Bits Bucket for June 29, 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.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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Oregon Housing Demand Turns Negative At Peak Of Season
http://www.zillow.com/local-info/OR-home-value/r_46/#metric=mt%3D30%26dt%3D1%26tp%3D4%26rt%3D14%26r%3D46%26el%3D0
Region VIII checking in.
Housings Dead Cat Bounce: Is the Fed’s Dream Coming to an End?
http://www.equities.com/editors-desk/personal-finance/real-estate/is-the-fed-s-dream-coming-to-an-end
“Potential buyers, as might be expected, feel no sense of urgency to buy because they believe this glut is going to exist indefinitely.”
25 million excess, empty and defaulted houses can’t be hidden.
Current Delinquency Rate on SFR Mortgages: 8.21%
Long Term Delinquency Rate Pre-Housing Fraud:1.2%
(Source: Federal Reserve Bank of St. Louis web site, last accessed May 13, 2014.)
I wonder why there is a 584% increase?
Could this reflect that the Fed snapped up all those MBS through QE3? Now that the MBS are buried on the Fed’s balance sheet, no creditor is harmed by a high rate of delinquency (other than the Fed, which can use the printing press to offset its losses…).
Now that the MBS are buried on the Fed’s balance sheet, no creditor is harmed by a high rate of delinquency (other than the Fed, which can use the printing press to offset its losses…).
Bingo.
This is crony capitalism in its most extreme form, as the Fed steps in and ensures that the losses are spread across every individual who holds dollars, rather than those who chose to take the risk.
+1
Is this the data?
http://research.stlouisfed.org/fred2/series/DRSFRMACBS
Hawaii Housing Demand Collapses 14% YoY; Approaching 5-Year Low
http://www.zillow.com/local-info/HI-home-value/r_18/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D14%26r%3D18%26el%3D0
Virginia Housing Demand Plummets 23% YoY; Now At 10 Year Lows
http://www.zillow.com/local-info/VA-home-value/r_56/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D14%26r%3D56%26el%3D0
Boulder, CO Housing Demand Plunges 14% YoY; Sale Price Falls 5%
http://www.zillow.com/local-info/CO-Boulder-Metro-home-value/r_394405/#metric=mt%3D30%26dt%3D1%26tp%3D5%26rt%3D6%26r%3D394405%26el%3D0
La Mesa, CA Housing Prices Turn Negative At Peak Of Selling Season; Inventory Explodes 87%
http://www.movoto.com/la-mesa-ca/market-trends/
Escondido, CA Housing Demand Collapses To 10 Year Lows; Supply Doubles
http://www.zillow.com/local-info/CA-Escondido-home-value/r_11337/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D8%26r%3D11337%26el%3D0
http://www.movoto.com/escondido-ca/market-trends/
“Sold in past year (%)
The percentage of all homes in Escondido that were sold in the past 12 months.”
It was going like gangbusters in early 2009 before the Fed started QE3; after that the housing market there has continually slowed to its current level which may be the lowest ever (at least it is in recent years).
Realtor Charged With Forgery
http://chestertontribune.com/PoliceFireEmergency/exrealtor_don_johnson_faces_new.htm
And this is news because…?
Mortgage Broker, Title Agent, Real Estate Appraiser Arrested for Defrauding Mortgage Lending Institutions
http://www.fbi.gov/newyork/press-releases/2014/four-arrested-for-defrauding-mortgage-lending-institutions
Shady people. Shady occupations. Never trust anyone in these occupations.
20 Years For Ponzi Investment Scheme For Realtor
http://petaluma.patch.com/groups/police-and-fire/p/20-years-for-ponzi-investment-scheme-for-realtor-73
And why exactly is this news…?
Bellingham, WA Housing Demand Plunges 15% To 2008 Levels; Prices Head South
http://www.zillow.com/local-info/WA-Bellingham-home-value/r_50950/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D8%26r%3D50950%26el%3D0
Dallas TX Housing Demand Dives 6% YoY; Falls Through 2009 Level
http://www.zillow.com/local-info/TX-Dallas-home-value/r_38128/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D8%26r%3D38128%26el%3D0
New York Housing Demand Sinks 4% YoY; Moribund Sales Volume Slides Lower To 2009 Levels
http://www.zillow.com/local-info/NY-home-value/r_43/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D14%26r%3D43%26el%3D0
Manhattan Housing Prices Tumble 15% YoY As Sellers Slash Grossly Inflated Prices
http://www.zillow.com/local-info/NY-New-York-County-home-value/r_2452/
Ahahhahaha. Rocknroll on the shills!
http://www.zillow.com/local-info/NY-New-York-County-home-value/r_2452/
First, the link you sent was to the Zillow Home Value Index, and showed prices up 17.7% YoY. It would be nice if you would actually link to the intended graph, cause that doesn’t appear to be it.
I suspect that you really meant to send the link to a different metric, which appears to match your “Tumble 15% YoY” summary—except that it is the LIST price. Everyone here knows that list prices are meaningless. Sale prices are much more meaningful, and are up 2.8% YoY per Zillow.
http://www.zillow.com/local-info/NY-New-York-County-home-value/r_2452/
I think the following is the link that you meant to send:
http://www.zillow.com/local-info/NY-New-York-County-home-value/r_2452/#metric=mt%3D18%26dt%3D1%26tp%3D5%26rt%3D6%26r%3D2452%26el%3D0
List prices are meaningless eh?
Gotcha fraudster.
Meaningless in terms of telling you something about the transactions that are occurring—yes.
How interesting are the standing limit orders in the order book for a stock that are nowhere near the bid-ask spread? Not very interesting. How much do they tell you about the price at which shares actually changed hands today? They tell you nothing about the actual transactions that occurred.
The fact that you can’t grasp that is… stunning.
Yet the fact that transaction prices are at points lower than asking prices all the while those asking prices are falling.
You’re a fraud.
nowhere near the bid-ask spread?
It occurs to me rather late, but I might remind you that the old car that you keep joking about asking $50K for, is a fine example of this type of out-of-the-market listing price.
You can ask whatever you want for it (just like a used house), but that doesn’t mean that it’s really even part the market.
Why would asking prices be dropping if transaction prices aren’t also dropping?
There is a difference between these and the 50k honda example. If multiple Hondas were for sale and the asking price was increasing that would mean there were Hondas selling at 50K or more. Not absolutely. There could be some conspiracy to put a bunch of false listings for Hondas out there but it’d have to include all those selling the same make/model.
Do you really think there is something similar going on with the drop in asking prices? What would be the point?
Why would asking prices be dropping if transaction prices aren’t also dropping?
Ah, Shrimpy has hit on the right question, I think.
Listing/wishing prices doesn’t tell you anything about what market prices are doing, but perhaps it DOES tell you something about the psychology of the out-of-market sellers.
Which may foretell something about transactions in the future.
“Everyone here knows that list prices are meaningless.”
Count me out of your definition of ‘everyone.’
It’s the high list prices and unwillingness to lower them which explains collapsing transactions demand, despite historically low rates.
Exactly.
“Everyone”= one single fool.
Ok, perhaps “meaningless” was a bit strong. Median list price does tell you one thing: what the median person who is listing their house is asking for it, or wishing for it. That’s why we called them “wishing prices” for years here.
