April 19, 2014

Bits Bucket for April 19, 2014

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

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Comment by Housing Analyst
2014-04-19 02:39:02

Houses depreciate, always.

Comment by LolaLOL
2014-04-19 06:30:54

Are people back to HELOCing again now that prices have gone back nutso? Are banks allowing it like last time?

A buddy of mine who is always strapped is suddenly paying for a porch being put on?

Comment by Mr. Banker
2014-04-19 07:28:12

There it is again, positive proof that people are smart.

Comment by oxide
2014-04-19 10:10:09

Amy (not me) brings you stats and predictions. Someone else can bring the Cheetos and beer.

Home-equity loans are back, pitfalls included
By Amy Hoak, Marketwatch, Jan. 21, 2014, 5:00 a.m. EST

The statistics: New home-equity loan activity (including both one-time loans and lines of credit) rose 30.8% during the first nine months of 2013, compared with the same period a year earlier,

For perspective, in 2013, new home-equity lending activity is expected to have reached $60 billion, the highest level since 2009, Cecala said. But in 2006, activity reached a record high of $430 billion.

year-over-year growth in home-equity lines of credit alone is expected to have grown by 16% in 2013, in terms of the total amount of credit available to borrowers, according to Equifax and Moody’s Analytics. It’s expected to grow another 5% to 10% in 2014.

Many lenders will limit the combined loan-to-value ratio of the loan and the first mortgage to 80%, Cecala said. That automatically restricts activity, since home prices are still down from 2006 to 2007 highs.


Comment by LolaLOL
2014-04-19 12:52:02

Thanks. I was wondering if there was some limit at 80% or something based on last time’s experience. My suspicions are that some who’ve bought in the 2010 to early 2012 timeframe are slinking back to the banks looking for a little spending money.

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Comment by Pete
2014-04-19 13:41:49

“My suspicions are that some who’ve bought in the 2010 to early 2012 timeframe are slinking back to the banks looking for a little spending money.”

Many folks have gotten into credit card debt to help through the hard times. Perhaps some are helocing to pay that off, which would be a wise choice.

Comment by ibbots
2014-04-19 06:55:54

Houses may depreciate, but funny how prices don’t always do the same.

Comment by Housing Analyst
2014-04-19 07:12:47

No. What is “funny” is you choose to cherry pick a narrow 10 years of world history to substantiate a fallacy. Nice try.

Let’s dig a little deeper my friend. What are your losses?

Comment by Skroodle
2014-04-19 07:47:52


Comment by Whac-A-Bubble™
2014-04-19 04:18:19

Is China’s housing bubble over yet?

Comment by Whac-A-Bubble™
2014-04-19 04:19:57

Are you a genuine home buyer, or the other kind?

Comment by Whac-A-Bubble™
2014-04-19 04:23:09

Asia News
China Home-Price Rises Slow as Demand Eases
Third Consecutive Month of Deceleration May Prompt Changes to Restrictions
By Esther Fung
Updated April 18, 2014 3:34 a.m. ET

High-rise housing under construction in the suburbs of Beijing. European Pressphoto Agency

SHANGHAI—Growth in residential property prices across large- and medium-size Chinese cities slowed further in March as lending limits and discounts undercut demand, according to analysts and property developers.

Average new-home prices in 70 of China’s larger cities rose 7.3% from a year earlier in March, according to calculations by The Wall Street Journal based on survey data released Friday by the National Bureau of Statistics. Prices rose 0.2% on a month-to-month basis, compared with about 0.3% in February.

The year-to-year rise in February was 8.2%, down from 9% in January. This slower growth rate over the past three months compares with accelerating prices in each month of 2013. In December, for instance, the average price rise was about 9.2% compared with 9.1% in November.

Excluding public housing, prices in March rose 7.7% compared with 8.6% in February.

China’s housing market is an important pillar of growth in the economy. The construction, sale and outfitting of apartments accounted for nearly a quarter of China’s gross domestic product in 2013, Moody’s Analytics calculates. China’s economy saw growth slip to 7.4% in the first quarter, an 18-month low, from 7.7% in the fourth quarter.

Property prices surged last year despite government efforts to control them. Since February, however, developers in some cities have been cutting prices to spur sales. A tighter mortgage market has also undercut sales, builders say, as banks remove discounts and take longer to approve mortgages.

“China can’t achieve its growth target if the housing market is weak,” said Michael Klibaner, China research director at property agency Jones Lang LaSalle, who called for easier bank-lending terms for genuine home buyers.

Comment by Whac-A-Bubble™
2014-04-19 04:25:23

UPDATE 1-China home price inflation cools to 8-month low in March
Fri Apr 18, 2014 9:03am IST

* March home prices +7.7 pct y/y, slowest gain in eight months

* Average price gains expected to ease this year - analysts

* More developers to cut prices in some cities with oversupply (Add details)

BEIJING, April 18 (Reuters) - China’s home price inflation slowed to an eight-month low in March, extending to a third month a loss of momentum in a property market that has been a strong spot in the world’s second-largest economy.

Average new home prices in China’s 70 major cities rose 7.7 percent in March from a year earlier, easing from the previous month’s 8.7 percent rise, according to Reuters calculations based on data released by the National Bureau of Statistics (NBS) on Friday.

In month-on-month terms, prices rose 0.2 percent in March, slowing from February’s rise of 0.3 percent.

Analysts said the cooling of the property market is an initial indication of stabilisation and they expected the easing trend to continue this year.

“Home price rises will continue to lose momentum this year as we have seen more developers start to cut prices,” said Liu Yuan, a research head of property consultancy Centaline in Shanghai.

“However, we think the market will finally stabilise thanks to still strong demand and local governments’ possible moves to ease restrictions on home buying,” Liu said.

Comment by Whac-A-Bubble™
2014-04-19 04:28:56

China’s home price growth decelerates
English.news.cn 2014-04-18 16:55:54
Home prices in major Chinese cities grew at a slower pace in March, with fewer cities reporting month-on-month price gains, the National Bureau of Statistics (NBS) announced on Friday. (Xinhua photo)

BEIJING, April 18 (Xinhua) — Home prices in major Chinese cities grew at a slower pace in March, with fewer cities reporting month-on-month price gains, the National Bureau of Statistics (NBS) announced on Friday.

Of a statistical pool of 70 major Chinese cities, 56 saw month-on-month gains in new home prices last month, down from 57 in February.

For existing homes, prices increased in 42 cities in March, also down from 46 in the previous month, the data showed.

Month on month, new homes in four cities saw prices decline while 14 cities saw prices drop in existing homes.

Year on year, prices of new homes increased in 69 cities last month, even though 68 of them saw the rates of growth moderating, said Liu Jianwei, a senior statistician at the NBS.

In 58 cities, the growth rates also decelerated in the prices of existing homes in March, Liu said.

Price gains in fewer cities and a price growth moderation have come about amid sluggish property sales and an economic slowdown in the first quarter of 2014.

The NBS data showed 201.11 million square meters of property were sold in the first quarter, down 3.8 percent year on year. The sagging market also led to a slide in economic growth, which slowed to 7.4 percent in the first quarter, down from 7.7 percent in the last quarter of 2013.

Based on the data, it is fair to say the country’s property market is facing a downturn, because high inventories especially in third- and fourth-tier cities and people’s growing reluctance to buy homes mean a further slide in both sales and price growth,” said Zhang Dawei, chief analyst with property agent Centaline.

Zhang noted that the average new home prices of the 70 surveyed cities grew only 0.23 percent in March month on month while average existing home prices gained 0.12 percent. “The two figures both marked the lowest rate of growth since 2013, which shows price growth has begun to moderate after it peaked in the fourth quarter of 2013,” he said.

Comment by albuquerquedan
2014-04-19 06:42:28

The Chinese intend to move five million people out of the capital and are starting to move factories out. I suspect many of those ghost cities will soon have a factory next to them:


Comment by albuquerquedan
2014-04-19 06:48:34

I wish we could have a hard landing like this:


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Comment by Whac-A-Bubble™
2014-04-19 08:31:34

More likely scenario: A gradual release of air from the soufflé that plays out over decades to come like Japan’s has since 1989.

Note that since the article posted below was published on March 9, 2012, the Nikkei average has risen to a current level of 14,516.27 — much higher than 9,900, but also far lower than the 39,915.87 level reached way back in 1989.

Japan’s lost decades — and ours?
By Robert J. Samuelson,

Since the financial crisis, a shadow has hovered over the U.S. economy: Japan. Could what happened there happen to us? The issue transcends last year’s earthquake. The bursting of Japan’s real estate and stock bubble in the early 1990s has had lasting consequences: a “lost decade” (actually, two) of meager growth and weak job markets. Though hardly a depression, Japan’s prosperity has been partial and unsatisfying, enjoyed by some and missed by others.

Let it be said that some economists now think Japan could break from this dismal pattern. Here is John Makin of the American Enterprise Institute in a recent commentary: “After many years of false starts, the Japanese economy may finally be set to boom — or at least to enter a period of sustained growth with a sharply rising stock market.” At about 9,900, Japan’s Nikkei stock index is about a quarter of its historical high of 39,915.87 in 1989.

Comment by Ben Jones
2014-04-19 06:51:04

‘many of those ghost cities will soon have a factory’

China has a glut of factories. There is over-capacity in almost every sector. You have an odd contradiction; somehow you distrust government solutions in the US but believe that a corrupt communist government can magically fix a housing bubble which is bursting as I type.

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Comment by albuquerquedan
2014-04-19 07:03:31

Ben, the article said they were going to close factories and move them. I do not think that a controlled economy is the most efficient. However, we are still talking about a country where very intelligent people are earning a couple bucks per hour. China is going to grow despite government not because of it. But when we evaluate China and things like housing bubbles we do need to consider that China can do things like move five million people to where the houses are even, if people do not exist in those areas now.

Comment by albuquerquedan
2014-04-19 07:15:56

When I evaluate the prospects of a country I look at three factors:

1. Economic system, free enterprise or socialistic with my preference being that they lean toward free enterprise.

2. Average IQ of the nation.

3. Natural resources of the nation.

If a country is really rich in natural resources, they can have a low IQ and be socialistic and still have bright prospects. Also, while East Germany was left behind economically by West Germany, it has the highest standard of living in the communist world because of high IQ. All three factors are important but IQ becomes more and more important as we move into the informational age. China is being held back by its government backed industries. However, it has less of a safety net than we do, so socialistic income transfers are less in that country than in this country. So deciding which country right now is the most socialistic is more difficult than most people imagine.

Comment by LolaLOL
2014-04-19 07:16:22

China at some point will have to deal with the fact that it is just a blatant dictatorship.

Comment by Skroodle
2014-04-19 07:49:08

Revolution is coming.

Comment by Whac-A-Bubble™
2014-04-19 08:17:46

‘many of those ghost cities will soon have a factory’

China has a glut of factories.

I guess that won’t necessarily stop them from adding to the glut, in a desperation attempt to populate those ghost cities, even as more empty apartments are built at an ever-increasing rate in order to maintain the appearance of 7%+ growth forever?

Slow motion economic train wrecks are normally about as exciting to watch as drying paint. But this one has recently become quite a bit more interesting than the norm.

Comment by Whac-A-Bubble™
2014-04-19 08:36:51

“1. Economic system, free enterprise or socialistic with my preference being that they lean toward free enterprise.

2. Average IQ of the nation.

3. Natural resources of the nation.”

Doctrinaire approaches don’t always work out very well when other factors are in play, such as massive overcapacity due to central planners who misallocated capital to money-loosing sectors like residential real estate.

Watch and wait to see how badly this plays of for central planners in both the U.S. and in China over the coming decades.

Comment by Igor
2014-04-19 10:46:24

“You have an odd contradiction”

Dan’s constant defense of and praise for dictatorships like communist China and Czar Putin reveals his paymasters’ true goal, and it ain’t free market libertarian capitalism.

