIM and cost of commuting that people here incur just to call themselves “home owner.”

With all the money I had left over “throwing my money away on rent” instead of throwing my money away on PITIM, I had no better place to put it but stock funds, precious metals, and government securities.

 
 
Comment by Whac-A-Bubble™
2014-03-26 01:15:26

Housing Sales Still Under the Weather, But Not From the Weather
BY Tim Mullaney | 03/25/14 - 10:58 AM EDT

NEW YORK (TheStreet) — Here’s what you need to know about the housing numbers released Tuesday.

They weren’t great. But they weren’t terrible. For once, whatever was wrong was not really about the weather.

Overall, new homes sold at a seasonally adjusted annual rate of 440,000 in February — meeting the average forecast in a survey by Econoday, and about 1% less than at this time last year.

That’s the good part, which augurs fairly well for the spring selling season. It’s a big deal for the economy because residential construction and related specialty trades are still more than a million jobs short of the pre-recession highs. A surge in construction offers hope for both employment and higher wages — home building wages have climbed 5% in the last 12 months for which the government has reported data.

The bad news: The big dip in the numbers was sales in the western United States, where sales were down 27% from a year ago, to an annual rate of 95,000 homes. Since the weather wasn’t a major factor in the West — it has been dry in California and not snowy as it has been in the East and Midwest, for instance — that’s at least a mild concern.

Sales rose 20% in the southern states to 255,000 homes a year, so concerns about the economy may not be the problem. Instead, it may be that affordability is an issue in some markets, especially out west.

A new report by Trulia.com says the national housing market is still about 5% undervalued, but a larger number of local housing markets have seen home prices rise faster than local fundamentals should support. And they are concentrated in the west — right of the top 11 California metropolitan areas are overvalued, Trulia’s Jed Kolko says, out of 19 overvalued metros nationwide.

There’s not any huge risk of a new housing bubble — as Kolko points out, the Case-Shiller/Standard & Poor’s House Price indexes show price growth moderating in recent months.

 
Comment by Whac-A-Bubble™
2014-03-26 01:18:17

Housing’s mixed signals: Are we in a bubble or not?
Diana Olick | @diana_olick
15 Hours Ago
CNBC.com

At face value it doesn’t make a lot of sense. Sales of existing homes have declined in six of the last seven months, and sales of newly built homes are still running at less than half the pace of historical norms.

Home prices, however, continue to rise. They are rising so far, so fast in some markets that several analysts are now crying “bubble!” while others contend homes are still largely undervalued.

Analyzing home price levels relative to fundamental prices leads us to conclude that there is no need to fear a bubble for at least a few years to come, if at all,” say researchers at CoreLogic, who base their thesis on the fact that recent house price appreciation is a result of a market correction for houses being undervalued since the housing crash.

 
Comment by azdude
2014-03-26 06:02:58

quit your job and let your stocks and your house make you some cash.

Comment by Bill, just South of Irvine, CA
2014-03-26 08:06:44

what house?

I figure my stock funds on the average are giving me $110,000 gains a year on average. And of course my cost basis is very reasonably below the NAV on most of my funds. Not much to worry from this point of view. But I’m not about to buy a Bentley convertible.

Comment by In Colorado
2014-03-26 09:58:38

It’s a good thing stocks always go up :-)

And before you think I’m picking on you, I also own stocks.

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Comment by Bill, just South of Irvine, CA
2014-03-26 12:15:59

My stocks went down from 2000 to 2003. And from 2008 to 2009.

When did I say stocks always go up? When?

I have been saying stocks are the best return in the long run on any asset class. I have been beating my chest about that for years here. So stay out of the S&P 500 index fund and put all your money in cash. I dare ya!

 
 
 
 
Comment by goon squad
2014-03-26 06:36:37

up 9% year over year, $200+ per square foot is the new normal

http://www.bizjournals.com/denver/news/2014/03/25/case-shiller-denver.html

Comment by scdave
2014-03-26 07:33:15

$200+ per square foot is the new normal ??

Unfortunately we left that station long ago…$600. is the new normal around here…

Comment by goon squad
2014-03-26 07:42:01

You are coasty coastal, n’est pas? SC = Santa Clara?

This is flyover here. Just another cowtown (there was a recent article about an infestation of tumbleweeds in some new Front Range development). The incomes here do not support $200+ per square foot.

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Comment by scdave
2014-03-26 09:13:31

n’est pas? SC = Santa Clara ??

Yep…95051

The incomes here do not support $200+ per square foot ??

Well, I don’t think many incomes here support our $600. per square foot either…Really big down payments is what appears to be playing out here thereby making the income to debt ratio within reach…Don’t ask me where the cash is coming from because your guess is as good as mine although I believe stock is playing a significant role…

 
Comment by MightyMike
2014-03-26 09:25:39

So how do the realtors spin the tumbleweed issue? Do they say it’s cool because it gives the neighborhood a nice western, cowboy feel?

 
Comment by In Colorado
2014-03-26 10:02:19

So how do the realtors spin the tumbleweed issue? Do they say it’s cool because it gives the neighborhood a nice western, cowboy feel?

Those nabes don’t fetch $200 a square foot. A few days ago I posted links to houses in suburban Denver that are ~$100/sq ft. Drive a bit north to Greeley and prices drop to well below 100/sq ft.

 
Comment by In Colorado
2014-03-26 10:03:49

And plenty of people commute from Greeley to jobs in the northern Denver metro area.

 
Comment by Albuquerquedan
2014-03-26 13:50:41

Do they say it’s cool because it gives the neighborhood a nice western, cowboy feel?

Its the Russkies fault. Russian thistle was not even in this country when most western movies are set. It is an invasive species that entered our country because we did not adequately control our borders and multiplied like crazy. Isn’t it interesting how history repeats itself?

 
 
 
 
 
Comment by rms
2014-03-26 06:44:21

“Which U.S. housing markets are currently the most “bubble”-y?”

It has to be So California.

 
Comment by Rental Watch
2014-03-26 08:51:58

Coastal California seems to be the top of the list from my standpoint.

Comment by Housing Analyst
2014-03-26 09:04:39

It certainly in terms of fraud and corruption.

 
Comment by scdave
2014-03-26 09:18:04

Coastal California seems to be the top of the list from my standpoint ??

Depends how you define coastal…Many areas actually on the coast have not gotten real bubbly…SLO has gone up but it has not gotten stupid…

Comment by Rental Watch
2014-03-26 13:35:45

As a broad region, there seem to be a lot more places that have gone crazy along the coast than not. I’m sure there are exceptions.

There are 15 counties that touch the ocean (excluding Santa Clara–I don’t count the bay).

Those that might not be completely bonkers perhaps are 3-6 in number, Del Norte, Humboldt, Mendocino (all WAY north), and then SLO and perhaps Monterey and/or Santa Barbara (although I bet these last 2 are on their way).

The others (Sonoma, Marin, SF, San Mateo, Santa Cruz, Ventura, LA, Orange and San Diego) seem to have all gone completely nuts.

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Comment by rms
2014-03-26 17:48:53

“SLO has gone up but it has not gotten stupid…”

San Luis Obispo County, California
-median home sales price: $415,000
-median household income: $58,630

Note that S.L.O. County includes areas like Paso Robles.

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Comment by Avocado99
2014-03-27 08:25:36

The difference between SLO city and Paso is like, Malibu and Fresno.

 
Comment by rms
2014-03-27 12:20:49

“The difference between SLO city and Paso is like, Malibu and Fresno.”

+1 True. I was thinking Malibu and Merced. :)

 
 
Comment by Avocado99
2014-03-27 00:10:46

SLO has the highest COL in the state if you consider local wages.

It takes 1.9 jobs to live there. 1.8 on SB.

But it is also one of the best quality of life towns in all of the USA with perfect weather.

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Comment by rms
2014-03-27 07:18:21

“SLO has the highest COL in the state if you consider local wages.

It takes 1.9 jobs to live there. 1.8 on SB.

But it is also one of the best quality of life towns in all of the USA with perfect weather.”

+1 It was clearly impossible for us to raise children there with mom at home. But we didn’t seek social services; we moved north to eastern Washington. One heck of a change, IMHO.

 
 
 
 
 
Comment by Whac-A-Bubble™
2014-03-26 01:09:57

The Reserve Bank of Australia is sounding the alarm on housing speculation.

Comment by Whac-A-Bubble™
2014-03-26 01:10:57

Buyers beware: RBA says housing market will cool off
Date March 26, 2014 - 4:18PM
Jonathan Shapiro
$A surges as RBA chief addresses bubble fears, says home building to boom

The Reserve Bank is sounding the warning bell on housing speculation, commercial property and retail securitisation funds in its semi-annual financial stability report released on Wednesday.

While the Reserve Bank has generally quelled speculation that there is a housing bubble, it has used the report to reiterate the risks of “speculation” to both housing investors and lenders.

The bank said that stronger activity in the housing market particularly by investors can be a signal of “speculative demand which can exacerbate property price cycles and encourage unrealistic expectations of future housing price growth among property purchasers”.

“While rising housing prices and greater household borrowing are expected results from the monetary easing that has taken place and are helping to support residential building activity, they also have the ability to encourage speculative housing activity,” the bank said.

“It is important for investors and owner-occupiers to understand that a cyclical upswing in housing prices when interest rates are low cannot continue indefinitely and they should therefore account for this in their purchasing decisions,” the RBA said.

 
Comment by Whac-A-Bubble™
2014-03-26 01:11:57

Australia central bank warns against looser lending standards in housing market
SYDNEY Tue Mar 25, 2014 8:31pm EDT
A suburban street is seen in Geelong February 24, 2014. REUTERS/Jason Reed

(Reuters) - Australia’s central bank on Wednesday urged banks not to take undue risks and relax their lending standards, warning the current low interest rate environment has the potential to encourage speculative froth in the housing market.

In its 56-page Financial Stability Review report, the Reserve Bank of Australia (RBA) said the country’s financial system is sound and major banks are well placed to meet higher international liquidity standards due to kick in next year.

It noted that local banks have increased their resilience to adverse shocks since the global financial crisis and their asset performance has continued to gradually improve.

“With banks’ bad and doubtful debt charges now at relatively low levels, and in an environment of moderate credit growth, the sources of profit growth may be more limited in the period ahead,” the RBA said in its twice yearly review.

“It will be important for financial stability that banks do not respond by unduly increasing their risk appetite or relaxing their lending standards.”

One area that needed particular attention was their housing loan practices, the RBA said.

“The pick-up in lending for housing would be unhelpful if it was a result of lenders materially relaxing their lending standards,” the report said.

 
 
Comment by Whac-A-Bubble™
2014-03-26 01:19:28

Did the weather dent new home sales in your area?

Comment by Whac-A-Bubble™
2014-03-26 01:31:27

Originally-reported January new home sales in U.S. = 468,000
February new home sales = 440,000
Decline in rate of new home sales (based on originally-reported figure):

(440/468-1)*100% = -6%.

Sounds like “they” had better revise that January figure downwards in order to reduce the perceived rate of decline!

 
Comment by Whac-A-Bubble™
2014-03-26 01:32:27

New-home sales fell across most of U.S. in February
New-home sales fell in February across most of the U.S., after surging a month earlier. (Patrick T. Fallon / Bloomberg)
By Andrew Khouri
March 25, 2014, 8:30 a.m.

Sales of recently built homes fell back in February, as harsh weather and high costs held back buyers.

New-home sales dropped 3.3% from January to a seasonally adjusted annual rate of 440,000 last month, the Commerce Department said Tuesday. Economists had expected sales to drop after an unexpected surge in January.

Economists, though, anticipated a slightly better showing. The median forecast for those polled by Bloomberg News was for an annual rate of 445,000. January’s rate was also revised downward from 468,000 to 455,000.

The report comes as builders have expressed pessimism over the new-home market. Developers have said a shortage of ready-to-build lots, few skilled workers and rising building costs have held them back.

New-home buyers have also struggled recently with cold weather and higher prices and mortgage rates.

Sales fell in all regions except the Midwest, where they surged 36.7%. Sales dropped 15.9% from January in the West, a major homebuilding region spared February’s extreme weather.

The national median price for a new home was $261,800 last month, up from $260,800 in January. Compared with February 2013, the median price fell 1.2%.

Comment by LolaLOL
2014-03-26 07:28:40

I would think new home builders have many more ways to disguise prices declining, what with all the upgrades, incentives, financing tricks, etc.

Comment by oxide
2014-03-26 07:53:26

Even Househunters admits this. Anytime the clueless househunters look at a new build, the realtor has to remind them that the builder will not negotiate on price; they only add (profitable) upgrades.

Why would homebuying “surge” only in the Midwest? Investors swooping in?

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Comment by Albuquerquedan
2014-03-26 08:56:08

Anytime the clueless househunters look at a new build, the realtor has to remind them that the builder will not negotiate on price; they only add (profitable) upgrades.

When I bought just before the tax credit expired, I made the builder negotiate. I wanted the price reduced by essentially the amount of the credit because I expected the house to fall by at least the $8000 (which was significant in flyover). The builder wanted to pull out all the appliances, which I rejected. Then just before agreeing he just wanted to pull out the washer and dryer which I rejected which made the Realtor I was working with freak out but in the end I got everything I wanted including the cheap but new GE washer and dryer. As Realtors go she was not bad and since I was not paying her, I got my money’s worth but I never forgot whom she was working for.

 
 
 
Comment by Rental Watch
2014-03-26 13:45:33

More interesting to me is the year on year data.

West down from 131 to 95 Y-o-Y…down 30% or so.
Midwest about flat (66-67)
South up 213 to 255
NE down 35 to 23

Overall supply has gone up from 152 to 189. I sure wish they would give data on WHERE supply has increased by region.

Comment by Housing Analyst
2014-03-26 14:32:47

I’m not sure how supply can go up anymore than it has considering how overbuilt everything is.