But median list price certainly don’t tell you what the market prices are doing.
Using the “Median list price” data-point to argue that “Housing Prices Tumble 15%” is complete hogwash. Sure, median price of houses that are listed has shifted but that does not necessarily tell you anything about the prices of houses that have closed.
keep ducking and weaving fraudster.
Your points are taken. That is, sellers can list their homes at high prices where they will never sell for as long as they wish. The only useful information seems to be that the market value is below the wishing price. How much below depends on the prices for similar homes that recently sold.
I am curious why cnbc ratings keep tanking 6 years into a supposed recovery?
Too much Obama cheerleading too little real reporting.
Obama,Obama, Blah..Blah..Blah.Your posts are getting as old as Ha
I agree. It is fashionable now for people to make constantly negative remarks about the guy, even though everything in the country has improved since he took office. I wonder why so many people need to hate him so much.
you forgot this. —-> /sarcasm
My neighbor hasn’t mowed his yard in three weeks.
Way to go Obama!
He’s letting that lawn grow because there will soon be 16 and 17 yr old Hondurans that will do it for 4 dollars.
I wonder why so many people need to hate him so much.
I don’t wonder why.
Also if you don’t pile on then the Koch brothers’ paid minions tar and feather you as a libtard…
“Obama,Obama, Blah..Blah..Blah.Your posts are getting as old as Ha”
Attacking the messenger does not make the statement less true.
maybe casue the average american is still not caught up from 2008, and a tv network cannot survive on the 1%..
Bring back the daytraders
how can you day trade without any volitility? I think a lot of day traders and short sellers went broke.
“I think a lot of day traders and short sellers went broke.”
What a surprise!
Let me see … the retail traders pay money to trade and the pros get to trade for free, so the advantage goes to … (let me think about this for a moment) … why, the advantage goes to the pros!
Before we get too deep into the negative macro picture, I think it is worth mentioning that on an individual level, YOU control things. You can get a job, advance, and do very very well for yourself. Simply being willing to work hard will put you ahead of 80 percent of the pack. Being able to work hard with focus will take you even further especially in the Twitter generation who cant even sit down to read a manual.
The silver lining of the Idiocracy crowd is that they cannot compete with those with some brains who are willing to work hard.
But keep your eyes open for the crooks who want to exploit you.
So 80% of America isn’t willing to work hard? Who here agrees with that?
By definition the bottom 50 percent of workers work less hard than the others. Then there are those who do not work at all by choice or because they lack any work ethic at all. I’d say willingness to work hard will easily put you in the top 20 percent of the population.
But I’m sure you and I have very different ideas about what it means to work hard.
“So 80% of America isn’t willing to work hard? Who here agrees with that?”
How about 47%?
“By definition the bottom 50 percent of workers work less hard than the others.”
Bottom by effort or bottom by pay?
I can say that many of the hardest working people I have ever seen in action were not that well paid. But they have neither the training nor the analytical or language skills to do mental heavy lifting.
It certainly is possible that we have different ideas about what constitutes hard work. You haven’t explained what you mean by it.
Everyone knows what hard work is, except you apparently.
No, it’s clearly everyone except you.
To paraphrase Mark Twain:
Those do not watch CNBC are uninformed. Those who do watch CNBC are misinformed.
If you think of CNBC as a gigantic commercial, an informercial, then its existence makes sense.
Same goes for HGTV.
Same goes for the Heros Channel.
One step further or two. Ask of everything on TV, what are they trying to sell me?
FIFA?
The public does not trust this market.
This applies to the real estate market also. Without the fake flipper investor mania there are few buyers at current prices. Drop things back down 30 percent and we’ll talk.
This is all no different than during the Great Depression market of 1929 to 1953. The 2009 low might have been the modern form of 1933.
From 1933 to 1937 the market went way up, then meandered for 8 years. That meandering was fine for people who 1) still had jobs and money to invest and 2) had plenty of reserves in treasuries, cash, and CDs. The stock funds they had would be earning dividends.
I never trust any market. Any investor worth his salt would not. That is why you need assets in opposite - performing areas outside of stocks to draw from.
I find some wisdom in your message. I have learned that the central bankers, corporations via buybacks, and wall street really control the movement. Regardless of how you feel about it being rigged you can make money if your on the same side of the trade as them.
Most of the public got hosed in 2008.
“The 2009 low might have been the modern form of 1933.”
Or 1930, except there was no QE3 from 1931-1933.
But can you tell when they are going to press the button and flush all of your gains?
They are pushing it right now…very, very slowly so as to not spook the herd.
Suck ‘em in, shake ‘em out.
Jun. 19, 2014
Economy Watch: FOMC Says Tapering to Continue
By Dees Stribling, Contributing Editor
Much of the economic news on Wednesday came from the Federal Reserve, especially the fact that the Federal Open Market Committee has decided to continue tapering its stimulus of the economy (QE3, to use a slightly quaint term). In July, the central bank is going to buy agency mortgage-backed securities at a pace of $15 billion a month rather than $20 billion a month, and it will add to its holdings of longer-term Treasuries at a clip of $20 billion per month rather than $25 billion.
The FOMC also says that U.S. economic activity has rebounded in recent months, with labor market indicators showing further improvement, though the committee admitted that the unemployment rate “remains elevated.” The FOMC’s statement also notes that “household spending appears to be rising moderately and business fixed investment resumed its advance, while the recovery in the housing sector remained slow.”
…
Suck ‘em in, shake ‘em out ??
Yep….Its called shaking the tree….
It is true that employment is better now. My employer is trying to hire a bunch of people. They are finding it difficult to find qualified candidates. Most of the candidates don’t apply when they are told the pay rates. Many of the new-hires end up quitting within 6 months because they get better pay somewhere else. I am happy there, but I negotiated a much bigger rate than the one I was offered.
“that employment is better now…”
OK, if you ignore the newly minted ten million people who will never get another job. Might as well, the Ministry of Truth ignores them.
It’s one thing that I have had a job, I’ve pretty much always been “on my feet”. It’s another thing to have so many not employed neighbors. A healthy community has opportunity for all, not just the top performers.
A healthy community has opportunity for all, not just the top performers.
It ain’t just about “top performers,” there is a huge group who have developed or been taught no skills at all for being able to hold a job.
uh huh. Riiiiiiiiiiiight… Meanwhile
US Labor Force Participation Rate Falls To 36 Year Low
http://data.bls.gov/pdq/SurveyOutputServlet
My employer is trying to hire a bunch of people. They are finding it difficult to find qualified candidates. Most of the candidates don’t apply when they are told the pay rates. Many of the new-hires end up quitting within 6 months because they get better pay somewhere else.
A simpler way of saying all of that is that your employer just doesn’t pay enough. Its difficulties hiring and keeping staff are simply a consequence of that.
Mighty:
Yeah, but they didn’t have the same problem a couple years ago. They are just starting to realize that things have changed.
Auntie, trouble like that in places I have worked, was noticeable in late 2008 at the earliest. That place had real rocky “numbers” the bean counters were trying to add up. It was absorbed by a huge company a couple of years ago, fortunately for the workers who survived several rounds of brutal layoffs.
