Bits Bucket for June 17, 2014
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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for the most part house prices always go up.
“The two most common elements in the universe are hydrogen and stupidity.” -Harlan Ellison
This is what someone close to me said to me this weekend: “The market is not going to drop back down as low as it was before.”
I didn’t have the heart to ask him, “Why not?”
Yes, people have been saying that ever since the market first started to drop. They’re on drugs, and I want some of that. Just wish I knew a reputable pusher.
dumb dumb dumb
the nominal price means nothing. real prices (adjusted for real inflation) mean something. And even then, it doesn’t take into account the carrying costs for the property - taxes, insurance, maintenance, etc.
We have an example of the difference between nominal prices and real prices for housing in today’s CPI. Overall inflation is up .4% and shelter costs are up .3%. Government uses an imputed rent cost for shelter so not accurate to say it shows that housing prices went up .3% based on that data but just for argument sake lets say that houses did. Thus, you would have the nominal price of your house go up .3% but the real value drop by .1%. But the real life is even more complicated then that since that would apply to people that own their houses. If the bank really owns the house and you have an interest rate below 5% you probably made out particularly if you are better off itemizing and were able to deduct the interest.
“Government uses an imputed rent cost for shelter so not accurate to say it shows that housing prices went up .3% based on that data but just for argument sake lets say that houses did. ”
This is discussed by Jack Bogle (Vanguard founder & Chairman) in his excellent book “Enough”. He dissects this imputed rents treatment by the government as part of his overall look on how we disqualify anything that can’t be quantified and then go way out of our way to quantify things, botching up the real economy along the way.
I think I agree with what you’re saying about taxes–that the incentive works for some with low interest rates, but that it complicates the picture and probably suckers some dopes into buying houses or spending (borrowing) more than they otherwise should. Banks thrive on stuff like this.
“for the most part house prices always go up.”
As long as increasing wages push them up; classic inflation?
As long as increasing wages push them up ??
Or cash fat buyers…
Considering housing demand is at 19year lows, there aren’t buyers of any type.
THINK scdave.
Those cash fat buyers couldn’t save The Game’s house in LA. If they aren’t there then they aren’t in most places. Hence all the focus on SF area or San Diego, two very nonrepresentative areas. It’s 2 AM, right before the lights come on and looking across the bar at just the right angle, with quite a buzz, the market looks okay enough. In 10 minutes everything will change.
San Diego is falling.
Here is how you afford housing without wage inflation:
1. Bring a second reliable income into the home. This started with women entering the professional workforce in the 80’s, now it’s roommates or Grandma’s government cheesecheck.
2. Lower interest rates and lower down payments. 20% down at 7% interest is not much different from 10% down and 4% interest, in cash or PITI.
3. Simply make housing costs a higher % of the budget. The rule of thumb used to be 28%, now it’s upwards of 40%.
All of this capacity can be accessed without the txoic loans. However, ISTM that we are running of this capacity. There’s an upper limit to how much people can afford. But doesn’t mean that house prices will craaaaater. It just means that the current prices will stop at a new normal until there is some wage inflation so prices can rise again. And there is still the investor/foreigner wild card.
So 2) is not sustainable as recent history has shown and will in fact collapse. 1) and 3) are both textbook definitions of greatly reduced standard of living. I would go so far to call 3) a textbook definition of serfdom.
This is how you justify massive intervention by the government and the banking system in the economy? You have some serious cognitive dissonance going on here, friend.
My header line was worded badly. I’m not justifying that this is what people should do to afford a house. I am delineating what people can do, and is doing, to pay the mortgage (or rent).
Unless all J6Ps walk away en masse and says “I refuse to pay 40% of my income on PITI,” some of them will continue to buy at these prices, if they can find a way. The lure of building equity up to a paid-off house is too strong. But as I said, prices are very close to, if not over, a current ceiling. Even at these interest rates. J6P can’t afford fully amortized howmuchamonths much longer. I don’t think we’ll see 2006 prices again until we see low PITI toxic mortgages, or until wages do inflate.
It just means that the current prices will stop at a new normal…
Yada … Yada … Yada …
You have no idea how many flippers and speculators are out there. They caused the runup and they will cause the run down. I could not believe all the new listings and price reductions that showed up this weekend in the small neighborhood I watch.
Clicking through the photos you see the tell tale countertops, the plumage of the bird species known as the yellow backed flipper.
Do you have an example? I;m not sure which countertops are telltale. Granite countertops on 1980’s cabinets?
Anything obviously new is a flip.
HOW MANY TIMES DO I HAVE TO TELL YOU, WOMAN?
- When multiple people move into a single household, they leave behind some empty houses. This increases inventory, which puts downward pressure on prices.
- Lower interest rates AND lower down payments are long-term mutually exclusive. Lenders who do that are risking their fannies (mae).
- When housing costs go up compared to incomes, that makes builders build. Because builders like money, so they will get some of that if they can.