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Comment by inchbyinch
2014-03-26 07:27:00

I recall when the reic/nar said a movie opening (can’t remember the movie) dampened current sales. It was just hilarious.

Comment by oxide
2014-03-26 09:45:35

Which of course was total bunk. The target demographic of any big opening movie is 100% fangirlz and fanboyz, 96% of whom are too young, too lucky-ducky poor, or spent too much of their down payment money on costumes, to even think about buying a house. Believe me I know.

Comment by inchbyinch
2014-03-26 14:24:36

oxide
You’ve got to give them credit for the ability to lie, embellish, and deceit. Evidently, they think people are that stupid.

Reminds me of the Fraud & Death Administration = FDA.
Not to happy about Arsenic in my chicken.
Hey, we made Pfizer take the chicken feed drug off the market. What they didn’t disclose is that Roxarsone was replaced with Nitarsone. I’m not eating chicken anymore. Eggs are my next phase out.

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Comment by Tarara Boomdea
2014-03-26 17:35:05

Comment by inchbyinch
2014-03-26 14:24:36
Reminds me of the Fraud & Death Administration = FDA.
Not to happy about Arsenic in my chicken.
Hey, we made Pfizer take the chicken feed drug off the market. What they didn’t disclose is that Roxarsone was replaced with Nitarsone. I’m not eating chicken anymore. Eggs are my next phase out.

Wow. What is safe to eat at this point?

 
Comment by inchbyinch
2014-03-26 22:38:40

Tarara
Not much. That’s for reading my post and taking it seriously. No wonder our cancer epidemic is a vicious cycle. The conglomerates of chemical and drug companies are literally killing us.

I do Breast Cancer Prevention volunteerism work and the BS the ACS, FDA, USDA, Big Pharma, Make Up, Personal Care and Food Companies denying certain know carcinogens just haven’t been proven just pisses me off. We live in a very toxic world.

A Yale grad said when he was an FDA employee, he was appalled at what their policies were, and he was told they work for industry.

 
Comment by inchbyinch
2014-03-26 23:18:07

http://www.huffingtonpost.com/chris-hunt/arsenic-in-chicken_b_3267334.html

Just reading this now.
Not to good for my insomnia, but wth.
The shenanigans continues with the FDA and Pfizer.

 
Comment by Tarara Boomdea
2014-03-27 07:13:48

Oh I do; it’s appalling. I guess you can only do the best you can.

I have to put up with some sighing from my family, what’s bad to eat now, etc. My daughter’s diag is sub-clinical Asperger’s, so I’ve tried to be aware of foods that help or hurt. There’s a lot of things I’d avoid giving her when she was a kid, but she’s over 21 now so I wouldn’t insult her by trying to control what she eats. She makes pretty good choices. Obviously everyone would benefit from less sugar, etc.

 
Comment by inchbyinch
2014-03-27 11:00:13

Tarara
Sorry to hear about your daughter. You seem like a great gal, and a good mom. As far as the eyes rolling crowd, I get that condescending arrogance as well. They are the brainwashed zombies.

in 1931, Dr. Otto Warburg, won the Nobel Prize in Medicine for his hypothesis that the origin of a (tumor) cancer cells might have a secondary cause, but the formation of high glucose and lack of oxygen is the first change of the cell. Many current docs/scientists are proving him right (revisited hypothesis). Cancer is turning out to be a metabolic disease that is damaged mitochondria. Blood Cancers are different.

Someone said (can’t recall who) “Science progresses one funeral at a time”. So true.

 
Comment by Tarara Boomdea
2014-03-27 12:25:42

Ah, she’ll be fine (very young for her age, but genius IQ). TMI risk here but my house is like a hospital ward, taking care of 82 yo mother with leukemia, crazy old dog.

Back to housing, stability would be one reason I’d buy under the right circumstances; I hate the PM, the inspections and the owner is acting weird towards us. It adds to my paranoia about having to move before we’d like.

Rents here (Vegas) are still 2x a mortgage payment. Ben mentioned a “bloodbath” of a market here but most locals are very rah rah recovery.

 
 
 
 
 
Comment by Whac-A-Bubble™
2014-03-26 01:34:53

Are you fearing China’s slowdown?

Comment by Whac-A-Bubble™
2014-03-26 01:37:46

ft dot com
March 25, 2014 4:07 pm
China’s struggle for a new economy
By Martin Wolf
When a superb horse meets a high obstacle, the odds are on the horse. But even the best may fail

What are the prospects for the Chinese economy? Few, if any, economic questions can be more important. I have just attended this year’s China Development Forum in Beijing, which brings western business leaders and scholars together with senior Chinese policy makers and academics, with this question very much in my mind.

Outside China, pessimism has been growing about the ability of the colossus to sustain its rapid growth. Worriers are paying particular attention to excessive capacity, investment and debt. I share the view that making the transition to slower and more balanced growth is an extraordinarily hard challenge even by the standards of those China has already met. Yet betting against the success of Chinese policy makers has been a foolish wager. When a superb horse meets a new obstacle, the odds must be on the horse. But even the best horse may fall.

 
Comment by Whac-A-Bubble™
2014-03-26 01:40:36

China poised to ramp up its stimulus policies
Date March 26, 2014 - 1:21PM
Glenda Kwek
Business Reporter
Focusing on growth: China’s Finance Minister Lou Jiwei. Photo: AP

Signs that China’s economy is coming off the boil are fuelling speculation that the country’s government will step in with new stimulus measures and could even cut official interest rates.

But any stimulus measures are expected to stop short of the massive economic “pump priming” undertaken by the country in 2008-09, when the central government announced a four trillion yuan package.

“Can growth stabilise without a major change of policy stance? We believe it cannot, as tight labour market conditions suggest that potential growth has already dropped to around 7 per cent or below,” analysts at Japanese broker Nomura said in a note.

“From a cyclical perspective the cumulative policy tightening since mid-2013 will likely damage investment momentum in coming quarters unless the policy stance loosens.”

Comment by Combotechie
2014-03-26 06:34:36

China needs to build more Ghost Cities.

Comment by In Colorado
2014-03-26 07:23:02

And don’t forget the bullet trains to nowhere.

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Comment by Albuquerquedan
2014-03-26 07:30:30

Yes because we do not want Jerry Brown to be building the only one of those.

 
Comment by Whac-A-Bubble™
2014-03-26 07:45:31

And they will, so long as more stimulus is needed…

 
Comment by In Colorado
2014-03-26 09:18:16

Yes because we do not want Jerry Brown to be building the only one of those.

Jerry’s train wouldn’t go “nowhere”. But that’s irrelevant, as it will never see the light of day.

 
Comment by AmazingRuss
2014-03-26 12:19:00

It goes somewhere in the central valley… worse than nowhere.

 
Comment by Albuquerquedan
2014-03-26 13:19:10

Yes. However, he hopes to connect it to somewhere else someday and I am sure that there are realtors in the central valley telling people to buy now before the bullet train drives up the property values.

 
Comment by Albuquerquedan
2014-03-26 13:20:54

BTW, I am willing to bet some politically connected people have bought up sh#t land near the route that they can sell for twenty times what they paid for it, if the boondoggle ever happens.

 
Comment by In Colorado
2014-03-26 14:47:57

It goes somewhere in the central valley… worse than nowhere.

According to wikipedia the bullet train is supposed to connect San Francisco with LA. That it would go through the central valley is hardly surprising. You didn’t expect it to plow through tony coastal communities, did you?

 
Comment by Albuquerquedan
2014-03-26 15:03:17

But Colorado, the problem is there is not enough money to connect San Francisco to LA. So the “plan” is to build the line first to the central valley and then hope they can find additional funding. So it is the bullet train to no where until they secure the additional funding.

 
Comment by Albuquerquedan
2014-03-26 15:13:39

Can’t find an explicit story right now but if you look at this article they explain that it is being built in segments. The one to the Central Valley will be done in 2017 but the segment to LA will not be done until 2028. However, that is assuming they figure out how to pay for it and the new high tech and real estate bubbles do not burst.

http://articles.latimes.com/2012/nov/16/local/la-me-bullet-schedule-20121116

 
 
Comment by inchbyinch
2014-03-26 07:31:09

I hope the new ghost city isn’t all the lofts and mega apt towers in downtown Los Angeles. 97 new projects, mostly Chinese and So Korean $. The transformation is wonderful, but long term?

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Comment by Albuquerquedan
2014-03-26 06:36:29

“Can growth stabilise without a major change of policy stance? We believe it cannot, as tight labour market conditions suggest that potential growth has already dropped to around 7 per cent or below,” analysts at Japanese broker Nomura said in a note.

At a 7% growth the Chinese economy will double in just ten years. In terms of demand for resources, a 7% growth rate today is probably equivalent to a 14% growth rate only about 8 years ago because China’s economy was doubling even faster back then.

Comment by In Colorado
2014-03-26 07:25:28

If it really is growing 7% per year. If they stop building empty skyscrapers, ghost cities and bullet trains to nowhere, what would the growth number really be? That they are buying fewer raw materials would indicate that their economy is slowing down.

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Comment by Albuquerquedan
2014-03-26 07:54:40

I am sure they are fudging on the number now and they were before. But they are still increasing imports of raw materials consistent with 6-7% growth, take out misallocation of investment projects and you would still have 5% growth which is a doubling every 14 years and equivalent to 10% growth only eight years ago. If you look at total debt public and private, Great Britain and the U.S. are a lot closer to the collapse.

 
Comment by Albuquerquedan
2014-03-26 08:23:13

This is interesting:

http://www.mining.com)
Updated: 2014-03-26 10:00
Counter:8

According to new data from Hong Kong Census and Statistics Department mainland China’s net imports of gold totaled 109.2 tonnes in February.

That’s up more than 30% over the 83.6 tonnes in January and up a whopping 79.3% compared to the same month last year when Chinese imported 60.9 tonnes from the financial and trading hub.

As is the case with copper and increasingly iron ore, much of the imported bullion is being used as collateral for loans, mostly short-term facilities and trade credit, amid a worsening credit crunch inside the country.

 
Comment by Albuquerquedan
2014-03-26 08:39:14

http://www.chinamining.org/News/2014-03-14/1394776237d66541.html

This article kind of puts it into perspective.

 
Comment by Bill, just South of Irvine
2014-03-26 09:36:37

The funny thing is the armchair crowd who ridicule gold buyers. Is the Chinese government stupid for buying tons of precious metals that have little manufacturing value and that do not earn yields?

I don’t think so.

 
 
 
 
Comment by Whac-A-Bubble™
2014-03-26 01:42:44

China’s Economic Slowdown Fans Hopes Of Policy Easing
By Moran Zhang
on March 25 2014 12:47 PM
The last pair of steel box girders is slung to be installed on the Sutong Bridge over the Yangtze River in east China’s Jiangsu province May 29, 2007. REUTERS/China Daily (CHINA) CHINA OUT

China’s economy slowed markedly since the start of the year, with multiple measures falling to multi-year lows, prompting Nomura’s analysts to believe that the Chinese government will likely ease both monetary and fiscal policies in the second quarter.

Without easing measures, the chance of the Chinese gross domestic product growth (GDP) dropping below 7 percent – the “lower bound” that Beijing is willing to tolerate — in the second quarter or the third quarter is above 50 percent, Nomura forecasts in a note published Tuesday.

The HSBC China flash PMI fell to an eight-month low of 48.1 in March, while the domestic and overseas order indexes of the first-quarter corporate survey conducted by the People’s Bank of China dropped significantly to 44.4 and 45.4, respectively, their lowest in almost five years.

Another worrying sign is that growth of property investment looks set to slow in coming months, as its leading indicator, property transaction growth, slowed sharply in January and February.

 
Comment by Whac-A-Bubble™
2014-03-26 01:44:39

New worries on China growth as flash PMI shows contraction
By Adam Rose
BEIJING Mon Mar 24, 2014 10:26am IST

An employee works above a furnace containing molten steel at a factory of Dongbei Special Steel Group Co. Ltd. in Dalian, Liaoning province January 30, 2014. REUTERS/China Daily/Files

(Reuters) - China’s manufacturing engine contracted in the first quarter of 2014, a preliminary private survey showed on Monday, raising market expectations of government stimulus to arrest a loss of momentum in the world’s second-largest economy this year.

The weaker-than-expected survey knocked the country’s main share index and other Asian markets off early highs, and lopped around a quarter of a U.S. cent from the Australian dollar, which is often used as a proxy for Chinese risk.

The flash Markit/HSBC Purchasing Managers’ Index (PMI) fell to an eight-month low of 48.1 in March from February’s final reading of 48.5. The index has been below the 50 level since January, indicating a contraction in the sector this year.

Output and new orders both weakened but new export orders grew for the first time in four months, the survey showed, suggesting the slowdown has been driven primarily by weak domestic demand.

“Usually, for the month of March, the PMI will rebound, because after Chinese New Year, there should be some activity coming back, but this PMI is disappointing,” said Wei Yao, China economist at Societe Generale in Hong Kong. “The government probably will have to provide some supporting measures.”

“I think the slowdown is not over yet and our expectation is that the deceleration will continue into Q2,” she added.

 
Comment by Whac-A-Bubble™
2014-03-26 01:50:52

China
China Is Prepared for Rough Economy Ahead, Li Says
By Dexter Roberts March 13, 2014
China’s Premier Li Keqiang speaks during a press conference after the closing session of the National People’s Congress at the Great Hall of the People on March 13 in Beijing
Photograph by Feng Li/Getty Images

Even as China’s economy shows further signs of weakening, Premier Li Keqiang said his government is prepared for challenges. “The Chinese economy has huge potential and flexibility. We have the ability and conditions to keep this year’s economic operation within the reasonable range,” he told reporters during a press conference on Thursday at the closing of the National People’s Congress in Beijing. “We should first grind the ax before cutting firewood. We squarely face the difficulties and challenges, draw on advantages and avoid disadvantages. This is how we overcome difficulties.”