Off and on since 2009 I saw glimmers of “we’re hiring like crazy,” and it was either the case of low pay or a big proposal that fell through as the customer backpedeled out.
That’s how it goes but the key is to keep working and at least save something every year. Whether it’s $1,000, $10,000, or $40,000. So that you don’t have to draw from your retirement accounts (with the tax penalty) or reduce your contribution to those accounts.
I just started my 30th year of my career.
Back in the mid-80s I had idealistic hope that Artificial Intelligence research would pay off with more individual liberty for us, as well as much more prosperity. Instead it was hyped from day one. I remember knowing that rule-based systems were easy to do. Made one in college. Presto! I had my own expert system! Well in the 80s hucksters used the same deal to sell such software to businesses for $thousands so that the businesses could boast they have software using artificial intelligence!
These days I am leery about research into AI being used against us. Software is used by NSA to do pattern matching between various points of data to follow our every move. I would not doubt the IRS uses systems to trace expatriot money to names and addresses. Well Orwell did warn us.
There are good things about software and internet. The internet is the alternative source of news that the LIEberal MSM cannot control. We would never have heard about the Cliven Bundy ranch issue or billions of rounds of ammo being bought by traditionally non-armed government agencies without internet.
Thirty something years in high tech is about right for me to do some type of career change. Either with a unique thing about software or maybe a low tech health coach. The question is when do I make the move? And from where - Phoenix?
if you ignore the newly minted ten million people who will never get another job….
……I had idealistic hope that Artificial Intelligence research would pay off with more individual liberty for us, as well as much more prosperity. Instead it was hyped from day one.
We saw this coming in the 60s and 70s and the perception was less work and more prosperity for all - and Americans were fine with the concept, but a funny thing happened on the way to more liberty and prosperity for all.
Because the above outcome requires aspects and certain levels of actual Socialism - that is, at least a partial sharing of the benefits and means of production. So instead of emulating a more Swedish style of capitalism, USA, through propaganda embraced SupplySide economics which gave all the benefits of productivity gains to the very few. We did it, we live it and it gutted our middle class.
“USA……Following Failed B.S. Economic Theories Since 1981″
And having some 22 year old chickypoo scan the resumes…and open your company up to lawsuits……..there are no adults reading the resumes today…..
Start there… they are in the deleted file….plenty of them…..
My employer is trying to hire a bunch of people
We just hired someone. Ended up negotiating upward the pay package. It was the right person, we paid what it took to make them happy leaving their current job.
If history is any guide, they will get pay raises and stick around for quite a while (the person they are replacing was here for 15 years, and is leaving for retirement).
We didn’t think we would need to pay as much as we did, but the market is the market.
CNBC has no credibility left except among the very stupid. People can contrast their permabullish lies with the economic reality they see all around them, and are tuning out.
jim cramers ratings are in the toilet too.
“jim cramers ratings are in the toilet too.”
But he sure had a good run while he was hot didn’t he. And while he was hot he sure moved a lot of stock, didn’t he.
(There’s a message here somewhere.)
promoter all the way. who do u think they will wheel out to replace him?
Obama, when his term of office ends.
Johnny Carson made a joke and ended up causing a month-long run on toilet paper.
http://www.todayifoundout.com/index.php/2012/12/this-day-in-history-december-19th-johnny-carson-accidentally-starts-a-month-long-nation-wide-toilet-paper-shortage-crisis/
We are deep into the era of fraud much like before the internet bubble crashed. Everything is a lie, so many stats juked, ratings faked, prices lied about. It needs a reset and the PTB know it.
Get out NOW. Come back during the next bail out.
His only good advice is the “ring the register” when you found some solid gains. My kids got their etrade accounts in 1998 and 2000. Growth has been good, so want to ring the register as things will likely plummet. But these stocks are buy and hold, not speculative in nature, so gotta…not sell now!
Jon Stewart rips Jim Cramer a new one over Cramer’s calls to buy Bear Stearns (as it crashed from $60 to $2).
https://www.youtube.com/watch?v=Hg8gicJurLI
CNBC tanking, Cramer ratings lowest ever - are the sheeple waking up?
http://www.zerohedge.com/news/2014-06-24/cnbc-viewership-drops-lowest-1997-cramer-has-worst-month-ever
I actually have no idea who this Cramer character is.
“I actually have no idea who this Cramer character is.”
Go here:
http://en.wikipedia.org/wiki/Mad_Money
I’m not sure I need to. Apparently there are enough of you keeping an eye on him.
On a channel (CNBC) that’s rife with douchebaggery, Cramer is in a league of his own. That’s as much as you need to know.
Financial housing crater. If you bought a house 1999-current, this is you. Don’t dispair though. There are many others just like you. Tens of millions of you.
http://www.tampabay.com/resources/images/dti/rendered/2011/03/PER_sinkhole030611_165073a_8col.jpg
LOLZ
“If you think financing a rotting pile of garbage for 360 months is an “investment”, you’ve got rocks in your head.”
You better believe it mister.
J._Fraud?
http://fc05.deviantart.net/fs24/i/2008/012/b/b/Here_and_Almost_Donked_by_hmh452002.jpg
That is creepy.
GM to run assembly plant 24/7 in order to meet demand.
http://www.dallasnews.com/business/autos-latest-news/20140628-gm-arlington-plant-runs-24-hours-a-day-to-satisfy-suv-demand.ece
Fixt for you Idgit.
GM to run assembly plant 24/7 in order to meetsubprime demand.
All manufacturing plants aim to run 24/7. It’s how they get the highest profits. Hire more people without buying more equipment or space.
And if they’re illegal immigrants, that’s even better. Hammer their pay through the floor, abuse them, and threaten to have them deported if they tell anyone. Keep them scared, and you keep them in line.
gm cars sck- almost all are under recall
gov motors says it all
Haven’t owned a GM car. I priced some used gmc trucks a while back and they hold their value well.
My friends gotta 12 year old gmc suv with 200k miles on it that runs great and hasn’t needed anything other than tires and oil changes.
How’s the LV party? Sorry to have to miss out again…paternal duties prevented my attendance.
Las Vegas is running out of water. Wonder how THAT will affect their real estate “recovery.”
http://www.telegraph.co.uk/news/worldnews/northamerica/usa/10932785/The-race-to-stop-Las-Vegas-from-running-dry.html
LV? Lola Video? Please tell me no.
No Lola. No Liberace. Enough is enough.
Is there an LV party?
I promised myself that I would make it to the next one, but if it’s going on now, I didn’t even hear about it!
I want a meet up!
Carlsbad Pizza Port?
Did Ben move to Vegas?
How’s the Qingdao metal scandal shaping up this fine Sunday morning?
Business
Shanxi Coal Files Lawsuits Over Qingdao Metal Scandal
Problems For the Qingdao Firms Mount as Fallout From the Incident Widens.
By Chuin-Wei Yap
Updated June 27, 2014 3:59 a.m. ET
Aluminum ingots are piled up at a bonded storage area at the Dagang Terminal of Qingdao Port. Reuters
BEIJING—State-owned Shanxi Coal International Energy Group Co. (600546.SH -3.23%) said Friday it has sued two companies allegedly involved in a metals-backed financing scandal in China’s eastern port of Qingdao, signaling mounting problems for the Qingdao firms as fallout from the incident widens.