The woman is in with no way out.
She’s in a mental corner. None of her apologies seem to lead to the light.
“The lure of building equity up to a paid-off house is too strong.”
The lure of debt is an open pit and a diseased whore. The short path to owning stuff is to not buy it until it is a reasonable price and you have the money. Buying with 30 year debt at the top of a bubble (2004 to 2006) is not as attractive logically as waiting modestly and saving to buy outright in less than 10 years. “Lure” is the answer.
Yet are always a net loss. Go figure $hithouse Poet.
Real estate always goes up, in the long run.
In the long run, we’re all dead…
Right on cue!
Thanks Amy!
http://2.bp.blogspot.com/-_eEkRXhtPbM/T4oB31QC5ZI/AAAAAAAABU0/7cwpBE7naJg/s1600/U.S.+Housing+vs+Stock+Market+Growth.jpg
In 1900 in stocks, $100 turned into well above $10,000 by 2010. However the graph above is not linear, so the $10,000 to $100000 range, it’s hard to interpolate. Stocks might have ended up at $20,000.
In 1900 in real estate, $100 turned into about $4,000 by 2010.
I would expect the inflation rate to end up just about where real estate ended up.
Case - Shiller studies are fact.
Real Estate is not an investment.
But you can get some mighty nice rental income from real estate. Dividends aren’t quite so reliable, and rarely as high.
Nor at current prices. Cash flow is negative even in flyover.
I doubt Bill would suggest going whole-hog on stocks right now, either.
I’m not increasing my current weekly, twice monthly, and monthly investments in stock mutual funds - just staying the same.
But I’m trying to squeeze out more money from my former company stock fund since it’s my biggest gainer of all my investments - ever. And put that into treasury bills. After a 500% gain of holdings I had over two years I don’t mind a few extra 52 week T-bills yielding 0.035%.
http://www.bloomberg.com/news/2014-06-17/wealthy-clintons-use-trusts-to-limit-estate-tax-they-back.html
“Wealthy Clintons Use Trusts to Limit Estate Tax They Back”
Aawwww, isn’t that sweet?!? The rich Clintons want you to pay more taxes to fund the socialist agenda- but they then take measures to weasel out of it themselves. I’ll be the useful idiots out there supporting Hillary will be duped into being her rabid apologists- again. Just like the crazed Obombanites in their religious fervor. They’re all being played and they just can’t admit it. Isn’t that special?
She doesn’t have moon-face in that photo; likely off the steroids now.
Same age as Reagan when he became Pres. That’ll make for some funnin.
50 percent or so of voters will support Hillary on the simple and deluded belief that she is the last best hope to get a woman into the WH.
Do the 47% have the capacity to rationalize beyond their cheese issues such as the gender occupying the oval office?
She’s going to have to walk a tightrope of not appearing with other younger more vital looking women in the same shot. Nothing peels back the delusional mask of an old crone like a young hotty standing next to her.
I also just have this weird feeling that the universe is somehow just going to stand in her way. Some of that is wishful thinking, but I think time passed her by.
Her age and her looks are going to be her biggest liability, and I think the Dems will nominate a handsome and charismatic younger man.
Agree. For what it’s worth, the Hillary Wars have started up again over at the Great Orange Liberal Website. Her vote in favor of the Iraq War hurts her, as does her hawkishness as SoS and general bad vibes. And that’s the Dems. The R’s have their own litany from Benghazi to Vince Foster. Too many negatives.
I think 2016 will be a governor’s year.
Somehow I just don’t believe her
“The Clintons’ finances are receiving attention as Hillary Clinton tours the country promoting her book, “Hard Choices.” She said in an interview on ABC television that the couple was “dead broke” and in debt when they left the White House in early 2001. After being criticized for her comments, she told ABC’s “Good Morning America” that she understood the financial struggles of Americans.”
Everyone else can use the same tax rules, Mr. Rabid Republican.
I have an idea, how about we make the tax system simpler, make the loopholes fewer, tax rates lower.
As is, the accountants and lawyers get rich, as those with money exploit the loopholes to pay less tax (Clintons, Buffett, etc.).
Just because everyone can exploit the tax rules doesn’t make the rules reasonable.
From yesterday:
—————–
Comment by Whac-A-Bubble™
2014-06-16 18:56:59
[auntie Fed]“It’s perfect because the bubble houses were gigantic, meaning they can contain more people.”
That’s right! Four Mexican familias can live in a McMansion affordably priced ‘from the $1 millions.’
——————
Tool Brothers unwittingly(?) builds the best boarding houses. Their McMansions have princess suites — just a bedroom with an on-suite bath. Many of the master suites have AM kitchens. Almost all the basements are roughed in for an additional bathroom. That’s enough for seven families.
“Four Mexican familias can live in a McMansion…”
I think the Salinas, CA strawberry-picker preferred one family.
