The Housing Bubble

“A house is a depreciating asset and a loss that never stops losing”

At what point does RICO come into play?

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A Whole Lotta Democratic Corruption Going On
Townhall.com | March 28, 2014 | Michelle Malkin

Has Nancy Pelosi seen a newspaper lately? (Pro tip, hon: Like the Obamacare monstrosity, you have to read it to find out what’s in it.) I’d love to see her face in the wake of the veritable epidemic of Democratic corruption now sweeping the country. Pelosi’s blink count must be off the charts.

I’m going to make it easy on Pelosi and put all of the latest cases in one handy rogue’s gallery reference list. But let’s not be naive. It’s clear to me that the Barack Obama/Eric Holder DOJ is clearing the decks before the midterms. Prediction: The FBI’s GOP corruption shoe will drop right before the elections for maximum distraction and damage. For now, let’s take stock of the jackassery:

–The Dirty Democratic Mayors’ Club: Charlotte, N.C., Mayor Patrick Cannon, who bragged about partying with the Obamas to help grease the wheels for city projects, was arrested this week on federal corruption and influence-peddling charges. He’s accused of accepting gobs of cash payoffs and Las Vegas trips.

The bust follows former New Orleans Mayor Ray Nagin’s conviction in January on corruption charges; former Trenton Mayor Tony Mack’s February conviction on cash bribes for a downtown parking garage; and former San Diego mayor and serial groper Bob Filner’s disgraceful resignation after conviction on sexual harassment-related charges; former Detroit Mayor Kwame Kilpatrick’s conviction on extortion, bribery and conspiracy charges; and former Birmingham, Ala., Mayor Larry Langford’s corruption and bribery conviction.

–California state Democratic Sen. Leland Yee, gun grabber by day, alleged arms-trafficking gangsta by night: Yee made a decades-long career out of sanctimoniously demonizing gun owners and railing against the Second Amendment. He was arrested this week on corruption charges after an FBI sting found probable cause to believe Yee had conducted wire fraud and engaged in a conspiracy to deal firearms without a license and illegally import firearms. The Chinatown pol went so far as to discuss “details of the specific types of weapons” with a prospective donor. Yee is currently a candidate for California’s secretary of state office.

–Pennsylvania state Democratic Sen. LeAnna Washington, party animal: This week, a judge ruled that the Keystone State could proceed with a trial against Washington, who reportedly forced her legislative staff for eight years to use taxpayer time and money for an annual birthday party whose proceeds were diverted to her campaign account. She is charged with felony theft of services and felony conflict of interest. More than a half-dozen former employees blew the whistle. “I am the f—ing senator,” she screamed at one staffer who objected. “I do what the f— I want, and ain’t nobody going to change me.”

–Rhode Island state Democratic House Speaker Gordon Fox, multiple-raid target: The powerful Democrat, beloved by the left for his gay-marriage activism, announced last weekend that he is stepping down from office after FBI raids on his home and work office. Fox is the target of several criminal investigations by the U.S. attorney’s office, FBI, IRS and state police. Mum’s the word so far on the nature of the alleged criminal activity involved.

–California state Democratic Sen. Ronald Calderon, all in the corrupted family: Calderon is on a paid leave of absence after being hit with a 24-count federal indictment for bribery and corruption. His brother also was charged with multiple counts of money laundering and influence peddling. Prosecutors allege the legislator accepted nearly $100,000 in bribes, plane trips, gourmet meals and golf games in exchange for political favors. He also is accused of paying his daughter $39,000 for a phony office job and paying $40,000 in “consulting” fees for a campaign website that didn’t exist.

–California state Democratic Sen. Roderick Wright, lying liar: Also on paid leave, the entrenched Los Angeles-area politician is now fighting his January conviction on felony perjury, false declaration of candidacy and fraudulent voting charges. Wright claimed to live in a rented room in an Inglewood home within his district, but the jury found his true residence was outside the district in upscale Baldwin Hills. The jury found he lied on candidacy declarations and voter registration documents and fraudulently voted in five elections.

–New York state Democratic Assemblyman Bill Scarborough, shady jet-setter: The FBI and state authorities raided his home and offices as part of a probe into his travel voucher practices. He blamed a “tabloid hit job” by the New York Post over questionable per diem claims totaling $60,000.