China’s industrial production, retail sales, and investment growth all came in below expectations for the first two months of the year. Factory output grew 8.6 percent in the first two months, the National Bureau of Statistics announced on March 13, less than the 9.5 percent expected in a survey by Bloomberg News.

Retail sales rose 11.8 percent—the slowest pace for the first two months in a decade, and less than a projected rise of 13.5 percent. Meanwhile, fixed-asset investment grew 17.9 percent, compared with an expected 19.4 percent, and slower than the 19.6 percent recorded last year.

“The fairly dramatic slowdown is unusual in Chinese economic history of the last decade” and the figures were “shockingly weak,” said Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong. “It points to a major deceleration of momentum in the beginning of 2014,” wrote Kowalczyk in a research note.

The latest signs of weakness follow rising local debt and problems with shadow banking, as well as overcapacity in industries including steel, cement, and solar equipment. China’s first ever onshore corporate bond default occurred on March 7, when Chaori Solar Energy Science & Technology was unable to meet debt payments; the company had a net loss of 1.33 billion yuan ($216.7 million) in 2013, its third year of losses.

“I’m afraid sometimes certain individual cases of defaults are unavoidable. What we should do is to step up monitoring, properly handle relevant matters, and ensure there is no regional and systemic financial risk,” said Li in the press conference.

 
Comment by Whac-A-Bubble™
2014-03-26 01:52:21

China
China’s Bear Stearns Moment Is More Likely a Slow Burn
By Dexter Roberts
March 19, 2014

Listening to the short sellers, one could be forgiven for expecting the imminent toppling of China’s once-envied economy.

Stock traders have doubled bearish bets against some of China’s biggest property developers, while a smaller one, Zhejiang Xingrun Real Estate, was unable to pay creditors that included more than 15 banks and collapsed just days ago. That came less than two weeks after Shanghai Chaori Solar (002506:CH) became the country’s first company ever to default on an onshore bond—an episode dubbed China’s “Bear Stearns Moment.”

Despite signs of impending doom, expect a slow burn, rather than sudden meltdown. Yes, China’s economy has become way too leveraged, with non-financial corporate debt amounting to $12 trillion, or 120 percent of gross domestic product, as of the end of last year, according to Standard & Poor’s (MHFI). Still, Beijing has the financial muscle to stop any big defaults by the companies it cares about, and it will make sure that those chosen ones—usually state-owned enterprises—survive to see many further days.

It’s hardly as if defaults were unexpected; people predicted them for a while. Many—including some members of the Chinese government—have been calling defaults necessary to start solving the moral hazard problem that plagues China’s economy. So yes, there will be more defaults, particularly by companies in sectors facing overcapacity such as Chaori Solar. Real estate companies in China’s lower-tier cities, many of which are dangerously overbuilt, may be allowed to go bust, too.

Still, a countrywide property bust—what many have been calling the likely trigger for economic doomsday—is unlikely to impend. If anything, the new leadership has proven more cautious than its predecessors when it comes to placing serious curbs on the real estate market. (It hasn’t figured out how to support China’s local governments if towns and villages are prevented from relying on land sales to developers to raise funds.) Moreover, China has multiple real estate markets, and some are doing pretty well.

 
Comment by Whac-A-Bubble™
2014-03-26 01:53:40

China News
Angry Chinese Homeowners Vent Frustrations After Price Cuts
Homeowners Demand Their Money Back After Developer Cuts Prices on New Homes
By Esther Fung
March 22, 2014 9:11 a.m. ET

CHANGZHOU, China—Groups of angry homeowners put up banners and demanded their money back after Hong Kong-listed property developer Wharf Ltd. cut prices on new homes in an eastern Chinese city, in the latest sign of stress in the nation’s property market.

Around 20 homeowners picketed outside a property showroom in Changzhou Saturday, demanding to meet executives of the developer. They said they wanted their money back after prices at the project, called Phoenix Lake Garden, were cut by as much as 16%, according to the protesters.

Meanwhile, there was also a small disturbance at a second project called Ambassador House in the same city after the same developer cut prices there. According to property agency Soufun Holdings, SFUN +1.19% Wharf cut prices of 20 apartments in the project to 8,200 yuan ($1,317) per square meter, down from the average 11,000 yuan per square meter it recorded in recent months.

“Wharf, give us justice. Return us our hard earned money,” read one of the banners, held up on bamboo poles outside the Phoenix Lake Garden showroom of a project for mid- to high-end apartments and villas.

“We aren’t speculators. We just want an explanation from the developer,” said one 35-year-old home buyer, who said he had bought an apartment and gave his surname as Wu. “This is very unfair.”

Comment by Puggs
2014-03-26 08:58:14

“UNFAIR!”

Flipping baby!

Go put your big boy pants on.

 
Comment by jose canusi
2014-03-26 09:29:54

Sum ting wong.

 
Comment by Bill, just South of Irvine
2014-03-26 09:40:54

This is a good lesson for them. They will become shrewd at persona finance in the years ahead.

Comment by tresho
2014-03-26 10:45:39

They will become shrewd at persona finance in the years ahead.
Liù Píng Píjiǔ won’t get shrewd any sooner than J6P does. Don’t expect either to happen.

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Comment by Bill, just South of Irvine, CA
2014-03-26 10:56:06

Yeah you are probably right. I cannot project my own actions on others. My builder decreased prices on the strip of houses on my block for three years straight. My caboose was black and blue from my own kicking. I did not blame the builder.

Shame on me - it was.

From there I learned to diversify my risk and sell my rapidly declining asset - the house as soon as I could.

 
 
 
Comment by Kidbuck
2014-03-26 13:51:08

When prices were going up did builders picket recent buyers to demand their houses back?

Comment by Puggs
2014-03-26 18:24:39

Just as goofy of logic. I drove that brand new car I just bought through the dealer window when I found out it dropped 10K the very next day. “UNFAIR!!!!”

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Comment by Housing Analyst
2014-03-26 02:29:25

Have you dumped your depreciating house while you still can?

Comment by Blackhawk
2014-03-26 07:06:42

HA,

Why would I do that? I love my house, I’ve locked in my housing costs for the rest of my life and I like knowing what those costs are going to be. Besides I’ll pay it off about the time I want to retire.

What are your costs going to be in 5 years? 10 years?

You see I’m not harassing you, I want you to think about this because inflation is going to be hitting us. I don’t know how soon or how bad, but it’s coming for sure. How do I know this?

The US government (excluding all states, counties & cities) has $17,500,000,000,000+ in debt plus another $100,000,000,000,000 in unfunded mandates?

$117,500,000,000,000 div by 317,756,000 people = $370,000 per citizen!

A family of four owes $1,480,000.

Peace brother

Comment by Housing Analyst
2014-03-26 07:15:45

Why would you? To limit your losses. You know very well how they’re stacking up. The price of knowing “what your costs are going to be” is a large one. Have you calculated it?

Now the question becomes;

“Do you really believe wages(inflation) are going to double or triple to meet grossly inflated housing prices?

Of course not. Housing prices will continue to deteriorate by two-thirds to meet wages(deflation).

Comment by Blackhawk
2014-03-26 08:18:47

Have housing and rental prices deteriorated? I thought the rents just kept going up and the house prices were bouncing around.

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Comment by Housing Analyst
2014-03-26 08:25:54

You’re ducking and weaving again.

Have wages gone up to meet massively inflated housing prices?

Of course not.

 
Comment by Blackhawk
2014-03-26 10:45:51

HA,
This is the last time as I’m getting tired of telling you the same thing over and over again.

My salary has more than kept up here in Phoenix but I’m probably more blessed that many.

IMO housing prices aren’t “massively” inflated in my area and my mortgage is about $300 less than rent.

I’m not totally against going the all rental route, but what I’ve been trying to tell you that sometimes it makes sense.

I’ve worked with my company for 25 years, they really like my work, they’re making money almost every year and it’s very secure. I don’t want to move, but if I change my mind I can rent this out and have cash flow.

So, that’s it. Peace brother.

 
Comment by Housing Analyst
2014-03-26 11:01:41

http://www.movoto.com/phoenix-az/market-trends/

$130/sq is a 136% premium ontop of reproduction costs and 250% premium ontop of resale and “prices aren’t massively inflated” heh?

I’m guessing you paid those premiums thus your confirmation bias is cranked my friend.

 
Comment by Housing Analyst
2014-03-26 18:25:15

Have wages gone up to meet massively inflated housing prices?

 
 
 
Comment by "Uncle Fed, why won't you love ME?"
2014-03-26 07:19:16

Inflation? That’s some back-asswards thinking, dear. The entire global elite is trying to produce inflation, and have been for years. They can’t get it done.

Comment by Jingle Male
2014-03-26 13:51:47

My burrito bowl at Chipotle has gone from $4.45 to $6.75 in the last few years. That is a 51.6% increase. That is inflation!

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Comment by Albuquerquedan
2014-03-26 14:09:43

Salmon is through the roof and cashews are way up in price.

 
Comment by "Uncle Fed, why won't you love ME?"
2014-03-26 17:49:53

Chipotle raises their prices because millions of gringos have been fooled into thinking that it’s OK to spend seven bucks on rice and beans, not because of inflation.

And AD: You don’t need to cherry-pick the price of a couple things that are up for a reason. It’s OK to use the CPI. Food prices go up and down a lot.

 
 
 
Comment by 2banana
2014-03-26 07:32:06

Remember - a house is an unmovable asset that can be taxed to infinity to pay off corrupt public unions

Comment by scdave
2014-03-26 07:41:27

a house is an unmovable asset that can be taxed to infinity to pay off corrupt public unions ??

Not in California…

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Comment by Housing Analyst
2014-03-26 07:47:38

Yes in California too.

 
Comment by Rental Watch
2014-03-26 13:49:02

Prop 13 property tax protections are part of California’s constitution. To change it would require an amendment to the CA constitution, which would take a vote of the people.

So far, politicians have been afraid to even mention reforming prop 13…it’s considered the “third rail” of CA politics.

 
Comment by Housing Analyst
2014-03-26 14:27:23

Why bother when CA bleeds you dry a million other ways?

 
 
 
Comment by Bill, just South of Irvine, CA
2014-03-26 08:30:21

BH

Government owns your property. You own the property rights on that property.

Comment by Whac-A-Bubble™
2014-03-26 09:00:56

Gubmint and the bank share ownership; gubmint’s rent collection is called ‘taxes’ and the bank’s is called ‘interest.’

Gawd bless our landlords for paying the gubmint and the bank their due.

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Comment by Blackhawk
2014-03-26 10:57:13

I understand, but if the government starts taking away everyone’s homes we’re all in a bit of trouble, aren’t we?

I have one big concern that caused me to want a house.

I have IRA’s, 401k’s, stocks and coins. Other than the coin, everything else is just an electronic ledger in my computer.

Do I really own those electronic funds??? They’re just a bunch of x’s and o’s in the frickin computer. If the SHTF what am I going to loose first? The electronic ledger stuff or the house?

At least the house is something tangible that I can live in, protect my family in and set it up any way I want. Maybe I’m the only guy that thinks about these things, but that’s one of my concerns.

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Comment by Housing Analyst
2014-03-26 11:06:24

The difference is the house is a depreciating asset and a loss.

 
Comment by tresho
2014-03-26 11:13:06

At least the house is something tangible that I can live in, protect my family in and set it up any way I want. Maybe I’m the only guy that thinks about these things
You’re not the only one, by any means. However, the only way you can put yourself in a position to lose nothing is to have nothing. In many ways something tangible and fixed is easier to steal than something movable. I parked my truck camper in my own driveway for 25 years until my city outlawed that practice. Now I must pay to store it elsewhere, for no good reason, IMO. It can get worse, and is worse, for many other homemoaners. Meanwhile the FED is continually squeezing value out of my savings any which way it can, to benefit the pig men of FIRE.

 
 
 
 
Comment by goon squad
2014-03-26 07:09:51

I’d rather lie on my back consuming groceries than buy a used house.

Comment by Albuquerquedan
2014-03-26 08:24:57

At least you will be getting your money back from Obamacare taxes.

 
 
 
Comment by Blackhawk
2014-03-26 03:49:28

EPA’s coal ash rule still not done

“In the past five-plus years, EPA has produced more than 200 pages of proposed rules, received more than 600,000 written comments and outlined two possible approaches to clamp down on companies that produce and stockpile the stuff.

The end is finally in sight, with crucial deadlines approaching in the next nine months. But EPA still hasn’t made it clear exactly what its final rules will look like.

Environmental groups say coal ash ponds populate the outskirts of hundreds more power plants around the country, tempting another inevitable accident. The draft rules EPA has released so far wouldn’t have affected dormant storage sites like the one in North Carolina”

http://www.google.com/gwt/n?u=http://www.politico.com/story/2014/03/epa-coal-ash-rule-104967.html

So you see, the EPA will do it’s job and come out with a ruling, but it takes time to get it right. That, plus a whole bunch of paper and ink because they love to use a bunch of fancy words.

I wonder if they’re rulings will cause any companies to go bankrupt.

Out west we call this “fly ash” and we recycle it as an additive to cement.

Comment by Blue Skye
2014-03-26 06:16:32

Anything you pave a road with is not considered “waste disposal”.

Comment by Housing Analyst
2014-03-26 06:22:19

Beneficial reuse.

 
Comment by Blackhawk
2014-03-26 06:44:45

Blue,

Fly ash is mixed in with the cement and other additives. It hardens and is completely inert when it’s used this way. It’s mainly a respiratory exposure as a dust, which I guess is why they store it in ponds in the east.

The reliable, age old methods of electrical generation have left us with some clean up issues and the EPA has done a great job getting these done. I don’t agree with everything as they tend to be too stringent.

Example: In the past they city sewer systems were tasked with treating water to such an extent that the water was almost pure. Then, since no one wants to drink water right out of a sewage treatment plant, they’d dump the water onto the ground, let it soak into the ground and let the earth clean it even further. My beef is that it’s a waste of resources to purify the water and then dump it on the ground.