Comment by albuquerquedan
2014-04-19 12:09:02

Hi Lola. I am not defending China’s government. I just refuse to engage in group think. A few years ago, when the MSM made it seem like China was going to grow at 10% per year for decades. I pointed out they would hit a resource wall that would force them to slow growth. However, slowing growth does not mean collapse and that is the group think of today. Saying a country is growing economically is not approval of its government but that is too nuanced for you. Putin is protecting his country’s interests, while I may not approve of all it methods, he is still better than a President that consistently does things against its national interest. Latest example another delay in the XL decision, it only makes it more likely that Canadian oil will go to China, so if you are against China, you should be denouncing Obama’s decision.

Comment by albuquerquedan
2014-04-19 12:24:04

I think we lost a post so I will try this one. Pointing out that the MSM is trying to slant our opinions of China and Russia to advance globalization is not a defense of dictatorship. However, I am more worried about Obama/Reid’s BLM than I am of Putin since I am far more likely to have to interact with it.

Comment by Igor
2014-04-19 13:42:43

Ronald Reagan: The Soviet Union is an evil empire, and will end up on the ash heap of history.

Our Danny: That Putin, he’s our kinda guy! And you’ve gotta admire communist China, they get ‘er done!

Comment by Housing Analyst
2014-04-19 14:40:16

Excess. Capacity. Falling. Demand.

Get it through your big empty skulls.

Comment by Ben Jones
2014-04-19 19:27:26

I’m going to have to disagree with some posters here; this is the fourth dimension of political reality, media and the unspoken forces of globalism.

‘the MSM is trying to slant our opinions of China and Russia to advance globalization is not a defense of dictatorship’

The MSM; China good, Russia bad. China is pro-globalism, Russia not so much. What is the MSM portrayal of Chinese leaders? Really, really smart. Nice suits, and after all they will be the global leader eventually. (The old fall-back; it’s inevitable, may as well wake up and smell the coffee. Just like globalism itself, even though nothing it has promised has come to pass in 30 years). The Chinese are a bunch of dumbells IMO; just look at this joke of a housing bubble they encouraged.

‘That Putin, he’s our kinda guy!’

I don’t know that much about the guy. Don’t really care and why should we? But I do know that our non-governmental organizations (NGO’s) have spent hundreds of millions running political opposition in Russia. As they have in Arab states, etc. What would we do if Russia was spending these amounts on political groups in the US? Probably freak out and ban them (or kill them). Look at it for what it is; a NATO power grab into former Soviet client states. And NATO is the one-worlder military body. I don’t support this stuff. It’s not their right to take my money and build a one-world government so they can sit around in 5 star hotels and make deals with multi-national corporations. To heck with that. Just fill the pot-holes senator, and stop trying to police the world and knock it off with this new world order mumbo jumbo. It’s not going to happen any more than China is going to be the lone world superpower.

‘Arthur Jensen: You have meddled with the primal forces of nature, Mr. Beale, and I won’t have it! Is that clear? You think you’ve merely stopped a business deal. That is not the case! The Arabs have taken billions of dollars out of this country, and now they must put it back! It is ebb and flow, tidal gravity! It is ecological balance! You are an old man who thinks in terms of nations and peoples. There are no nations. There are no peoples. There are no Russians. There are no Arabs. There are no third worlds. There is no West. There is only one holistic system of systems, one vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, reichmarks, rins, rubles, pounds, and shekels. It is the international system of currency which determines the totality of life on this planet. That is the natural order of things today. That is the atomic and subatomic and galactic structure of things today! And YOU have meddled with the primal forces of nature, and YOU… WILL… ATONE! Am I getting through to you, Mr. Beale? You get up on your little twenty-one inch screen and howl about America and democracy. There is no America. There is no democracy. There is only IBM, and ITT, and AT&T, and DuPont, Dow, Union Carbide, and Exxon. Those are the nations of the world today. What do you think the Russians talk about in their councils of state, Karl Marx? They get out their linear programming charts, statistical decision theories, minimax solutions, and compute the price-cost probabilities of their transactions and investments, just like we do. We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable bylaws of business. The world is a business, Mr. Beale. It has been since man crawled out of the slime. And our children will live, Mr. Beale, to see that… perfect world… in which there’s no war or famine, oppression or brutality. One vast and ecumenical holding company, for whom all men will work to serve a common profit, in which all men will hold a share of stock. All necessities provided, all anxieties tranquilized, all boredom amused. And I have chosen you, Mr. Beale, to preach this evangel.

Howard Beale: Why me?

Arthur Jensen: Because you’re on television, dummy. Sixty million people watch you every night of the week, Monday through Friday.

Howard Beale: I have seen the face of God.

Arthur Jensen: You just might be right, Mr. Beale.”

Comment by CA renter
2014-04-20 04:27:43

Totally agree, Ben. Nice quote, too! :)

Comment by Whac-A-Bubble™
2014-04-19 04:31:57

China Housing Prices Slow Again
By International Business Times | Economy News | Apr 18, 2014 01:24PM GMT
International Business Times

By Greg Morcroft - China’s decades-long move to urbanize its huge population has been the high-octane fuel powering that nation’s growth engine, but officials have reported another month of slowing growth in home price increases, heightening concerns about the sustainability of the real estate market in the world’s second-biggest economy.

Beijing-based Standard Chartered PLC economist Lan Shen, told Bloomberg on Friday that, “there are definitely risks in the property market of China’s smaller cities. The property market will be a big factor that presses the country’s economic growth this year.”

China said overnight that March home prices in 70 of its largest cities rose 7.3 percent from a year ago. While folks in the U.S. regions hit hard by the financial crisis might envy that, it’s worrying to China watchers as it is an eight-month low for the key datum and is nearly a full percentage point slower than the reported just a month earlier in February. It’s also more than 1.5 percent lower than January’s pace of a 9 percent year-over-year price rise.

“The current property market is just cooling down mildly from the red-hot situation seen in past years, which is actually quite good for the healthy development of the industry,” Chen Guoqiang, vice chairman of China Real Estate Society, told Reuters Friday morning.

Comment by albuquerquedan
2014-04-19 08:59:25

Remember an economy growing at 7% will double in ten years. An economy growing at 5% will still double in 14 years. China still had the ability to grow out of its glut of factories and houses due to still high growth rates.

Comment by Whac-A-Bubble™
2014-04-19 09:05:54

Also remember that an economy growing at 7%+ for many years on end will typically culminate in an explosion of debt followed by a massive, protracted crash.

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Comment by albuquerquedan
2014-04-19 09:12:07

But I have posted several times that if you consider all the debt in China both private and government it is much less than the U.S. They do not have issues with massive pension debt for instance.

Comment by Whac-A-Bubble™
2014-04-19 09:15:46

A massive capacity glut can sink them nonetheless, particularly when their best customers have far more debt than they do, from which they are currently deleveraging.

Comment by albuquerquedan
2014-04-19 12:10:53

I hope you are not including the U.S. because that is not true in Obama’s America we are not deleveraging.

Comment by albuquerquedan
Comment by albuquerquedan
Comment by Whac-A-Bubble™
2014-04-19 04:34:17

China Housing Market Bubble Start to Pop as Economy Faces Hard-Landing
By Jerin Mathew
April 14, 2014 10:29 GMT

A Chinese national flag flutters at a construction site for a new residence complex in Beijing

China’s property bubble has already started to burst as the country struggles to avoid a hard-landing after the housing market became overheated with soaring prices.

China’s commercial and residential property sectors are not doing well, especially in the city of Hangzho, which has “become the symbol of a market in distress”, according to Forbes.

The world’s largest retailer, Wal-Mart, is closing its Zhaohui store in Hangzhou on April 23 as a part of its overall plan to dump unprofitable locations. The sale of the large store comes as the city has too much supply of commercial properties, according to Forbes.

Hangzhou’s Grade A office buildings at the end of 2013 had an average occupancy rate of 30%, according to real estate broker Jones Lang LaSalle.

In Hangzhou’s residential sector, occupancy is weak and prices are declining due to massive overbuilding.

Secondary market for homes is facing a steep decline in prices, while developers are offering deep discount on new home sales, but investors and owners are not noticing.

“It seems that the 30% price cut in Hangzhou really changed the way Chinese people think about real estate,” said Anne Stevenson-Yang of J Capital Research, “and I doubt there is any turning back from here.”

“The real estate market in Hangzhou looks like it has just passed an inflection point. It is not so much that fundamentals have deteriorated—they have been weak for some time—as that people’s mentality has changed,” Forbes writes.

Despite deeper discounts, consumers are not buying properties, because they think that prices will come down further.

The Wall Street Journal earlier reported that the discounts in Hangzhou could be “a signal of broader market weakness ahead.”

Comment by Whac-A-Bubble™
2014-04-19 04:36:43

Have you noticed any change in housing market momentum in your area?

Comment by Whac-A-Bubble™
2014-04-19 04:39:02

The Daily Ticker
Momentum may be changing in the housing market: Robert Shiller
By Bernice Napach 20 hours ago Daily Ticker

Get ready for a potentially slow buying season in the housing market.

Pending home sales are down 11% from a year ago, mortgage rates are about 1% higher than a year ago and homebuilders are breaking ground at a slower pace than expected — at an annual rate of 946,000 units, more than 2% below forecasts.

Investors who had become a growing part of the market are pulling back and the Fed, which has been supporting the housing market through its quantitative easing policies, continues to reduce those purchases, says Shiller.

It’s not at all clear that momentum is a safe bet anymore,” says Shiller, a Nobel prize-winning economics professor at Yale. But he expects home prices will continue to rise, though most likely at a slower rate.

Comment by Whac-A-Bubble™
2014-04-19 04:42:48

Is the market in your area experiencing a silent spring?

Comment by Whac-A-Bubble™
2014-04-19 04:43:48

The Daily Ticker
Housing forecast: A not so sunny spring
By Bernice Napach April 16, 2014 10:04 AM Daily Ticker

Spring is usually the time when potential home buyers hit the road in search of that perfect house, and sales pick up. But this spring isn’t looking so sunny.

Housing starts in March rose less than expected, at a 2.8% annual rate, housing permits fell 2.4% and pending home sales in February fell to their lowest level in almost two and a half years. Homebuyer traffic in 40 major U.S. markets in March was down about a third from a year ago, according to a Credit Suisse index.

We might have already seen the peak of the recovery,” says The Daily Ticker’s Aaron Task. “Unless overall economic activity picks up and wages pick up we may be plateauing in the housing market.”

And there’s more data to support that thesis. Mortgage lending is at a 14-year low, 30-year fixed mortgage rates are averaging about 4.6% vs. 3.6% a year ago and the homebuilder confidence index last measured 47 (below the key 50 level) indicating more pessimism than optimism about the market.

In addition, investors, like the Blackstone Group which had been binge buying homes to rent are retreating from the market. Its housing acquisitions are reportedly down 70% from a year.

But rents have been rising. The real estate website Zillow and the New York Times found in an analysis that the median rent in 90 cities now exceeds 30% of the median gross income in those cities.

Comment by Whac-A-Bubble™
2014-04-19 08:39:46

Since Blackstone Group has decreased its investment purchases by 70%, hopefully the all-cash Canadian and Chinese investors are picking up the slack. Otherwise, many local markets which were somewhat frothy last year due to all the investor-created foam may soon face outright price collapse.

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Comment by ibbots
Comment by LolaLOL
2014-04-19 07:32:37

Real estate editor pimping rear view mirror news. Same old story, prices rising on claimed lack of inventory. But when inventory appears it just sits.

You can set up your lemonade stand then when there is a line cut off supply and jack up prices. But the price you sell that one or two glasses of lemonade for at that point ain’t what the next kid’s gonna charge. And you’ll be out of business quicker than you can say effed flipper.

Comment by Whac-A-Bubble™
2014-04-19 08:42:41

“But the price you sell that one or two glasses of lemonade for at that point ain’t what the next kid’s gonna charge.”

I think you have pointed out why inventory manipulation works best when just a few Megabanks plus a handful of Leviathan government institutions (Federal Reserve bank, Fannie Mae, Freddie Mac, etc) control a lion’s share of the entire housing market.