–Illinois state Democratic House Rep. Keith Farnham, child porn probe suspect: After sponsoring two bills to increase penalties for child porn possession, Farnham was the subject of state and federal raids last week on his home … for possession of child porn. Over the weekend, he resigned his seat citing “serious health issues.” There’s a euphemism.

Remember: Nancy Pelosi famously promised to “drain the moral swamp” and end the “culture of corruption.”

As long as they vote democrat - all is good.

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Biden: Millions of Illegal Aliens Are “Already American Citizens in My View”
Top Right News | 03-28-2014 | Brian Hayes

Vice President Joe Biden, in a speech to the U.S. Hispanic Chamber of Commerce’s 2014 Legislative Summit, on Thursday said the “11 million” illegal aliens in the United States “are already Americans.”

“Eleven million people living in the shadows I believed are already American citizens,” Biden said. “These people are just waiting, waiting for a chance to be able to contribute fully, and by that standard, 11 million undocumented aliens are already Americans in my view.”

Well, that is one way to avoid the obama housing bubble v2.0

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Couple Lived On $1.2m Yacht In Palm Beach While Collecting Welfare And Food Stamps
cbs12.com - March 27, 2014

MINNEAPOLIS, Minn.- A nationwide warrant is out for a Minnesota couple who allegedly received over $167,000 in public assistance while living on a $1.2 million yacht in Palm Beach, Florida, reports CBS Minnesota.

“These rich folks ripped off the system,” Attorney Mike Freeman said at a Friday news conference. “We are going to do every darn thing we can to make sure they do hard time,” said Freeman.

Colin Chisholm III, 62, and Andrea Chisholm, 54, are facing one count of wrongfully obtaining public assistance of more than $35,000, which is a felony charge. The couple’s whereabouts are currently unknown.

“I’ve never ridden on a yacht that nice, and I bet most of us haven’t, but they were living on it while they were collecting public assistance,” said Hennepin County Attorney Mike Freeman.

Energy Boom Spurs Growth - Yahoo News

New 2013 census information released Thursday shows that cities are the fastest-growing parts of the United States, and a majority of the metro areas showing that growth are located in or near the oil- and gas-rich fields of the Great Plains and Mountain West.

Neighboring cities Odessa and Midland, Texas, show up as the second and third fastest-growing metro areas in the country. Sara Higgins, the Midland public information officer, has a simple explanation: oil. “They’re coming here to work,” Higgins said.

Energy production is one of the fastest-growing industries in the United States, the Census Bureau said. The boom in the U.S. follows the use of new technologies, such as hydraulic fracturing and horizontal drilling, to tap oil and gas reserves.

“Mining, quarrying, and oil and gas extraction industries were the most rapidly growing part of our nation’s economy over the last several years,” Census Bureau Director John H Thompson said.

Like I’ve been saying, there’s plenty of opportunities in the areas where the oilfields are growing. The President could spurn growth all over the country if he opened up public lands, but he won’t. My hope for this country is that the next President will.

The biggest leveraged buyout in history looks like it is finally going bust for good.

It involves 2 of the biggest PE firms (KKR & Tex Pacific) plus Goldman who bought out a Texas utility with borrowed money… finally the thing ran into the ground. Very juicy stuff.

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http://www.reuters.com/article/2014/03/27/energy-future-hd-loans-idUSL4N0MO3MY20140327

“Formerly known as TXU, Energy Future was taken private in October 2007 in the largest leveraged buyout ever, and has struggled to manage its debt of more than $40 billion ever since.

The sponsors of the buyout, who include KKR, TPG, Goldman Sachs and others, are expected to recover very little, if any, of their roughly $8 billion investment.

Energy Future Holdings is expected to reveal in an annual report that it did not receive an auditor’s opinion that it could survive as a going concern, which would trigger a default on loans and push the company into Chapter 11.”

You gotta wonder how the press would be reporting on this differently if a republican was in the white house and had just spent $6 trillion in borrowed dollars and nationalized 15% of the US economy…

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AP poll shows ObamaCare support hits new low … of 26%
HotAir | March 28, 2014 | Ed Morrissey

Democrats who still think that defending ObamaCare makes for a great midterm strategy will be shocked, shocked by the latest AP-Gfk survey results. The rest of us … not so much. Support for the law dropped to a record low in this polling series, and even the slight improvement in the perception of its implementation leaves it far below the Democratic base numbers:

Public support for President Barack Obama’s health care law is languishing at its lowest level since passage of the landmark legislation four years ago, according to a new poll.