In a filing to the Shanghai Stock Exchange, Shanxi Coal said it filed a lawsuit Wednesday in China’s northern province of Shanxi against six companies, including Qingdao Decheng Mining Ltd. and its parent Dezheng Resources Holdings Co., over $177 million in missing payments.
Western bankers say these two companies are the focus of an official probe on allegations of illegally duplicating warehouse receipts for metals the companies used as collateral to obtain loans. Qingdao port authorities have confirmed a probe, but the government hasn’t officially commented on the investigations.
The coal producer’s lawsuit doesn’t appear to be directly linked to the financing scandal, and the lawsuit doesn’t mention any financing arrangement. Shanxi Coal is suing Decheng, Dezheng and four other companies over lapses in payment on their trading agreements with the Shanxi firm.
The lawsuit focuses on a string of commodity-supply deals signed by these companies and Shanxi Coal between July 2012 and December last year, primarily for the import and sale of alumina powder and aluminum ingots, according to the filing. Alumina is a raw material used to make aluminum.
In one of these deals, Shanxi Coal is alleging that Decheng acted as guarantor for a letter of credit obtained by Shanxi Coal used to facilitate imports of these metals. Two companies that Decheng had guaranteed under this deal failed to pay about $120.4 million under the terms of sales, the filing said. A letter of credit is a document that assures payment to a seller for the goods.
In another deal under the same lawsuit, Shanxi Coal alleges that Dezheng had acted as guarantor for a sale of alumina to a third company, which also resulted in a missing payment totaling 352.5 million yuan ($57 million).
Shanxi Coal, based in Shanxi’s capital Taiyuan, said negotiations with these companies hadn’t been successful. Dezheng, Decheng and two of the other companies involved in these deals had met with Shanxi Coal representatives in May and committed in writing to repay the missing sums, but failed to do so, the filing said.
Decheng and Dezheng didn’t respond to calls for comment on Friday.
The other four companies accused in the lawsuit are Hualong Xianqi Aluminum Co., Kwang Nam (Hong Kong) Ltd., New Team International Holdings Ltd. and Qingdao Yida Mining Ltd. The companies couldn’t be reached or didn’t offer comments on Friday.
Singapore’s foreign ministry and Western bankers have confirmed Dezheng’s chairman Chen Jihong, a naturalized Singapore national, is being held under a government probe. Foreign banks, including Standard Chartered PLC and Citigroup Inc., have made loans worth hundreds of millions of dollars backed by metal collateral held at Qingdao, according to Western bankers. A portion of these loans went to entities linked to Decheng Mining, these bankers say.
The Qingdao financing scandal has already weighed on global financial markets. It has cut import appetites in China and encouraged hedge funds overseas to build up short positions on global copper prices.
…
The scandal just goes to prove my point about the birth rate of suckers.
China hit by Another Commodity Scandal as $15bn of Gold Transactions are Declared Fraudulent
By Finbarr Bermingham
June 26, 2014 13:55 BST
China’s commodities trading sector has been dealt a fresh hammer blow after its National Audit Office’s (NAO) uncovered tens of billions of renminbi (RMB) in loans were obtained on the back of false gold transactions.
The NAO said that RMB94.4bn ($15.2bn, €11.2bn, £8.9bn) worth of loans had been backed by falsified gold transactions.
The report suggested that bullion producers had been borrowing on the back of commodities stocks, subsequently holding the borrowed amount in high-yield securities. This practice became more common after the Chinese government tightened lending restrictions in an effort to limit the amount of cheap liquidity in the market.
However, it has emerged that the producers (of which there were 25) have been borrowing on the back of non-existent transactions.
The news comes as the probe into the Qingdao Port copper and aluminium fraud continues, with authorities investigating commodity traders who are alleged to have obtained multiple loans on the back of single instances of metals stock.
…
I’m expecting assurances at any moment now that this so-called scandal is a creation of the Western MSM to cast doubt on the sustainability of China’s stellar growth rate.
LMAO! Good one.
South China Morning Post
Traders at risk from bank credit clampdown
PUBLISHED : Friday, 27 June, 2014, 1:04am
UPDATED : Friday, 27 June, 2014, 1:40am
Reuters
A warehouse fraud in Qingdao’s port has forced banks and trading houses to consider new controls in the mainland’s massive commodity financing business, which traders say could lead to drying up of credit for all but large firms and state-owned companies.
Commodities trading is dominated by the large and state-owned companies but there are thousands of small firms in the market. Faced with tougher bank requirements for financing, they could sell down stockpiles, squeezing demand for metals and other raw materials.
Any new requirements would also increase the risk that customers who do not regain credit lines may default on payments for services such as hedging, or for imports.
“The fear is not so much about the big boys, but some of the other smaller, newer players, who may have only been in this commodity financing game for the last two to three years,” said Jeremy Goldwyn, a director with commodities broker Sucden. “If all of a sudden the tap is turned off to them, they might have more of a crisis.”
…
Could these boys be too small to bail?
Here’s how: Higher gold prices predicted for next week:
http://www.kitco.com/news/2014-06-27/Higher-Gold-Prices-Forecast-For-Next-Week%20-Survey-Participants.html
China rubber stocks fall as port probe hits financing: sources
By Lewa Pardomuan
SINGAPORE Tue Jun 24, 2014 4:54pm EDT
A worker collects latex from a rubber tree at a rubber plantation in Deli Serdang district, Indonesia’s North Sumatra province February 6, 2010. REUTERS/Tarmizy Harva
(Reuters) - Rubber stocks in bonded warehouses in China’s Qingdao port have fallen about a tenth from a peak in May, partly on reduced demand for the commodity as a loan collateral after a fraud investigation at the port, industry sources said.
The drying up of rubber financing deals shows how a probe at Qingdao port, the world’s seventh busiest, into suspected fraud related to metal financing has had an impact on other commodities used in a similar fashion.
Metals such as copper and zinc have been widely used for financing, a practice in which a commodity is pledged as collateral for a bank loan. But other commodities such as iron ore, soybeans and rubber have also been pulled into the trade, driving up stockpiles.
“After the investigation into metals, banks are more careful in granting financial support, so it’s not like before,” said a senior person involved in the rubber industry in Singapore.
…
Where is the problem with using the same collateral to back multiple loans, so long as the collateral never gets called in?
u should promote homes for jim the realtor.
Mining group caught in $2.7bn scandal
AFP
19 Jun, 12:48 AM
A Chinese mining group allegedly used the same commodity stocks as collateral for loans of more than $A2.78 billion from different banks, state-run media reports, with its other lenders also including Standard Chartered, HSBC, and BNP Paribas.
Dezheng Resources, a mining and trading company, and its affiliates are suspected of borrowing more than 16 billion yuan ($A2.78 billion) from 18 Chinese banks using the same stockpiles of metals stored at Qingdao Port, the 21st Century Business Herald (21st CBH) reported, citing unnamed sources.
One of Dezheng’s subsidiaries also took out 17 loans from six foreign lenders over the last decade, it said.