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Comment by Housing Analyst
2014-04-19 14:44:28

Imagine the stunning losses these suckers face in TX.

Comment by Whac-A-Bubble™
2014-04-19 04:44:48

How soon will the GSEs be wound down?

Comment by Whac-A-Bubble™
2014-04-19 04:52:43

“…the hundredth proposal to get rid of Fannie and Freddie…”

Comment by Whac-A-Bubble™
2014-04-19 04:55:10

Ritholtz: “Why do we want the federal government backstopping securitized loans?”

The Daily Ticker
Sponsored by
Fannie and Freddie tumble on “idiotic proposal” to wind down GSEs
By Aaron Task March 12, 2014 2:04 PM Daily Tickerl

Shares of Fannie Mae and Freddie Mac were down sharply for a second straight day after Senate Banking Committee members Tim Johnson (D-SD) and Mike Crapo (R-Idaho) outlined plans to wind down the mortgage giants.

In a nutshell, the plan would replace Fannie and Freddie with an FDIC-like regulator to oversee the mortgage-backed securities market while requiring private investors (vs. taxpayers) to take the first 10% of any loss before any government backstop kicks in.

Of course, this is just the outline of the plan and there are major political obstacles to getting anything done in Congress, much less on such a contentious issue as the government’s role in the housing market. Most political observers do not believe the proposal will make it through Congress — or avoid President Obama’s veto pen if it did survive the legislative gauntlet.

“We think there are several obstacles blocking the Johnson-Crapo bill in the Senate,” writes Brian Gardner, SVP of Washington Research at Keefe, Bruyette & Woods:

Time: “In a shortened election year, the Senate calendar is already crowded with other legislation and pending nominations. It will be difficult for the Senate leadership to find time to schedule for a bill as complex and politically sensitive as a GSE reform bill.”

Politics: “We think the Senate Democratic leadership will be reluctant to force their vulnerable members to take difficult votes on a politically sensitive issue like mortgage finance.”

And then there’s the House where “there is deep unease among House Republicans to maintaining a significant federal backstop for the U.S. mortgage market,” according to The WSJ.

Comment by Neuromance
2014-04-19 10:26:28

Ritholtz: “Why do we want the federal government backstopping securitized loans?”

Any kind of taxpayer guarantee undermines market discipline and creates perverse incentives.

BUT - it’s big money for the big donors, being able to palm off risk on the taxpayer while keeping the profit. It’s just a continuation of the “privatize the profits, socialize the losses” model.

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Comment by Whac-A-Bubble™
2014-04-19 04:56:37

Fannie, Freddie shareholders lobby against U.S. housing reform bill
April 9, 2014 2:57 PM
By Margaret Chadbourn

WASHINGTON, April 9 (Reuters) - A coalition of investors in Fannie Mae and Freddie Mac on Wednesday launched an effort to stop Congress from moving ahead with a U.S. housing finance reform bill, arguing it would deny them a fair share in any remaining value in the two companies.

The new tax-exempt group, Investors Unite, said it wants to protect the rights of shareholders in the bailed-out mortgage finance companies. It is holding meetings in Washington and sending dozens of investors to Capitol Hill to promote its cause.

The group’s formation is the latest sign of stepped-up lobbying activity ahead of a Senate Banking Committee meeting later this month on a bill that would abolish Fannie Mae and Freddie and replace them with a new agency to back home loans.

The group opposes the bill because it would prevent the companies from recapitalizing and compensating shareholders.

I think it needs further study,” said coalition leader Tim Pagliara, the chief executive officer of CapWealth Advisors, a wealth management firm whose clients own some 8 million shares.

Comment by taxpayers
2014-04-19 05:08:05

when the LP comes into power

Comment by Whac-A-Bubble™
2014-04-19 05:16:04

LP = Lady Prez?

Comment by LolaLOL
2014-04-19 06:34:42

What’s in it for her?

Comment by Whac-A-Bubble™
2014-04-19 08:48:22

1. A feather in her cap for finally winding down the GSEs and replacing them with a similar government insurance scheme christened under a new name (AHA = Affordable Housing Act?)…

2. It could also reflect the current CIC’s reluctance to deal with the GSE wind down and the possible blame game that could ensue if the housing market subsequently tanks.

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Comment by LolaLOL
2014-04-19 06:29:25

When will we admit we are getting nowhere on the drug problem?
When will we admit we are trapping millions of children to awful horrible lives in the inner cities?

Comment by Combotechie
2014-04-19 06:36:05

We? What’s with this term “we”.

Comment by LolaLOL
2014-04-19 06:45:22

When will society admit, there is that better?

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Comment by Blackhawk
2014-04-19 06:53:06

That’s where the permanent Democrat majority has been for decades.

Do you think they have the same in mind for the rest of us?

If not, what would they change?

Comment by goon squad
2014-04-19 06:56:29

“There is no society” — Prime Minister Margaret Thatcher

Comment by Combotechie
2014-04-19 07:15:55

Here’s the rest of the quote:

“They’re casting their problem on society. And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then, also to look after our neighbour. People have got the entitlements too much in mind, without the obligations, because there is no such thing as an entitlement unless someone has first met an obligation” - Margaret Thatcher

Comment by The Zima Guy
2014-04-19 11:15:00

There’s a village. It takes a village. Hilarious will replace Obama as the next village idiot.

Comment by Whac-A-Bubble™
2014-04-19 04:45:48

Is it a given that it is never, ever a good financial move to buy a house?

Comment by Whac-A-Bubble™
2014-04-19 04:46:48

Get ready to read the most important financial advice you will ever see in print.

Comment by Whac-A-Bubble™
2014-04-19 04:51:29

Enjoy listening to the dumb bozo interviewer strike out using every Realtor® sales pitch line in the book against a brilliant, blistering attack on the financial folly of home ownership.

The Daily Ticker
The case against owning a home
By Morgan Korn
March 18, 2014 12:19 PM
Daily Ticker

Are you house hunting? Home prices have been rising but are far off from their pre-housing bubble peak. Mortgage rates are also climbing — they’ve increased 1 percentage point since touching record lows a year ago — yet buyers can still borrow at super low rates of 4.37%, which is the average rate for a 30-year mortgage loan according to Freddie Mac.

There are many well-known positives of being a homeowner, such as laying down roots in a neighborhood, customizing the property to your liking, and, in theory at least, investing in long-term price appreciation.

But James Altucher, investor, author and entrepreneur, argues that owning a home could be one of the biggest financial mistakes to make: “It is never, ever a good idea to buy a house,” he says in the video above.

What’s Altucher’s beef with owning a home? “The house is totally illiquid, homeowners are trapped in a location, it’s not easy to move and taxes and other fees go up faster than the price of inflation,” he says. “There’s no law that you have to follow the ‘American Dream’.”

Comment by goon squad
2014-04-19 07:01:10

“There’s no law that you have to follow the ‘American Dream’.”

My life is the American Nightmare. Sometimes I wake up feeling like I’m suffocating, then I realize I’m just buried under a large pile of money, all the money that I have left over after “throwing money away on rent” every month.

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Comment by Bill, Just south of Irvine
2014-04-19 11:09:57

“My life is the American Nightmare. Sometimes I wake up feeling like I’m suffocating, then I realize I’m just buried under a large pile of money, all the money that I have left over after “throwing money away on rent” every month.”

LOL - now stop that. You will upset IE Landlord and Amy the Hoax.

Comment by LolaLOL
2014-04-19 07:21:26

Long discussions on Altucher’s blog about why it makes no sense to own in most cases.

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Comment by Bill, just South of Irvine
2014-04-19 07:27:12

I enjoy James Altucher’s writings a lot. He is one of my favorite writers. His writings on why you should quit your job (and be an independent contractor) are in alignment with my theme.

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Comment by Whac-A-Bubble™
2014-04-19 08:51:15

I thought I heard some resonance between his message and what you post here. I frankly am about 100% in agreement, as regards the anti-diversification folly of home ownership versus the financial freedom that comes with renting.

Comment by Pete
2014-04-19 14:51:55

In his blog on the “Why I Am Never Going to Own a Home Again” page of his blog, he does end it with this below. I don’t agree with it, but I thought it was interesting, given everything else he wrote. There’s no date on the blog, but the responses are from 2011.

“By the way, this is going to sound like a contradiction: but I think housing is a great investment right now. I think housing prices have gone down far enough and I can list the reasons why housing as an abstract investment concept is going to go higher from here. But I don’t like to write about investing on this blog.”

Comment by Bill, Just south of Irvine
2014-04-19 15:21:11

I guess he’s allowed to contradict himself in the very bottom “by the way” tidbits every once in awhile. Those “by the way” deals are where his heart is. Where is mind is, well those are the main posts. Those are him thinking clearly. The Fannie Mae meme affected him in that little disclaimer. All of us have the hypocritical what if’s

Sometimes I think of myself buying a house in Scottsdale and just working in Phoenix, not traveling back and forth. But I have to read blogs like his.

And my point is you can never be mobile enough. There is no such thing as being too mobile. Mobile is “mobile-able” and does not mean you have to always move. It means you have a great flexibility (short lease, no kids, no marriage, few furnishings) so that you can move to another location that has a far better opportunity.

I am now going to browse Dice. I had a dream last night that I was negotiating (hourly rate) for a consulting gig with my former shop. It was a great feeling. I miss the lack of job security.

And I do not have a secure job now. It is a salaried job but it is a no-growth thing. I am only trying to get a foothold in commercial work so I can have more consulting opportunities in the future. Sometimes you have to do a strategy contrary to your big strategy in order to gain more opportunity in the future.

Comment by scdave
2014-04-19 07:48:09

“The house is totally illiquid ??

So what…Its not a investment its your home…The only time liquidity should be relevant is when you want to sell…At that time, liquidity is just a function of price point…

homeowners are trapped in a location ??

So what…Many people don’t feel like being a nomad…They want a long term place to put down roots & live…Maybe raise a family..

taxes and other fees go up faster than the price of inflation ??

This dude have some kind of crystal ball ?? Thats is a pretty broad assumption and is not credible…My taxes DO NOT go up faster than inflation…Quite the contrary…In the aggregate, they have gone up far, far lower than the rate of inflation…

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Comment by Whac-A-Bubble™
2014-04-19 08:52:15

“My taxes DO NOT go up faster than inflation…”

I don’t suppose Prop 13 has anything to do with that?

Comment by Whac-A-Bubble™
2014-04-19 08:56:34

“The house is totally illiquid ??

So what…Its not a investment its your home…The only time liquidity should be relevant is when you want to sell…At that time, liquidity is just a function of price point…”

Tell that to the poor slobs who bought at the peak bubble price in 2007 and will most likely never again see their mortgage above water for as long as they wear their massively-leveraged, illiquid, devalued financial albatross around their necks.

Comment by scdave
2014-04-19 09:43:34

I don’t suppose Prop 13 has anything to do with that ??

It has everything to do with it…Take the leverage away from the tax man through initiative or get bent…We don’t have a revenue problem…We have a spending problem…

Tell that to the poor slobs who bought at the peak bubble price in 2007 and will most likely never again see their mortgage above water ??

What does that have to do with liquidity ?? Even if they are upside down the property is still liquid in the market place…Its all about price point which makes this guys statement that a house is not liquid bogus…

Comment by Whac-A-Bubble™
2014-04-19 09:55:35

“What does that have to do with liquidity ??”

The foolish anti-diversification strategy of leveraging up their household financial balance sheets to purchase a massively overpriced, illiquid asset is what explains how they entered the pot of stew in which they currently simmer.

Comment by Bill, Just south of Irvine
2014-04-19 11:11:12

Great Post of Altucher W-A-B.

Yours is the post of the day.

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Comment by Bill, Just south of Irvine
2014-04-19 11:17:53

I would love to post that of Altucher on my facebook page, but I already p.o.’d my boss. He is gung ho on California real estate. 95% of his employees are under age 40, got married and bought houses in OC and are raising kids.

I already p.o.’d my boss with my posts on the Bundy Ranch standoff last weekend. My boss is a liberal.

