Bits Bucket for July 27, 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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Does anybody see any slowing in manufacturing? I am seeing that in the oil and gas industry, people have stopped buying big ticket items. Layoffs are coming.
Seems like the mantra is growth rather than sustainability.
This question has come up in the past: is continuous growth possible? The answer, IMO, is that it is definitely not possible to have growth over 5% for hundreds of years.
As production/ people become efficient all the mass produced stuff gets overproduced. Unless it is a consumable the demand for long lasting items should steadily keep declining. Granted innovation will create the need for some future demand, but for the owners of highly capital intensive equipment the incentive is to keep the stuff working/ running for multi-decades, as seen in the O&G industry.
what is growth?
Is it more buildings going up?
Is it more stuff being sold?
Is it more services being offered?
Is it more people working?
Where is all this growth going on?
I have a hand full of clients in construction, industrial heating/ cooling, oil and gas drillers, etc. and they all report being slammed.
It isn’t solely local activity either as they work all over the US.
That being said, until people can go back to work at meaningful wages, the so called recovery will continue to ring hollow for many.
And you think wages will double or triple to meet grossly inflated housing prices?
Of course not. Housing prices will continue falling to meet wages.
“Does anybody see any slowing in manufacturing? I am seeing that in the oil and gas industry …”
As for the slowdown in the oil and gas industry, here’s something interesting:
http://www.zerohedge.com/news/2014-05-30/us-gasoline-consumption-plummets-nearly-75
Note, in the article, what’s going with money velocity.
I really do not know where this guy gets his numbers. LA has higher unemployment than the whole country. From an anecdotal point of view, I would say traffic in LA has gone back up to those heady days circa 2006-7. Same thing in Houston.
Even considering an improvement in fuel efficiency of these modern cars, the 65% collapse in consumption is rather difficult to believe. If it were true then most of the smaller towns would have to see a 80% reduction in consumption and hence in commuting.
I would put forth the argument that M2 velocity has little to do with consumables. People have to drive to work or conduct business. And I have a hard time thinking that fuel consumption for recreation is a big chunk of overall fuel consumption.
People have to drive to work or conduct business ??
75 million baby boomers will be driving less & less as each year passes…
Complete BS. You know sometimes you have to apply a little common sense to claims. There would hardly be a gasoline station left if demand had dropped off 75%. The EIA is a little slow on its data but it shows a 6% decline between 2007 and 2013, this would include the heart of the recession and gasoline consumption has been rising since then:
How much gasoline does the United States consume?
In 2013, about 134.51 billion gallons1 (or 3.20 billion barrels) of gasoline were consumed2 in the United States, a daily average of about 368.51 million gallons (or 8.77 million barrels). This was about 6% less than the record high of about 142.35 billion gallons (or 3.39 billion barrels) consumed in 2007.
Also from the EIA showing increasing gasoline consumption, if you check out Barron’s magazine you will see we are buying less fuel efficient cars and more trucks.
Total U.S. liquid fuels consumption rose by 400,000 bbl/d (2.1%) in 2013. Consumption of hydrocarbon gas liquids (HGL) registered the largest gain in 2013, increasing by 150,000 bbl/d (6.4%). Total consumption is expected to fall by 10,000 bbl/d in 2014, with declines in the consumption of residual fuel oil and unfinished oils offsetting increases in distillate fuel and gasoline. Total consumption grows by 70,000 bbl/d in 2015, with HGL consumption increasing by 80,000 bbl/d.
Motor gasoline consumption grew by 90,000 bbl/d (1.1%) in 2013, the largest increase since 2006. Motor gasoline consumption grows by 30,000 bbl/d in 2014 and then falls by 10,000 bbl/d in 2015 as improving fuel economy in new vehicles increasingly offsets highway travel growth. Distillate fuel consumption increased by 90,000 bbl/d (2.5%) last year, reflecting colder weather and economic growth. Consumption of that fuel rises by 120,000 bbl/d and 60,000 bbl/d in 2014 and 2015, respectively.
“Complete BS. You know sometimes you have to apply a little common sense to claims. There would hardly be a gasoline station left if demand had dropped off 75%’”
I see from your response that you did not read the article. If you did then right away you would have come across this paragraph:
“Obviously, even in the most-nightmarish economic Armageddon, a (relatively short-term) 75% collapse in gasoline consumption is simply not possible. Unless we were dealing with a nation whose economy had been suddenly ripped apart by civil war, or some small nation devastated by a massive earthquake or tsunami; it’s simply not possible for any economy to just disintegrate that rapidly, without there being some ultra-powerful exogenous force also at work.”
No I did read it and I read this claim:
Since the beginning of “the U.S. economic recovery”; U.S. gasoline consumption has plummeted by nearly 2/3. As the pseudo-recovery began, and supposedly “strengthened”; U.S. refineries were ordered to fill up the inventories of their dealer network, in anticipation of the increased gasoline consumption which would have occurred in any real “recovery”.
And that is a complete BS statement or are you trying to mislead people since I have demonstrated the inaccuracy of your link.
What he tries to do is create a straw man about a 75% decline and than tries to sound reasonable by “only” claiming 66 2/3 decline, the headline misleads the most but the entire story overstates the decline by an order of magnitude, it is loony tunes.
Complete BS. You know sometimes you have to apply a little common sense to claims ??