It did not give totals but named them as Britain’s Standard Chartered and HSBC, BNP Paribas of France, DBS from Singapore, Dutch-Belgian bank Fortis and KBC of Belgium.
Among the domestic lenders, the state-owned Export-Import Bank of China and Bank of China were the group’s biggest providers, loaning it 2.2 billion yuan and two billion yuan respectively, it said.
“Virtually all the local banks in Qingdao and banks that have branches in Qingdao are involved, because companies like Dezheng had been regarded as quality clients and everybody fought with each other to lend to them,” the report quoted a manager with a “big state-owned bank” as saying.
Foreign banks including Standard Chartered and Citigroup have loaned hundreds of millions of dollars on the basis of collateral held in Qingdao port, in the northern province of Shandong, to various entities, Dow Jones Newswires said Tuesday, citing unnamed Western bankers.
…
A $2.7 bn scandal has to be peanuts in the broader context of the Chinese economic miracle.
The real questions here are:
1) Does cockroach theory apply with respect to the Chinese economy?
2) If so, will other cockroaches soon come to light?
Cockroach theory:
Heard on the Street
Collateral Damage in China’s Commodity Pileup
By Aaron Back
June 23, 2014 7:10 a.m. ET
Shipping containers at a Qingdao port. Several foreign banks are investigating whether the same stocks of copper and aluminum stored there were pledged to all of them as loan collateral. Agence France-Presse/Getty Images
The mysterious case of missing metals at a Chinese port is a headache for the global banks involved. It is also an omen of more widespread risks in the country’s financial system.
…
The whole commodities market is one big rigged game of fraud, financed by the hard-working people of the world. Prices are based upon greed, not fundamentals, but what’s new?
How to break free of the machine by axing personal debt.
http://www.theguardian.com/commentisfree/2014/jun/24/revolution-axe-personal-debt-resist-easy-credit
This is a great article full of lots of Truth and I am so confident and so glad that few people will choose to read it, and of those few people who do choose to read it few of them will apply to their lives the lessons the article offers to them.
Sheep get sheared because they are sheep. And I am so glad that this is so.
Another reason, as if more were needed, to dump your Facebook account. Or at least read the fine print and see how creepy it really is.
http://www.independent.co.uk/life-style/gadgets-and-tech/facebook-manipulated-users-moods-in-secret-experiment-to-show-bad-moods-spread-9571004.html
Huxley’s “Brave New World” revisited.
http://www.theburningplatform.com/2014/06/28/brave-new-world-revisited/
Great GDP thread yesterday. Interesting, that the weak US dollar is great for our large exporters like GE, Caterpillar, and so forth, but makes the Chinese imports more expensive, you know, the stuff the middle class occasionally needs, like tennis shoes and clothing. But hey, if it’s good for the conglomerates, then all is right with the US.
There are approx. 109,500 shopping centers in the US, and retail is in a death rattle (High end and $1.00 sector both holding. Wal-Mart, Target, Kohl’s, Costco had to lower expectations and still took a hit). There is little disposable income out there. Most Baby Boomers we know are scared to spend, with inflation for necessities hitting their wallets. Welcome to the GDII. Your opinions?
(HA-keep your nasty personal attacks at bay, and show some class.)
That’s not inflation. Learn the difference.
“Your opinions?”
Keep your cash and keep your means of cash flow (meaning if you have a good paying job then hang onto it; If you are offered an incentive to retire then just say no.)
Oh, and go all in when P/Es go below eight.
Here’s a chart of P/Es you can use as a reference:
http://www.multpl.com/
My favorite stores in the recovery:
EBAY
CRAIGSLIST
HARBOR FREIGHT
Have you ever been into a big lots? Basically full of product fresh off the boat.
The 99 cent stores is putting a whooping on walmart.
I like Big Lots for certain things, sometimes they have some gourmet treats I could never afford otherwise, also like ‘em for toilet paper, detergent, paper towels. Better than WalMart, at least around here.
Have you ever been into a big lots? Basically full of product fresh off the boat.
I’ll never buy anything from them again—they sell absolute garbage. I bought a can-opener there for $0.99, one of the really simple bent-metal variety; seemed like a reasonable price, and how can you mess something like that up? On attempting to open the very first a can with it, the sharp bit sheared off and flew past (but thankfully not _into_) my eye.
Never going back.
This is what I find so despicable about the Chinese import model. Assuming the prices are actually cheaper for the customer (oftentimes the savings goes right into the shareholders/CEOs pockets instead), the products still end up costing more because they do not last. You have to buy a dozen of them to get the same useful life as one quality made in the USA product.
Take a vacuum cleaner for instance. I bought one last year, and the handle falls off now. Yes, you are vacuuming along and then suddenly the handle comes off and the rest of the unit falls to the ground. I need to buy another one now. I remember my mom had the same Kirby vacuum the whole time we grew up. She still may have it. And, that thing would sucked anything up. All it needed was infrequent belt changes.
I just ordered a quilt online from Macy’s. When I received it, I was overcome by the chemical smell it was off gassing. The patterns on it were created by chemical dyes, and I could barely be in the same room as it. The material was terribly cheap and scratchy. I am returning it to the store. This was actually an expensive purchase. I hate Chinese products. Every single one. I resent the whole situation.
The safety issues are even worse than the quality issues.
I resent the whole situation.
+infinity.
It’s one thing when you KNOW that you are taking on the risk of purchasing a super-cheap product from a super-cheap retailer (as in my example); it’s another thing entirely when you are trying to buy a quality product from a higher-end retailer, and still find that you end up with low-quality junk. I find it incredibly frustrating how hard it is to locate and purchase quality products these days. Grrr…
I hate Chinese products. Every single one. I resent the whole situation.
The consequence of an economy “un-managed”.
Or an economy “managed” for the very, very rich.
When the Chinese need higher quality they buy German products.
even orange and apple juice come from china………
How can Upstate NY apple juice cost more then shipping the concentrate from china?
“than” would be an appropriate comparative. “then” indicates an a subsequent activity. Grow up!
The 99 cent stores is putting a whooping on walmart ??
A drive to the bottom line…Competitive destruction…
I sell food to richies.
And let me guess- you’re in Bend, OR and your name is Mike but you are currently hiding from Housing Analyst under another moniker after your emotional meltdown the other day?
+ 1 inchbyinch….Nice post…The retail space part is spot on….
yeah I think online shopping is really taking off. These folks on ebay dont pay for a giant retail store and can thus pass on lower prices.
It use to be nice when you bought something from somebody and they appreciated it. You feel like a number at walmart. I feel like they dont give a rats @ss about my business. People like to be acknowledged.
I have met a lot of cool people craigslisting.
Why should Walmart workers give a rat’s ass about their customers? They are underpaid and abused.
then they should go somewhere else.
No, you should just get used to the fact that you’re just another nobody.
hey loserboy,
your the only nobody here.get a life.
Baby Boomers are the richest cohort ever to roam the face of the Earth. Their spending is much more reckless than anyone else. If you think the Boomers aren’t spending enough to keep the party going, then say hello to the hangover.
“Baby Boomers are …”
Baby boomers.
Sometime I expect to see a plea to put us boomers, every one in gas ovens and gas us all.