No one at work in Irvine asked me why I don’t have a house. Some assume I own a house in Arizona. One or two people asked if I own a house in Arizona and I tell them no. I have an apartment there. That is the end of the convo and they go there own way. I don’t finish off with Altucher’s line “I prefer to have cash in the bank and the freedom to not fear changing communities for a job in case I get fired.

Comment by Whac-A-Bubble™
2014-04-19 14:36:55

Politics and housing don’t mix well with bosses, from my experience…

Comment by Housing Analyst
2014-04-19 14:53:29

“Cash is a beautiful thing. Having cash in the bank keeps you calm when everyone else is committing suicide.” ~Altucher

Comment by Bill, just South of Irvine
2014-04-19 15:34:07

And the punch drinker very easily forgets that having a lot of cash and zero debt means no lost sleep. The narcotic of the N.A.R. says that is okay. You can now paint your walls the fluorescent orange you want. Go ahead, HELOC!

Comment by Guillotine Renovator
2014-04-19 17:49:18

I cannot stand Altucher, but he was spot on in that interview.

Comment by Bill, just South of Irvine
2014-04-19 15:02:32

“There are many well-known positives of being a homeowner, such as laying down roots in a neighborhood, …”

This always gets me puzzled. Why would “laying roots in a neighborhood” be positive at all for you? It is positive for the local government only, that wants a stable community of docile sheep willing to take more fleecing. This era, what is positive for the thugernment is not good for you.

“customizing the property to your liking” - what? Tell me i should spend $6,000 a month on PITI-M rather than my $1350 so that i can put pictures on my wall. Go ahead i dare!

“and, in theory at least, investing in long-term price appreciation.” there is that word again, “investing.” and long term appreciation? What? Houses only go up 1% annually compared to the inflation rate in general. Stocks perform much better over long periods. Your house is NOT an investment.

‘But James Altucher, investor, author and entrepreneur, argues that owning a home could be one of the biggest financial mistakes to make: “It is never, ever a good idea to buy a house,” he says in the video above.’ IT IS NEVER EVER A GOOD IDEA TO BUY A HOUSE!

‘What’s Altucher’s beef with owning a home? “The house is totally illiquid, homeowners are trapped in a location, it’s not easy to move and taxes and other fees go up faster than the price of inflation,” he says. “There’s no law that you have to follow the ‘American Dream.’

But there is the punch bowl. As Oxide knows, when you drink from it and fall victim, the same chemicals will make you evangelize home buying.

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Comment by Bill, just South of Irvine
2014-04-19 15:05:15

Becoming less mobile is never ever positive. So “laying down roots in a neighborhood” is never an advantage for you.

Comment by Bill, just South of Irvine
2014-04-19 15:07:37

Staying highly mobile does not mean you must always move. This is my key point: It means you can take a new opportunity easily should you decide a different location is better for you.

Comment by CA renter
2014-04-19 18:54:52

Bill, for those who have children, stability is a big deal. All too often, families have to move from their rentals (in which they are well established and entirely comfortable) because the LL wants to sell, or move into the rental themselves, or jack up the rent, etc. Moving a family, especially one that is established in the community, is VERY different from moving a single person with few personal possessions. Your preference is to be unencumbered, and I totally get that, but many people choose to have permanent, life-long ties to other people.

IMO, the greatest benefit of owning is having a place that is paid off by the time one is retired (either voluntarily retired, or simply unable to get a job). Knowing that your future housing costs are fairly fixed is a wonderful feeling.

I’m no Kool-Aid drinker, and have spent more of my adult years as a renter than an owner, so acknowledge the many benefits of renting; but there are many downside risks to renting, too.

Comment by Bill, Just south of Irvine
2014-04-19 19:12:58

“Many downside risks…” explain what the risks are from renting an apartment. Remember, I rent in areas where renting is far cheaper than owning.

Comment by Guillotine Renovator
2014-04-19 19:28:45

“There are many well-known positives of being a homeowner, such as laying down roots in a neighborhood…”

WTF does the above even mean? What’s the difference between living somewhere one year and ten? I can get to know new neighbors in a matter of a few weeks, and you can’t pick your neighbors anyway. And some will invariably move. There’s a reason for the term “good fences make good neighbors”.

Comment by CA renter
2014-04-19 19:54:03

Comment by Bill, Just south of Irvine
2014-04-19 19:12:58

“Many downside risks…” explain what the risks are from renting an apartment. Remember, I rent in areas where renting is far cheaper than owning.


In our area, rents have risen dramatically over the past few years, and rentals are very difficult to come by. Apartments around here often rent for *more* than SFH’s that are about the same size, or larger! Also, apartment managers, especially the corporate ones, tend to raise rents every chance they get.

The risks of renting an apartment are:

1.) having rents go up more than your income

2.) not having an affordable place to live (near hospitals, family, etc.) when you retire and/or are unable to work

3.) protecting yourself from inflation…the Fed/govt is hell-bent on increasing prices without increasing wages. Housing is one way for “regular” people to own something that will offset their loss of purchasing power, especially as it relates to housing.

Comment by Bill, Just south of Irvine
2014-04-19 21:34:18

Ah! Okay. My point all along is that I said I can rent cheaper than owning in the top paying cities - for engineering work and those are in the coastal zones in blue states.

Let’s take Southern California. In the 80s it was common for engineers to leave for another big corporation in case they did not get the quick promotions. They automatically got 15% or more pay increases at their next place. So shifting jobs was their way to move up the ladder in income. The smart ones rented all along and moved to where the next job was. Southern California is big and the big engineering firms can be dozens of miles apart. So you don’t want to be a dummy and buy a house within 5 miles of one site then have to commute two hours each way to another job for 3 years or so.

Mobility is always superior to staying put.

Comment by CA renter
2014-04-20 04:30:48

Agree about the argument for mobility, especially since most jobs are essentially temporary these days.

Personally, we’re in a different situation (DH is tenured), so it makes sense for us to own a home. Also, we bought at a time when PITI was less than rent for a comparable home (late 2011). This is in San Diego County.

Comment by Housing Analyst
2014-04-20 06:54:11

PITI has never been less than rent anytim in the last 14 years.

Comment by LolaLOL
2014-04-19 06:38:33

Does it even matter whether it is — ever — a good time to buy a house?

It certainly isn’t a good time to buy one now, when prices are just starting to drop, inventory is exploding, FHA limits have collapsed and the race for the doors is on.

Why burn up processing power on the hypothetical when you can observe the actual?

Comment by Whac-A-Bubble™
2014-04-19 04:58:57

Stupid is still out there, despite an overwhelming plethora of evidence.

Comment by Housing Analyst
2014-04-19 05:06:10


Comment by Whac-A-Bubble™
2014-04-19 05:07:32

Buy when everyone else is selling and hold until everyone else is buying. That’s not just a catchy slogan. It’s the very essence of successful investing.

– J. Paul Getty

Even after the crash, Americans still love real estate best
By Jeff Macke 19 hours ago

Five years after a real estate bubble popped in epic fashion, it seems Americans are looking to get back in the trade. According to a recent Gallup poll, 30% of us say real estate is the best long-term investment. Gold and stocks were ranked as the second most popular investments at 24%.

The results are a far cry from the peak popularity of housing back in 2002, but are still eye-popping in light of the magnitude of the housing collapse just 6 years ago. In the attached clip Yahoo’s Phil Pearlman says America’s passion for investing in whatever seems to be rising at the moment may have given us collective amnesia, but other forces are at work as well.

“Part of this is confirmation bias,” explains Pearlman. Most people didn’t sell in 2007. Those who managed to hang on are still in tangible possession of a physical asset in the form of their house. Intuitively any asset that managed to survive the last decade of craziness in America can’t be all bad, can it?

A Contrarian Indicator

Over the years, America’s preferences as measured by Gallup have shown some wild swings. Back in 2002 in the wake of the dot.com bubble bursting, more than 80% of Americans regarded corporate corruption as at least “somewhat widespread” and fewer than 1 in 5 thought equities were a good long-term investment.

As fate would have it stocks were just weeks from bottoming when the 2002 poll was taken. Those who bought a basket of U.S. stocks the day the Gallup data was released made nearly 20% over the next 12 months. Suffice it to say there’s some statistical support for the idea that buying whatever asset is the most unpopular at any given moment is a good strategy.

With home prices on the rise it makes some sense to see housing regaining some appeal as an asset. What’s harder to understand is the stubborn appeal of gold. The price of gold has dropped more than $600 an ounce, equal to almost ⅓ of its value in the last two and half years.

A deeper dive into the numbers offers a disturbing explanation. As it turns out gold is overwhelmingly favored in households earning less than $30,000 per year. With the volatility of gold prices and its inherent lack of utility, the notion of gold being an optimal investment is a triumph of marketing over economic fact.

Comment by Whac-A-Bubble™
2014-04-19 09:08:56

I liked the part about how households earning under $30,000 a year overwhelmingly favored gold. Not to suggest any of the regulars here who count physical among their investments belong to that group…

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Comment by Bill, Just south of Irvine
2014-04-19 12:11:23

The veteran gold buyers - buying coins over time, do not consider gold an investment. I certainly do not. However, a house is a huge commitment of your life and you cannot dollar cost average into a house.

Gold has had its ups and downs. But generally one ounce of gold will buy a good quality man’s suit. In essence it’s a form of savings but not really an investment.

Mining stocks - now that is an investment. A mining company can expand and do more mining - or contract. A mining company has management to do the bidding of the shareholders.

Historically gold has performed better than bonds. Bonds have performed better than T-bills. T-Bills and houses have performed about the same over time. Cash was the worst performer. The best performing asset class is stocks.

With all the money I saved by renting instead of buying, I put most of my excess money in stock mutual funds and have reaped the rewards. If I put my money instead in T-bills I would be much worse off, but I would still be free and not a prisoner of a SFH neighborhood.

Comment by Bill, Just south of Irvine
2014-04-19 12:23:02

There is a nice advantage of stacking precious metals bullion that is seldom discussed that I cannot reveal here, even with the anonymity of this blog.

I don’t tell people how much physical form of precious metals I own. I don’t tell my sisters that I own any precious metals at all. My cheap living lifestyle tells people enough - that 1) either I have no interest in materialism or the display of materialism or 2) I don’t have money.

My 11 year old Toyota economy car is a big statement.

My boss certainly knows my income. The company’s 401k advisor knows my standing in net worth, so my boss probably knows as well.

It is fun to annoy those who expect you to drink from the punchbowl and buy a stucco box (should be “stuck-o” box) and do other conformist things to become a drone member of a community. They feel safer if you become docile and do not rock the boat.

Somehow a high net worth renter who is not married and has no kids is a big threat to their utopian dream - the “American Dream” farce.

Comment by Bill, Just south of Irvine
2014-04-19 11:33:47

“Even after the crash Americans still love Real Estate the best.”

Too much punch they’ve been drinking.

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Comment by Whac-A-Bubble™
2014-04-19 14:40:31

It doesn’t help one bit that the Fed spiked the QE3 real estate punchbowl with Bacardi 151.

Comment by ann gogh
2014-04-19 08:19:34

if I comment here I have to scroll around to see if I got a response:
So my walking partner told me yesterday that she and her husband just closed on a 3k sq ft in vista for 755K
I am sad to see her move but jealous she gets all that space to put her stuff. So they got a loan for 650k and her monthlys are 2800.00
Of course her husband has a great job and I can only qualify for 250k!
someone tell me she’s going to make a mistake?

Comment by Mr. Banker
2014-04-19 08:31:45

“I am sad to see her move but jealous she gets all that space to put her stuff.”

Tell her I love her. Tell her I love the idea that she will have all that space that needs to be fill up with her stuff. Tell her that if she doesn’t have the money on hand to spend on stuff to fill up all that space that she will have that she can still fill up the space by buying stuff on credit.

BTW, I love the idea that these big McMansion thingys have large, empty looking closets.

Comment by Whac-A-Bubble™
2014-04-19 09:13:43

Good point. Those large, empty-looking closets can hold lots of future purchases on revolving credit paying rates north of 18%.