If I had the time I could come up with many more issues regarding their “over stringent” standards that waste the resources for meager returns.

Comment by Blue Skye
2014-03-26 06:57:07

Treatment plant effluent goes into streams and rivers here, which flow to other peoples drinking water intakes. Not so long ago, it was all untreated. Now it is only occasionally untreated.

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Comment by In Colorado
2014-03-26 10:09:00

Same here

 
 
Comment by Housing Analyst
2014-03-26 06:57:36

Nonsense.

WWTP’s don’t treat to potable quality water. If they did, there would be no need for WTP’s.

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Comment by Blue Skye
2014-03-26 07:15:25

There would still be a need for WTPs. Nature itself has many things it wants to share with humans.

 
Comment by Housing Analyst
2014-03-26 07:19:09

It could be done. Heavy disinfection with newer technologies is the key. Ozone, UV or supercharged UV using H2O2. Traditional oxidizers create far too many nasties.

 
Comment by Blackhawk
2014-03-26 07:19:49

HA,

No need for WTP’s? Huh, after you dump the clean water into the earth most people want it cleaned.

I think they dump it in the ground because most people don’t want to think about the water coming from a sewage treatment plant and then getting pumped right into the water supply. Yuck!

I don’t know what to say. I’ve seen the small sewage treatment plants, I’ve seen the small towns trying to deal with the EPA standards, I’ve heard about the expenses associated with the standards and I’ve seen the small streams of clean water flowing away from the sewage treatment plant.

 
Comment by Housing Analyst
2014-03-26 07:25:36

Based on your previous post, no need.

You said;

“Example: In the past they city sewer systems were tasked with treating water to such an extent that the water was almost pure.”

WWTP’s don’t treat to potable water quality. They were never required to under CWA or any other regulation, ever.

 
Comment by Blue Skye
2014-03-26 07:29:31

“I’ve seen the small streams of clean water…”

Have you seen them in an overflow event? Happens more frequently than you might imagine.

My Village is conducting a house by house inspection to reduce storm water diversion to the sanitary sewers. We do this because we swim in the lake and drink from it ourselves.

BTW, please do not flush your prescription meds down the toilet.

 
Comment by Albuquerquedan
2014-03-26 07:56:58

BTW, please do not flush your prescription meds down the toilet.

No give them to Rio, if they are useful for a manic/ depressive.

 
Comment by In Colorado
2014-03-26 10:11:52

No need for WTP’s? Huh, after you dump the clean water into the earth most people want it cleaned.

Our Rocky Mountain stream and river water is chock full of parasites. It has to be treated for human consumption.

And yeah, the waste water that we pour back into the Big Thompson isn’t potable, but it isn’t sludge either.

 
 
 
 
Comment by j-j-j-joe
2014-03-26 06:47:04

Not sure if you realize this, but EPA is basically owned by special interests/big business. The revolving door between EPA and its biggest regulated companies (think Kochs, Monsanto, Exxon) is epic.

Comment by Blue Skye
2014-03-26 07:02:37

Both sides of that coin involve the same technology. Job mobility is not proof of ownership on either side.

However, the EPA is owned by the FedGov, which in turn takes truck loads of bribe money from big business.

 
Comment by Albuquerquedan
2014-03-26 07:07:35

All regulatory agencies suffer from capture and I am sure you know it. That is why many libertarians want to use technology to create more reputational risks for companies and rely less on government which has a tendency also to favor the politically connected when it regulates. BP was very close to the Obama administration before the Gulf of New Mexico blow-out, it also has one of the worse reputations in the oil industry for safety. Its Beyond Petroleum campaign, its political campaign donations and acceptance of AGW all made it a darling of the Obama administration and probably contributed to lax enforcement directed at them.

Comment by Blue Skye
2014-03-26 07:23:20

Dan, you are getting a little crazy with that Gulf of New Mexico thing. Look at a map.

We need something like the EPA, but it is obviously overbuilt, and whimsical. I like the ASTM model of setting standards.

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Comment by Albuquerquedan
2014-03-26 07:32:20

Just drinking my coffee. Thank you Gulf of Mexico.

 
Comment by jose canusi
 
Comment by goon squad
2014-03-26 11:32:49

BP cares about the “small people”

https://m.youtube.com/watch?v=th3LtLx0IEM

 
 
 
 
 
Comment by Blackhawk
2014-03-26 04:19:36

ND records nation’s highest personal income growth

North Dakota records nation’s highest personal income growth in 2013; income grew 7.6 percent per the Associated Press/Yahoo News

BISMARCK, N.D. (AP) — North Dakota has recorded the highest personal income growth among all states for the sixth time in the last seven years.

My contention is that a whole bunch of states could experience this kind of prosperity if Pres Obama would get out of the way and allow oil exploration on public lands. 7.6% is a big increase, but he’ll probably choose to limit this expansion because liberal rich guys like Tom Steyer are against it because it would hurt their green energy investments.

Comment by ragerunner
2014-03-26 13:15:15

The challenge is, the cost to live in may parts of North Dokota went up by a lot more than 7.6%.

 
 
Comment by oxide
2014-03-26 05:13:58

Quick check of the zip code… houses in my zip run the gamut from blocks of 3/1 cookie cutter cold war ramblers to mid-size 1970’s split levels up to very nice unique homes. Of all the homes for sale, almost half of them are Pending. Reno flips the ramblers generate a $60-$70K profit at least. Mansion teardowns are listed for outragoues prices and are justifiably sitting on the market.

Comment by Housing Analyst
2014-03-26 06:17:10

Strange that is considering housing demand in DC was flat until it cratered in the last few months.

Demands dead cat bounce.

http://www.zillow.com/local-info/DC-Washington-home-value/r_41568/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D8%26r%3D41568%26el%3D0

Comment by j-j-j-joe
2014-03-26 06:48:18

oxide lives in MD, not DC. Also remember, about 70% of DC is a nightmare.

Comment by Housing Analyst
2014-03-26 06:54:07

How much demand do you see going on here Lib……. Doesn’t align too well with Mz. Cratertons assertion.

http://www.zillow.com/local-info/MD-home-value/r_27/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D14%26r%3D27%26el%3D0

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Comment by j-j-j-joe
2014-03-26 07:14:34

OK RAL, I found a picture of oxy handling her housing investment:

http://i.imgur.com/kLl7dA1.jpg

 
Comment by Housing Analyst
2014-03-26 07:30:37

Funny.

Now that chart……

 
 
Comment by Albuquerquedan
2014-03-26 13:59:51

Also remember, about 70% of DC is a nightmare.

And the people living in the other 30% are creating the nightmare for the rest of us.

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Comment by "Uncle Fed, why won't you love ME?"
2014-03-26 07:15:40

Hi Oxide:

Did you have a nice house-warming party last weekend? Your house on the pond is cute.

 
 
Comment by 2banana
2014-03-26 05:55:31

Obama’s populist pitch fizzles - “2014 might not be the year for Democrats”
The Hill | March 26, 2014 | Bernie Becker

President Obama’s populist economic pitch is fizzling.

The White House hoped to hammer Republicans this year on an array of pocketbook issues centered on hiking the minimum wage to $10.10 an hour, an effort meant to appeal to independents and rally Democrats to the polls.

Three months in, Obama’s approval ratings are flailing in the low 40s, and Senate Democrats haven’t even been able to unify their 55 members on a minimum wage bill.

That’s made it tougher to contrast the positions of Democrats with Republicans in an election year that is shaping up to be about the healthcare law and Obama.

Senate Democrats, according to independent projections, could easily lose the six seats needed to give the GOP a majority of the upper chamber. And House Democrats, who once talked up winning back the chamber, could now easily lose seats.

But they also insist that economic pitch is the best they’ve got to counter the consistent Republican drumbeat on ObamaCare, and that this brand of populism worked in Obama’s 2012 reelection over GOP nominee Mitt Romney.

They argue Russia’s incursion into Ukraine has taken them off message, and that they still have more than seven months to rally.

Still, Democrats face a slew of political headwinds.

While the minimum wage hike polls well, voters don’t have confidence in the economy and believe the country is headed in the wrong direction — a dangerous combination for the party holding the White House.

“The populist message was so much easier when you had a villain like Romney,” the aide said about the 2012 nominee, a former private equity executive worth hundreds of millions of dollars.

Democrats are seeking other avenues to sharpen their message. Reid and other party leaders have increasingly trained their fire on Charles and David Koch, the industrialist billionaire brothers who fund a range of conservative causes.

Democrats are casting the Kochs — and the GOP, by extension — as actively working against the middle class, though some have also speculated those efforts are aimed as much at ginning up fundraising as anything else.

Matt Bennett of Third Way, the centrist Democratic think tank, said the party should put a greater emphasis on growth and opportunity for the middle class, rather than an income inequality message he says doesn’t resonate.

Even so, Moulitsas, who also writes a column for The Hill, acknowledged that 2014 might not be the year for Democrats.

Comment by goon squad
2014-03-26 06:47:38

Drudge link post pending which confirms the inevitability of the Permanent Democrat Supermajority.

Comment by reedalberger
2014-03-26 09:25:22

“Permanent Democrat Supermajority.”

Spanktravision for the fascist left.

 
 
Comment by Albuquerquedan
2014-03-26 07:00:03

Democrats are casting the Kochs — and the GOP, by extension — as actively working against the middle class, though some have also speculated those efforts are aimed as much at ginning up fundraising as anything else.

If we want to know what the Democrats talking points are all we have to do is read Rio’s posts since he is paid to present the, BTW, Oxide as I said yesterday sorry about thinking your post was a Rio post. However, to your point:
1. NG cars burn cleaner in terms of real pollutants and if you consider carbon a pollutant( I don’t ) emit half as much carbon pollution.
2. Similarly, modern nuclear plants are safer than the 1960s models in Japan and pollute less than fossil fuels and if you are concerned with co2 are the only source capable of replacing coal and other fossil plants in a major way. Even though they are not modern this is the reason Japan is about to restart its plants, if alternative energy sources would work, they would not.
3. Finally, a strong economy and a clean environment are not inconsistent in fact unless we have a strong economy we cannot afford to use the most modern environmentally beneficial technologies. If you add the California tax credit, the U.S. tax credit and the California environmental essentially carbon exchange credits, Tesla receives almost $30,000 per car and is still barely viable, without cheap fossil fuels such subsidies would not be possible.

Comment by oxide
2014-03-26 12:45:14

I never denied that NG “burns” cleaner than other fossil fuels; however I take exception to the marketing speak that NG “burns” cleaner. Sure, once it’s all cleaned up, CH4 gives you complete combustion. But the extraction process is a mess.

For the AGW aspect, it’s probably better to use renewables get rid of coal before NG. The folk in West Virginia will just have to have some other jobs to do. I admit, I’m tired of every politician having to give coal-fired lip service to that buggy-whip of a state. I’ve driven through western MD and WV and there are a few wind farms. Wouldn’t it be ironic if mountaintop removed messed with the wind patterns so that wind will be less viable when the coal is gone? I wonder if there’s research on that.

The real problem is peak fossil fuels. NG is cheap and plentiful now, but not forever, especially if we start putting it in cars and/or shipping it to Asia.

Comment by Albuquerquedan
2014-03-26 13:44:15

Wouldn’t it be ironic if mountaintop removed messed with the wind patterns so that wind will be less viable when the coal is gone?

Actually, I don’t think you could put a wind turbine on those mountains before they flatten them. That said I am not a fan of mountaintop removal, WV does not require sufficient bonding, and they impact the drainage system of areas too profoundly to justify removing small seams of coal. WV uses the excuse that there is too little flatland in the state to get variances from SMCRA.

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Comment by Blackhawk
2014-03-26 06:13:28

Bill, RE: “I cannot reveal my coin shop. However, here is the criteria I use for finding a reliable dealer - - -”

Thanks very much.

Comment by 2banana
2014-03-26 06:28:57

Repost pls

Comment by Blackhawk
2014-03-26 06:47:03

Comment by Bill, just South of Irvine, CA

2014-03-25 19:04:43

I cannot reveal my coin shop. However, here is the criteria I use for finding a reliable dealer:

1) You have to have a good relationship with them over the years. Are they as willing to buy your coins as they are willing to sell? - In Some years I sold precious metals

2) Are they members of the numismatic organizations?

3) Do they have referrals?

4) Are they willing to trade in an exchange of your choice - credit card, personal check, cash?

5) Do they have a showroom where you can walk in and buy or sell?

I’ve bought and sold in Los Angeles, Baltimore, and Phoenix and managed to find dealers I regularly have been a customer of.

Kitco forums or discussion boards have threads for gold, silver, platinum, palladium, and other metals. It would pay to lurk there for advice. I have seen some good posts there. There are gold bugs and permabears (anti-gold) alike on the forums.

Someone recommended you store quantities in ten different places, so no more than ten percent of all your metals should be in any one place. For instance, a theif would probably think that 10% is all you had and then leave the location after he gets that 10%. Even putting 10% in a safe deposit box is a good idea. The bank thieves might take it and deliver it to their buddy the thugernment, but that is only 10%.

If you are way up in years you of course need to give out your precious metals as gifts to your beneficiaries. Just like you would ultimately give up driving a car.

 
 
 
Comment by j-j-j-joe
2014-03-26 06:25:03

My contribution to housing bubble tracking today:

http://www.redfin.com/MD/Baltimore/810-Oldham-St-21224/home/53000567

They’re building hundreds of these on a former industrial site about a dozen blocks from me. They’re the part of the neighborhood that is between several train tracks and they’re a stone’s throw off of I-95/I-895 right before the harbor tunnels.

Parking is also very bad in that area and these big townhouses only have small garages (1 car). So parking is already a big problem and the red line subway won’t even start to be built until 2016.

Comment by goon squad
2014-03-26 06:44:59

$1300/month to rent these new 1 bedroom apartments:

http://www.1000sbroadway.com/

Comment by rms
2014-03-26 06:52:08

Is there complimentary wireless iPone charging stations in the lobby?