We boomers lack the recklessness you describe. Instead, some of us enforce the fiscal discipline to not burden future generations. Pass it on !
Great GDP thread yesterday. Interesting, that the weak US dollar is great for our large exporters like GE, Caterpillar, and so forth,…
The weak dollar should also cause those exporters to hire more workers.
Yeah don’t tell the truth if you don’t sugar coat it and deliver it in a soothing NPR fraudster voice.
Truth often hurts. Shock therapy is often necessary. Ask Rose Kennedy.
What kind of shock therapy did Rose Kennedy undertake?
She must have done something right in life, as she lived to age 104 1/2.
I thought you said “sock therapy”. Like puppets. Kind of a funny image.
I think they lobotomized her when the shock therapy didnt work.
Craigslist antidote - I am selling a 4 panel Asian Room Divider (art piece/pretty) and I got this weird email. They wanted to have a shipper come to my home and package it, and I was to take a check or let him have my banking info.
I replied my bro worked for the F*I computer crimes/scam investigative unit. I got rid of him immediately.
I am thinking of a Fine Art Fund for an investment. Any input is welcome.
Put it out on the curb with the rest of the junk.
“I am thinking of a Fine Art Fund for an investment. Any input is welcome.”
Psssst - I can get you the Mona Lisa (the original!) if the price is right.
That is the oldest scam in the book. They are going to issue a fake cashier’s check. Easy to weed out those types.
A fine art fund? That sounds like a great way to flush your money down the toilet. Fine art is for rich people who are hedging against the currency of their place of residence. If you want to hedge against currency, then you are better off buying gold or real estate.
Did you know Vincent Price’s Art Museum (he donated his collection and was involved) is at East L A City College? We have it on our summer itinerary. It’s free or very cheap for admission.
Price went to Yale. One of a kind, truly cool, multi-dimensional human being.
Who are you bringing to bodyguard?
I thought it was kinda cool that Phil Collins donated his Alamo artifact collection back to Texas:
http://www.nydailynews.com/entertainment/phil-collins-donates-alamo-artifacts-article-1.1846660
“No water, no peace” signs already coming out in Detroit as the Free Sh!t Army/Democrat Voters for Life demand their water back.
http://www.latimes.com/nation/la-na-detroit-water-20140629-story.html#page=1
Can you please explain your moniker?
He’s not allowed to talk about it.
Raymond K Hessel.
Go here and you can learn all you need to know about him in only three-and-a-half minutes:
http://vimeo.com/76448056
Why? Was he banned by Ben, or is your reply somehow related to the meaning of the moniker?
It’s from the movie “Fight Club”.
I saw that movie. Which one was Raymond?
Which one was Raymond?
LMGTFY:
http://lmgtfy.com/?q=Raymond+K+Hessel
(cheat-sheet: store clerk that Tyler threatens to kill)
I don’t remember that part. meh
Imagine the dismay of the entitlement class, which was led to believe the freebies would go on forever as long as they voted straight Democrat. Now they’re learning that their DNC plantation overlords were just the hired help, not the real masters - and that Wall Street views them as disposable once they start getting in the way of unfettered greed.
And more Democrat faithful thrown under the bus to satiate Wall Street’s “austerity” demands. I have no sympathy.
http://www.theguardian.com/world/2014/jun/28/chicago-schools-teacher-layoffs-rahm-emanuel-union
Prices are on their way back up to their permanently high plateau. They went down last time because of a perfect, stochastic storm that nobody could have seen coming. That was a global financial crisis with no known cause, and it can’t happen twice in one lifetime. Buying a house now is the smartest thing you can do. Any other activity is a sign of mental and emotional instability.
It is now appropriate for home-owning receptionists to make snotty remarks toward higher-level workers, but only if the higher-level person is a tenant. Actually, receptionists with “homes” should give basic life advice during out-of-work activities to tenants who probably make 3-4x what the receptionist makes. This goes double for receptionists who have always relied on their husbands to make all the money and financial decisions.
PEACE!
You hate men.
You hate men ??
Sarcasm ??
V does not hate men…She just calls out the double standard that exists in society…I have had the pleasant experience of meeting her personally…Very bright and quite attractive from this mans eye’s….
Good. Get a room again.
Agree. On the double standard part, never seen her in person.
Don’t worry GR. I hate everyone equally.
Take heart. The drop is occurring in the PHX area and you know it. With the flipvestors gone there is no real demand. The number of listing with price reductions is huge. A bit sticky at first just like last time though, but once the drop snowballs it will give those with good incomes a chance again.
A market full of homes with people who could not afford to buy them today is deviant and unsustainable.
I am seeing new for-sale signs being erected more than once per week now, just along my own personal routine routes. Like on my way to work, or to Sprouts, or on a walk, etc. I have seen some disappear, but those never got Pending or Sold signs. I think the landlords just decided not sell after all, and then rented them to the next person.
I think the landlords just decided not sell after all, and then rented them to the next person.
Maybe so, but this indicates that the asking prices need to drop and not everyone can just take down a sign and keep on renting it out. On a 300k house a few months vacant while waiting to sell and then getting a new tenant can easily set you 5 grand in the hole for just the vacant time. Those who have to sell or who want to capture small profit or avoid larger losses will set the market lower and lower.
Yeah, where have heard that “permanently high plateau” meme before? Oh yeah, right before the crash of ‘29:
http://www.iamthewitness.com/doc/1927-1933.Chart.of.Pompous.Prognosticators.htm
“Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months.”
— Irving Fisher, Ph.D. in economics, Oct. 17, 1929
“Ph.D. in economics”
He was a bit more than that — actually a historically famous professor at Yale. (And not only renowned for his famously wrong prediction!)
Whac - continuing from yesterday -
There is one very efficient way of widely dispersing money to increase GDP - thru the tax system.
Why is the Fed even involved ?
People who fail as badly as the Fed has are fired after less than a year. And they have been failing horribly for six years !
Thank you - I can answer my own question - but somebody had better start managing the economy better or there really will be problems counterfeiting will not smother.
“… but somebody had better start managing the economy better …”
Is it even possible that somebody can manage the economy at all?
I know there are a lot of people who THINK they can but given that the track record of economists isn’t all that great I just wonder if it is really possible for anyone to do it.
Feynman said something about someone could learn the rules of chess is an half-hour-or-so but could then spend most of his life studying how to play and still not become a Grand Master.
It is very unlibertarian to even think an economy should be managed. Managed = planned. Stalinism comes to mind.
It is very unlibertarian to even think an economy should be managed.
Of course economies should be managed. What successful modern economy was not “managed”? Good and productive economies are akin to a vegetable garden. An economy not managed is akin to a field of weeds.
You put too much energy adhering to labels instead of reality, history and human behavior.
economies should be managed.
BTW, a major aspect of our Constitution written by our founders is related to “managing” the American economy.
CONCLUSIONS
The movement for the Constitution of the United states was originated and carried through principally by four groups of personalty interests which had been adversely affected under the Articles of Confederation: money, public securities, manufactures, and trade and shipping: An Economic Interpretation of the Constitution of the United States, Charles Beard teachingamericanhistory dot org
All the central planners can’t create market demand for oligarch apologists and their book-length hagiographies.
http://www.zerohedge.com/news/2014-06-29/30-discount-book-and-still-not-cheap-enough
Failures of historic attempts at central planning come to mind.