Thinking about this makes me as happy as a clam that we live in a cramped little rental home!

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Comment by Bill, Just south of Irvine
2014-04-19 11:42:51

Large closets - more space to put things you buy and then forget about but your credit card does not forget about it.

“Things” - I learned this from my dad when I was a teenager to never be a slave to your possessions. While my dad certainly was no libertarian, by having fewer and fewer things, you gain more and more freedom. It so worked well with my own personal immersion into practical voluntaryism.

This “American Dream” BS is the most widely used drug by the general public, more than alchohol, and probably as hard to get sober from it as from alcohol.

Comment by Mr. Banker
2014-04-19 12:04:27

“… you buy and then forget about but your credit card does not forget about it.”

A credit card: A gift that keeps on giving. This happens if you position yourself at the correct end of it.

You can’t lose with the stuff I use.

Comment by Whac-A-Bubble™
2014-04-19 09:11:34

…in vista for 755K.

…someone tell me she’s going to make a mistake?

’nuff said.

Comment by Neuromance
2014-04-19 10:35:13

See, this is the problem I have with massive central bank and government manipulation of the housing market - it sends deceptive signals to the public about the market. Most people don’t consider the details of the market. They see what prices are doing, and move on the momentum, without paying attention to why it’s happening:

• The Economist house price index: http://www.economist.com/blogs/graphicdetail/2014/02/us-house-prices

• Case Shiller House price index (click on the link, the actual link is a PDF): http://us.spindices.com/index-family/real-estate/sp-case-shiller

BUT - what this does is suckers decent people. I sincerely hope none of the people I know who’ve bought houses lose money. I don’t know your friends, but I bear them no ill will. What I do think is wrong is intentionally manipulating the market and sending deceptive signals as a result to the public, solely to benefit the financial sector and connected insiders. But hey, profit for the cronies, right?

Comment by Mr. Banker
2014-04-19 12:07:48

“But hey, profit for the cronies, right?”


Just doin’ God’s work.

“If God did not want them sheared then He would not have made them sheep.” - Calderas

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Comment by Whac-A-Bubble™
2014-04-19 14:45:12

“If God had not wanted bankers to eat bacon, then he would never have created pigs.”

Comment by Whac-A-Bubble™
2014-04-19 14:43:03

“BUT - what this does is suckers decent people.”

The Romans warned on this problem two millenia ago:


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Comment by FED Up
2014-04-19 11:19:02

“got a loan for 650k and her monthlys are 2800.00″

For a 30 year loan that would be a 3.3% interest rate on a jumbo amount, so not sure how they swung that when the current rate on a 30 year is around 4.1% - unless it’s an ARM.

Comment by Mr. Banker
2014-04-19 12:37:43

“- unless it’s an ARM.”

Love it!

Get them to sign up for an ARM and you’ll get back and arm and a leg.

Ah, there are so many endless wonders offered up by signatures placed above dotted lines.

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Comment by Ann Gogh
2014-04-19 16:39:18

I could handle 2,800.00 a mo if I had a house for life. But it sounds pretty armed. What happened to the days of 20% down from parents and a real home affordable?

Comment by rms
2014-04-19 18:39:10

“For a 30 year loan that would be a 3.3% interest rate on a jumbo amount, so not sure how they swung that when the current rate on a 30 year is around 4.1% - unless it’s an ARM.”

+1 ‘yer onto something.

For a napkin calculation regarding home ownership I’ve used $800/month per $100k for PITI. Thus, a $650k crib costs $5,200/month, roughly speaking. Then there’s depreciation, general repairs, yard work, etc., which adds up fast. Oh yeah, I forgot about the 4-door pickup truck and leather touring minivan in the driveway…fugg’n incredible when you think about it.

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Comment by Ann Gogh
2014-04-19 18:56:34

I better ask her if she got an ARM!

Comment by Whac-A-Bubble™
2014-04-19 05:17:09

Is a stock market correction in the offing?

Comment by Whac-A-Bubble™
2014-04-19 05:19:45

Yardeni: Stock Correction Just Gives More Juice to Bull Market
Friday, 18 Apr 2014 08:45 AM
By Dan Weil

The stock market’s correction that crested last Friday merely represents more fuel for the five-year-old bull market, says Ed Yardeni, president of Yardeni Research.

I characterized it as an internal correction,” he tells CNBC. “Certainly if you look at the broad averages, the S&P 500 certainly didn’t have much of a correction.”

The Nasdaq Composite index dropped 8.5 percent from its 13-year high March 6 through last Friday. And the S&P 500 slid 4.3 percent from its record high April 4 through last Friday.

Yardeni sees good coming out of that. “I do think this internal correction actually increases the longevity of the secular bull market,” he contends.

The more we can internally correct this market, the more that high-priced stuff can become a little cheaper and the money doesn’t leave the market but actually goes to some of the areas that have been left behind” the better, he argues.

Indeed, stocks rebounded this week, with the S&P 500 gaining 2.7 percent, its best performance since July.

This is a very broad bull market, it’s a very democratic market,” Yardeni notes. “It doesn’t leave too much behind.”

His year-end price target for the S&P 500 is above 2,000.

This market’s not cheap. I’ve been bullish for five years, but these things don’t last forever,” he said. “At this point, I think if we can just get stocks to increase at the same pace as earnings — and I think earnings will grow — I think we’ll have a pretty decent year of maybe 10 percent increase for the S&P 500.”

Comment by Whac-A-Bubble™
2014-04-19 05:21:43

One area of the stock market certainly hasn’t run out of bull:
Delphic utterances of MSM-quoted analysts

Comment by Combotechie
2014-04-19 05:34:59

“Delphic utterances of MSM-quoted analysts”

It’s what they do.

Comment by Combotechie
2014-04-19 05:52:06

The most correct and honest answer to questions regarding the future is “I don’t know”. But analysts cannot say “I don’t know” to questions because if they did they would no longer be considered analysts.

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Comment by Housing Analyst
2014-04-19 06:07:00

True analysis can’t be found anywhere but here. The HBB is the final outpost of real analysis.

Comment by Whac-A-Bubble™
2014-04-19 09:16:52

“I don’t know”

That statement is a money loser if ever one was uttered.

Comment by Combotechie
2014-04-19 09:24:56

The real money loser is the statement that goes something like “I don’t know but I’m going to do it anyway ’cause David Lereah said I should”.

Comment by Bill, just South of Irvine
2014-04-19 16:31:21

When I hear someone tell me “I don’t know” when it in my interest for the. To know, I have more respect for them. In some work situations I sometimes work on very difficult engineering problems. Management gets frustrated but when they hear me tell them “I don’t know” and never tell them lies, it disarms them. They wish I lied. A lie by an employee empowers management. This “I don’t know” situation actually just happened to me. I kept telling the young manager I don’t know. He started by yelling at me as if I was a dummy. But I kept reporting “what is,” and what problems I ran into and he finally put me on an easier task and gave my old task to the appropriate engineer. The work involved undocumented open source code with hundreds of preprocessor ifdef statements that make the code unreadable.

Comment by Whac-A-Bubble™
2014-04-19 05:25:59

Home> Money
Investors Ask If Stock Drop Is Just the Start
NEW YORK April 11, 2014 (AP)
AP Business Writer
Associated Press

Is the selling over or has it just begun?

That’s the question investors are asking after the biggest weekly drop in the Standard and Poor’s 500 index since January. The stock market hasn’t had a correction, or fall of 10 percent from recent highs, since 2011.

It is inching close to one, at least in technology stocks.

Investors drove the stock market lower for two straight days at the end of the week. Big drops in once-soaring tech stocks sent the Nasdaq below 4,000, and the index has fallen for three weeks in a row.

The market has been trying to come back, but each time the selling just picks up,” said Quincy Krosby, a market strategist at Prudential. “The buyers are just not stepping in.”

The first-quarter earnings season has just started, but investors seem in little mood to wait for results. Financial analysts expect earnings for companies in the S&P 500 to drop 1.6 percent from a year earlier, according to FactSet, a financial data provider. At the start of the year, they expected a jump of 4.3 percent.

If profits do fall, it would be only the second quarterly drop in three years.

Earnings are going to come in on the sloppy side,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “The market needs to correct.”

Krosby said the market will be focused on the swath of corporate earnings due out next week, such as those for General Electric, Intel and several financial companies. Investors will also closely follow a speech by Federal Reserve Chair Janet Yellen.

Investors understand bad weather played a role in the performance of many companies during the first three months of the year, but they still want to hear whether demand for products and services is improving, Krosby said.

The market is going to try to assess: Is the economy still losing momentum or gaining the traction we need to support valuations?” she said.

Comment by LolaLOL
2014-04-19 06:48:56

“stock market hasn’t had a correction, or fall of 10 percent from recent highs, since 2011″

Lots of things have been going up since 2011…lots of things due to crash

Comment by Whac-A-Bubble™
2014-04-19 09:18:26

Right. It’s good to keep perspective on the fact that Helicopter Ben initiated QE3 in March 2009, and the taper which is underway will remove a massive prop that blew the latest bubble in risk asset prices back through the roof.

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Comment by rms
2014-04-19 12:24:22

“Investors Ask If Stock Drop Is Just the Start”

“The gold I mine from this burg I don’t get from diggin’. There ain’t a shot of whiskey, a hand of poker, or any fella that wants to dip his wick that I don’t get a cut of.” –Big Rump Kate

Comment by albuquerquedan
Comment by albuquerquedan
Comment by Mr. Sun
2014-04-19 07:22:43

“… and how sunspots have had an eerily accurate correlation to earth’s temperatures for centuries. Data strongly suggests that solar cycles have a definite impact on the world’s climate.

And right now, the best data on sunspots also suggest the world is about to enter a time of global cooling. This doesn’t deny that mankind is influencing the world’s climate; sunspots’ very regular 11 year cycles can temporarily overwhelm a larger context of man-made (the scientific term is anthropogenic) influences.”

It’s about time I get the credit that is mine.

Comment by Blackhawk
2014-04-19 15:40:04

“The February 28, 2014 research paper by Unit Economics on global cooling goes into pages of detail on how some of the most important—and allegedly impartial—raw climate data has been regularly altered by private and public sector members of the scientific community.

And that’s really too bad, because people working on questions around global temperature have very few datasets to choose from.

One is the temperature anomaly dataset developed by NOAA (the US National Oceanic and Atmospheric Administration). The other is from the Met Office Hadley Centre in collaboration with the Climatic Research Unit of the University of East Anglia in England, which is known as the HadCRUT3 dataset.”

Dan. I’m shocked that scientists would fudge the numbers. They really don’t want to go back to the good old days when their budgets had only six figures.

Comment by albuquerquedan
2014-04-19 16:05:44

Dan. I’m shocked that scientists would fudge the numbers. They really don’t want to go back to the good old days when their budgets had only six figures.

If you are shocked about that I am sure you will be shocked about Obama fabricating numbers again. For Obamacare to succeed it needed 40% of the people signing up to be young. So he announced Friday, a 35% sign-up. I was a bit surprised until I read the rest of the article. He included 7% which were on their parents’ insurance. The 40% never was meant to include them, when Obamacare clearly failed to meet the needed number Obama moved the goal posts. The real number is 28% which is an epic fail. Even that number will probably drop since it includes people that have signed-up but not paid. Since unhealthy people are more likely to pay to receive the services, it will slip even further. Another day, another lie from Obama.

Comment by Ann Gogh
2014-04-19 19:02:23

I heard that even people who get subsidies will have come up with the five grand deductible! I smell visa and MC in on the scam!

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Comment by albuquerquedan
Comment by LolaLOL
2014-04-19 07:56:13

Those charts are very interesting. Lola was talking about the debt tripling under Reagan but only doubling under Messiah. Was the Fed subsidizing the economy under Reagan the way it is under Messiah? Easing every time economy hits soft patch during his terms.