 
Comment by AbsoluteBeginner
2014-03-26 08:30:53

‘$1300/month to rent these new 1 bedroom apartments:’

They look like something a 6 year old kid would construct out of Lego blocks.

 
Comment by j-j-j-joe
2014-03-26 10:35:41

The new apartments on Broadway in Fells Point (B’more) look exactly like those too. Even the part with the brightly colored panels (red, yellow, etc).

Plus that is a much more walkable & nicer neighborhood than the link I posted above.

 
 
 
Comment by Blue Skye
2014-03-26 06:27:25

According to the WSJ, Brazil’s debt rating is headed back to junk status.

“This cut is a confirmation of the loss of credibility by the country…”

If this was a case of massive credit expansion in China showing up as temporary prosperity in a mining colony, it’s now looking like the party is winding down. Hopefully they can keep up appearances until after the World Cup.

Comment by 2banana
2014-03-26 06:30:17

All the BRIC have also rejected sanctions against Russia…

 
 
Comment by Whac-A-Bubble™
2014-03-26 07:47:29

Don’t let a falling BRIC land on your head.

 
Comment by RioAmericanInBrasil
2014-03-26 08:52:48

According to the WSJ, Brazil’s debt rating is headed back to junk status.

It was all over the news last week about real scientists discussing climate change’s affect on food supply. Brazil might be living it. The droughts are so bad and everywhere, food prices are getting out of control. Water is getting rationed. I guess climate change can be bad for economies. Who’d of thunk it? Most this entire country needs rain. But JoeSixPack is still way smarter than NASA.

Brazil’s Biggest Drought In Decades Also Worsens Interest Rate Outlook

http://www.forbes.com/sites/kenrapoza/2014/03/25/brazils-biggest-drought-in-decades-also-worsens-interest-rate-outlook/

Brazil’s worst drought in 50 years will have more than an impact on tomato prices (which rose over 20% recently). Inflation is now seen cracking through 6% again and that means the Central Bank will likely have to rethink its desired plans to cut interest rates in the second half.

On Monday, the Central Bank’s Focus survey of economists had inflation forecast to hit 6.28% this year.

Last Friday’s release of the March IPCA-15 wholesale price inflation index confirmed the drought’s impact on food prices. The drought was so bad in Brazil’s semi-arid northeast that food inflation is expected to remain for most of the year now. As it is, Brazil’s food prices have risen almost 20% year to date.

Comment by Blue Skye
2014-03-26 12:07:58

Unfortunately, inflation and fiscal crisis in Brazil is not due to wilting tomatoes or predictions about the climate 100 years from now.

 
 
 
Comment by goon squad
2014-03-26 06:32:47

washington examiner (drudge link)

‘for the first time in american history, non-whites will make up half or more of the next generation, likely pushing washington toward a bigger government — and the gop better tone down their anti-government rhetoric if they want to win them, according to a top polling outfit.

pew research vice president michael dimock said that the trend among younger americans is support for government programs and acceptance of democratis party policies.

‘their tendency is more liberal, their tendency is bigger government,’ he said of so-called ‘millennials’ born between 1979 and 1995. they will likely set the trend for the still-unnamed next generation.

‘this is a generation that is 41 percent non-white; the next generation is likely to be close to 50 if not more than 50 percent non-white, and the anti-government kind of tone is one that really doesn’t resonate with that non-white sector in particular,’ said dimock.

his advice to the gop: ‘try to take as much of the anti-government rhetoric out.’

LOLZ

as we correctly predicted, within a generation voters will have the ‘choice’ of voting for the free sh1t party or the more free sh1t party.

and whitey gets to pay for all of it :)

Comment by rms
2014-03-26 06:54:49

“and whitey gets to pay for all of it”

Gosh, I hate it when that happens.

Comment by goon squad
2014-03-26 07:04:52

It’s all good bro. My liberal betters inform me that it will be a multicultural utopia just like in the Super Bowl Coke commercial:

https://m.youtube.com/watch?v=443Vy3I0gJs

 
 
Comment by 2banana
2014-03-26 06:57:37

The Irish were not “white” for a hundred years. Now they are.

Zimmerian (half Hispanic) was all white to the media.

Will affirmative action now end with no majority race?

Comment by "Uncle Fed, why won't you love ME?"
2014-03-26 07:05:14

The Irish are the whitest people anywhere. You are backward.

Comment by Albuquerquedan
2014-03-26 07:16:14

Irish suffered discrimination that no minority today suffers so I take his point to mean that, however the key point is this:

Zimmerman (half Hispanic) was all white to the media. Moreover, Hispanic is not a race. Hispanics can identify themselves as white or any other race. The vast majority identify themselves as white. Thus, when headlines say that half the births will be non-white, they are including Hispanics that identify themselves as whites and will probably be moving to the Republican party in the future just as Irish and Italians and other non-English/German whites moved to the Republican party.

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Comment by RioAmericanInBrasil
2014-03-26 09:00:28

Irish suffered discrimination that no minority today suffers

When the “Irish suffered discrimination that no minority today suffers” black people were slaves in chains and being sold as one would a dog and being worked much harder than mules.

Hispanics that identify themselves as whites and will probably be moving to the Republican party in the future

The only way that would happen is if the Republican party in the future moves towards the Hispanics.

Today’s version of the Republican party is almost done.

 
Comment by goon squad
2014-03-26 11:45:22

“Today’s version of the Republican party is almost done”

Whaddya mean? That “Take America Back” and “Restore Our Future” aren’t winning campaign platforms?

LOLZ

 
Comment by MightyMike
2014-03-26 13:11:28

Don’t forget “Yes, you did build that!”

 
 
 
 
Comment by apathy
2014-03-26 07:46:06

imagine how asians feel, since they earn 20% more per year than whites

https://www.census.gov/prod/2013pubs/p60-245.pdf

 
Comment by Neuromance
2014-03-26 08:01:04

‘this is a generation that is 41 percent non-white; the next generation is likely to be close to 50 if not more than 50 percent non-white, and the anti-government kind of tone is one that really doesn’t resonate with that non-white sector in particular,’ said dimock.

I heard Ann Coulter make a similar observation on Hannity recently. But you know… the whole ‘focused on small government’ seems to me to be more a businessman versus non-businessman model versus a white versus non-white model.

I mean think about how many poor whites there are. How many white government employees and contractors there are. These folks probably don’t care about ‘big government’ as a core issue.

White interests are not monolithic and framing this argument as white versus non-white might be a mistake. Especially since it’s really business owner versus non-business owner, it seems to me.

Another data point: http://www.gallup.com/poll/160373/democrats-racially-diverse-republicans-mostly-white.aspx

Comment by goon squad
2014-03-26 09:23:32

“White interests are not monolithic”

My liberal betters inform me that all whites (especially white males) are members of the oppressor class and historical beneficiaries of slavery and colonialism.

Social Justice™ will only be achieved when whitey pays reparations.

Comment by Albuquerquedan
2014-03-26 14:01:53

Social Justice™ will only be achieved when whitey pays reparations.

We did it was called the Civil War.

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Comment by Northeastener
2014-03-26 09:09:18

within a generation voters will have the ‘choice’ of voting for the free sh1t party or the more free sh1t party.

“Democracy never lasts long. It soon wastes, exhausts and murders itself. There was never a democracy that did not commit suicide.”

- John Adams, letter to John Taylor, 1814.

Do people today really think the founders of this country didn’t understand these concepts regarding “Democracy”? That they are unique to modern civilization in the 21st century?

Comment by goon squad
2014-03-26 09:48:05

“The best argument against democracy is a five minute conversation with the average voter” — Winston Churchill

 
 
Comment by reedalberger
2014-03-26 09:29:02

“‘for the first time in american history, non-whites will make up half or more of the next generation, likely pushing washington toward a bigger government — and the gop better tone down their anti-government rhetoric if they want to win them, according to a top polling outfit.”

If true, better get used to those photos of Brazilian slums.

Progress - The progressive’s answer to a high quality of life.

Comment by Bill, just South of Irvine
2014-03-26 19:06:25

Exactly you must encourage your white offspring (if you have any) to invest in the depreciating asset of a house so that Juan, Rose, and the ten children can move in next door and enlighten your offspring with the culture of gangstas, mariachi (loud and proud of course), macho wife beating, and drugs. You have to be tolerant of other cultures you see.

Me? I will rent.

 
 
 
Comment by j-j-j-joe
2014-03-26 06:33:43

Walmart files 10k with SEC, lists “reliance on food stamp recipients” as a material risk factor.

http://blogs.marketwatch.com/behindthestorefront/2014/03/24/wal-mart-makes-official-its-reliance-on-food-stamp-recipients-for-profits/

LOL, I wonder how that conversation went when whatever associate or partner suggested that to Walmart counsel.

Unrelated, but in the news now (bc of Supreme Court case) — I wonder what Walmart’s outside counsel is thinking about regarding the Hobby Lobby case. What would Walmart (or other big retailers/fast food) do if they could gain exemption from certain labor or employment laws? Or maybe ERISA exceptions would be a better target?

Comment by goon squad
2014-03-26 06:53:17

Lollie LOLZ on Wal-Mart and the poors!

Another article some months ago noted that the employees of one Wal-Mart Supercenter consume $900,000 of welfare benefits annually.

And lollie LOLZ for the Ohio Wal-Mart that held a food drive for its own employees last Christmas.

The future belongs to Lucky Ducky :)

Comment by j-j-j-joe
2014-03-26 07:05:02

If I had been working on the walmart 10k, I would’ve suggested we attach this picture, which is worth 1000 words.

http://i.imgur.com/LpHrbCT.jpg

10k’s are a decent way to tell what a sh*tty company you’re dealing with. Sallie Mae’s 10k is a real doozy, revealing their predatory underpinnings. Cigarette and gun company 10k’s reveal a lot about who their core customers are as well.

Comment by goon squad
2014-03-26 07:25:19

I love shopping at my local Wal-Mart for stuff like socks and bleach and ammo. There’s nothing sexier than seeing a tramp stamp on a muffin top. Tats on the neck and hands are pretty kewl too.

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Comment by In Colorado
2014-03-26 07:43:54

You need to shop at the WalMart in Broomfield, next to Flat Irons Mall.

We have two Walmarts here in Loveland. The one on US34 resembles your description: tats, tats and more tats.

The one in US287 on the north side of town feels like a different world. Non beater cars in the parking lot and nary a tat inside the store.

Then there is the Walmart on the west side of Greeley, affectionately referred to by locals as “WalMartinez”.

 
Comment by goon squad
2014-03-26 09:56:23

“WalMartinez”

Isn’t that like racis against Spanish people and stuff?

 
Comment by In Colorado
2014-03-26 10:17:31

Isn’t that like racis against Spanish people and stuff?

The thing is, that’s what the Greeley Hispanics call it :-D

 
Comment by Tarara Boomdea
2014-03-26 10:36:39

Our local Walmart is a pit.

One time I was there, a highly tattooed guy was clearing the aisles while walking a giant dog with a spiked collar through. I don’t think anyone dared ask, but I’m sure it was a service dog.

I think it was this same trip that I heard a woman ask for a book of stamps. The cashier offered to ring them up but she said she’d pay for them later, and tucked them into her gigantic cleavage.

 
Comment by Housing Analyst
2014-03-26 10:39:42

^ now that’s funny!

 
 
Comment by oxide
2014-03-26 08:59:39

The worst part of that pic is that there are people actually sitting in chairs and concentrating on the fight, not just stopping to look as the walk by.

What is the appeal of tats? For the life of me I don’t know.

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Comment by In Colorado
2014-03-26 10:19:31

I believe that the appeal is to express your individuality, by doing what everyone else is doing. I also suspect that guys do it because it makes them feel “bad azz”

 
Comment by goon squad
2014-03-26 11:52:17

When I see women with alot of tats I think: bad credit, daddy issues, probably on depression/bipolar meds.

 
 
 
 
Comment by "Uncle Fed, why won't you love ME?"
2014-03-26 07:02:47

It is the Wal*Mart religion that all employees and customers must be on food stamps, but the corporate tax rate should be negative.

Lettuce prey.

Comment by Albuquerquedan
2014-03-26 07:21:31

Lettuce prey to the AGW gods since they want all the middle class cabbage.

 
 
 
Comment by j-j-j-joe
2014-03-26 06:35:16

Only 3 in 10 jobs in the U.S. pays over $30k.

http://www.lawyersgunsmoneyblog.com/2014/03/blaming-men-for-failing-to-acquire-imaginary-jobs

Kind of significant considering that 30k is sort of a minimum threshold where you could conceivably see a man argue that fathering a child would be financially feasible w/o gov’t support or a wife who earns more money and plans to continue working f/t. (Even then, childcare can often cost 1000/month or more.)

Comment by "Uncle Fed, why won't you love ME?"
2014-03-26 06:55:18

I read a while back that the average child-care costs for two kids was higher than the average pretax salary of women.

Comment by Blue Skye
2014-03-26 07:09:44

It’s usually cheaper to grow your own.

 
Comment by j-j-j-joe
2014-03-26 07:25:00

It’s probably higher than the salary of the average male as well.

 
 
Comment by In Colorado
2014-03-26 07:38:03

Kind of significant considering that 30k is sort of a minimum threshold where you could conceivably see a man argue that fathering a child would be financially feasible w/o gov’t support or a wife who earns more money and plans to continue working f/t.

You don’t need government edicts to curb population growth, all the PTB need to do is foster a system where few can afford to raise a family. And they can accomplish this by slowly phasing out family subsidies. For the poor, you slowly take away the food stamps. For what’s left of the middle class, you take away tax credits for children and day care expenses as well as the MID.

I expect that in the not too distant future children will be as rare as a well funded pension plan.