Could say your claim is BS also A-Dan…
The United States Department of Defense is one of the largest single consumers of energy in the world, responsible for 93% of all US government fuel consumption in 2007 (Air Force: 52%; Navy: 33%; Army: 7%. Other DoD: 1%)
93% of government use but what percentage of overall use? The military is not using a high percentage of overall demand. You really need to stop relying on MSNBC it is not accurate and it is not news it is opinion.
http://www.dailyenergyreport.com/how-much-energy-does-the-u-s-military-consume/
From a link that will soon post:
The DoD accounts for less than 2 percent of the US energy consumption and more than 93 percent of the U.S. government energy consumption
I see a major slowdown in the stock prices in the staffing industry. I saw it in staffing itself last year as the newbies low-balled themselves and priced the veteran consultants out of the job shopping.
7 months into the year and my former staffing company stock is priced less than 1/2 of a percent higher than on the first trading day in January, although at one point this year was up by 15%. And even though it reported out-of-the-ballpark earnings in the last earnings report the investors did not give much of a hoot. They investors know the winds of change are coming in.
Kelly Services, a competitor firm, was praised by the analysts in early January as the best staffing stock to own. It flopped. Was above $24 January 2, tumbled to $23 a few weeks later, above $25 in April and is slightly below $17 now. Down 33% from January 2.
Manpower is down 5% from January. Although both Kelly Services and Manpower had a bad 2012 year in stock performance, my former staffing company had a great five years with every year end higher than the beginning. It’s IT and health care staffing. IT and health care are the cream of the crop. So when the stock performance of a staffing firm in those areas goes south, while the others go south, these converging signs don’t bode well, at least for the staffing industry itself.
After Helmsley’s death, her Greenwich estate was originally listed for $123 million, but several price cuts led to its eventual sale to the current owners, for $35 million.
http://www.zillow.com/blog/leona-helmsleys-home-listed-155969/
Pretty nice woodwork…With that said, you better get some nice woodwork for 35-mil…
“Pretty nice woodwork…”
+1 Indeed. However those bookshelves are so twentieth century that they remind me of those lawyer ads where the mouthpiece is staged with the wall of law books.
The only thing that has grown is the feds balance sheet. From 1/2 a trillion to over 4 trillion. Currency created out of nothing to plug holes in the banks.
If we are in a recovery why are interest rates still at zero? I heard something yesterday that was kind of interesting.
We could have another recession when we have never gotten out of the previous one. That would be the first time that has happened.
Inflating asset prices such as stocks and homes has been what I’ve seen.
Inflating stocks to get some kind of trickle down wealth effect. Most people dont own any stock, they have been screwed too many times.
Inflating home prices so the banks can unload homes at a higher price.
Wealth should be measured as assets less liabilities. Growth should be measured as increased income less debt accumulated. Math just isn’t in favor during a mania.
“We could have another recession when we have never gotten out of the previous one. That would be the first time that has happened.”
Maybe the wrong word is being used here; Maybe the word that should be used is the word “depression”.
IMO a recession is business cycle related while a depression is more closely associated with a longer-term secular cycle - a cycle every other generation or maybe every third generation gets to experience.
These depressions tend to “re-educate” people’s thinking a bit. The generations that grow up during these depressions tend to think about things a bit differently that the preceding generations.
The generations that grow up during these depressions tend to think about things a bit differently that the preceding generations ??
Well, I think the meltdown in 2008 was about as close as you can get to a depression…And, IMO, we are seeing the “Generational Effect” of that meltdown and aftermath right now in the falling household formation and falling home ownership numbers with people in their 30’s…
Contrary to Obama propaganda the recession was not as bad as 1973 measured by the fall off of GDP, however the recovery has been the weakest in modern history and that is all on Obama. Everyone of his policies has been counterproductive.
It’s all on yer mom, PropagandaDan.
“We could have another recession when we have never gotten out of the previous one.”
Then it would be the SAME recession, not a new one.
No one is trying to create a trickle-down wealth effect. Why would they? The uber-rich don’t believe that they would make money off of that, do they?
Hey Ben…A few days ago you responded to my post saying that most of the foreclosures were underwritten as “Prime” loans…Wouldn’t you agree that the first part of the housing meltdown would have been the highly leveraged loans to people who had no capability to service those loans particularly in area’s like Las Vegas ?? With the falling values this then engulfed some that would have been considered properly underwritten loans…I can see that in many places, even if you put a 30% down payment, at the height of the crisis you could have easily been underwater with your 70% LTV….
‘the first part of the housing meltdown would have been the highly leveraged loans’
What else would you expect?
‘the falling values this then engulfed some that would have been considered properly underwritten loans’
So why did they stop making payments? ‘Oh Mabel, our neighbor is underwater, don’t make out that mortgage check.” Subprime was contained, right? That’s the second best joke ever made.
Jeebus, this is all so unnecessarily convoluted. But that’s not by accident. The PTB and media work around the clock on propaganda. Here’s an example:
‘Take a good look at the chart above and you’d be excused for concluding that we’re in the midst of the greatest stock market bubble of all time. Not only has the S&P 500 fully recovered from the financial crisis, it’s a staggering 30% higher than the peaks of the Internet and housing bull markets.’