Comment by albuquerquedan
2014-04-19 08:55:09

No. If Reagan would have had the Fed keeping down interest rates the deficits would have appeared much smaller. However, the Reagan deficits as a percentage of the GDP were much smaller than Obama’s and that is the fair way to judge deficits. Taken to the extreme he is saying if one president inherits national debt of $1 and raises that debt to $3, it is worse than taking a $1000 debt to $2000. In terms of the debt Obama was lucky that Bush did run of the debt so he only doubled the debt.

Of course, inflation would not have plummeted under Reagan had the Fed monetized the debt but we would not have had interest rates dropping for decades had he not broken the back of inflation. Finally, I know people will say Volcker broke inflation but in the end a president gets the Fed policy he or she wants.

Comment by Whac-A-Bubble™
2014-04-19 09:22:02

Brian Bethune, an economics professor at Tufts University, said this chart shows what a big chunk of assets the Fed controls.

“It’s rather shocking,” he said.

But it also shows that the central bank has transferred the risk of higher interest rates to their balance sheet from the private market, Bethune said. Private-sector wealth won’t take as big a hit when bond prices go down and rates go up.

Since the Fed has engorged its balance sheet with such a large share of assets which will face price risk when interest rates go up, why is everyone so concerned about the QE3 taper?

Comment by phony scandals
2014-04-19 07:31:41

U.S. Senator Reid, son combine for China firm’s desert plant

By Marcus Stern
Fri Aug 31, 2012 5:06am EDT

(Reuters) - U.S. Senator Harry Reid recognized nine years ago that connections between his official duties and the lobbying activities of his relatives could lead to ethical questions.

Now, questions surrounding family ties are flaring again in Nevada around the Senate majority leader. He and his oldest son, Rory, are both involved in an effort by a Chinese energy giant, ENN Energy Group, to build a $5 billion solar farm and panel manufacturing plant in the southern Nevada desert.

Reid has been one of the project’s most prominent advocates, helping recruit the company during a 2011 trip to China and applying his political muscle on behalf of the project in Nevada. His son, a lawyer with a prominent Las Vegas firm that is representing ENN, helped it locate a 9,000-acre (3,600-hectare) desert site that it is buying well below appraised value from Clark County, where Rory Reid formerly chaired the county commission.

The two Reids deny discussing the ENN project.

“I have never discussed the project with my father or his staff,” said Rory Reid. Kristen Orthman, a spokeswoman for the senator, said he had not discussed the project with his son.

The Langfang, China-based ENN Energy Group hopes to build what would be the largest solar energy complex in America. The site chosen with Rory Reid’s guidance is in tiny Laughlin, Nevada, a gambling town of 7,300 along the Colorado River, 90 miles south of Las Vegas.


To advance the Nevada project, ENN retained the state’s largest and most prestigious law firm - Lionel Sawyer & Collins, where Rory Reid works. It is headed by Richard Bryan, a former Nevada attorney general, governor and member of the U.S. Senate.

Rory Reid faced a one-year cooling off period from lobbying the Clark County commission after leaving his post in January 2011, and Bryan took the lead on ENN’s negotiations with the county.

Since the one-year ban expired, Rory Reid has been ENN’s primary representative before the county, according to Steve Sisolak, the board’s vice chairman.

Rory Reid acknowledged representing ENN at both the county and state levels since January. He declined to discuss the project otherwise.

Two months after Harry Reid’s China trip, Lionel Sawyer registered ENN Mohave Energy LLC as an American subsidiary of the Chinese company. The firm negotiated with the county to buy the land rather than lease it, as the county’s staff had recommended.

In December, Clark County commissioners voted unanimously to sell up to 9,000 acres of public land to the subsidiary at pennies on the dollar.

The deal spurred local controversy. Separate appraisals valued the land at $29.6 million and $38.6 million. The commission agreed to sell it to ENN for $4.5 million.

The county did build in certain conditions before the project could begin, including milestones for jobs creation and investment. ENN also must assure the county that it has a power company willing to commit to buying energy from the solar farm. But in the eight months since the commissioners approved the deal, no utility has signed a power purchase agreement.

However, Harry Reid stepped up again.

The Democrat recently used an online discussion related to his annual energy summit for an as-yet unsuccessful effort to pressure Nevada’s largest power company, NV Energy, to sign up as ENN’s first customer.

In the July 30 discussion, Reid said the project “would start tomorrow if NV Energy would purchase the power.” The utility controls “95 percent of all of the electricity that is produced in Nevada and they should go along with this.” Reid’s online comments were first reported by the Las Vegas Review Journal.

The power company responded by saying it had exceeded its minimum renewable energy requirements both last year and this year, though it would consider buying power from ENN in the future. A spokesman for NV Energy declined to discuss the matter further.

Bryan, the head of the law firm, did not return repeated phone calls and emails.

An official with ENN in Langfang did not respond to emails.

In 2007, after a controversy over the number of lawmaker relatives engaged in lobbying, Congress passed the Honest Leadership and Open Government Act, sharply restricting the lobbying activities of close relatives of members of Congress.

The law only applies to registered lobbyists and Rory Reid is not registered as a federal lobbyist in Washington or a state lobbyist in Nevada, according to records in both jurisdictions.

http://www.reuters.com/article/2012/08/31/us-usa-china-reid-solar-idUSBRE87U06D20120831 - 104k -

Comment by Skroodle
2014-04-19 07:51:42

So the Chinese are recycling all that fiat currency we sent them and people are surprised by this?

Comment by Combotechie
2014-04-19 07:59:11

The surprise to some is that these trillions of worthless, unbacked fiat dollars we sent over to China for years has any value whatsoever.

Some posters here predicted that the only use they would have at this point in time was to be burned as fuel so as to keep warm.

Interestingly these posters have become a bit silent lately.

Comment by In Colorado
2014-04-19 08:15:44

FWIW, I need more of those fiats to to pay for food, gas, healthcare, education, etc, than before.

They aren’t worthless, but are definitely worth less.

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Comment by phony scandals
2014-04-19 08:25:26

“The surprise to some is that these trillions of worthless, unbacked fiat dollars we sent over to China for years has any value whatsoever.”

“Our Land: Collateral for the National Debt”

Wed, Apr 14, 2010 - 2:05pm

We commonly use two misleading expressions; “money out of thin air” and “government printing press” both imply that our money has no backing. And often, the term “fiat” money is used to imply the same misconception. The truth is that every dollar (FRN) issued by the private banks is backed by the good faith and credit of “We the People.”

It is true that the money is created for free by the private banks and it is true that the banks add neither any banking or reserves but; it is not free for “We the People.” The banks use our credit which means we are backing the money. If you are wondering why we as a nation; are paying private banks interest and principal for money created via OUR credit - you are catching on - but that’s another story!

I have often wondered what the reckoning might look like when we finally begin to default on our national debt. What’s on the other side of national bankruptcy? In some other bankrupt countries, we’ve seen natural resources taken and public infrastructure privatized in leiu of debt repayment. This article provides some other possibilities and a plan for what may be coming:

A listener sent me a copy of a report of the FOURTH WORLD WILDERNESS CONGRESS, which was held in Denver in 1987. Over 1500 people from sixty countries were told that wilderness lands were to protect the reindeer, the spotted owl and other endangered species. Ninety percent of the group consisted of conservationists, ecologists, government and United Nations bureaucrats. The other ten percent were world banking heavyweights, such as David Rockefeller of Chase Manhattan Bank, London banker Edmund de Rothschild and the Secretary of the U.S. Treasury, James Baker, who gave the keynote address. George W. Hunt, an investment councilor, served as official host and sat in on all the meetings. It was George Hunt that wrote the report from which I have gleaned much of my information.

During the first three days, the group was told that the WILDERNESS CONGRESS was about beating the ozone deterioration and bringing the rain forests back. The following days were closed to the public. With only the bankers in attendance, the topics discussed centered on the creation of a “WORLD CONSERVATION BANK” with collateral being derived from receipt of wilderness properties throughout the world.

This bank would have central bank powers similar to the Federal Reserve. It would create currency and loans and engage in international discounting, counter-trade, barter and swap actions. Rothschild personally conducted the monetary matters and the creation of this WORLD CONSERVATION BANK. This bank would refinance by swapping debt for assets. A country with a huge national debt would receive money to pay off the debt by swapping the debt for wilderness lands. The plan was to swap one trillion dollars of Third World Debt into this new bank. In the long term, when the countries won’t be able to pay off the loans, governments from around the world will give title to their wilderness lands to the bankers.

George Hunt wrote: “Title to the lands will go to the World Wilderness Land Inventory Trust. This Trust will float into the World Conservation Bank by the unanimous decree of the world’s people, saying, God bless you for saving our reindeer.Hunt goes on to say that World Bank loans, as they stand now, are not collateralized.

They’re saying, we want collateral, so when we loan-swap this debt, we’re going to own the Amazon if you default. They’re going to make their bad loans good by collateralizing them after the fact with all of this land and somebody is going to end up with title to twelve and half billion acres. They have multi-trillions of dollars upon which they can create currencies and loans and they’re going to begin to barter and counter-trade and loan-swap against the United States. The World Conservation Bank is a scheme to monetize land. This will function as a world central bank and out of that bank there will grow a one-world fiat currency.

This isn’t some scheme conjured up during the Bush and Clinton administrations. The United Nations World Commission on Environment and Development was created in 1982. The commission published the “BRUNDTLAND REPORT,” setting the stage for unlimited enactments to take over ecology, and environmental and pollution laws throughout the world. The report stated: “We will have a proposal for very harsh, quasi-spiritual ecological laws for MOTHER EARTH. A MOTHER EARTH COMES FIRST mentality will arise throughout the world.”

Then James Baker made his keynote speech in 1987, he stated that, “No longer will the World Bank carry this debt unsecured. The only assets we have to collateralize are federal lands and national parks.” Baker’s definition of federal lands includes Heritage sites, of which there are about 20 in the United States. I say “about” 20, because they are being added on a regular basis.

As I write this article, Congress is about to vote on a proposed Rim of the Valley National Park that would include over 500,000 acres of National Forest land and 170,000 parcels of private property including many farms and ranches. At the same time there is a bill before Congress called the Northern Rockies Ecosystem Protection Act that would increase the acreage of designated wilderness by 50% in the lower 48 states. *** While our Heritage sites take in quite a large amount of territory, such as Yellowstone National Park and Mesa Verde, the Grand Canyon and the Everglades, other countries have much greater areas. Brazil for example has the Amazon Conservation Complex and Canada has the Canadian Rocky Mountain Parks. As I write this story, the list includes 851 properties in 141 countries, comprising over one third of the earth’s land mass. Will all this land collateralize the world’s debt? Probably not, so along comes NAIS (the National Animal Identification System).

According to the United States Department of Agriculture, “The first step in implementing a national animal identification system (NAIS) is identifying and registering premises that are associated with the animal agriculture industry. In terms of the NAIS, a premise is any geographically unique location in which agricultural animals are raised, held, or boarded. Under this definition, farms, ranches, feed-yards, auction barns and livestock exhibitions and fair sites are all examples of premises.” That may be the definition some government bureaucrat will give you, but the word “premises” under the “international Criminal Court Act 2002- Sect 4, states: The word “premises” includes a place and a “conveyance.” Why check with the International Criminal Court Act? Because on June 8, 2007, Under-Secretary of Agriculture Bruce Knight, speaking at the World Pork Expo in Des Moines, Iowa, is quoted as saying, “We have to live by the same international rules we’re expecting other people to do.”

Throughout the entire Draft National Animal Identification System Users Guide, land is referred to as a premises and not property. A “Premises” has no protection under the Constitution of the United States, while property always has the exclusive rights of the owner tied to it. The Fifth and Fourteenth Amendments of the Constitution protect property rights.

The word “Premise” is a synonym for the word tenement. A definition of the word tenement in law is: Property, such as land, held by one person “leasing” it to another. Webster’s New World Dictionary 1960 College Edition defines “Premises” as the part of a deed or “lease” that states its reason, the parties involved and the property in “conveyance.” Webster then defines “conveyance” as the transfer of ownership of real property from one person to another. It is quite obvious that the bureaucrats in Washington had a very good reason to use the term “premises” and never mention “PROPERTY.”