Comment by Housing Analyst
2014-03-26 07:46:14

The US no longer needs a growing population. Another means to that end is greater acceptance and legal recognition of gay marriage, wider access to birth control(obamacare), crushing heavy handed child support laws that discourage procreation and marriage, etc.

 
Comment by goon squad
2014-03-26 07:52:05

Adopting shelter pets is better than having child creatures.

Comment by Albuquerquedan
2014-03-26 08:05:38

Adopting shelter pets is better than having child creatures

Their teen years are certainly easier. Although in a dog, that is about two years old.

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Comment by 2banana
2014-03-26 07:52:22

I expect that in the not too distant future children will be as rare as a well funded pension plan.

Back when America was more free…
With a much smaller federal government
With much lower taxes and “penalties”
With NO federal safety programs

Americans had HUGE families.

Go figure.

Comment by In Colorado
2014-03-26 09:28:43

Also …

Jobs were not offshored and a man with a high school education could earn a middle class paycheck to support his family.

State U’s were virtually free.

The very wealthy paid a higher percentage of their income in taxes than the middle class.

The medical industrial complex didn’t have us by our cojones.

And, perhaps most importantly, the culture encouraged having a family. It was simply something you did.

As for “huge families” I was a child in the 60’s. Most families I knew had 2-3 kids … even the Catholic and Mormon families.

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Comment by MightyMike
2014-03-26 11:30:12

You’re probably thinking of the 1950s and ’60s, Colorado. I think that 2Banana would like to take us back to that wonderful time before that awful FDR came along.

 
 
Comment by MightyMike
2014-03-26 09:38:49

My grandparents told me what life was like back in those days. It was pretty miserable.

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Comment by "Uncle Fed, why won't you love ME?"
2014-03-26 17:55:10

Me too. It’s so easy for the Republicans to point to a day that no one remembers, back when corporations ruled everything, and say “it was better then”. It wasn’t.

 
 
 
Comment by apathy
2014-03-26 07:56:39

You don’t need government edicts to curb population growth, all the PTB need to do is foster a system where few can afford to raise a family. I expect that in the not too distant future children will be as rare as a well funded pension plan.

That’s worked well in India.

Comment by Albuquerquedan
2014-03-26 08:46:32
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Comment by Whac-A-Bubble™
2014-03-26 21:56:20

Nyeh znayu kak govoreets po russky.

 
 
 
Comment by scdave
2014-03-26 08:01:42

+1 +1 Colorado…Only the very rich and the very poor (women) will have children…The rich so they can continue the generational wealth…The poor because they feel the need for fulfillment…

Comment by Albuquerquedan
2014-03-26 08:06:59

The poor because they feel the need for fulfillment…

No, I think it is because of the reason identified in the movie Idiocracy.

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Comment by scdave
2014-03-26 09:24:18

No, I think it is because of the reason identified in the movie Idiocracy ??

Thats a perspective from a intellectual view…The fundamental reason for many IMO, is to have purpose…They don’t have anything else of value…

 
 
Comment by In Colorado
2014-03-26 09:22:19

Take away the foodstamps and I think the poor will stop having kids.

Even in third world countries the birth rate is down.

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Comment by scdave
2014-03-26 09:26:04

Take away the foodstamps and I think the poor will stop having kids ??

I would agree although its not just food stamps, its housing and much more…But, we all know that the food is not going to be taken away from the children nor wll the roof over their head so hence, they have babies…

 
Comment by goon squad
2014-03-26 09:28:45

Take away the foodstamps and it’s “Go Time”

Matt Bracken’s fiction depicts exactly what would happen in that scenario.

Got 7.62×39?

 
Comment by In Colorado
2014-03-26 09:49:49

Just saying that if the PTB want to stop population growth, this is how they can do it. And they wouldn’t do it all at once, they would phase it in over a decade or two. As the SNAP bennies slowly shrink and new section 8 vouchers become harder and harder to get, the single mom phenom would reverse course.

 
Comment by In Colorado
2014-03-26 10:24:17

Take away the foodstamps and it’s “Go Time”

Which is why you go don’t go “cold turkey”. You have the bennies slowly degrade and slowly make it harder to qualify for them. The unwashed will slowly change their behavior to conform to the current situation. Then you’ll reach a point where you just shut the whole thing down and few will complain as it will be of no value at that point.

 
 
 
 
Comment by Whac-A-Bubble™
2014-03-26 07:49:11

Yet 63% of American households can “afford” to be homeowners.

Go figure…

Comment by In Colorado
2014-03-26 09:51:09

I would say that the lion’s share of that 63% are older and bought when houses were reasonably priced.

Comment by ragerunner
2014-03-26 12:56:56

Bingo - when the boomers start ‘moving on’ you will see home ownership rates drop drastically.

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Comment by goon squad
Comment by In Colorado
2014-03-26 07:26:51

It’s what happens when your best customer (China) buys fewer raw materials from you.

Comment by scdave
2014-03-26 08:04:27

Yep…Australia also…

 
Comment by Blue Skye
2014-03-26 11:13:18

Sell what China stops buying.

 
 
 
Comment by "Uncle Fed, why won't you love ME?"
2014-03-26 06:47:18

crater

 
Comment by phony scandals
2014-03-26 06:55:28

Open the floodgates? Indiana becomes first state to scrap Common Core

Fox News
March 25, 2014

Indiana has become the first of 45 states to opt out of the national education standard known as Common Core, and critics of the controversial K-12 program say the move could “open the floodgates” for others to follow.

Comment by measton
2014-03-25 15:29:28

Creationism wins yeah
——————————————————————————–
This Common Core math problem asks kids to write the ‘friendly’ answer, instead of the correct one!

10:06 PM 03/25/2014
Robby SoaveReporter

A second grader’s answers to a Common Core-aligned math worksheet were marked as incorrect because they weren’t “friendly” enough… even though they were the right answers.

A screenshot of the worksheet was posted to Twitter. The teacher wrote that even though the questions — addition and subtraction problems — were solved correctly, the student used the wrong technique to arrive at the answers.

@Talkmaster a 2nd graders Common Core math homework. pic.twitter.com/mkGGVA0bJ1
— Sam Heath (@smheath11) March 25, 2014
“Correct answers, but let’s find the ‘friendly’ numbers,” wrote the teacher.

The teacher wanted the student to solve “530 – 270 = ?” in the following manner: First, add 30 to both numbers, changing the problem to “560 – 300 = ?”. These numbers are the “friendly” numbers, because they are supposedly easier to work with.

The student, however, simply subtracted 270 from 530 the good old-fashioned way, arriving at the same answer. Unfortunately, this is not a Common Core-approved technique.

Though friendly numbers can be useful, the worksheet illustrates the weird priorities of Common Core, according to Twitchy:

In Common Core math, it often is not good enough to get the correct answer. Instead, students are required to show “higher order” thinking skills — in this case, use of the associative property. Yes, the associative property is important and should be taught at some point. Unfortunately, we suspect that many 7-year olds will not be able to understand this particular assignment. With limited days in the school year, wouldn’t second graders — second graders! — be better off spending their time attempting to master the traditional subtraction algorithm?

The Daily Caller readers know that this is not the first Common Core worksheet to baffle young children and infuriate adults.

(RELATED: EPIC FAIL: Parents reveal insane Common Core worksheets)

(RELATED: ANOTHER impossibly stupid Common Core worksheet sure to make your kid a moron)

(RELATED: This Common Core math worksheet offers a glimpse into Kafkaesque third-grade hell)

(RELATED: Can you solve this grammatically incorrect, impossible Common Core question?)

(RELATED: ‘Why are they making math harder?’ More absurd Common Core math problems)

(RELATED: Is this Common Core math question the worst math question in human history?)

http://dailycaller.com/2014/03/25/this-common-core-math-problem-asks-kids-to-write-the-friendly-answer-instead-of-the-correct-one/ - 92k -

Comment by Blue Skye
2014-03-26 07:13:04

In one school system I am aware of, the correct answer is to artfully depict the problem, or to write a story about the problem, not to give a numerical answer.

Comment by Albuquerquedan
2014-03-26 07:26:21

Maybe they are training consultants where the answer is “anything you want to be”. Or maybe they are training future authors of AGW reports where the problem is like this:

1. 1998 world temperature .62C above the mean
2. 2013 world temperature .61C above the mean

Answer the world is warming.

Comment by 2banana
2014-03-26 07:41:18

No.

The answer is that we need bigger and bigger government, more and more regulations and higher and higher taxes…

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Comment by Blue Skye
2014-03-26 07:43:43

I understand. I have obsessions too. Lately I think all the time about being out on the lake with my beautiful red headed deck fox in the warm summer sun. For you it is apparently AGW. Good luck. I think my fantasy will materialize before yours.

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Comment by Albuquerquedan
2014-03-26 08:18:13

I need to be proactive. I expect the Democratic talking points from Rio soon and I will be tied up in meetings for most of the rest of the day starting in less than an hour.

 
Comment by RioAmericanInBrasil
2014-03-26 09:05:42

I have obsessions too…… For you it is apparently AGW.

ADan’s obsessions are AGW, Rio, Rio, Rio, junk science and bad math.

I expect the Democratic talking points from Rio soon

See?

“I was always on your mind…..I was always on your mind”

 
Comment by rms
2014-03-26 22:56:53

“…with my beautiful red headed deck fox…”

+1 Great priorities.

 
 
 
 
Comment by eastcoaster
2014-03-26 10:26:04

My 4th grader has to use stupid methods to do math problems. And he can do it the “old fashioned way”. I feel like the stupid methods should be used as a last resort for kids who can’t grasp the traditional way. Yet he’ll get dinged if he doesn’t do it “their” way.

In other news, his teacher handed back a math test recently where she loudly proclaimed that, “No one got 100%!” My son had one question wrong. When I looked at it, I saw that his answer was - in fact - correct. I made a note on the test and sent it back to the teacher. She re-graded.

Unreal.

Comment by Whac-A-Bubble™
2014-03-26 21:59:38

Rule no. 1 of mathematics: THERE IS MORE THAN ONE WAY TO GET THE RIGHT ANSWER.

Rule no. 2: SO LONG AS YOUR METHOD IS CORRECT AND DIRECT AND DELIVERS THE ANSWER, YOU ARE GOOD.

Why force kidz to use stupid methods to get the answer when smart methods work better?

 
 
 
Comment by Brandon Boise
2014-03-26 07:17:32

I’m faced with rent vs buy this summer. Landlord is not renewing my lease and have discovered that rents are way up and starter homes way up. Typical 3/2 1100 sq ft house is renting for $950 to $1100 a month. These houses in my area (if you can find one) are on the market for $160k and up. This is in a county where median household income is barely $56k a year.

While not too bubbly compared to some places, the numbers don’t work well when you can barely find much at the entry level price. I’ve heard anecdotally that a lot of people in the area have wrecked their credit and thus taking up the rental stock and pushing prices up. Hopefully the market turns in the next few months. Not liking the decision of overpaying rent or overpaying for a starter home.

Comment by Housing Analyst
2014-03-26 07:29:27

In Boise?

 
Comment by Blue Skye
2014-03-26 07:40:04

Brandon,

When overpricing corrects, rent will reset in one lease term, or in one move. Overpaying with a mortgage locks you into losses for decades.

In your example, renting is half the cost of buying.

Comment by Brandon Boise
2014-03-26 08:11:00

I’ll keep an eye on things - because of kids in school I’m locked into a certain area and there is zero single family new home construction within a 20 minute drive less than $200k.

I’m definitely very cognizant of locking in losses with a purchase.

 
Comment by scdave
2014-03-26 08:11:02

In your example, renting is half the cost of buying ??

If you are going to suggest that to him then show him your math please because my math does not support that opinion…

Comment by Housing Analyst
2014-03-26 08:17:13

Start using depreciation in your math and you’ll get there in a hurry.

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Comment by Blue Skye
2014-03-26 08:21:53

No disrespect, but that is probably why you have a mortgage.

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Comment by scdave
2014-03-26 09:29:12

Loans of many types don’t bother me….Useful tool…Google started out with a loan don’t ya know…

 
Comment by Housing Analyst
2014-03-26 09:58:03

And google is a multi billion dollar enterprise. A house is a depreciating asset and a loss than never stops losing.

 
 
 
Comment by oxide
2014-03-26 09:36:07

Skye, I rented for almost 20 years, and I have NEVER seen same-unit rental rates “correct.” Ever.

Example: here is a $170K house in Boise:
http://www.zillow.com/homedetails/2516-N-Heath-Ave-Boise-ID-83713/79522466_zpid/

2003 built 3/2. Decent interior finishes, kid-friendly yard, and a Bonus Room over the garage. Zillow has a tiny PITI calculator in the pale blue box. If Brandon puts 10% down at the best interest rate, his PITI will be about $1000/month, which is about the same as rent.

$160K for a $56K median income is 3x, which historically is about accurate. While the historic rule of thumb was 2-2.5x income, that was when interest rates were 7-9%.

Comment by Brandon Boise
2014-03-26 10:54:54

Wish it was on the right side of town for me - the most affordable homes are a 45 minute round trip commute from my kid’s school.

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Comment by Housing Analyst
2014-03-26 11:04:39

“$160K for a $56K median income is 3x, which historically is about accurate. While the historic rule of thumb was 2-2.5x income, that was when interest rates were 7-9%.”

Either one or the other is the “historic accurate”.

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Comment by Blue Skye
2014-03-26 11:55:44

“almost 20 years…”

We are at the end of an one hundred year credit cycle. These things repeat and repeat and repeat through history. You might yet see some things that you didn’t during the last 20.

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Comment by Albuquerquedan
2014-03-26 14:43:15

We are at the end of an one hundred year credit cycle.

On that we agree.

 
Comment by Bill, just South of Irvine
2014-03-26 15:11:36

We are at the end of an one hundred year credit cycle.

On that we agree.

Ah! You refer to the Federal Reserve I suppose.

Took them awhile to get the dollar to go totally fiat though.