‘But is this really the case?…While it requires some explanation, the answer is that we’re most likely not experiencing another irrational inflation of stock prices. The market’s record level is instead a predictable response to the Federal Reserve’s policy of keeping interest rates at historically low levels.’
‘it’s important to appreciate that monetary policy itself doesn’t cause bubbles. This may sound strange if you’ve read much about the financial crisis, given that the Fed is often blamed for both inflating and popping the housing bubble. But this narrative is flawed’
‘the problem with this chain of events is that it excludes a number of critical pieces. Most importantly, it wasn’t low interest rates that caused so much havoc; it was the proliferation of subprime mortgages.’
See, it’s a “narrative”. It wasn’t stupid high prices that were, or are, a problem, it was the loans. The logical conclusion is, the Federal Reserve and the government did nothing wrong. And are doing nothing wrong now. And by dismissing the facts as a “narrative”, it throws in a bit or conspiracy theory to boot.
I’ve been pointing this out for a while. Think back; a few years ago you would read UHS says stuff like - “those prices were an illusion, they weren’t real”. Well those prices are back in some places and are way up in many. Yet bubble price levels are just a goal post of “recovery” now. Denver has recovered, Florida is just getting started.
30% down? Who the heck is doing that?
‘Conventional or “regular” loans are not insured by the government. There are three government-backed mortgage types: FHA, VA, and USDA.’
‘HUD (Department of Housing and Urban Development) administers the Federal Housing Administration (FHA) loan program, available to first-time and other buyers who cannot afford a traditional twenty percent down payment. The program – intended to stimulate the housing market by making loans accessible and affordable – allows buyers to purchase with down payments as low as 3.5 percent of the purchase price.’
‘Military service members and their families can qualify for the U.S. Department of Veterans Affairs (VA) loan program that is also guaranteed by the federal government. Buyers can receive up to 100 percent financing for the purchase of the home, i.e., they can purchase a home with no money down.’
‘The United States Department of Agriculture (USDA) also offers a loan program for rural buyers with “a steady, low or modest income” who are unable to secure housing through conventional financing.’
‘Conforming or Jumbo Loans: refers to the size of the loan and the underwriting guidelines established by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).’
‘Also worthy of note, are HomePath Mortgage Products that are specialty programs available only on Fannie Mae-owned homes. These properties are exclusively foreclosed homes and homes taken back as deed-in-lieu of foreclosure or forfeiture. The Home Path financing programs are designed to help sell these homes and have several additional benefits: 5 percent down on owner-occupied properties, no PMI, no lender-required appraisal, and flexible mortgage types. Investors can also take title as an LLC and can possibly finance up to twenty properties.’
Did the Fed stop buying MBS from Fannie Mae and Freddie Mac? And did the GSEs stop securitizing and federally insuring mortgages?
Who knew?
The MBS issued by Fannie and Freddie are not conventional mortgages.
I thought the Fed bought the MBS and Fannie and Freddie bought and federally insured conventional mortgages (those subject to the conforming loan limit).
But I don’t claim to be an expert…
“Jeebus, this is all so unnecessarily convoluted. But that’s not by accident. The PTB and media work around the clock on propaganda.”
We have a few working for them right here on this blog.
‘We have a toolbox of measures which can be used to cool down credit-fuelled demand…We will not hesitate to use them”. With these words, Central Bank Governor Patrick Honohan today reminded readers of this paper that, just as it is the Pope’s job is to be a Catholic, a Central Bank governor’s job is to nip credit-fuelled inflation in house prices - or any other prices for that matter - in the bud.’
‘No problem there. But context is everything. He may not wish to create that impression, but his remarks lend fuel to say that there is credit-fuelled demand when in fact there is nothing of the sort. Nowt. Nada. Nichts.’
‘Sure, house prices are up by 12.5pc nationally in the year to June and 23.9pc in Dublin. These rates have not been seen since the boom that preceded the crash. According to the “my dog has four legs, all cats have four legs therefore my dog is a cat” mindset of some commentators, this means another boom is upon us. And possibly, in their way of thinking, another crash.’
‘Given the heterodox lapses of the past, Patrick Honohan is right to reaffirm his doctrinal purity. But as sure as the Pope is a Catholic, there ain’t no boom.’
‘Besides the case for ending the agony inflicted on homeowners in negative equity, there are compelling economic reasons to suggest that far from worrying about prices being driven up by a non-existent credit bubble, we should be worried about them being kept artificially low by a dysfunctional banking system.’
‘With every percentage rise in house prices, thousands of homeowners are released from the chains of negative equity and given the confidence to spend money. And a normalisation of the housing market can lift construction out of its current state of chronic underemployment and low output.’
‘No one wants a “feel-good factor” induced for electoral purposes. But a prudent “feel-OK” factor is desperately needed. And if that happens to benefit politicians as well, that is incidental.’
Another slant on the propaganda:
‘Peter J. Wallison holds the Arthur F. Burns Chair in Financial Policy Studies at the American Enterprise Institute, a Washington, D.C., think tank. He spoke to the Trib regarding the failings of the Dodd-Frank Wall Street Reform and Consumer Protection Act.’
‘Q: Four years after this law was approved, concerns are still being expressed that this is not an effective piece of legislation. In your mind, what are Dodd-Frank’s primary flaws?’