I am convinced that the word “premise” will put an encumbrance on your deed. The bankers say they want to monetize land. It’s your land and my land they want to monetize.

The bankers are in the process of accumulating the wealth of the world. Very few privately owned assets can be termed “real wealth.” Genesis 47 describes how Joseph had storehouses full of grain to feed the people, but he didn’t have a welfare program. During the first year of the famine, Joseph took “ALL THE MONEY” the people had for only one year’s supply of grain. The second year he took all their cattle for another year’s supply of grain. The next year they said, “We have nothing left but our bodies and our land. Buy us and our land in exchange for food and we and our land will be servants to Pharaoh.” Genesis 47:21 states, “And as for the people, he removed them to the cities and made slaves of them.” - complete article link

http://www.peakprosperity.com/forum/our-land-collateral-national-debt/38295 - 259k -

World Wilderness Congress - Wikipedia, the free encyclopedia
http://en.wikipedia.org/wiki/World_Wilderness_Congress - 40k - Cached - Similar pages
Presented programs to bring races and nations around the world together in the

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Comment by Mr. Banker
2014-04-19 09:01:09

“The bankers are in the process of accumulating the wealth of the world.”

Yeah? Well it’s not as if doing so is all that hard.

Put in front of a schmuck a sheet of paper filled with a lot of words (my favorite word is the word “adjustable”) that has dotted line at the bottom and most likely he will sign it.

He signs and we both smile. Later on only one of us left smiling - and if you have to ask which one is left smiling then you should run down to see you local banker asap.

Comment by Mr. Banker
2014-04-19 09:18:36

“… governments from around the world will give title to their wilderness lands to the bankers.”

What a great idea! Instead of remaining government land the land will belong to the banks. And if those citizens that used to get a bit uppity about decisions that got made over the use of government land start flapping their jaws about decisions that get made over the use of land owned by the banks then they will just have to somehow learn to keep their mouths shut because the land they will be bitching about is land that they will have no say over.

Lol. You can’t lose with the stuff I use.

Comment by tj
2014-04-19 18:34:52

The truth is that every dollar (FRN) issued by the private banks is backed by the good faith and credit of “We the People”

meaning less crap that can’t be made rigorous.

It is true that the money is created for free

for free? is it ‘free’ when interest is being paid on it?

The banks use our credit which means we are backing the money.

we aren’t ‘backing’ the dollar. there’s nothing behind the dollar but trust. when that’s gone, so is the dollar.

the dollar gets its value from the efficiency of our labor, and loses some value from economy crippling things like high taxation and onerous regs. what’s left is the equilibrium.

I have often wondered what the reckoning might look like when we finally begin to default on our national debt.

that depends on the form the default takes. will it be an honest admission of inability to pay or continued denial until it gets run into the dirt?

Comment by taxpayers
2014-04-19 07:40:22

how much are re taxes going up in your hood? 6+ here 22151

Comment by Skroodle
2014-04-19 07:52:48


Whew, that’s a lot.

Comment by scdave
2014-04-19 07:55:59

how much are re taxes going up in your hood? 6+ ??

They will never stop going up either…Its a money printing machine for the county assessor….Want a new library, convention center, park, Firehouse, civic center, on & on…You may or may not agree with California’s Prop #13 but it put a stop to all the politicians little pet projects to make themselves look good and line the pockets of their donors…

Comment by Skroodle
2014-04-19 09:46:12

Yeah, if there’s one thing that comes to mind when I hear California it fiscal responsibility and a lack of lobbyist.

Comment by In Colorado
2014-04-19 08:20:35

how much are re taxes going up in your hood

Zero. So what don’t you leave for Hotlanta? Could it be because you have a cushy, well paid, taxpayer funded, beltway DC job and any replacement job in low taxland would pay far less?

Comment by phony scandals
2014-04-19 07:47:12

Western lawmakers gather in Utah to talk federal land takeover

‘It’s time’ » Lawmakers from 9 states gather in Utah, discuss ways to take control of federal lands.

By Kristen Moulton
The Salt Lake Tribune
Apr 18 2014 03:07 pm •

It’s time for Western states to take control of federal lands within their borders, lawmakers and county commissioners from Western states said at Utah’s Capitol on Friday.

More than 50 political leaders from nine states convened for the first time to talk about their joint goal: wresting control of oil-, timber -and mineral-rich lands away from the feds.

http://www.sltrib.com/sltrib/politics/57836973-90/utah-federal-lands-states.html.csp - 109k -

Comment by Skroodle
2014-04-19 07:54:35

Aren’t the oil companies,mine companies, and ranchers able to use the Federal lands for minimal payments?

I can’t see the corporate lobbyists allowing this to happen.

Comment by Mr. Banker
2014-04-19 09:33:37

I suggest ownership of these Federal lands be turned over to the banks so banking experts will be allowed to handle things in such a way as to serve the public interest.

Comment by MightyMike
2014-04-19 10:06:03

If those state governments want to buy some land from the Feds, that would be great. The federal government could use the dough. I have a bad feeling that they want it for free. They want to be high-ranking generals in the FSA, just like that freeloading rancher.

Comment by phony scandals
2014-04-19 14:32:36

“If those state governments want to buy some land from the Feds, that would be great. The federal government could use the dough.”

“it is about collateral. YOUR land is being stolen by the government and used to secure loans the government really had no business taking out in the first place.”

Michael Rivero

The following article was first written in 1998. I am relinking it here not so much as to say “I told you so”, but to point out that the long term economic future of the United States was obvious, or should have been obvious, to the people who are awarded lofty degrees and paid huge salaries to comprehend such things. Instead, the economists persisted in explaining away the visible signs of gathering troubles and earned their salaries by justifying why the policies that robbed the poor to give to the rich should continue unabated.

In the last 8 years, during what are supposed to be record setting good times, the Federal government has nearly DOUBLED its debt load. The estimated interest on the debt equals all the personal income tax paid by all Americans. Our government is so deep in debt that it cannot get out.

This brings us to the issue of collateral. We’ve borrowed so much money the lenders are getting nervous. Back during the Johnson administration Charles DeGaulle demanded the United States collateralize the loans owed to France in gold and started carting out the bullion from the treasury. This caused several other nations to demand the same and President Nixon had to slam the gold window closed or the treasury would have been emptied, since the United States was even then in debt for more money than the treasury could cover in gold.

But Nixon had to collateralize that debt somehow, and he hit upon the plan of quietly setting aside huge tracts of American land with their mineral rights in reserve to cover the outstanding debts. But since the American people were already angered over the war in Vietnam, Nixon couldn’t very well admit that he was apportioning off chunks of the United States to the holders of foreign debt. So, Nixon invented the Environmental Protection Agency and passed draconian environmental laws which served to grab land with vast natural resources away from the owners and lock it away, and even more, prove to the holders of the foreign debt that US citizens were not drilling. mining, or otherwise developing those resources. From that day to this, as the government sinks deeper into debt, the government grabs more and more land, declares it a wilderness or “roadless area” or “heritage river” or “wetlands” or any one of over a dozen other such obfuscated labels, but in the end the result is the same. We The People may not use the land, in many cases are not even allowed to enter the land.

This is not about conservation, it is about collateral. YOUR land is being stolen by the government and used to secure loans the government really had no business taking out in the first place. Given that the government cannot get out of debt, and is collateralizing more and more land to avoid foreclosure, the day is not long off when the people of the United States will one day wake up and discover they are no longer citizens, but tenants.

The following map shows the current extent of all lands grabbed by the government under the guise of environmentalism.

http://whatreallyhappened.com/WRHARTICLES/ARTICLE2/doodoo.php - 87k - Cached -

Comment by phony scandals
2014-04-19 15:29:58

Executive Orders 2: Native American affairs

Posted by Paul Shannon / August 26, 2013

On June 26, 2013, President Obama issued Executive Order 13647: Establishing the White House Council on Native American Affairs. The first meeting of this group, which there were no representatives of the tribes, was closed to the press and public. Another reason for questioning this Council is because of the Bureau of Indian Affairs, that has been around since 1824 and is the oldest bureau of the Department of Interior. Instead of improving the BIA, they held a secret meeting with no representative of the people they are discussing.

Bureau of Indian Affairs

The BIA’s mission is to “enhance the quality of life, to promote economic opportunity and to carry out the responsibility to protect and improve the trust assets of American Indians, Indian tribes and Alaska Natives”. The bureau provides services, all while managing 55 million acres of land taken from them by the American government. There are also 57 million acres of subsurface mineral estates involved. Also, when tribes want to open the casinos that have become so popular, they have to ask for approval from the BIA. When the Eastern Band of the Cherokee Nation went to open theirs in North Carolina, they had to give up the immunity by the males to be drafted.

Council backlash

When the order was issued, the National Congress of American Indians praised the creation of the Council, as they had been pushing since the beginning of the President’s time in office. After the first meeting, several Native American news organizations blasted the Administration over the fact that the only input into the meeting by the tribes was a conference call in June. Secretary of Interior Sally Jewell said in a statement: “Today’s meeting underscores President Obama’s commitment to build effective partnerships with American Indian and Alaska Native communities and make the federal government work more efficiently to find solutions to the challenges facing Indian Country”. The meeting was focused on implementation of an executive order to create a more effective partnership with the tribes without the tribes having access.

http://misguidedchildren.com/politics/2013/08/executive-orders-2-13647/2948 - 42k -

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Comment by phony scandals
2014-04-19 15:34:56

Fri Nov 01, 2013 at 09:14 AM PDT.

President Obama issues Executive Order on Climate

Manage lands and waters for climate preparedness and resilience: America’s natural resources are critical to our Nation’s economy, health and quality of life. The E.O. directs agencies to identify changes that must be made to land- and water-related policies, programs, and regulations to strengthen the climate resilience of our watersheds, natural resources, and ecosystems, and the communities and economies that depend on them. Federal agencies will also evaluate how to better promote natural storm barriers such as dunes and wetlands, as well as how to protect the carbon sequestration benefits of forests and lands to help reduce the carbon pollution that causes climate change.

http://www.dailykos.com/story/2013/11/01/1252319/-President-Obama-issues-Executive-Order-on-Climate-Preparedness - 213k -

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Comment by phony scandals
2014-04-19 15:45:43

Rosa Koire - Behind the Green Mask:Un Agenda 21 Disc 4 - YouTube

http://www.youtube.com/watch?v=TETtL-vq2bg - 136k - Cached - Similar pages
Mar 11, 2014 …

Comment by CA renter
2014-04-19 19:28:43

Lots of good links there, phony scandal. Thanks for sharing those.

Comment by Whac-A-Bubble™
2014-04-19 08:58:04

Was Helicopter Ben’s QE3 really the best way to salvage the U.S. economy after the Great Recession? Not so much for households on Main Street.

Comment by Whac-A-Bubble™
2014-04-19 09:04:29

How Household Debt Caused the Great Recession: A Q&A With Amir Sufi
A talk with the ‘House of Debt’ co-author and University of Chicago economist on the roots of the financial crisis, the problem of student loans, and how to talk about the issue of debt.
By Whet Moser
Published Thursday at 11:53 a.m.
Photo: University of Chicago Press

Recently Thomas Picketty’s Capital in the 21st Century, a 700-page tome about capital, wealth, and inequality, its design consciously echoing Marx’s Capital, reached the bestseller list. Even with an audience normalized to the subject by the success of pop-econ books, the immense anticipation for and success of the book caught many in the dismal science by surprise.

Before the publication of Picketty’s book, his research on inequality laid the groundwork for its release, buoyed by the increased attention given to the subject in the wake of the Great Recession. But it wasn’t always so. When the housing bubble popped and the financial markets spiraled out of control, the pillars of the American economic system—and not its vast foundation—received the bulk of the attention from economists, policy experts, and politicians.

In their forthcoming book House of Debt, University of Chicago economist Amir Sufi and Princeton economist Atif Mian revisit the run-up to the Great Recession—they’re also blogging about related topics here—arguing that the central cause was a massive increase in household debt, concentrated among those least able to incur it.