She also said this re: Immigration and why the Repubs want it:
“No, Republicans want a default shamnesty where the workers never gain the right to vote or collect social security, but their presence here is decriminalized, and they are subsidized by taxes during their productive working years only.”
So the argument is that they are in favor of a guest worker program, but not shamnesty? Heck, so am I but I would cut out all social services also as I think many R’s would. I don’t think any but a tiny number of 1%er R’s want govt subsidized benefits for illegals. This still isn’t making the point that both sides are equal on this issue. And if the point is that it is just the crooked 1%er plutocrats of both stripes, well that isn’t the same.
That tiny number of 1%ers are the ones calling the shots.
“Tool Brothers unwittingly(?) builds the best boarding houses.”
Ya gotta love the idea of multiple families living under one roof of a faux luxury McMansion to share housing costs.
At least they won’t have to live in their parents’ basements!
They can’t qualify without fraud.
If the reported numbers seem too good to be true, maybe they’re fabricated.
Census playing a game of seek-and-go-hide - NY Post By John Crudele
“A person in its Philadelphia office was caught several years ago falsifying data that went into the nation’s jobless report and the Consumer Price Index, both of which tremendously affect financial markets and people’s lives
And — this is the irksome part — Census covered up this misdeed. And the Commerce Department, which oversees Census, also covered it up”
Truth. Something your government doesn’t know how to tell. Maybe we should throw all the bums out.
The left on this board still denies that jobless report was fabricated. I called it out as a fraud when it was issued and they cannot even admit the truth after the government was caught.
The Left has been taking a whupin on this board recently.
Anyone with half a brain stopped believing the government’s numbers decades ago. We’ve been told that unemployment is low while food stamp usage has steadily increased for decades, and will continue to increase while the government, regardless of who is in charge, will continue to provide fake unemployment and inflation numbers (the latter are necessary to cut SS benefits without officially cutting them).
http://www.bloomberg.com/news/2014-06-17/consumer-prices-in-u-s-increase-by-most-in-more-than-a-year.html
Real wages continuing to fall in the U.S., thanks Obama.
‘thanks obama’
the 0.1%er pigmen should be sincerely thanking obama, because the fruits of the obama recovery have all gone to them
true dat and it was predicted by many and in fact I did on this board when the first QE began.
In fact, if you look beyond the economic cycle Obama has caused the real wages of most Americans to trend downward starting in 1973.
For the last 40 years, the real wage cycle has been tied to the real energy price cycle, it is as simple as that. Reagan caused lower energy prices and Clinton enjoyed them, mainly through luck but he did not mess up the Middle east so he deserves some credit. Obama’s AGW policies and his Middle East policies have raised energy prices so it should not be a surprise that wages are stagnant. Wages rose under Reagan and Clinton after the Internet bubble began.
Have to go for the day enjoy.
Obama doesn’t control U.S. wages. In fact, I believe he supports a higher minimum wage, which presumably would have the effect of making average U.S. wages go up.
Obama doesn’t control U.S. wages.
Good presidents pursue policies that raise wages and bad presidents cause wages suppression. Raising the minimum wage may redistribute wealth but it does not raise general wages in real terms it depresses wages. Obama’s economic policies are a disaster.
schadenfreude
Deserting the Beast:
http://takimag.com/article/deserting_the_beast_fred_reed2/page_2#axzz34ttJuFrq
“The herd. In a thousand American Legion halls across the nation, veterans gather on Memorial Day to make patriotic speeches. There are clichés about the ultimate sacrifice, defending our freedoms, God, duty, and country, our American way of life. Legionnaires are friendly, decent people, well-meaning—now, anyway. If there were an earthquake, they would pull the wounded from the rubble until they dropped from fatigue. They are not complex. They listen to the patriotic speeches with a sense of being a band of brothers. And if you told them they were suckers, conned by experts, used, they would erupt in fury, because somewhere inside many have suspected it.”
“People are squeamish these days, so we hide the horror of what we do. The public might gag and say, “No. No more.” Besides, we do not want to discourage recruiting. In our Fallujahs we do not show the rotting corpses, or footage of the disemboweled as they try to crawl, god knows to where, while they bleed to death.
And we do not show Johnny with his new colostomy bag, or blind, or with three stumps and one partial arm, or paraplegic, or, never, ever, the quads, paralyzed below the neck, lying on slabs, turned over from time to time to avoid bedsores. The public does not see—though I have seen—the 17-year-old sweetheart of the young Marine from Memphis, when she first sees her betrothed irremediably blind with half his face a hideous mass of mangled flesh—and her obvious thought: Oh Jesus, Johnny, oh Johnny, how can I do this? Onward, Christian soldiers.”
“There is another reason why veterans rage at any deviation from the tales of nobility and sacrifice. Two choices exist for a man who has been mutilated in the hobbyist wars of Washington’s neocon pansies. He can believe desperately that he became a lifelong cripple in a worthy cause. God. Duty. Country. He can believe that he is appreciated. He can hope, or pray, that it was somehow worth it.