‘A: I wouldn’t say that this is not an effective piece of legislation. I would say that it is a destructive piece of legislation, because it has slowed the growth of our economy substantially and caused the lack of jobs that has characterized the recovery since 2010…it is based on the wrong conception, the wrong idea, about what caused the financial crisis.’
‘The fundamental problem with Dodd-Frank in my view is that it is directed at imposing very tough regulations on the financial system, when the cause of the financial crisis was not loose regulation of the financial system but rather very poor government housing policies.’
‘My view would be that we ought to repeal the entire law and start all over again, but looking then at the real causes of the crisis, which was government housing policy.’
‘That means putting aside tougher regulation of the financial industry in order to develop policies that will maintain a stable and high quality housing system in the future.’
huh…. these guys seem obsessed with “housing policy”. Do you think it’s because housing a cash cow for govt and financiers? Ironically, it is the outcome of government “housing policy”(inflated prices, excess inventory, bottlenecked markets) that actually requires someone to intervene to correct it.
Whatever you do, don’t gamble on a house at any price and stay out of the way of this thing or you’ll be crushed by it.
‘One truth was that in Cyprus we did not have a functioning banking system, because banks operated, solely, as debt-collection agencies. The granting of new loans and facilities had become a negligible part of the business as banks focused on loan recoveries.’
‘People will be outraged that taxpayer’s money was used to save the co-ops so they could repossess homes, but what would be the alternative?’
‘The argument constantly used is that the banking sector must be supported because if it were allowed to collapse the consequences for the economy would be even worse. However, the way things are going there will be many that will start to question this reasoning and argue that the situation could not become any worse if the banks were left to sink. But the truth is things would become worse as the economy would collapse completely and debtors would still have to repay their loans or face foreclosure.’
‘Unfortunately, there is no alternative to keeping afloat the debt collection agencies formerly known as banks, even if the cost, economic and social, for doing so keeps on rising.’
“…but rather very poor government housing policies.”
Which nobody in power has bothered to scrutinize or repudiate.
Hence the same policies which led to the crisis can gradually come back into play during the so-called recovery.
‘Unfortunately, there is no alternative to keeping afloat the debt collection agencies formerly known as banks,…’
Are banksters the new repo men?
To summarize our Irish independent journalist, “If you even mention the giant housing-bubble elephant that is standing in the middle of this room, then Ima call you stupid.”
Good form, Irish independent journalist, good form.
Any thoughts on how much longer from now anyone will be able to tell whether the program worked?
Bernanke is getting a bunch of money for talking for 15 minutes. Success!
who the h@ll is listening to him?
I guess there is no higher success for a former Fed chair than rock start status plus the potential to prostitute 15 minutes of time for $200K in speaking fees.
look at all the youtube videos of blown calls. He is not an economist.
the last prop for the economy was oil and natural gas drilling, I have been talking for a number of months that I was seeing the rig count leveling out. We now have vehicle sales leveling out, housing construction falling and oil and NG drilling leveling, 2% or less growth in the GDP is our future without serious policy changes.
“… 2% or less growth in the GDP is our future without serious policy changes.”
And just what policy changes do you have in mind?
Personally, I think we have to get away from the idea that all things economic can be “managed”.
Supply side economics and entitlement reform. We need to make manufacturing cost effective again. Obama knew what to do, Bowles/Simpson told him, but despite having a Congress overwhelming Democratic while Reagan never had the House during his entire administration and the Senate just a few years, Obama did nothing but play golf while Rome burned. A good start would be to repeal every law passed during the Obama administration starting with Obamacare and Dodd/Frank.
What happened to make manufacturing less cost effective, beginning in the early 1980s? Was it the decimation of our perfectly sound, succesful, and necessary system of tariffs? Don’t bother answering; the answer is yes.
2% or less growth in the GDP is our future without serious policy changes ??
IMO, Policy changes will come in 2017 if we can somehow “limp” are way to that date without another meltdown…I see, and my personal actions will reflect my anticipated major overhaul in Tax Reform and some kind push into National Infrastructure (WPA) like program…I also see a shrinking of the military budget and a re-think on people who have federal convictions for victimless crimes…In our society today, due to technology and potential liability, we have rendered these people marginally employable…
The 2016 Presidential debate will be starting soon…The candidate who puts forward a vision for the all the above IMO, will win in a landslide….There will be a lot of unhappy campers with the loss of their tax advantaged perks but the “majority” of americans will be better off particularly the 20’s,30’s & 40’s….
The repub’s are dead…They will trot out their same old slate with their half-governer from alaska as their keynote….Will see what Hilary does…I think she will move to the middle pissing off many on the far left…If she doesn’t, I think it opens the door for someone like Paul Ryan….
Big change is coming…
You do realize that 20% or more of the people in jail for “drug” crimes have a criminal history of rape, murder and aggravated assault with a weapon? As California has released people its crime rate is moving up. Spending on the military is now considerably behind (1) social security spending (2) medicare/Medicaid spending. Both of them alone are much higher than military spending. Europe has virtually no military and it is completely broke and has higher debt than we do. The welfare state is over and it failed, since the average IQ of this country has been dropping for decades maybe people will vote for more free sh*t but there is no money to pay for it since growth is less than half of what it was under Reagan. Kill capitalism and you kill the golden goose that pays for free sh*t.