You’d be hard pressed to come up with three more abject exemplars of crony capitalism in this country.
Yes, but there have been successes as well.
Bill
Managing the economy means playing within the rules, and those rules are too onerous for “libertarian” ingenuity because they suffocate often without reason.
In a democratic society “managing the economy” means government putting rules into effect that have meaning and make sense without inhibiting progress. Some cash helps too.
Can you honestly say the plethora of rules that exist are all meaningful and are enforced evenly ?
Central planning means the will of an ultra small group. Managing the economy is totally different.
You speak statist Patrick. I don’t grok statist. Sorry. Everything from spontaneous order (that is, without initiation of force) is…orderly. I do not like management at all. That requires initiation of force.
Whose head do you point the gun at Patrick. Why? How just is that?
I do not like management at all
Wait Bill. You “don’t like management”.
But you’ve worked for management for admittedly 30 years. If you don’t “like” it, how could you do it for 3 decades and still call yourself a libertarian?
Is 3 decades doing what you don’t like liberty?
People who fail as badly as the Fed has are fired after less than a year. And they have been failing horribly for six years !
The Fed hasn’t failed. On the contrary, it has succeeded brilliantly at doing exactly what it was surreptitiously created to do in 1913: enrich the .1% at the expense of the bottom 99%. It’s also inflicted a stealth tax called inflation by debasing the dollar’s purchasing by 98% since the Fed’s founding.
The Fed does not work for the people of the United States. It works for the banks. The banks do not think the Fed has failed them.
Why must my economic activity be managed by someone?
Clearly, you don’t know how the game is played. As George Carlin explains, there’s a club and you ain’t in it.
https://www.youtube.com/watch?v=kJ4SSvVbhLw
Because you operate your boat by good rules. The economy’s rules suck.
Where are you boating this summer?
Sandy. Lake Ontario. White sandy dunes. Protected anchorage at Sandy Pond. Rednecks and beachcombing.
Blue Skye
Top of Lake St Clair. Lots of activity on US side; great fishing on Canadian side. Great anchorages ie island with a fantastic beach, quiet river waters.
I have a spot in Port Lambton area if you want to tie up for a while (free).
We went off the rails somewhere. Technology used to be something that would lead to improvements in quality of life and productivity. Much of the tech improvement now seems to be a scam to continue selling to the rubes and to further the planned obsolescence shell game.
All this cell phone, tablet, entertainment app frippery providing little amusements amounts to no real improvement. Look at the kitchen. Basically the same dishwashers, stoves and fridges and other appliances as back in the 80s. Cars are the same. Air travel still takes pretty much the same amount of time.
We just seem to be developing more and better idiot boxes and food that is too tasty to resist.
Orwell seems more prescient by the day.
http://www.theguardian.com/technology/2014/jun/29/facebook-users-emotions-news-feeds
Suburbs in KC, elsewhere, see post-recession bounce
http://www.kansascity.com/news/government-politics/article637578.html#storylink=cpy
……As the Great Recession recedes, the suburbs are fighting their way back after losing luster among young professionals and baby boomers who embraced the energy of city living.
For generations, people fled cities for the suburbs, especially following World War II as the culture depended increasingly on the car and Veterans Administration loans made buying a house possible for more Americans.
Then the recession hit at the same time as a new appreciation for urban lifestyles emerged, especially among the young.
Recently, many of the country’s big cities reversed the longstanding trend in which they grew faster than their suburbs, partly because people were skittish about moving in shaky economic times.
The economy dampened the appetite for the suburbs among young adults. Many were unemployed or underemployed. Fewer jobs were available. Student-loan debt burdened would-be homebuyers.
Now as the economy lumbers back, pent-up demand for yards, garages, quiet neighborhoods and convenient places to raise the kids put the suburbs back in vogue.
As the economy gains momentum, our settlement patterns shift. More young adults are following their parents’ paths back to the suburbs as they marry, buy homes and have children.
Cities in 19 of the 51 largest U.S. metro areas grew faster than their suburbs from 2012 to 2013, down from 24 from 2011 to 2012. In contrast, only eight major cities grew faster than their suburbs from 2000 to 2010.
http://www.kansascity.com/news/government-politics/article637578.html#storylink=cpy
Nervous savers pulling their money as Bulgaria experiences its worst bank run in 17 years.
http://www.bloomberg.com/news/2014-06-29/bulgaria-arrests-two-men-amid-efforts-to-stop-run-on-banks.html
http://blogs.marketwatch.com/thetell/2014/06/29/facebooks-news-feed-manipulation-touches-off-firestorm/?mod=MW_latest_news
More of Facebook’s creepy attempts to manipulate users.
Don’t forget that Facebook was created by a creepy guy to give other creepy guys a means to assign ratings to coeds who weren’t interested in creepy guys.
Who remembers the savvy under-30 set who used subprime loans to snap up homes of their own during the pre-2008 period.
Whatever became of them?
I saw some of them the other day at the local carnival, scrambling under the Ferris wheel to catch the change that spilled from people’s pockets.
Student Loan Debt Could Hinder Housing Recovery
By Josh Mitchell
(full article at bottom of linked page)
“The homeownership rate among those under 35, meanwhile, has fallen to 36.2%, from a high in 2004 of 43.6%.”
Has the next housing recession started?
By Jonathan Horn
6 a.m., June 27, 2014
Homes are lined up near Carmel Valley. — K.C. Alfred
Q: Given that sales have fallen on a year-over-year basis for eight consecutive months, has San Diego County’s next housing recession already begun?
•Murtaza Baxamusa, directs planning and development for the Family Housing Corporation, of the San Diego Building Trades in Mission Valley:
No. Summer should tell which way the market is headed in San Diego. Unfortunately, projections of a spring recovery in home sales, including my own, were too bullish. The deadwood of distressed inventory took longer to burn off, the domestic market demand was not as strong as anticipated, and growth in sales tempered by an expected increase in mortgage rates. Nevertheless, the economic winds of consumer confidence, new construction and labor-force employment, are gently blowing in the right direction. There continues to be a healthy uptick in home prices and active inventory. So I remain optimistic about a continued recovery.
…
“Q: Given that sales have fallen on a year-over-year basis for eight consecutive months, has San Diego County’s next housing recession already begun?”
Just because demand is collapsing doesn’t mean that a recession has begun.
Economists “stumped”? Go figure.
Housing Market Fake-Outs Stump Economists
http://www.npr.org/2014/06/29/326571381/housing-market-fake-outs-stump-economists
Many homebuyers have been throwing down cold hard cash for their entire house purchase in recent years. Some are baby-boomers who sold a bigger house and are downsizing. Some are investors. Others are from outside the U.S.
“Top of the list in terms of cash sales in the first quarter was Florida, with 64 percent of all sales going to cash buyers, followed by New York, 59 percent; Alabama, 56 percent,” says Daren Blomquist, vice president of RealtyTrac, which did a study on cash purchases.
Many housing economists, however, think the numbers in that study are overstated — which suggests that even some experts aren’t certain about exactly what’s happening.