Do you trust fiat? I am leery about owning over $200k in US treasuries, although mostly savings bonds. But my crystal ball does not tell me if my metals or my treasuries are doomed.

The odd thing is that the dollar is still around, treasuries went up, precious metals went up, farmland went up, and stocks went up over the course of 80 years. So buying some of each should give me an easy sleep at night.

 
Comment by Blue Skye
2014-03-26 15:43:15

“So buying some of each…”

Staying out of debt is the best start at diversifying!

 
Comment by MightyMike
2014-03-26 16:18:48

I think that the cycle was around 30 years long and ended last year.

 
Comment by Blue Skye
2014-03-26 17:36:00

Mike, do you mean that the last huge multigenerational credit expansion debt mania ended about 30 years ago, or that the current/recent credit expansion peaked last year?

A cycle is full circle.

 
Comment by Housing Analyst
2014-03-26 18:14:19

I think he’s talking about the 30 year bond cycle.

 
Comment by MightyMike
2014-03-26 18:52:44

I guess I wasn’t talking about a full circle. I was referring to the very high mortgage interest rates that hit their peak in 1981. According to the Freddie Mac page that I link to below, the average mortgage rate was around 18½% in October, 1981. At the end of 2012 the rate was 3.35%.

That’s a fall of a bit more than 15% in 31 years. So, during that period, the rate fell half a percent per year on average. This is something that people need to keep in mind when they consider the rise in house prices that occurred during those 30 years. The decline in interest rates obviously can’t happen in the coming 30 years. I think that there’s a good chance that rates could rise a lot over the next 5 or 10 years.

http://www.freddiemac.com/pmms/pmms30.htm

 
 
 
 
Comment by 2banana
2014-03-26 07:43:34

Housing cost less than 3x average family income is not bubbly

Comment by Housing Analyst
2014-03-26 07:50:15

eh…. that’s bubbly. Long term metric is 2x annual.

 
Comment by Brandon Boise
2014-03-26 07:54:01

Here’s the data: http://publicstats.intermountainmls.com/static/Reports/Ada/2014/February-2014-Ada.pdf

Median selling price is just under 200k. 3x median gets you a 20 year old starter home - You might be able to find a stripped down new construction house way out in the suburbs for 3 x income.

My argument is that 3 x income has become the entry level point rather than the median point.

Comment by Housing Analyst
2014-03-26 08:03:20

Stick with a sq ft metric. Don’t trust the stealtor data or their methods.

And as blue skye stated, rental costs are a mere half the carrying cost of a depreciating house at current asking prices.

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Comment by scdave
2014-03-26 08:15:11

My argument is that 3 x income has become the entry level point rather than the median point ??

PITI should not exceed 30% of your gross assuming you have no other long term debt obligations…I.E. Car payment…

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Comment by Housing Analyst
2014-03-26 08:30:18

No. 25% of gross and 33% of net was the shoot from the hip metric used by mortgage salesmen.

 
 
Comment by Housing Analyst
2014-03-26 08:53:06

By the way Brandon…. the most accurate metric to use is construction cost /sq ft. Stick with $45/sq ft(structure only) and then reduce based on age and condition of structure. An SFR in average condition without a bunch of gingerbread is roughly two-thirds the construction cost. Add in lot cost(remember, it’s just dirt) and external structures like outbuildings, garages, pools(depreciate them by one-third) and you’ll get to the actual price it’s worth.

Good luck

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Comment by Northeastener
2014-03-26 10:45:06

By the way Brandon…. the most accurate metric to use is construction cost /sq ft. Stick with $45/sq ft(structure only) and then reduce based on age and condition of structure. An SFR in average condition without a bunch of gingerbread is roughly two-thirds the construction cost. Add in lot cost(remember, it’s just dirt) and external structures like outbuildings, garages, pools(depreciate them by one-third) and you’ll get to the actual price it’s worth.

Most useful housing-related post on the HBB in a long time right here. This should be added to the HBB favorites.

 
Comment by Housing Analyst
2014-03-26 10:48:14

Thank you.

 
Comment by rms
2014-03-26 23:13:51

“Most useful housing-related post on the HBB in a long time right here.”

+1 Saved that one.

 
 
 
 
Comment by Neuromance
2014-03-26 08:10:27

Not liking the decision of overpaying rent or overpaying for a starter home.

This is the problem. The FIRE sector working with politicians have managed to extract ever increasing amounts of wealth from the population, whether they indulged themselves in the housing mania, or recognized the situation and tried to be prudent.

IMO, there’s no good answers, just less bad ones. I’d focus on trying to build net worth that’s not irretrievably locked up in an illiquid asset. How are you going to use a house’s worth to increase your purchasing power? Put it up as collateral for a loan? That’s not really increasing your purchasing power. Also, realize that houses have significant carrying costs, even when the mortgage is done. And finally, they limit mobility, especially if you go underwater.

Having said that, it pays to open up a spreadsheet and run the numbers yourself. One sheet has PITI-UMF, then just TI-UMF (with inflation increases). Another sheet has costs of renting (historic rents linked here). And then see what’s best for your situation and goals.

Basically, figure out what situation is less bad.

 
Comment by eastcoaster
2014-03-26 10:38:27

How old are your kids? How much downpayment do you have saved? Those were 2 of the critical factors in my decision to buy vs. continuing to rent (son was in 1st grade, had 25% downpayment plus reserve left over). I, too, wanted to buy in a specific school district (which isn’t very large - graduating classes are only around 225 kids). My house was a 33 year old rancher owned by very old people before me (read: needs major updating). So the house isn’t my dream house, but the neighborhood is the unbeatable.

Had my son been in middle school or older, I would likely have just continued to rent. When I bought, I called it my 12 year plan. I will likely sell (and go back to renting) when he graduates HS.

Good luck to you whatever you decide.

Comment by Brandon Boise
2014-03-26 10:51:42

Unfortunately very little down payment - but still qualify for FHA. Kids are 4 and 6, have split custody and live 2 blocks from their current school (and their mother) so I’m pretty locked into a certain area. I’m not too excited to buy - but honestly trying balance buy vs rent while also looking at intangibles such as stability for the kids, being near school, and not commuting too far, etc.

Comment by Housing Analyst
2014-03-26 11:03:01

Find a girlfriend with her own place like everyone else does.

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Comment by rms
2014-03-26 23:18:46

“Find a girlfriend with her own place…”

+1 And make sure 2.0 is a hottie; you only live once.

 
Comment by Whac-A-Bubble™
2014-03-26 23:23:43

How can anyone afford a hottie girlfriend plus alimony?

I hope I am born rich in my next life.

 
 
Comment by eastcoaster
2014-03-26 11:24:13

In your case, I’d probably keep renting. I greatly admire you for sticking close to your kids and staying in the same school district. That’s definitely looking out for their best interests.

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Comment by In Colorado
2014-03-26 07:48:54

Apparently the noveau rich in China are desperate to get out of Dodge.

“Rich Chinese overwhelm U.S. visa program”

“The number of applicants is now so great that the government might run out of permits.

Any foreigner willing to commit at least $500,000 and create 10 jobs in America can apply for an investor immigrant visa — also known as an EB-5.

The demand from mainland Chinese eager to move abroad has already led the U.S. government to warn the program could hit a wall as early as this summer.

Chinese nationals account for more than 80% of visas issued, compared to just 13% a decade ago, according to government data compiled by CNNMoney. That translates to nearly 6,900 visas for Chinese nationals last year, a massive bump up from 2004, when only 16 visas were granted to Chinese.”

http://money.cnn.com/2014/03/25/news/economy/china-us-immigrant-visa/index.html

And this doesn’t include all the Chinese here on student visas. I also wonder how many come on a tourist visa and overstay.

And there are the others migrating to Canada, Oz, NZ and anyplace that will take them in exchange for some money.

Comment by Dolly Llama
2014-03-26 07:59:09

Dollars coming home to roost….thanks to the central planners of the USSA.

 
Comment by apathy
2014-03-26 09:31:38

Why limit it to 10,000 per year. If people want to buy their way in here for $500k, let them come. Once they get here, they can sit on message boards and bitch about america like everyone else.

Comment by Housing Analyst
2014-03-26 09:43:45

My….. How apathetic. Cheer up! Falling housing prices to dramatically lower and more affordable levels is positive, bullish and good for the economy.

 
Comment by Whac-A-Bubble™
2014-03-26 22:02:39

Why would anyone in their right mind overpay $500K+ for a house when they can rent it at a very small multiple of the purchase price?

 
 
Comment by Bill, just South of Irvine
2014-03-26 09:50:16

The U.S. government charges the Chinese $500,000 for this while it wants to give amnesty to 20 million illegal alien low income future Democrat voters?

Got it,

Comment by In Colorado
2014-03-26 09:55:36

Hey, the Chamber of Commerce wants taxpayer subsidized, cheap labor, and what the Chamber of Commerce wants, it gets.

 
Comment by goon squad
2014-03-26 10:15:16

Denver Post recently reported that 31% of Hispanic children in the state of Colorado live in poverty. And that within a decade births to Hispanics will be over 50% of births in the state.

Permanent Democrat Supermajority

Comment by In Colorado
2014-03-26 10:27:24

As long as the young, pretty things keep moving here, it’s all good. I mean, someone has to bus their tables and scrub their toilets, right? And if the young and pretty choose to have a family they’ll just buy a house in an upscale nabe like Highlands Ranch and let the poor live off of Colfax.

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Comment by goon squad
2014-03-26 12:05:58

The breeders want to live in Highlands Ranch. The wealthy DINKs want to live in Washington Park or the Highlands, with a high walk score proximity to dumb sh*t to throw their disposable income on.

I think Denver may well be developing into a doughnut hole, with a wealthy core, the Lucky Ducks pushed out to Lakewood or Aurora, surrounded by the ring of wealthy suburbia/exurbia with “good” schools.

East Colfax is still sketchy but it’s gentrifying.

 
 
 
 
 
Comment by Housing Analyst
2014-03-26 08:33:04

“Get what you can get for your house today because it’s going to be much less tomorrow for many years to come.”

Thats right. With 25 million excess empty and defaulted houses just sitting and another 35 million addition houses emptying as boomers expire will keep housing prices diving for years to come.

 
Comment by Housing Analyst
2014-03-26 09:55:08

The bill for home-equity lines is coming due

http://www.marketwatch.com/story/the-bill-for-home-equity-lines-is-coming-due-2014-03-26

And it’s going to be ugly.

Comment by goon squad
2014-03-26 12:20:30

I used to sell HELOCs for TARP bank back in 2004-2005, wonder how many bankruptcies, divorces, suicides I may have indirectly caused.

Spending those commission checks sure was a lot (alot) of fun :)

 
Comment by rms
2014-03-26 23:33:30

“And it’s going to be ugly.”

+1 Ugly for the lenders.

It was a great time to be silver and sell your worn-out 1970’s $35k home to the bank for $350k and plow it into the untouchable 401k; send ‘em the keys.

 
 
Comment by Bill, just South of Irvine, CA
2014-03-26 10:46:01

Oh man I must have needed that cup of coffee ASAP. Somehow it killed a headache I had lingering for an hour. I’m at home sick. No use giving other people colds, and the sick pool time is available. So R and R is important.

Think I took 4 days sick in the last 14 years. Three of them without pay for being a consultant. But you get the wrath of people who don’t like you bringing in a cold.

So now it’s a great time to do light house cleaning and gather up my tax forms for the weekend.

Comment by tresho
2014-03-26 11:17:20

must have needed that cup of coffee ASAP. Somehow it killed a headache I had lingering for an hour.
I have found a stiff cup of coffee is good for many types of pain, including (in my case) kidney stones. However,sometimes habituation to coffee causes headaches between doses. I’ve had that too.

Comment by Bill, just South of Irvine
2014-03-26 11:47:11

I had kidney stones before. And the bummer is that for me, they are caused by drinking green tea. These days even one cup of that tea brings on the pain. Coffee would do that too only if I had very large amounts.

Going through some vision problems lately and the eye strain also causes headaches. I think I am going to go into eye surgery veerrry soon, like in weeks!

 
Comment by Tarara Boomdea
2014-03-26 11:47:21

Comment by tresho
2014-03-26 11:17:20
kidney stones

God awful pain. If you haven’t already, look up benefits of magnesium for kidney stones. Worked for me.

 
 
Comment by Whac-A-Bubble™
2014-03-26 22:03:50

Good luck with the cold. There have been some nasty cold viruses circulating around SoCal this winter…

 
 
Comment by Ella58
2014-03-26 10:56:19

There was a post yesterday about Airbnb. Looking up foreclosures yesterday, I stumbled across what is actually behind these vacation rentals: millions of dollars of debt.

Hollywood Celebrity Estate, $1195 per night on Airbnb:
https://www.airbnb.com/rooms/753783

Same property, foreclosure auction scheduled for next month:
http://www.auction.com/California/residential-auction-asset/1360142-8336-8545-FRANKLIN-AVENUE-LOS-ANGELES-CA-90069-E1600

Auction date: 5/14/14*
Total est. indebtedness: $2,122,792.60

The debt history is pretty fun –
Sold 2004 for $1.3m
$1.5m - 1st mortgage, Aug 2006 (Notice of Default 2009, Notice of Trustee’s sale 2012)
$165k - 2nd mortgage, Sep 2006
$250k - 3rd mortgage, Dec 2006 (Notice of Default 2008)
$850k - 4th mortgage, October 2008

Unpaid taxes +$16k as of last title check in 2012

*As of yesterday auction was scheduled for 4/10, but within an hour it was postponed to 5/14. If it - or anything in this zipcode - ever actually goes to auction, I will die of shock.

Comment by "Uncle Fed, why won't you love ME?"
2014-03-26 12:14:11

How do you evict a delinquent Airbnb guest who doesn’t want to pay?

Comment by Ella58
2014-03-26 12:53:58

I think Airbnb charges in advance for the stay. As for “guests” overstaying their welcome and prepayment? No clue.