China understands and this article is for mighty mike and his comment that government banks were not consistent with capitalism. I said that China was moving toward capitalism and this is just another example and it is happening even faster than I imagined. China is allowing private banks:http://www.chinadaily.com.cn/business/2014-07/26/content_17928463.htm
Um, yes, we have been regaled with countless articles detailing the shenanigans of China’s shadow (private) banking system thus far. You don’t just throw an unregulated loan shark into a communist system and call it capitalism. That is better known as corruption. Like, “My high-ranking Communist Party uncle let me have a private bank so I could launder his bribe money for him.” That sort of thing.
Sorry you need to reverse social security and Medicare/Medicaid. Just a few years ago that was true but with the increase in the use of Medicaid under Obama that is no longer true.
Spending on the military is now considerably behind (1) social security spending (2) medicare/Medicaid spending ??
Add in the 240,000 strong DHS and where is it…Then add in the War on Drugs and where is it ??
We spend more than the entire world combined on the military and passing laws that make everyone a potential criminal…
You do realize that 20% or more of the people in jail for “drug” crimes have a criminal history of rape, murder and aggravated assault with a weapon?
And you do realize that means there is 80% left don’t you…
Yes but even those 80% are evaluated by probation and parole before sentencing and even though they do not have a violent criminal record, their probation officer is probably recommending jail usually because they have gang links or some other factor that makes them a threat to society. The federal system may have some people incarcerated that do not belong there. However, most states have a shortage of beds and if you are in jail it is usually because you are perceived as a threat to society.
their probation officer is probably recommending jail usually because they have gang links or some other factor that makes them a threat to society ??
What a bunch of friggen BS….Its about money A-Dan…From top to bottom our criminal justice system is about money not about keeping us safe…Big-Old Capitalist like you should appreciate & understand that…
“You do realize that 20% or more of the people in jail for “drug” crimes have a criminal history of rape, murder and aggravated assault with a weapon?”
Implies that they belong in jail even though not convicted of those crimes.
Ha! PropagandistDan is not a capitalist. He argues more and more for communism every day. He thinks the United States would be better off if we had government-owned banks. He wants a 0% corporate tax rate, since that’s what the (government-owned) corporations in China pay.
Like he is ever going to acknowledge the OBVIOUS propensity of a for-profit justice system to maximize the number of profit-making prisoners.
You do realize that 20% or more of the people in jail for “drug” crimes have a criminal history of rape, murder and aggravated assault with a weapon?
Back during the days of Prohibition, it’s possible that many of the people locked up for possessing, producing or selling alcoholic beverages also had violent crimes in their criminal records.
What about the other 80%?
Europe has no military? Putin might disagree with you.
Obvious not or he might not be so bold and successful.
Maybe the crime rate is up due to decriminalized illegal immigration. Correlation does not prove causation, PropagandaDan.
While there are no free lunches due to gamblers there are cheap lunches at the casinos. I am going to eat salmon at Burger King prices.
The Beijing Bubble: Will China’s Housing Addiction Damage the Global Economy?
July 24, 2014
“The sad fact is that much of the housing construction activity in China over the past several years was neither rational in economic terms, nor sustainable in terms of basic financial mechanics.”
Christopher Whalen
For some time now, a number of analysts have been warning that the boom in China’s housing sector could be the catalyst for a major economic collapse in that country. Such warnings are probably overdone, however, for the simple reason that the Chinese housing market is neither free, nor does it really reflect market forces. But that does not mean that the slowdown in China’s housing sector is not an ominous development.
Since the economic crisis began in the United States and Europe in 2008, the global economy has undergone a massive change, with exports by the developed nations falling and nations such as China scrambling to adjust to this reality. In order to avoid the paramount threat of political instability implied by falling export earnings and employment, China launched into a period of massive internal investment and development that not only caused a bubble in domestic housing prices, but distortions in global markets for commodities and even housing around the world.
China’s National Bureau of Statistics reported a surge in home sales after the 2008 subprime crisis, followed by a collapse in volumes that saw sales actually fall in the first half of 2013. Much of the construction and sales of housing in China was fueled by a vast increase in credit provided by China’s state-controlled banks and companies, this again following the imperative of creating growth in order to offset the decline in earnings from exports.
Esther Fung of The Wall Street Journal reports that the slowdown in China’s housing market has had a ripple effect throughout the economy, causing a decrease in spending for goods and services that runs counter to official targets for growth and employment. But the sad fact is that much of the housing construction activity in China over the past several years was neither rational in economic terms, nor sustainable in terms of basic financial mechanics. But that does not mean that China is facing a Western-style financial correction, much less a collapse.
Empty buildings and whole cities testify to the massive misallocation of resources in China, all steered by an authoritarian regime that is concerned first and foremost with political stability as opposed to economic sustainability. China’s housing market, which has only existed for the majority of Chinese since the mid-1990s, has been fueled by new construction driven by a natural desire of Chinese to improve their standards of living. After 2008, when economic activity in China actually fell, government agencies at all levels frantically targeted housing as a key part of the economic rescue plan.
The decision by Beijing in 2009 to spend nearly four trillion yuan on investments in basic industries was mirrored by regional governments, creating a massive increase in domestic spending that helped to blunt the effect of the global recession on China’s economy. In that year, nearly one-third of the credit provided by Chinese banks was related to real estate, and this allocation, if anything, has only increased since then. But Western observers should be careful not to think that a surge in “lending” by state-controlled banks and companies will necessarily lead to a Western-style correction, as bad loans cause capital losses. In China, the Communist Party simply allocates more resources to paper over credit problems.