Or he can realize that he has been suckered, snookered, conned. This can be hard to bear, very hard. It will get worse when a few years have rolled by and the new generation begins to ask, “Wasn’t there some kind of war in Afghanistan or somewhere? Maybe it was Africa.”
Men engaged in killing for petroleum can develop a suspicion that what they do is just wrong. Soldiers are trained, conditioned by experts, to do things that the civilized find abhorrent. If a man begins to doubt the justness of the war, then he becomes no more than a hired murderer. This is not pleasant. Thus no one must be permitted to say it. A contagion might result.”
lindsey graham says we have to fight them over there so we won’t have to fight them over here
freedom isn’t free
these colors don’t run
power of pride
let’s roll
et cetera
From an article on CNN dot com:
“Obama has ruled out U.S. troops on the ground — a stance to which U.S. Sen. John McCain of Arizona has taken exception.”
His daughter Meghan McCain should enlist, and so should all of Lindsey Graham’s Congressional pageboy twinks
His daughter Meghan McCain
… is utterly moronic
I thought it was “Mission Accomplished” ??
Four strawberry pickers making 30k can’t afford a million dollar home. This is just silly popping off. Those homebuilders aint being supported by multiple families living in their homes.
“Four strawberry pickers making 30k can’t afford a million dollar home.”
At Countrywide they’d be haul-n-down $30k/month.
Time to muster the 1st Congressional Battalion.
Death, taxes, war. Bank on it.
RAL, your thoughts on this? Seems life imitates art, which in turn imitates your thoughts on the housing market.
“Money Pit no more! House from Tom Hanks classic renovated and on the market for $12.5million”
——————————— (excerpt)
-The Long Island mansion featured in the 1986 Tom Hanks comedy, The Money Pit, is back on the market for $12.5 million
-Built in 1898, the three-story white clapboard home has eight-bedrooms and is located in Lattingtown, New York
-It has undergone a major renovation in recent years and the current asking price is more than four times what the owners paid just over ten years ago
-Rich and Christina Makowsky purchased the 5.4-acre estate for $2.95m in 2002 and found life imitating art
-’We didn’t realize how bad it was. We definitely could have done the sequel,’ said Rich
-The Steven Spielberg comedy is about a young couple who foolishly buy a beautiful mansion from a con artist for a ridiculously low price
http://www.dailymail.co.uk/news/article-2659123/Money-Pit-no-House-Tom-Hanks-classic-renovated-market-12-5million.html
Lol liberace
http://maine.craigslist.org/edu/4524321302.html
Sweet, tomb-sweeping day is a vacation?
http://wattsupwiththat.com/2014/06/13/new-study-suggests-a-temperature-drop-of-up-to-1c-by-2020-due-to-low-solar-activity/
Great, AZ needs a few degrees of relief.
warmists gonna warm, dannyboy
It is not wind or solar but it will reduce carbon emissions so enjoy Goon.
(Xinhua)
Updated: 2014-06-17 09:31
Counter:9
China still relies too heavily on coal for power, with nuclear power seen as the route to an optimized energy structure and cleaner growth.
In a meeting of the Central Leading Group for Financial and Economic Affairs on Friday, President Xi Jinping said clean and efficient use of coal and development of other energy sources were crucial to development plans. An energy supply system should be driven diversely by coal, oil, gas, nuclear, new energy and renewable resources, he said.
“By adopting top international standards and ensuring safety, China should lose no time in constructing nuclear power projects in eastern coastal regions,” he said.
At the end of 2013, nuclear power accounted for a paltry 2.11 percent of China’s total, dwarfed by 80.4 percent of thermal power and 15 percent for hydropower. The installed nuclear power capacity represented only 1.19 percent to total power generation capacity.
The need to conserve energy, reduce emissions and steer away from reliance on coal–the dirtiest form of energy–has never been more obvious.
China aims to reduce energy consumption per unit of GDP by 16 percent from the 2010 level by 2015. The indicator dropped 9.03 percent from 2011 to 2013, accounting for only 54 percent of the overall target.
“In reality, the development of nuclear power is all about substituting coal,” said Liu Qiang, an energy expert with the Chinese Academy of Social Sciences.
Considering the economic realities, nuclear power is not likely to face great opposition, Liu said.
Since the Fukushima nuclear disaster in 2011, China has reinforced safety at all nuclear plants. Plans for nuclear power safety and long-term development of nuclear power were passed in 2012, with approval planned for only a few projects in coastal areas before 2015, and none in inland regions.
By the end of last year, 17 nuclear plants were in operation, with a total capacity of nearly 15,000 megawatts of electricity.
At a meeting of the National Energy Commission on April 18, Premier Li Keqiang announced the introduction of new nuclear power plants along the east coast “at a proper time”.