The Associated Press-GfK survey finds that 26 percent of Americans support the Affordable Care Act.

China may be turning to stimulus so industrial metals are up:

http://www.bloomberg.com/news/2014-03-27/index-futures-rise-amid-u-s-retreat-gold-holds-decline.html

“But… but… they’re STUDENTS, not employees.”

The NCAA is really the worst org ever. Being a “student” isn’t even in the top 10 priorities of most D1 college fball or bball players.

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http://www.dailymail.co.uk/news/article-2591342/How-did-146-word-essay-Rosa-Parks-A-UNC-football-playerss-shocking-term-paper-released-whistleblower-alleges-widespread-academic-fraud.html

“In a CNN story that aired in January, Willingham said her research of 183 football or basketball players at UNC from 2004-12 found 60 percent reading at fourth- to eighth-grade levels and roughly 10 percent below a third-grade level.”

What Cody said

http://blogs.marketwatch.com/cody/2014/03/27/the-truth-about-gold-in-the-long-run/

Time to scrap the mortgage interest deduction: Simplify the Tax Code and Lower Tax Rates for All
Washington Examiner | 03/27/2014 | Philip Klein

In the coming weeks, Americans will spend an average of 13 hours and $210 to prepare their federal taxes. Beyond the compliance burden the federal tax code imposes, it also distorts economic activity and discriminates against some taxpayers in favor of others. But one of its most egregiously unfair provisions is also among its most popular - the mortgage interest deduction.

In theory, the mortgage interest deduction is supposed to encourage home ownership, a questionable goal for government to begin with. The purpose of taxes is to raise money to finance government services, not to manipulate human behavior or economic activity.

When lawmakers tell taxpayers that they can keep more of their money – but only if they spend that money the way politicians want – it’s just as much an exertion of government power as a spending program.

Allowing individuals to deduct mortgage interest payments drives up taxes on other Americans given the need to recoup the lost revenue, or, alternatively, adds to the deficit. The mortgage interest deduction itself drains $100 billion annually from the U.S. Treasury. When other tax policies meant to encourage home ownership are added - including the deductibility of state and local property taxes and the exemption of capital gains taxes from selling a home - that number rises to $175 billion.

The authors took a detailed look at the distribution of existing tax benefits for home ownership and found that the benefits do more to help wealthier Americans purchase larger homes than they do to encourage lower-income Americans who otherwise would be renting to purchase homes in the first place.

The study found that in Atlanta, Denver, Detroit, Minneapolis, Philadelphia, Phoenix, Seattle and Washington, D.C., 80 percent of taxpayers earning more than $100,000 claimed the deduction, compared with just 25 percent of those earning less.

A family with a household income of $500,000 with $1 million in mortgage debt being financed at 4 percent would generate $16,000 per year in tax savings, according to the authors’ calculations. In contrast, a household earning near the national median income of $51,000 with a home worth $221,000 (the median price), would receive tax savings of one-tenth that amount.

There are several leading objections to scrapping the mortgage interest deduction. One is that it would drive down home prices. Another is that American homeowners already purchased homes and did tax planning on the assumption that the tax benefit would be in place.

Recently, House Ways and Means Chairman Rep. David Camp, R-Mich., offered a comprehensive tax reform proposal that would allow individuals with existing mortgages to keep the deduction as is, while gradually reducing the cap to $500,000 for new mortgages. Another idea proposed by the authors is to change the deduction to a flat rate tax credit, to “limit the subsidy provided to upper-income taxpayers while simultaneously expanding it at the lower end of the income distribution.”

Run the poor and unsophisticated through the ringer a few more times, as long as Uncle Sugar or Aunt Janet pays us for the privilege.

The people who get meetings with politicians, and influence them, are their big donors. And they are the ones who ultimately write the rules.