…
I read the first and last paragraphs of this article. It seems that the author does not feel free to speak his mind clearly. He laces every negative connotation with the reassurance that the Communist party has complete control over everything that happens and, therefore, is capable of preventing anything bad (like a housing collapse) from ever occuring. I’m not quite sure if the author buys this tripe, but it would take nothing more than an airhead to counter it. If the Chinese government is so perfectly “in control”, then why do bad things often happen in China?
The same argument was made in the USA about the uber-rich. We could never have a drop in house prices or stock prices, since that would hurt The Ones, so The Ones would not allow it. Well, I don’t know if the The Ones were really hurt by the 50% crash, but it certainly happened, didn’t it?
More signs of a collapsing Chinese economy (Not):
http://europe.chinadaily.com.cn/business/2014-07/28/content_17932440.htm
Excerpt from a link that will soon post. Kicking your azz Whac 24/7
ECONOMY LOOKS UP
The rising industrial profits added to the evidence that the worst of the slowdown that hit China’s economy during the first quarter is over.
On July 16, the NBS revealed that China’s economic growth rebounded to 7.5 percent in the second quarter, showing strong resilience after a gloomy Jan.-March period.
HSBC China’s reading of the country’s manufacturing purchasing managers’ index for July rose to 52 points, its highest since the start of 2013.
Major financial institutions have raised their predictions in light of improving economic conditions and effective targeted stimuli from the Chinese central government. Merrill Lynch raised its 2014 annual GDP growth forecast for China to 7.4 percent, and HSBC upgraded its full year forecast to 7.5 percent.
The institutions said they expect the government to continue its policy stance and said the official 7.5-percent full year growth target is likely to be realized.
“Kicking your azz Whac 24/7…”
Well, not actually. That direct feed you have into the Commie Party official propaganda site isn’t an azz kicker. I doubt anybody in China actually believes the bilge their government publishes.
Another excerpt:
China’s industrial profits continued to grow at a faster pace in the first half of this year, the latest evidence that the world’s second-largest economy is gaining strength against downward pressures.
Industrial businesses saw their profits rise by 11.4 percent year on year, with the growth rate hitting a new high this year, data released by the National Bureau of Statistics (NBS) showed on Sunday.
Total profits of industrial companies with annual business revenue of more than 20 million yuan (3.2 million U.S. dollars) reached 2.86 trillion yuan, the NBS said.
Profit growth was up markedly from the increase of less than 10 percent recorded in the first five months.
The faster-than-expected growth was due to strong growth in June, when industrial firms raked in 588 billion yuan in profits, up by 17.9 percent from a year ago.
crater
let em crater then buy later for 65 percent less.
welcome to central planning 101 son.
…. and rent for half the monthly cost.
Region VIII checking in.
Region IV checked in and accepting Baby Jesuses by the bus load.
Region IV out.
Pelosi: We should treat illegal immigrant children like Baby Jesus
By LU Staff on July 23, 2014 at 10:01 am
Read more at http://libertyunyielding.com/2014/07/23/pelosi-treat-illegal-immigrant-children-like-baby-jesus/#51ptmPzplKCXisKF.9
From what I understand Sandy Pines in Tequesta is a very expensive place for teenage kids with problems and it is one of the places excepting these “children”.
By Michael Hausam 3 weeks ago
In response to the recent flood of illegal immigrants across our southern border, the Obama administration has been relocating thousands of them even deeper into the U.S. While some of these efforts have received significant news coverage, some have received none at all.
Here’s an interactive map that shows the various locations across the country where these events are occurring. Click on the markers to read the details of each detainment facility:
http://www.ijreview.com/2014/07/154021-interactive-map-shows-illegal-immigrants-2/ -
The 2014 Souper Bowl Coke commercial, in case you forgot:
http://www.youtube.com/watch?v=boicG2puD_4
Roger we confirm your location
Oil City plan:
http://erie.craigslist.org/reo/4586261661.html
What does “Oil City” mean anyway? This must be an inside HBB phrase, like “candy crapping unicorn” and “harpsichord.” I cannot find it in the urban dictionary. I kind of figure it means someone’s plan for getting out of the rat race and living on what savings they have.
I kind of figure it means someone’s plan for getting out of the rat race and living on what savings they have.
Yes that is what it means. I think a poster use to talk about oil city, Penn. I have not been there but have driven past its exit on the Interstate. The area look pretty depressed around the highway.
I can not remember the HBB’ers handle, but he had a bug-out plan of buying a low cost beater house in Oil City as an alternative to paying McMansionville prices. Maybe he wanted to just get off the radar of conspicuous suburbia. IDK, but the ‘Oil City plan’ is a meme now.
“I cannot remember the HBB’ers handle”
ByeFL or Bye Florida
I found there is also an Oil City in Oklahoma. But at one time I thought it was a euphemism for Midland or Odessa, Texas. I drove through those places once. A wildcatter’s paradise I would guess, but not much to sneeze at in either place.
Bill, yes, it was ByeFL (I still think it was a she) who wanted to leave Florida and move to Oil City, Pennsylvania, because housing was extremely cheap. Oil City is code for any one of thousand towns with cheap COL.