Earlier this month, the Ministry of Environmental Protection released the environmental impact statements for two new nuclear power plants, one in Guangdong Province and another in Shandong, but this is still not enough in the longer term.
“China’s nuclear power sector still has a long way to go before reaching the global average,” said Ye Qizhen of the Chinese Academy of Engineering.
A proportion of 10 percent of nuclear power is an ideal number for China, Ye said.
Cool story bro, but warmists gonna warm…
I am a lukewarmists bro.
Filthington, D.C.: Bending over US citizens 4U.
Luv it. Filthington.
How about this? Filthington: District of Craterton
I like the Crater aspect but it lacks something to my ear:
How about Filthington: District of Scumbia
“Filthington, D.C.: Bending over US citizens 4U.”
This is good stuff and should be the official city slogan. And the White House should hereafter be referred to as, “Neverland Ranch on The Potomac”.
U.S. housing start pace rises to 1 million new units, annualized.
http://www.bloomberg.com/news/2014-06-17/housing-starts-in-u-s-exceed-1-million-pace-for-second-month.html
Historically 2 million housing starts was a big year. 1.5 million was an average year. And 1 million was a bad, recession year.
Evidently, we’ve had to finally increase to what used to be a recession year, after six years.
Discovery dot com article linked from Google News:
“About 67 percent of Americans are overweight or obese, yet only 36 percent of them report being overweight. That means that about a third of us are overweight and don’t know it.
A 2010 study published in the journal Obstetrics & Gynecology found that nearly 40 percent of overweight women and 10.5 percent of obese women believed themselves to be underweight or of normal weight.”
Anecdotal confirmation of the latter can be easily found on the Plenty of Fish, OK Cupid, Match dot com dating websites
I want a study of delusional fat women and their voting behavior. I bet we have a strong correlation with Obama supporters.
Lol
On the other hand, I cannot imagine anyone on a whole foods diet and light exercise that burns a modest 200 calories a day being grossly overweight. My countrymen are so much into added sugar and sodium. When the simple solution is to shop around the perimeter of the grocery store. That’s the whole foods (but stay out of the cold cuts section). Myfitnesspal is a good app to let you know of any deficiencies in protein, iron, calcium, potassium, vitamin c, and vitamin a, as well report how much sugar, sodium, fats, and cholesterol is in your day’s food.
My countrymen are so much into added sugar and sodium.
The vast majority of your countrymen have no need to avoid sodium at all. For someone without high blood-pressure or a couple of much less likely conditions, there is ZERO reason to avoid salt. Let me say that again: there is zero scientifically-proven benefit.
The anti-salt campaign in this country is ridiculous. Please don’t encourage it.
Let me get this straight. I could take off a year from work and go hiking and be covered by Obamacare super-cheap because my income would be zero?
Let me get this straight. I could become self-employed and as ,ong as I show I make not that much money, I could get Obamacare really cheap?
Let me get this straight. In the future, even if I disown material possessions, I could still have affordable health care as long I pay the premiums or have someone else pay them?
Let me get this straight. In the future, when a good bit of America is post-prime employment bracket, health care will probably be the only thing that is between them and the grave?
Let me get this straight. What could possibly go wrong with my line of reasoning?
What could possibly go wrong with my line of reasoning ??
You sound like the house of Rep’s…Don’t complain, solve…Whats your alternative ?? Put it out here….
I am playing devil’s advocate. The more I learn to love the ACA, the better the chance that it will get replaced by something more transparent.
Robots don’t need healthcare. Not a future shock thing. More of a get-ready-for-how-companies have no choice but have to compete on saving costs. I am seeing a sea-level change at my workplace. They are counting on attrition more lately and probably under the gun to cut paperclips costs too. I wish them lots of luck. I still have my company stock shares. So, even after I depart them, if they continue to prosper, I can get some kind of remuneration from them, maybe, if the stock price continues to grow.
http://www.reddit.com/r/Economics/comments/28bj44/chilis_tablets_when_your_server_is_a_screen_you/
http://www.city-data.com/forum/work-employment/2139222-news-employee-benefits-disappearing-before-your.html
http://www.factcheck.org/2010/02/still-on-the-table/
They did.
Your analysis is wrong.
If your income is zero or extremely low, you qualify for Medicaid if your state expanded Medicaid. If your state decided not to expand Medicaid (and your income is low enough that you would have qualified for Medicaid if they did expand it) you can buy on the exchanges, but you don’t get a subsidy so it probably won’t be all that cheap.
Nope. I already went through all the different scenarios with health insurance on the health dot glove site. If I have a paid-off house, paid-off car, and just enough income to cover all the other expenses, then I qualify for free health insurance, but not medicaid.
Medicaid asset test was eliminated in the expansion if you are in a state that accepted the expansion.
http://www.hca.wa.gov/hcr/me/Pages/faq.aspx#new10
24. Will there be an asset test for Medicaid adults in 2014?
No. There will be no asset/resource limits for Medicaid adults under MAGI methodology
I believe the asset test comes back when you are eligible for Medicare and are trying to be a Medicare/Medicaid dual eligible (the people who get their nursing home care covered).