More important, does the owner - in foreclosure and not paying the mortgage - get to keep the $1195 per night?

 
 
Comment by rms
2014-03-26 23:47:04

“$850k - 4th mortgage, October 2008″

Due diligence?

 
 
Comment by tresho
2014-03-26 10:57:52

ABQ loses thousands of jobs over the last year. The other day there was a fairly large demonstration in downtown ABQ over police shooting & killing a man living in the foothills.

 
Comment by Blondiegirl
 
 
Comment by Blondiegirl
 
Comment by Housing Analyst
2014-03-26 11:28:59

“Housing: One Chart Says it All”

http://www.counterpunch.org/2014/03/21/housing-one-chart-says-it-all/

What does it say?

If you bought a house in the last 14 years or buy one anytime soon, you’re going to lose piles of money from which you’ll never recover.

Comment by goon squad
2014-03-26 12:14:20

“piles of money”

Do you mean the “piles of money” that smart renters are sitting on?

“Even if I fell, I land on a bunch of money” — Jay Z

 
Comment by Bill, just South of Irvine, CA
2014-03-26 12:20:15

Whew! Powerful.

Here is an update:

Sales of New U.S. Homes Fell in February to Five-Month Low

http://www.bloomberg.com/news/2014-03-25/sales-of-new-u-s-homes-declined-in-february-to-five-month-low.html

If Monty Python was still filming, there would be a segment on “I would like to become an FB” - an American walking into a Realtard office and hearing the price of a crack shack, offer to pay double because it will really go up very high in 5 years!

 
 
Comment by Blondiegirl
2014-03-26 11:34:00
Comment by "Uncle Fed, why won't you love ME?"
2014-03-26 12:07:01

Buying an overpriced house with a mortgage is buying yourself thirty years of anxiety and depression.

Comment by Bill, just South of Irvine
2014-03-26 12:31:11

Exactly. I beat my depression 24 years early be dumping the house in the mid 90s. Besides, other cities were moving their welfare types int my town. Handwriting was on the wall: “ghetto.”

Comment by Jane
2014-03-26 20:39:17

Let us all learn from Bill’s experience.

If you EVER consider buying a house -

Do.Not.Buy.in.nanny.states. The downtrodden and sons of Aztlan gravitate there because of the gravy.
Particularly Section 8.

OF COURSE your neighborhood is going to turn into a slum!

BTW, Arlington County in VA is a nanny state. Boy oh boy does it have its share of the sons of Aztlan. Particularly once they declared the town to be a sanctuary town.

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Comment by Bill, just South of Irvine
2014-03-26 20:50:25

Exactly. I am here partly to teach people what I lost and how I lost it so that they will not repeat what I did.

You know the sign of a smart young person? He hangs around older people and listens.

My dad would have convinced me not to buy that house if I did not do it impulsively. But it was too late. And my dad did not warn me about buying in a one company town either. He must have assumed I was not that stupid.

I recovered from that mistake, made another equally costly mistake ten years later but learned from that too, and posted it here.

 
Comment by MightyMike
2014-03-26 20:54:42

So many Mexicans have moved into country over the past few decades that they’re in every state.

 
Comment by "Uncle Fed, why won't you love ME?"
2014-03-26 21:39:54

They’re in every state, opening up Mexican grocery stores with refrigerators that are not cold enough. They sell rotten cheese. I’m serious.

 
 
 
 
 
Comment by Whac-A-Bubble™
Comment by Bill, just South of Irvine
2014-03-26 12:27:24

The top banks in the world are buying gold.

Why don’t they buy used underwear instead? Are they all that stupid?

Which of those banks are buying Bitcoin? The ones who are not, are they stupid?

Would they be better off loading up on cash in the form of the dollar as it gets printed like toilet paper?

 
 
Comment by Albuquerquedan
2014-03-26 12:26:55

From a Drudge link, damn now I do not know what I will have for dinner, in all seriousness it is only a matter of time before someone gets on a jet plane and brings something like this to the United States prior to their showing symptoms:

Guinea has forbidden the sale and consumption of bats and warned against eating rats and monkeys as the country combats a spread of Ebola, a hemorrhagic fever with a mortality rate of as much as 90 percent.

“We discovered the vector agent of the Ebola virus is the bat,” said Remy Lamah, the country’s health minister, in an interview from the town of N’zerekore today. “We sent messages everywhere to announce the ban. People must even avoid consumption of rats and monkeys. They are very dangerous animals.”

Comment by Bill, just South of Irvine
2014-03-26 12:37:39

The Ebola virus has been a problem since the 90s. Very scary. And mass transit is very scary with potential airborne diseases.

Comment by ragerunner
2014-03-26 13:11:50

So is the mall, grocery store, amusement park, and the office. If you take that point of view.

Comment by Pete
2014-03-26 23:24:40

“So is the mall, grocery store, amusement park, and the office. If you take that point of view.”

A rising tide lifts all boats.

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Comment by "Uncle Fed, why won't you love ME?"
2014-03-26 18:04:23

I sort of knew this one lady who died of hantavirus. After her death, a few people implied that she must have been a trashy person because you get that from rats. One person exclaimed that it “was not like her” to die of hantavirus, since she was a multimillionaire. I thought it was pretty inhumane for people to judge her based on her manner of death (association with rats).

Then you have another country where they think you’re weird if you don’t eat monkeys, and the government has to ban you from it.

 
 
 
Comment by SUGuy
2014-03-26 15:50:54

What can we predict about the NY – NJ foreclosure crisis? Will it follow the same pattern as Florida? Sob stories in the media, mortgage reduction promises by the politicians, hedge funds buying in bulk and converting them into rentals and lower mortgage rates by the fed.

Will it be leather, rinse and repeat or something else in your opinion?

Comment by Rental Watch
2014-03-26 16:35:06

I think all of the above (whining, promises, etc.)…however, the pace of resolution needs to pick up quite a bit if it’s going to impact the broader housing market. Otherwise, it will trickle out over a period of years.

Comment by Housing Analyst
2014-03-26 17:27:57

More “we’re going to hide 25 million houses forever” eh RenTrollHogWash?

 
Comment by "Uncle Fed, why won't you love ME?"
2014-03-26 18:05:45

Yeah, nothing will ever affect the broader housing market but inflation and ever-decreasing inventory.

Comment by Rental Watch
2014-03-27 09:41:38

Don’t you get it?

The VOLUME of distress flowing onto the market matters. If there is lots of shadow inventory (like in NY/NJ), but it flows onto the market in teeny tiny trickles (for whatever reason), it’s the same as there being no distress at all.

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Comment by Housing Analyst
2014-03-27 10:44:57

Again,….More “we’re going to hide 25 million houses forever” nonsense?

 
 
 
 
 
Comment by phony scandals
2014-03-26 16:32:40

IRS stonewalls probe of tea party targeting emails

By Stephen Dinan
7 hours ago

IRS Commissioner John Koskinen said Wednesday that he won’t be able to produce all of former employee Lois G. Lerner’s emails and those of other key employees by the end of this year, pushing it beyond this year’s congressional elections.

In a heated exchange over whether he and his tax agency employees are cooperating in Congress’s investigations into tea party targeting, Mr. Koskinen said the amount of time it will take to look through and redact private information from the documents could last years.

“What they want is something that’s going to take years to produce,” he told the House Oversight Committee, which six months ago issued a subpoena for Ms. Lerner’s emails because the IRS wasn’t acting quickly enough.

http://www.washingtontimes.com/news/2014/mar/26/irs-says-it-will-take-years-produce-tea-party-targ/ - 98k -

 
Comment by phony scandals
2014-03-26 16:44:47

“And some customers were blowing through their equity like it was a free ATM.”

The bill for home-equity lines is coming due

March 26, 2014, 9:42 a.m. EDT

Borrowers might get a ‘payment shock’; regulators warn banks of a brewing problem.

NEW YORK (MarketWatch) — The consequences of the financial crisis just keep popping up. Next on the horizon: home-equity lines of credit.

For borrowers who tapped into their home equity in the heady days before the crisis, odds are good that their bill is about to jump by several hundred dollars a month. Regulators are worried that this will throw the neediest borrowers into default. And banks are concerned about what this means for their bottom line.

“We’ve really been trying to get the word out that this is coming,” said Bob Piepergerdes, director for retail credit risk at the Office of the Comptroller of the Currency, which regulates national banks and has been pushing them to help borrowers whose home-equity lines are about to reset. “Our message is this: They shouldn’t wait to start addressing it.”

What’s going on here? Well, in some aspects, this recalls the familiar story of the mortgage-market implosion. Banks not so long ago were handing out home-equity lines with vigor, and not always bothering with minor details like whether customers could really afford them. And some customers were blowing through their equity like it was a free ATM.

The consequences of such home-equity largesse have been percolating, but not yet exploding. That’s because most of these lines let borrowers pay very little — usually interest only — for the first 10 years.

Those years, though, are coming to an end.

The OCC estimates that $171 billion in home equity lines held by the biggest banks will reset from 2014 through the start of 2018, compared to just $28 billion in the previous four years. The reset, or “end of draw,” means borrowers won’t be able to tap those lines any more - basically the equivalent of getting one’s credit card canceled - and they’ll have to start paying down the loan rather than just paying the interest.

Banks like Wells Fargo & Co. and Bank of America Corp. have been contacting customers whose lines are about to reset, via phone calls, letters and notices when they walk into a branch or use an ATM. The banks say they have two purposes: They want to make sure borrowers are aware that their bills are about to go up — and they want to see if they can help the borrowers who won’t be able to afford that. For example, a bank might be able to roll a borrower’s home-equity bill into their regular mortgage bill, which is likely to have a lower interest rate.

Brad Blackwell, portfolio lending manager at Wells Fargo, said that a lot of borrowers are surprised when they hear the news.

“They might have understood the line of credit when they got it,” said Blackwell, whose bank has developed a program called HEMAP, or Home Equity Maturing Accounts Program, to notify customers as much as three or four years ahead of time. “But that was seven to 10 years ago. Time goes a lot faster than I think any of us plan on it going.”

Citigroup Inc. and J.P. Morgan Chase & Co. have acknowledged in regulatory filings that borrowers could suffer “payment shock” when their home-equity lines reset.

http://www.marketwatch.com/story/the-bill-for-home-equity-lines-is-coming-due-2014-03-26 - 115k

Comment by "Uncle Fed, why won't you love ME?"
2014-03-26 18:07:10

no

everyone locked in a flat rate forever

 
 
Comment by phony scandals
2014-03-26 16:50:01

Bay Area cities could suffer if public pensions bankrupt CA cities this year

By BayAreaObserver
Wed, 26 Mar 2014, 4:38pm

Bay Area cities and their tax coffers are enjoying a tech-fueled boom, but three Southern California cities teetering on bankruptcy could tarnish the creditworthiness of the state and its municipalities.

Bloomberg News reported this week that the Los Angeles suburb of Placentia is “struggling for fiscal survival amid a California renaissance.” The financial news service also said that Adelanto and Upland are fighting insolvency.

The ugly details facing the troubled cities reflect familiar themes: Tax bases focused on property taxes over sales taxes means that the Prop. 13 caps hit especially hard. And the rising costs of retirement benefits for public employees are taking their toll.

Michael Coleman, fiscal adviser to the League of California Cities, tells Bloomberg, “The serious issue is that people in communities and organized labor think the problem has passed and it has not. “It’s actually getting worse,” Coleman said.

http://www.bizjournals.com/sanfrancisco/blog/2014/03/california-municipal-bonds-public-pensions-finance.html

 
Comment by goon squad
2014-03-26 18:25:58

Fat bits bucket today, 328 posts so far…

Comment by Housing Analyst
2014-03-26 18:33:43

Yeah…. and with out Lola’s endless squealing too. What’s the bits bucket record? Somewhere around 450 i think?

Comment by "Uncle Fed, why won't you love ME?"
2014-03-26 20:06:42

It was over 666. I remember people celebrating the 666 mark, but it went up after that.

 
 
 
Comment by phony scandals
2014-03-26 19:14:18

Does anyone else have a family picture where their kids that have legs are missing legs and have three fingers and a backwards thumb?

 
Comment by Bill, just South of Irvine
2014-03-26 19:16:43

Maybe more folks were taking a sick day off of work like me.

At least I made good progress on m taxes today and cleaned my kitchen and living room.

 
Comment by Muggy
2014-03-26 19:22:19

Hey all, if someone could repost this tomorrow, I would appreciate it. We are on vacation, so I asked a relative to do a drive by. My neighbor, the same one who has been sneaking his garbage into ours, was using our driveway to park his car.

1. I’m ready to go full throttle on the guy with letter to him cc’d to sheriff and property mgr. My wife thinks this is overboard. Our kids play together and whatnot.

2. What do you recommend for a home surveillance system? Simple is fine. One or two outdoor cams with a recorder. I have no experience in this realm.

I’d like to know what else he is doing while I am gone. I suspect he is using our water as well.

Comment by SUGuy
2014-03-26 19:54:48

Sams club

 
Comment by "Uncle Fed, why won't you love ME?"
2014-03-26 20:05:12

Maybe you could park your car in his driveway when you get back.

 
Comment by MightyMike
2014-03-26 21:01:55

My neighbors installed one that connects ti the Internet. They have an app on their Android phones that allows them to view the cameras when they’re on vacation.

 
 
Comment by Bill, just south of Irvine, CA
2014-03-26 20:31:00

Kind of late to post but will repost in in tomorrow’s BB:

I worked hard last year to guarantee that I will pay less in federal taxes this year than in 2012. And I cut my federal taxes by 33% for 2013 versus 2012.

The patriotic thing to do is starve the beast.

Comment by Bill, just south of Irvine, CA
2014-03-26 20:41:24

I’m predicting slightly better for the 2014 tax year - lower taxes than 2013.

I keep hoping most Americans do the same to starve the beast. This is the best way to force government to shut down at least some of its police state horrors.

 
 
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