I remember picking up on the meme in 2007-ish (prices were still high) when I combined a few concepts:
1. I looked up houses in Buffalo and was stunned to see that they were $60-70K.
2. I remember an article about someone in CA who had a ~1.5 hr commute to his “job on a loading dock” so that he could afford his house.
3. Katrina-fueled interest in prepping and self-sufficiency.
I thought to myself: why is this guy enduring a hellish commute to a freakin’ loading dock? It’s not like this guy works at Google and he has work on that exact campus. There must be a million loading docks in this country. Why CA? Why not work at a loading dock in… Buffalo? Or Lexington? Or Oil City, or [pick some town in bumble-F AZ]? The dock worker could buy a house a 2x income and financially actually be better off than a $80K cubicle dweller with a $275K condo and college loans. Add in a spouse at Wally World, and out dock worker is actually getting ahead. Or, if someone had savings, they could quit work and grow food and play like it’s go-time. Mother Earth News is all over this concept.
At the time, one of the major obstacles to the Oil City Plan was lack of health insurance. The low-wage employers didn’t really offer it, and then you’re stuck. Say what you will about Obamacare, but for the first time, it’s possible to go Oil City and at least get affordable catastrophic.
Say what you will about Obamacare, but for the first time, it’s possible to go Oil City and at least get affordable catastrophic.
As long as ACA stays put. It gives great incentive to people to NOT have to work for an employer if they could work for themselves. Personally, I don’t expect an employer to do much nowadays other than not shackle you down and whip you. Libertarian society morph coming up next?
Oxide, the real problem is not that he does a hellish commute to his job at a loading dock. The problem is that he was a slave to real estate to begin with, when instead he could have simply moved to an apartment near his job at the loading dock.
This afternoon I chit chatted with a neighbor at the laundry room. We seem to cross paths Sunday afternoon. So I kindly asked if he was ready for the work week. He says actually he already started today. He works at the AM / PM mini-mart at the corner. His commute is by foot and well within five minutes.
I’m not the only one who moves to a rental where ever my next job is, apparantly. The guy probably has a car but hardly ever drives it. A year ago I was commuting 40 miles each way for five weeks. Then got this apartment here 8 miles from my job. My 11 year old car has just over 80,000 miles on it.
That’s how it’s done by the smart money in Southern California. It’s far cheaper to rent than to buy. And STEM people here move around every three or four years. Sometimes across the basin to the next job 60 miles away. They keep their commute times down to less than 20 minutes so that they can spend quality time working off the body fat. The plus is that they still live cheap, fatten up their 401ks instead of their stomachs, and do this for 30 years or so before taking their 401ks to a low tax state and taking distributions in the low tax state instead of Taxifornia.
All roads just lead to YOU, don’t they. We’re talking about a dockworker, likely with a family, who wants to own a house. And in your answer, this low-pay dockworker inevitably morphs into YOU: single, STEM, high paid, big 401K, 1-2 bed apt for 30 years, etc.
The problem is always the same: the person is — inexplicably and shockingly — not YOU. The solution is always the same: he should become YOU. Wasting his life in some pool, getting off on dreaming about not paying taxes. What a triumph.
Bill, you too are a slave. You may not understand why, but you are.
“We’re talking about a dockworker, likely with a family, who wants to own a house.”
Like you, he “wanted” a house. He pulled on mommys skirt real hard(like you) and is now reaping the rotten fruit(like you). And good job developing the oil city narrative. I’ll do an even better job exposing it as another fantastical fraud.
They keep their commute times down to less than 20 minutes
Or this makes it easier to rack up overtime who are they going to call first in an emergency the guy who lives the closest…always worked for me……
Dont see any bars on the windows that’s a good sign, down the block looks like a few Irish bars restaurants…..good sign
Close to main street and 2 blocks away http://www.after55.com/listing/24004/twinbrook-medical-center
Except to be very picky, this is an end-unit rowhouse. “True” Oil City houses (ha ha) are typically SFH on enough land to grow food.
‘Except to be very picky, this is an end-unit rowhouse’
It is a starter Oil City house.
Miguel Torres, that would be one hell of a handle.
‘COYOTE’ ABANDONS MOVING VEHICLE FULL OF ILLEGALS
Human smuggler makes daring, but futile escape attempt
‘Coyote’ Abandons Moving Vehicle Full of Illegals
Image Credits: Canadian Border - Wikimedia Commons
by ADAN SALAZAR | INFOWARS.COM | JULY 27, 2014
South Texas Border Patrol agents arrested a young smuggler on Wednesday after he attempted to bail on his human payload while his vehicle was still in motion.
Agents pulled over Miguel Torres in the long and vacant stretch of land north of the Rio Grande Valley near Norias, Texas, after noticing his van was “riding low.”
Miguel Torres / Cameron Co. Jail
Torres then reportedly veered into traffic before jumping out of his van, which contained nine illegal immigrants.
The young man was eventually captured and charged with “smuggling aliens,” and will be in the custody of US Marshals following a brief stint in the Cameron County jail.
The incident is yet another illustration of how smugglers have little regard for their human cargo, and have grown emboldened by the prospect of endless profits, paying little heed to Obama’s empty promises and Gov. Rick Perry’s show of force.