But suppose I have assets Polly? The ACA is somewhat independent of assets, isn’t it? I am thinking that you can be self-employed and claim minimal net profit per a year and get qualified for a very cost-effective ACA policy. Turn this thing on its head. Use the system to take down the man.
Old people will keep gigantic sums of money in their brokerage accounts (saved up over decades of stable, high-paying employment). Old people will live in paid-off houses and drive paid-off cars. Old people will draw just enough income from their brokerage accounts to keep their income “low”, so they can get free health care. This low income will be more than sufficient to pay for a comfortable life, since they have no car payment, house payment, or medical costs.
Old people will use this health insurance to its fullest extend, insisting on all the latest and most expensive medical technologies to extend their lives by a decade or so. No problem because remember that they are drawing down their brokerage accounts very slowly (on purpose), just to keep the freebies rolling in.
Young, broke people with low-paid, unstable employment and crushing mortgage / student-loan debt will foot the bill. When they get old, they will just die because they want to.
Don’t old people get Medicare?
Not until they’re 65. Boomers need to retire at 55, which is now.
Old people will keep gigantic sums of money in their brokerage accounts (saved up over decades of stable, high-paying employment)
Only a pretty small fraction of old people have large sums in brokerage accounts. A much larger fraction only have their Social Security checks averaging around $1,200 a month.
Stats?
Have you already tiptoed through the exit to offload your bond fund holdings, or do you plan to hold on until the race to the exits is underway?
Fed mulling exit fees on bond funds: report
June 17, 2014, 5:42 AM ET
Bloomberg
Concerned with the possibility of a fire sale of bond funds should interest rate rise sharply, Federal Reserve officials have mulled the possibility of the need to impose exit fees on the sectors, according to a report by the Financial Times.
The discussions have taken place at a senior level but no formal policy has been developed, the report said. The Securities and Exchange Commission would have to change its rules, which some commissioners would be expected to resist, the report said, citing people familiar with the matter.
Since the financial crisis, a combination of new regulations and lower risk tolerance among banks has weighed on the dealer arms of banks, reducing the sizes of the balance sheets they once used to intermediate between buyers and sellers of bonds.
Whereas dealers would once take large blocks of bonds onto their balance sheets, cushioning the market impact of large outflows from bond funds, they no longer have that same capability.
That has underscored the fears among many market participants that the credit markets could be in for a rough ride if investors rush for the exits at once.
…
But if exit fees were retroactively imposed, wouldn’t that discourage future buyers? After all, they now have to calculate the added risk of arbitrary future penalties on any newly acquired government-issued securities.
June 17, 2014, 8:31 a.m. EDT
Is the economy really picking up? Not likely
Commentary: This doesn’t feel like a real recovery
By Irwin Kellner, MarketWatch
PORT WASHINGTON, N.Y. (MarketWatch) — According to the conventional wisdom, the economy is set to bounce back from its winter-induced slump. It won’t be the first time that the pundits got it wrong.
If this is a bounce back, I would hate to see what a decline looks like. For here we are, almost finished with the second quarter, and the economy doesn’t look much different than it did in the first.
The real world is telling us a different story than the pundits think they see in their crystal balls. Rather than picking up, the economy is still plodding along, not necessarily declining — but not shifting into high gear either.
…
Tens of millions of Americans with employer provided health insurance who are *not* on Obamacare get to pay double digit increases on the employee paid portion of their premiums, *because* of Obamacare.
That should work wonders for the Obama recovery, LOLZ.
All insurance is Obamacare insurance.
Tens of millions of Americans with employer provided health insurance who are *not* on Obamacare get to pay double digit increases on the employee paid portion of their premiums, *because* of Obamacare.
Haven’t double digit increases been the standard for past … I don’t know … 40 years?
Health care is 18% of USA GDP.
Invisible hand of the free market, baby!
http://www.nbcwashington.com/news/local/License-Plates-Photographed-Often-Tracked-in-Northern-Va-Cities-257568301.html
crayder
more walking and less clown-car driving:
http://www.bizjournals.com/denver/blog/broadway_17th/2014/06/denvers-in-the-middle-of-the-pack-for-walkability.html?page=all
some on this blog think walkscore is united nations agenda 21 nanny state socialism. but if you like your clown-car lifestyle, you can keep your clown-car lifestyle. and if lindsey graham and john mccain get their way, you’ll get to pay even more for your clown-car lifestyle, lolz.
I once lived in a town where the city council was seriously considering BANNING all cars from the hipster downtown area. This is a place where anyone spending any money has a car. The nearly homeless people insisted on crowding the streets with their bicycles. Why don’t they walk? Bikes and cars can’t really coexist peacefully.