Housing risk high in spite of Qualified Mortgage rule
Edward J. Pinto, Stephen D. Oliner | The Hill
via aei.org

The [National Mortgage Risk Index] shows that recent mortgage loans would not perform well under stress, despite the common perception that mortgage credit is tight, with only the highest-quality borrowers able to get a loan.

n February, the index indicated that 11.6 percent of recent home purchase mortgage loans, roughly one in nine, could be expected to default under severe stress. To put this number in context, in 1990 − before the loosening of lending standards that culminated in the meltdown in the housing market – the NMRI was at about 6 percent. Thus, the current level is nearly double what would be consistent with reasonably solid underwriting standards. This is largely due to a decline in down payments and a rise in DTIs.

The Federal Housing Administration (FHA) is the prime source of this risk.

Despite this unsafe risk profile, all of the loans covered by the NMRI meet the definition of a Qualified Mortgage (QM) set by the Consumer Financial Protection Bureau.

QM’s illusory safety net is especially worrisome for lower-income borrowers who continue to be placed in high-risk loans they may not be able to afford.

Federal housing policies continue to place borrowers, particularly lower-income borrowers, in harm’s way… ”

http://www.aei.org/article/housing-risk-high-in-spite-of-qualified-mortgage-rule/

As noted by one of the local Sports Talk shows…..

Median Family Income (June 2013): $52,100 (and dropping)

Paycheck for Miguel Cabrera per AT BAT in 2014: A little over $49,000.

From WUWT, this has been my point for years, now I know short hand to describe myself and differentiate myself from Rush, who is a denier:

In climate science, the real debate has never been between “deniers” and the rest, but between “lukewarmers,” who think man-made climate change is real but fairly harmless, and those who think the future is alarming. Scientists like Judith Curry of the Georgia Institute of Technology and Richard Lindzen of MIT have moved steadily toward lukewarm views in recent years.

Another indefinite delay on the project my SIL is working on. According to the press releases, for “Systems issues”.

Last week it was “waiting for good weather”. (Initial phase of project was supposed to have been completed 6 months ago. Then the end of December. Everybody is working 60 hour weeks)

Of course there is the PR spin, and then there is the real story. Like this screwed up documentation. Like the fuselage redesign, because the state of the art, all composite one is too heavy, pretty much like every all composite airplane usually is. Like the disassembly/reassembly of the project multiple times, because the left hand has no idea what the right hand is doing. Our aviation OEMS have forgotten how to build/certify airplanes. See Boeing 787. See Hawker Horizon business jet. Or in the case of the Eclipse Jet, didn’t have a clue from the get-go.

Sure they have their “Expert Systems” and such, but the reality is that there is a ton of “Tribal knowledge” in any manufacturing business that isn’t written down anywhere. Especially if the guys involved recognized that the “Expert system” is a means to replace them with “Help Desks” in Bangalore/Shanghai.

OEMs have dumped all of the old timers with experience, and replaced them with newbies and contractors, who will bail on the project as soon as a better job comes along. Mentors are so 20th Century.

As I’ve noted before the country is paying to make the same mistakes all over again, because all of the old guys who would see something and throw the “BS flag” have been sent packing. Or have been replaced by engineers who have been employed by their vendors, who have different priorities (mainly not admitting problems, due to the liability/contract concerns).

The sky is darkening, because thousands of chickens are coming home to roost.

Scrap Register)
Updated: 2014-03-28 14:58
Counter:24

Chinese gold demand experienced a very strong 2013 by nearly every measure, setting a new record high with opportunistic buying on price dips. The question is: can Chinese gold consumption continue to grow, and what is driving it?

Barclays thinks the overall fundamental trend remains intact and expect growth to continue to continue, albeit at a slower pace year-on-year.

Much of the gold imported by China to feed this voracious appetite has come from Western vaults as destocking and outflows from gold ETPs. Given that Chinese buyers prefer to hold physical gold, the flow of gold from the West to the East will likely remain a theme.

Even without any new official figures on central bank holdings, Barclays bottom-up fundamental analysis shows growth across jewellery and investment-related bar and coin demand. As per Barclays the demand will continue to grow, albeit likely at a slower pace than recently.

Barclays has revised our gold price forecast for 2014 up to $1250 an ounce from $1205 an ounce,after taking into account gold’s year-to-date performance.

“We have not changed our overall view and still believe that its next move will be lower. Palladium has similarly outperformed so far this year, hitting several year highs, due to possible supply concerns. However, we still expect market fundamentals to push palladium even higher by year-end,” Barclays added.