More than six years after the housing crash, economists are still trying to figure out what exactly is going on with the housing market.
And here’s the leading candidate for the next Fed-sponsored, taxpayer-funded bailout:
http://www.marketwatch.com/story/blackstone-readies-big-bet-hedge-fund-2014-06-29-191032150
If that big-bet hedge fund collapsed, could it bring down the entire global financial system? (Unless it was bailed out, that is?)
http://news.yahoo.com/insight-sectarian-genie-bottle-syria-iraq-141701979.html
Bullish! (Right?)
Even Joe Wiesenthal, a perma-bull shill, concedes the housing market is in the doldrums.
http://www.businessinsider.com/kb-home-ceo-on-first-time-homebuyers-2014-6
I can tell the housing market is headed into the crapper. How do I know? Because housing has gone from exciting to boring. Not long from now, the masses will be scratching their heads wondering why everyone thought housing was the best investment circa 2004.
Goldman Sachs starting to get nervous that its bought-and-paid-for Republicrat politicians might be unseated as populist anger at crony capitalism swells (and has already led to VA GOP primary voters rejecting Wall Street whore Eric Cantor):
http://www.zerohedge.com/news/2014-06-29/goldman-warns-political-risks-are-set-surge
http://www.forbes.com/sites/timworstall/2014/06/28/argentina-default-and-the-bond-vultures-no-we-dont-need-to-change-the-law/
Will be interesting to see what Argentina does tomorrow morning. And how it affects the markets.
Between the Argentina default story, the big 2.9% drop in Q1 US GDP, and the Qingdao metals scandal, it seems like there are lots of clouds on the international financial horizon.
Not to suggest that this could ever cause a stock market correction, or anything of that sort…
Not to mention this. Central banks can’t print oil, and $200 bbl would put a serious hurt on the global economy.
http://america.aljazeera.com/articles/2014/6/29/iraqi-forces-clashwithmilitants.html
Will be interesting to see what Argentina does tomorrow morning. And how it affects the markets.
Not tomorrow. Argentina does not play Switzerland until Tuesday.
The Financial Times of London
10:05pm GLOBAL ECONOMY
BIS warns over ‘euphoric’ markets
Macroprudential tools poor substitute for higher rates says ‘bank for central banks’
Central banks urged to end loose policy
Risk grows of disorderly EM bond sell-off
Lex Central banks – investing in equities
US and eurozone inflation prospects split
ft dot com
Markets Insight
Last updated: June 19, 2014 5:55 pm
Beware central banks’ share-buying sprees
By Ralph Atkins
Revenue raising could ‘contribute to overheated asset prices’
Like the rest of us, the world’s central bankers have had to cope since 2008 with low interest rates wiping out returns on their investments. They may attract little sympathy – who was it who slashed rates? But the consequences matter for markets, especially if central banks follow their own injunctions and move into riskier assets, notably equities.
An eye-catching report this week said that “a cluster of central banking investors has become major players on world equity markets”. An important driver was revenues foregone on bond portfolios.
Put together by the Official Monetary and Financial Institutions Forum, which brings together secretive and normally conservative central bankers, the report’s conclusions have authority. Some equity buying was in central banks’ capacity as, in effect, sovereign wealth fund managers. China’s State Administration of Foreign Exchange, which has $3.9tn under management, has become the world’s largest public sector holder of equities.
The boundary, however, with monetary policy making is not always clear. According to the Omfif report, China’s central bank itself “has been buying minority equity stakes in important European companies”.
Conflicts of interest
The irony of central bankers joining the global “hunt for yield” is delicious. Yet a big switch into equities is potentially problematic. With world stock markets hitting all-time highs, are central banks buying at the top and encouraging others to follow? Will they face conflicts of interest as they seek to pull economies out of their post-2007 sluggishness, with their responsibilities muddied – and their effectiveness lowered as a result?
Another worry is of sharp market corrections triggered by central banks’ actions or rumours about possible actions; transparency is not a strong point.
Central bank purchases of shares are not new. The Dutch central bank has invested in equities for decades. The benchmark for its €1.4bn portfolio is the MSCI global developed markets index.
The Italian, Swiss and Danish central banks also own equities. Across Europe, central banks face pressures from cash-strapped governments to boost income. As presumably cautious and wise investors, they have also been put in charge of managing sovereign wealth funds – Norway’s, for instance.
In Asia, the Hong Kong Monetary Authority launched a large-scale stock market intervention in 1998, splashing out about $15bn – and ended up making a profit. Since the Asian financial crisis of that year, official reserves have expanded massively – far beyond what might be needed in future financial crises or justified by trade flows.
While such cushions may provide stability, their management is harder when interest rates are at historic lows and liable to rise. “Blowing it is actually quite easy,” joked Julia Leung, a former HKMA official, at this week’s London launch of the Omfif report. For reserve managers invested in fixed income, she warned, “it will be a very bad year”.
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ft dot com
Economy
Aussie home sales fall for first time in 5 months
28 minutes ago
Is Australia’s property juggernaut running out of fuel?
New home sales down under fell 4.3 per cent in May from the previous month, the first monthly drop in five months, according to a trade body.
In a sign that the nation’s housing boom may have peaked, multi-unit sales dropped 16 per cent in May from April, signalling that the buy-to-let investors who traditionally buy smaller units are stepping back from the market.
Total home sales, excluding these small apartments, declined a much less dramatic 2.2 per cent in May compared to April, the Housing Industry Association said.
Geographically, the drop in sales was most substantial in mining-focused Western Australia, where sales of new homes fell 6.8 per cent, month on month.
Queensland’s housing market was the most robust covered by the survey, with sales gaining 0.5 per cent in May compared to April.
Australian property prices in the first quarter accelerated 10.9 per cent, year on year, leading the assistant governor of the nation’s central bank, Christopher Kent, to express concern.
everybody gets to be a celebrity when they grow up, right daddy?
everybody gets to be a celebrity when they grow up, right daddy?
What was his answer?
He answered: “You can be anybody you want to be on the internet, Lola.”
“What was his answer?”
Everybody get fifteen minutes.
Are you Andy Warhol’s son?
Everybody get fifteen minutes.
Updated for the spread of the Internet, the increase in mass-communications and the shortened attention spans of the populace, I believe it now should read:
“In the future, everyone will be world-famous for 15 seconds.”
only for 15 minutes
In June of 2013 Gold had to break through $1700 to break the long term downtrend. It didn’t break $1700.
Now in June 2014 Gold has to break through $1575 to break the long term downtrend.
Yet gold is up by 6% over the last 12 months now. Gold has flattened.
What catalyst can cause gold to go up sky high? Confiscation of our electronic assets (401k, IRA, brokerage accounts)? War? Massive corruption uncovered that shows a ginormous debt beyond anyone’s estimates? Massive tax hikes?
I think gold will meander around $1300 for a few years. But that makes it a good buy.
“What catalyst can cause gold to go up sky high? Confiscation of our electronic assets (401k, IRA, brokerage accounts)? War? Massive corruption uncovered that shows a ginormous debt beyond anyone’s estimates? Massive tax hikes?”
Sounds like some kind of ‘end of the world’ scenario might be necessary.