Boulder Co. and Burlington Vermont both do this and still do well. I would have to know more about this city where people can’t just park their cars a few blocks away and walk.
Walkists gonna walk, Dannyboy…
Why can’t ppl just park their bikes too? Pedestrians and bicyclists can’t coexist peacefully either. Ppl on bikes are too aggressive.
The delusion of debt donkeys refuses to die (yet)
Article includes requisite quote from a Stealtor® that housing is “sizzling hot”
http://www.bizjournals.com/denver/news/2014/06/16/consumer-confidence-in-denver-real-estate-inches.html
This chart was premature, we are still in the delusion phase in 2014:
http://www.picpaste.com/stagesbubble-s1vaWY8Z.png
It’s good to be the king
“The sale of luxury homes in metro Denver, which gained steam in April, picked up serious momentum in May with 127 luxury homes sold in the month compared to 93 in April, according to a new report by Coldwell Banker Residential Brokerage.”
http://www.denverpost.com/business/ci_25978425/luxury-homes-metro-denver-sell-quickly-may
Soon Denver and San Fransico will be the only two ‘hot’ markets left.
Don’t forget Seattle . . .
…and Ordos.
Very curious. This does not sound like a soft landing. Granted it is a real estate firm reporting this information, a NAR affiliate, and the focus of organizations like these is not data gathering and analysis, it’s sales. And historically, they have been known to change the numbers as it suits their sales goals. So, take this article for what it’s worth. When I hear NAR affiliates talking, I don’t so much focus on the accuracy of the data, but why they might be saying what they’re saying.
Northern Virginia’s housing market slows
Jun 17, 2014, 12:35pm EDT
Washington Business Journal
The median sales price in Alexandria last month was down 9 percent from a year ago. Loudoun County saw median prices that were down 1 percent from a year earlier.
Fairfax County saw no change in median prices, but Fairfax also saw the biggest drop in sales, down 22 percent from a year earlier. All five Northern Virginia counties saw a double-digit decline in year-over-year sales.
There is also a whole lot more for potential buyers to look at. Inventory is up by double-digits throughout Northern Virginia with the biggest increase in Loudoun County. There are more than 2,000 residential listings in Loudoun right now, up 31 percent from a year ago.
http://www.bizjournals.com/washington/breaking_ground/2014/06/northern-virginia-s-housing-market-slows.html
New Law Would Give Illegal Immigrants Right To Vote, Collect Government Benefits
We now have a pretty good idea as to why our southern border has been left completely unprotected
by Mac Slavo | SHTFplan | June 17, 2014
In recent weeks tens of thousands of illegal immigrants have flooded the southern border of the United States. So much so that border patrol agents are overwhelmed to the point where security along the Rio Grande river has become virtually non-existent. Instead of making arrests, detaining and deporting those who cross into America illegally, many immigration agents are reportedly mixing baby food and changing diapers for children left displaced by parents who’ve abandoned them in the hopes their kids would find greener pastures in the U.S.
The inaction on the part of the Federal government has left many bewildered. Some insiders at Immigration and Customs Enforcement (ICE) have even gone so far as to suggest that the entire situation has been orchestrated by the Obama administration in an effort to increase their voter base ahead of the upcoming national elections this year and in 2016. That allegation may have seemed ridiculous to supporters of amnesty legislation and immigration reform, who argue that allowing immigrants into America is a humanitarian issue.
But a new legislative proposal from Democratic Senator Guestavo Rivera of New York may have just proven that opponents of lax border policies have a legitimate concern as it relates to diluting the Conservative and Libertarian voter block, as well as the burden of more government spending to accommodate the influx of people requiring assistance.
If passed, the new law would give illegal immigrants the right to not only vote in local and state elections, but they’d also enjoy many of the taxpayer funded benefits available to American citizens.
In terms of the broad benefits available to non-citizens, this bill is the first of its kind in America.
The main objective of the New York Is Home Act, according to Rivera, is to integrate illegal immigrants, who are estranged from participation in civic, economic and political life.
The legislation not only gives illegal immigrants the right to vote, but establishes a kind of second-tiered citizenship on a state level, in which illegal immigrants can apply for tuition assistance, health insurance and driver’s and professional licenses, among other benefits.
“It’s mind-boggling,” says Michael Olivas, a professor at the University of Houston Law Center who specializes in immigration law, according to Businessweek. “I don’t believe there’s ever been a serious attempt to codify so many benefits and opportunities.”
The chances of such a law passing in the first go-around are pretty slim and even Rivera says that it’s only a first step. But the move reveals the end-game for Democrats who will no doubt push for similar legislation on a Federal level and throughout State Capitols across the country. Amid heavy criticism of President Obama’s foreign policy, continued degradation of the national economy, and the continued failure of promises to improve equality among the working class, the Democrats are quickly running out of options and run a serious risk of losing political control on every level of government.