This year, China became the world’s largest gold consumer, building on 2013’s blockbuster year. But since much of the strength in buying in 2013 can be attributed to price-sensitive buying, the question is, can Chinese gold consumption continue to grow? In our view, the answer is yes, albeit at a slower pace year-on-year, which we address in this month’s focus, said Barclays.

Funny how these things always seem to happen in right-to-work states.

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BMW plans $1 billion expansion in South Carolina
Yahoo News | 28 Mar 2014 | JEFFERY COLLINS

GREER, S.C. (AP) — BMW is celebrating its 20th anniversary of building cars in the United States by investing $1 billion in its plant in South Carolina to build two of its new X-series vehicles at the facility that ushered in a wave of foreign automakers building Southern plants.

The German automaker announced Friday it will create another line at the plant, producing the X7, a larger SUV with three rows of seats similar to a Cadillac Escalade. The company will also make the X4, a sportier version of the X3 coupe and plans to build a plug-in hybrid version of its smaller X5 SUV.

The $1 billion will be spent through 2016 at the plant in Greer, just down Interstate 85 from Spartanburg. BWM says it will hire 800 additional workers, bringing total employment at the plant to 8,800 people. The Greer plant will make 450,000 vehicles a year by 2016, becoming the largest of the company’s 28 plants around the world.

Almost 300,000 BMWs were made in South Carolina last year, and more than 2.6 million vehicles have rolled off the plant’s assembly lines in the past two decades.

Mercedes-Benz followed with a plant in Alabama a year later, and in the past two decades, Nissan, Toyota and Volkswagen have all followed with plants built in rural Southern locations

The point is, ladies and gentleman, that debt — for lack of a better word — is good.

Debt is right.

Debt works.

Debt clarifies, cuts through, and captures the essence of the evolutionary spirit.

Debt, in all of its forms — debt for life, for money, for love, knowledge — has marked the upward surge of mankind.

And debt — you mark my words — will not only save Teldar Paper, but that other malfunctioning corporation called the USA.

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We’re in a private debt crisis that could lead to the next economic collapse: Richard Vague
Nicole Goodkind - Daily Ticker - 3/28/2014

The U.S. is in the midst of a private debt crisis.

As of March 2014, American consumers owe $11.52 trillion in debt, an increase of 1.6% from last year. The average household owes $7,115 on their credit cards and the average indebted household owes $15,252. Americans owe $8.05 trillion in mortgages (the average mortgage debt being $152,209) and $1.08 trillion in student loan debt. When combined with corporate debts the U.S. collectively owes about $28 trillion in private debt.

“Every major crisis of our lifetime has been caused by a rapid increase of our private debt,” says Richard Vague, chair of the Governor’s Woods Foundation. “They all were a function of runaway private lending.”

People focus too much on government debt, argues Vague, when they should be attempting to quell private debt.

“There’s reputed to be 10 million mortgages that are still underwater,” he says. “There’s perhaps a half or ¾ of a trillion in second-lean loans that are still a problem and haven’t been dealt with. Those to us are logical candidates for restructuring programs.”

zuppa di pesce

http://picpaste.com/pics/091336827df74525ccfc29b327817760.1396051002.jpg

i decided to take a nap after skiing winter park today. i woke up feeling like i was suffocating. then i realized i was suffocating on a very large pile of money. all that money that’s left over after ‘throwing money away on rent’ every month. trees at mary jane were sick this morning under six inches of new pow pow…

Why pay a massively inflated price for a house today when you can buy later for 75% less?

Ay Romeo. The ape is dead.

An interesting aspect of the housing debacle that I haven’t heard mentioned lately is the rate that inflation has devalued the dollar in the last 7 years.

The new normal is now normal and America seems to be clawing its way out of its economic funk, and we just might have an economic
resurgence just in time for Hillary’s triumphant victory in 2014.

I made 2500 dollars this week in the stock market. That’s probably the second best week in the three years I’ve been playing. Guess I’m up at least 14 in that time. I’m not quite sure.

http://www.city-data.com/forum/work-employment/2081727-told-i-not-eligible-position-being.html

http://www.city-data.com/forum/work-employment/2081149-mobility-why-not-move.html

http://www.livingincity.com/alturra.htm

http://denver.craigslist.org/sci/4397096490.html