Last week we highlighted an instance in which a Texas Game Warden was attacked by a smuggler while surveying an area near the southern U.S. border.
When the officer approached, “the smuggler with the group resisted arrest and began hitting the warden as he tried to make his way back to Mexico,” a Texas Parks & Wildlife spokesperson told CBS affiliate Action 4 News.
The week before that, we reported smugglers likely working with cartels in South Texas were relying on booby traps to keep their criminal enterprises afloat. One human trafficker led federal agents on a chase through five different South Texas communities before throwing road spikes, or caltrops, at his pursuers in a bold escape attempt.
Earlier this month, we also showed how smugglers in the Texas border town of Roma were undeterred by the presence of news crews and proceeded to go about conducting their illegal business in broad daylight, inflating rafts, receiving payments and sending people over the river.
Despite smugglers’ renewed confidence, law enforcement agencies have been able to make some progress in stemming the risky, but lucrative trade.
Last week, the ICE Homeland Security Investigations bureau announced that an initiative dubbed Operation Coyote netted close to 200 smugglers operating in and around the southern U.S. border and recovered about $600,000 in ill-gotten profits.
But the “cargo” will now be treated as refugees, and we will give them all a neg-AM loan on a house.
http://www.forbes.com/sites/brucejapsen/2014/07/27/any-insurer-angst-on-obamacare-subsidies-may-emerge-this-week/?partner=yahootix
I hope we get information on how may of the new enrollees are still paying. I suspect that many went for another of expensive procedures and then dropped the insurance.
may=many
Endless Chaos in Obamacare Networks
July 11, 2014
BEGIN TRANSCRIPT
RUSH: Here’s Gus in Houston. Gus, you’re next on Open Line Friday. Hi.
CALLER: Rush, great to talk to you. Appreciate it. The reason I’m calling, what I do for a living is I sell knee replacements and hip replacements, and one of the ways we do that is by bringing in cadavers for surgeons to put our product in so they can practice putting our knee or our hip in. We were at a cadaver lab in Texas about a month and a half ago and had a variety of orthopedic surgeons that were putting these knees in. And the conversation turned to billing and insurance, and one of the guys brought up a problem he was having in his office.
And it turned out they were all having this problem. These guys with Obamacare, patients with Obamacare, present at their office, they give them their cards, they appear to be insured. That doctor’s office will then call the insurance company to make sure they are indeed insured. It looks like everything’s a go, they put a knee in. When they go to collect the money they’re being told these guys were not covered at the time, and they are on the hook for all this money. These guys are livid.
RUSH: Wait a minute, now. Wait, wait, wait, wait, wait. Just a second. I need to reconstruct this in my own words to make sure I understand this. You got a bunch of doctors, and they got Obamacare-insured patients presenting. They get treatment and then they present their Obamacare insurance cards, and the doctors do not automatically assume that means they’re good; they still double-check. So they call and they find out if indeed these people are insured and are covered, and are told they are?
CALLER: That’s correct.
RUSH: But they don’t get paid. So when they don’t get paid, they call back, “Well, sorry. They weren’t insured.”
CALLER: So that insurance company, whatever their peripheral look-see to see if that patient is covered is not the same information they’re looking at when they have to write the check, and they’re then telling that physician, “Sorry, you’re on the hook,” and these are big ticket operations.
http://www.rushlimbaugh.com/daily/2014/07/11/endless_chaos_in_obamacare_networks - 47k -
That’s not what I hear on NPR, that I usually get in the car between 6:00 and 6:30 local time on weekdays.
You can listen to C-SPAN and Rush at your desk, but you need to wear headphones.
This is not a reliable source of information. Besides, I’m pretty sure that both genders get and give knee/hip replacements, and the patient would be on the hook (not the doctor).
the doctor now has to be the bill collector wasting valuable time…
Pet peeves:
1) social conservatives who casually mention the United States is a Christian nation. It’s not. Treaty with Tripoli, 1796, article 11 says not.
2) LIEberals who casually say our form of government is a democracy. It’s not. Our form of government is a representative republic.
It’s so obvious to me that the founders were social liberal deists who did not trust 1) organized religion and 2) mob rule.
Mob rule is tyranny by majority, which afflicts Europe and has really become noticeable in the US the last 20 years or so.
I argue with some of the older conservatives I work with sometimes, that I consider personal civil liberties and the right to privacy more important than the election of establishment Republican party candidates.
In 2012 I voted for Gary Johnson, the libertarian US House candidate, yes to marijuana legalization, and left the rest of the ballot blank.
I may vote a straight GOP ticket for all state and local races this year, Colorado is a purple state but I won’t let it be on the issue of the 2nd Amendment.
Yes I voted for Gary Johnson as well in 2012. Here is what you should ask older conservatives for: Ask them for the login name and password of their bank accounts, any social network accounts and their email accounts. That will teach them to downplay the right to privacy.
Many of the conservatives do have something to hide. Many of them publicly denounce “immoral behavior” yet some of the very same ones are outed of the closet - like that Republican senator in Idaho or Montana for instance. Or like Senator Hyde and Newt Gingrich both attacked Clinton for “immoral behavior” and both of those guys cheated on their wives.
Tell those older conservatives “you certainly do have something to hide and you won’t publicly admit it or you are in denial.”
representative democracy
democratic republic
phony scandals