I spoke with Sufi about their thesis, how Americans think about debt and its implications for public policy, why we should be wary about student-loan debt—and what to do about it.

The problem with student debt seems to be that it’s much less of a choice than buying a house. You can buy a house if you think it will be a good investment, but you can always rent. But a college education is practically a necessity if you want to move into the middle class.

That’s probably one of the strongest points in the book—does it make any economic sense to make an 18-to-22-year-old to bear this aggregate economic risk. It makes absolutely no sense. If there’s something the financial system should do, it is exactly to allow people to finance an education without taking on so much aggregate economic risk.

Of course, from an incentives standpoint, you want to make sure people understand that if people take on debt that they’re going to have to find a job, individually, that they can afford to pay back that debt. But if the aggregate economy collapses, and of course that’s not your fault at all, why should you be bearing that risk, instead of people with a lot of money who are financing that loan? It’s crazy, really.

That’s something that, with student debt, you see how little sense the financial system makes from the perspective of actually helping people finance an education without taking on so much risk themselves.

One thing that comes up in the book is “Helicopter Ben”: that helicopter-drops of money would be the best way of getting the economy back on track, but it’s limited by the rules of the Fed. Is there any future for that?

No, essentially not. What we’re essentially saying is that the helicopter drops that make the most sense are targeted. They need to be targeted at the areas of the country where there’s too much debt. In that sense, once you have something like that, it really is a fiscal action, not a monetary action. I think that’s not going to happen.

We do talk about helicopter drops could help with inflation, but the experience that Japan’s going through now… a joke that we tell at the faculty lunch table is that inflation works so beautifully in macroeconomic models, but we actually have very little idea of how it works in the real world. What’s happening in Japan now is instructive. They’re doing what are essentially helicopter drops of money, they’ve been putting a lot of money into the economy. But what’s happening is that you’re getting inflation in goods prices, but you’re not getting wage inflation.

And that’s the worst-case scenario; that means real wages are going down, which is the opposite of what you want. I’ve always thought that these more targeted interventions, either on the fiscal side, or debt forgiveness, are much more advisable than relying on the central bank to try to use a sledgehammer to thread a needle. It’s a much harder game to play on the monetary side.

Comment by Whac-A-Bubble™
2014-04-19 09:27:18

If their thesis is correct, then a corollary is that the Great Recession is not over yet, but merely in a dormant state, as the subprime lending craze which led up to it was never really drummed out of the system and is currently heating up again.

Comment by phony scandals
2014-04-19 09:20:33

I saw a little confrontational domestic extremist terrorist have a sudden personality change in the check out line at the grocery store last week. His mother wouldnt let him get the candy he wanted.

White House Counterterror Chief: “Confrontational” Children Could be Terrorists

Obama adviser tells parents to be suspicious of their own kids

Paul Joseph Watson
April 18, 2014

Image: Lisa Monaco (White House).

White House counterterrorism and Homeland Security adviser Lisa Monaco gave a speech this week in which she urged parents to watch their children for signs of “confrontational” behavior which could be an indication of them becoming terrorists.

During the speech at at Harvard University’s John F. Kennedy School of Government on Tuesday night, Monaco, who replaced John Brennan last year in overseeing the executive branch’s homeland-security activities, said that parents need to be suspicious of “sudden personality changes in their children at home.”

“What kinds of behaviors are we talking about?” she asked. “For the most part, they’re not related directly to plotting attacks. They’re more subtle. For instance, parents might see sudden personality changes in their children at home—becoming confrontational.”

Monaco lamented the fact that, “The government is rarely in a position to observe these early signals,” encouraging parents to act as watchdogs to detect radicalization in line with President Obama’s goal of combating homegrown extremism.

Over the last decade, the federal government has broadened its definition of what constitutes potential terrorism to such a degree that the term has lost all meaning and is clearly being used as a political tool to demonize adversarial political activism.

Indeed, only yesterday Senator Harry Reid caused outrage when he labeled supporters of Nevada cattle rancher Cliven Bundy “domestic terrorists”.

Although such tactics pre-date the 2009 release of the MIAC report, the Missouri Information Analysis Center document was perhaps the most shocking in that it characterized a whole swathe of conservative Americans as domestic extremists, including Ron Paul supporters, people who own gold and people who display political bumper stickers.

A Homeland Security study leaked in 2012 upped the ante even further, demonizing Americans who are “suspicious of centralized federal authority,” and “reverent of individual liberty” as “extreme right-wing” terrorists.

Lisa Monaco’s speech and the federal government’s track record in assailing both banal behavior and political activism as potential “terrorism” serves as a reminder that the war on terror has now been focused inwardly against innocent Americans, making it all the more harder to detect actual terrorists.

Comment by Skroodle
2014-04-19 09:47:30

Terrorism is so broad now that pretty much all crime is now terrorism.

Comment by Whac-A-Bubble™
2014-04-19 09:57:32

People who say things you find disagreeable are also potentially labeled as terrorists nowadays.

Comment by CA renter
2014-04-19 19:43:18

Comment by Whac-A-Bubble™
2014-04-19 09:57:32

People who say things you find disagreeable are also potentially labeled as terrorists nowadays.


True, and absolutely frightening. People who visit homes in the regular course of their business have been getting trained to “look for signs of terrorism” in people’s homes. Things like “Don’t Tread on Me” posters or signs, or “Occupy Wall Street” signs, etc.

BTW, it’s not a right-wing thing. As anybody with a brain should know, the two-party system is designed to keep “We the People” at odds with one another. The *original* Tea Party movement and the Occupy Wall Street movement were essentially about the same thing (the corporate/financial takeover of our country by bankers and their ilk, and the government’s support of this effort). The Tea Party was dealt with by renaming them as a “Republican” group, and Obamacare was thrown out there (in the middle of the Great Recession!) in order to divert the (real and perceived) focus away from being anti-Wall Street to being anti-Obamacare.

Occupy was infiltrated by agents who posed as homeless hippies in an attempt to discredit the supporters of the Occupy movement, and the focus was (once again) shifted from being anti-Wall Street (banks/corporations) to trying to keep deadbeats in “their” homes, among many other fake objectives. Their message became so diluted that the original OWS supporters could no longer support what the Occupy movement was about. Note, too, how the movement went from being called “Occupy Wall Street” to the “Occupy Movement.”

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Comment by Carl Morris
2014-04-20 08:15:02

You forgot about the movement on the cop car.

Comment by Whac-A-Bubble™
2014-04-19 10:34:34

Do academic and Federal Reserve Bank financial economists continue to deny the existence of bubbles, even as the MSM continually serves up articles about them?

I suppose with sufficiently restrictive theoretical constraints, one could rule out the possible existence of bubbles under any and all circumstances.

Comment by Neuromance
2014-04-19 16:53:48

The 2013 Nobel* prize in Economics went to Eugene Fama, Robert Shiller and Lars Peter Hansen.

Fama denies the existence of bubbles, while Shiller focuses on them.

What does one call the Dutch tulip bulb mania? It seems incredible to call it anything but a bubble. Denying the existence of bubbles seems like sophistry, frankly.

* AKA, “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2013″

Comment by Whac-A-Bubble™
2014-04-19 10:39:04

Weekend Investor
How to Spot a Market Bubble
Investors can get burned when the air rushes out of a hot market.
By Joe Light
Updated April 18, 2014 6:21 p.m. ET

The drop in the tech-heavy Nasdaq Composite Index since early March encourages the vigilance of spotting market bubbles. Reuters

Investors have big fears about a small word: pop.

The bursting of two major asset bubbles—in home prices in recent years and Internet stocks at the turn of the century—has trained investors to scan the horizon for signs of where the next one might form.

The drop in the tech-heavy Nasdaq NDAQ +0.81% Composite Index since early March encourages the vigilance. Even with the recent pullback, the Nasdaq has more than tripled since hitting a 6½-year low in 2009, pumped up by highflying social media and biotechnology stocks.

Caution is well-advised for investors tempted to chase hot markets. At the same time, the “bubble” label sometimes gets slapped on assets too quickly, experts say. Investors should try to distinguish between markets that are overinflated and ones that are merely overpriced.

“Prices can be both ‘not cheap’ and ‘not in a bubble,’” says Vikram Mansharamani, a lecturer at Yale University who has written extensively on how to detect a bubble.

It isn’t easy to tell the difference. But the distinction matters a lot. When stocks are pricey, Mr. Mansharamani notes, future returns are generally lower. But when stocks—or any asset—are in a bubble, the pop can cause values to plummet, by 50% or more in extreme cases.
Enlarge Image

Beyond tech stocks, some warning signs point to shares of small companies, real estate in cities such as San Francisco and Honolulu, government bonds of debt-laden European countries and even stocks in utilities that are usually seen as safe havens.

Here is a guide to spotting bubbles, where they might be inflating now, and what to do when you find one:
Three Red Flags

The first sign of a potential bubble, and the easiest to spot, is a rapid rise in prices. The Nasdaq rose 110% in the 12 months before the dot-com bubble crested on March 10, 2000. Home prices in Las Vegas rose 41% in the two years before their April 2006 peak, according to S&P/Case-Shiller.

When bubbles are forming, the price spikes also tend to be interspersed with bouts of panicky selling, says Didier Sornette, who is director of the Financial Crisis Observatory at the Swiss Federal Institute of Technology Zurich.

To help find those patterns in the prices for hundreds of assets, Mr. Sornette and his colleagues enlist the help of a supercomputer named “Brutus.”

Another warning sign is when prices break sharply from an asset’s underlying value. With stocks, one popular way to measure value is to divide the market’s price by 10-year average earnings after adjusting for inflation.

Using that method, the median price/earnings ratio of large U.S. stocks since the late 1800s is 16, according to Yale economist Robert Shiller, a Nobel Prize winner who tracks the data. By contrast, the Shiller P/E passed 44 during the dot-com bubble.

The third indicator of a bubble is that investors and analysts identify an exciting technology or innovation that serves as an explanation for the rapid climb in prices, such as the rise of the Internet in the late 1990s, says the Bank of Finland’s Katja Taipalus, whose model is one of a number of tools that many central banks use to help identify bubbles.

As the bubble matures, individual investors pour into the asset, which is akin to “pouring fuel on a fire,” says Mr. Mansharamani, who wrote “Boombustology,” a book about detecting bubbles. “When there’s no one else left to get in, it’s almost over.”

Comment by Combotechie
2014-04-19 12:44:27

“Investors should try to distinguish between markets that are overinflated and ones that are merely overpriced.”

Lol. And I should - what? - I should decide to invest in one and not the other?

How about door number three, which is stay in cash?

Comment by Whac-A-Bubble™
2014-04-19 14:52:03

I always get a kick when the Wall Street Journal does one of these dry humor pieces. First they note that “bubbles are quite rare,” then they list out more bubbles than you can shake a stick at, plus they left out a bunch of other ginormous ones that are currently inflating away as I type (e.g. Chinese housing).

Missing from the narrative: The Fed’s role in pumping up bubbles sky high through indefinitely pinning interest rates to mat.

Comment by Combotechie
2014-04-19 16:01:41

Time to revisit an old theme of mine which goes something like this:

If you are a manager of other people’s money and you get to extract a hefty fee for doing so then you cannot afford to stay in cash because staying is cash is something your client’s can do themselves and they can do this for free. In other words, your clients will not need you which means they will not need to keep on paying you fees.

So you either invest your clients’ money in something other than cash or you starve. Since starving is a bit uncomfortable most money managers will choose to invest - and, after all, it’s not their money they are putting at risk.

So if you are a money manager you get to pick from the current pool of today’s investment vehicles one of two categories: The bubble or the overpriced.

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Comment by Muggy
Comment by rms
2014-04-19 18:50:06

Whole lot of chocolate on that site. :)

Comment by Muggy
2014-04-20 04:01:00

I hadn’t looked at the site. Lol… was using google image search.

Disclaimer: I am only recommending the “house with teeth” photo.

Comment by Ann Gogh
2014-04-19 20:19:56

They should use mercenaries to collect delinquent mortgages too :

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