They’ve come to the realization that their only option at this point is to offset the the losses in their voter base. And what better way to do that then to open the borders to hundreds of thousands of new voters to whom they can pander with free food, health care, and even voting rights?
While Homeland Security and domestic intelligence agencies monitor the activities of American citizens and militarize local police forces under the pretext of safety, we now have a pretty good idea as to why our southern border has been left completely unprotected.
“In politics, nothing happens by accident. If it happens, you can bet it was planned that way.” – Franklin D. Roosevelt
Did somebody say?
Permanent Democrat Supermajority
Dumb. If it passes. It won’t. It is already bad enough without fear mongering to lose credibility. It is that bad in reality. No need for dubious logic.
A person just said that they need the stock market to “pick up a lot more” before they can even think about retiring. Is that a reasonable thing to wish for?
Depends if we are talking about nominal or real terms. In a period of high inflation it might rise much higher than it is now since the assets of companies will rise in nominal value and that would be reflected in their shares. Of course, eventually the economy collapses and they don’t do so well. Like everything it is a question of timing, if your nimble and lucky it can work out well.
“Cluster Of Central Banks” Have Secretly Invested $29 Trillion In The Market
Submitted by Tyler Durden on 06/16/2014 07:22 -0400
Another conspiracy “theory” becomes conspiracy “fact” as The FT reports “a cluster of central banking investors has become major players on world equity markets.” The report, to be published this week by the Official Monetary and Financial Institutions Forum (OMFIF), confirms $29.1tn in market investments, held by 400 public sector institutions in 162 countries, which “could potentially contribute to overheated asset prices.” China’s State Administration of Foreign Exchange has become “the world’s largest public sector holder of equities”, according to officials, and we suspect the Fed is close behind (courtesy of more levered positions at Citadel), as the world’s banks try to diversify themselves and “counters the monopoly power of the dollar.” Which leaves us wondering where are the central bank 13Fs?
While most have assumed that this is likely, the recent exuberance in stocks has largely been laid at the foot of another irrational un-economic actor - the corporate buyback machine. However, as The FT reports, what we have speculated as fact for many years now (given the death cross of irrationality, plunging volumes, lack of engagement, and of course dwindling credibility of central planners)… is now fact…
Central banks around the world, including China’s, have shifted decisively into investing in equities as low interest rates have hit their revenues, according to a global study of 400 public sector institutions.
“A cluster of central banking investors has become major players on world equity markets,” says a report to be published this week by the Official Monetary and Financial Institutions Forum (Omfif), a central bank research and advisory group. The trend “could potentially contribute to overheated asset prices”, it warns.
The report, seen by the Financial Times, identifies $29.1tn in market investments, including gold, held by 400 public sector institutions in 162 countries.
China’s State Administration of Foreign Exchange has become “the world’s largest public sector holder of equities”, as the report argues is “partly strategic” because it “counters the monopoly power of the dollar” and reflects Beijing’s global financial ambitions.
In Europe, the Swiss and Danish central banks are among those investing in equities. The Swiss National Bank has an equity quota of about 15 per cent. Omfif quotes Thomas Jordan, SNB’s chairman, as saying: “We are now invested in large, mid- and small-cap stocks in developed markets worldwide.” The Danish central bank’s equity portfolio was worth about $500m at the end of last year.
Read more here
So there it is… conspiracy fact - Central Banks around the world are buying stocks in increasing size.
To summarize, the global equity market is now one massive Ponzi scheme in which the dumb money are central banks themselves, the same banks who inject the liquidity to begin with.
http://www.zerohedge.com/…cluster-central-banks-have-secretly-invested-29-trillion-market - 126k -
Boogie Down Productions — South Bronx:
http://www.youtube.com/watch?v=vsrOy32nJdI
Boogie Down Productions — 9mm Goes Bang:
http://www.youtube.com/watch?v=9zLH4gHdM_M
FEMA Region VIII checking in.
‘The Designer Of The F-15 Explains Just How Stupid The F-35 Is’
Another trillion down the drain.
Donk…. donk donk. Nuttin but chinese mystery meat.
“Misoiny”, the hatred of wine. This is an actual word. It can’t possibly exist, can it?
Insanity!!!
Bill, back up the Toyota:
http://www.321gold.com/editorials/aden/aden061614.html
Thanks. But I’m not scheduled to buy more gold until October or November, depending on which way the election winds blow. If Demos look like they will take control of Congress I will buy gold in October. If Repugnants look like they will win, I might postpone buying until November after the elections and the Friday before the week of Thanksgiving.
Oh Dog! My former mentor, my ex manager just praised a military guy on LinkedIn for uniting his branch of service with the police and fire departments in that community.
This is part of the Paramilitary trend of civilian police forces. And fire departments?
Good grief. She should think hard about what kind of world she is bequeathing her grandchildren.
sex with your girlfriend, porn, steak, and 3 meals a day and the weights…so what’s the problem?
http://www.ocregister.com/articles/nguyen-618692-kim-cass.html