August 15, 2014

Bits Bucket for August 15, 2014

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

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Comment by Whac-A-Bubble™
2014-08-15 00:40:07

How is the California housing market faring in the red hot summer sales season?

Comment by Whac-A-Bubble™
2014-08-15 00:42:01

Southern California home sales fall, median price drops
A for-sale home in the 3200 block of Hacienda Drive in Duarte is shown here. Southern California home sales hit a three-year low for the month of July, hampered by rising prices, a limited supply of homes and a decrease in investor activity. (Photo by Watchara Phomicinda/ San Gabriel Valley Tribune)
By Kevin Smith, San Gabriel Valley Tribune
Posted: 08/14/14, 8:16 PM PDT

Southern California home sales hit a three-year low for the month of July and the region’s median home price dipped to $413,000, industry tracker CoreLogic DataQuick reported Wednesday.

Hampered by rising prices, a limited inventory and a decrease in investor activity, sales of new and existing homes and condos in Los Angeles, San Bernardino, Riverside, Ventura, Orange and San Diego counties totaled 20,369 last month.

That was down 1.4 percent from June and down 12.4 percent from the 23,253 homes sold a year earlier.

The region’s median home price dipped 0.5 percent in July to $413,000, although it was up 7.3 percent from the year-ago price of $385,000.

The June 2014 median price of $415,000 for the six-county region was the highest since January 2008 when it also stood at $415,000.

CoreLogic DataQuick analyst Andrew LePage said Southland home prices have gained significant ground.

“Prices came a long way in a couple of years, and now a lot of would-be buyers just can’t stretch their finances enough to buy in today’s more conservative lending environment,” LePage said. “That’s not the only reason price appreciation is easing, but it’s one of the main ones. July was the first month in two years in which all but one of the six Southland counties posted a single-digit year-over-year increase in its median sale price. The more spectacular annual price gains of a year ago — over 20 percent — seem far back in the rear view mirror now.”

Looking ahead, LePage said double-digit price jumps seem unlikely unless there’s a burst of pent-up demand that might be triggered by more robust income growth, a loosening of mortgage credit or a significant move in interest rates.

Los Angeles County saw a similar year-over-year decline in home sales.

A total of 7,012 homes were sold in L.A. County in July, down 12.5 percent from the 8,012 that were sold a year earlier. The county’s median home price topped out at $457,500 in July, a 7.6 percent increase over the year-ago price of $425,000.

San Bernardino County’s home sales fell 9.9 percent in July to 2,435 homes sold compared with the 2,704 sold during the same period a year ago. But the county’s median price hit $240,750 last month, a 17.4 percent gain over $205,000 a year earlier.

Another report from the California Association of Realtors shows that housing affordability has declined.

The percentage of people who could afford to buy a median-priced, existing single-family home in California fell from 33 percent in the first quarter of 2014 to 30 percent in second quarter and was down from 36 percent in second quarter of 2013, according to CAR’s Traditional Housing Affordability Index.

Housing affordability fell statewide and in 19 of California’s 26 counties, CAR reported.

Home buyers needed to earn a minimum annual income of $93,590 to qualify for the purchase of a $457,140 statewide median-priced home in the second quarter of 2014. The monthly payment, including taxes and insurance on a 30-year fixed-rate loan, would be $2,340, assuming a 20 percent down payment and an effective composite interest rate of 4.32 percent.

“What I’m seeing right now is that the housing market is still going through a correction,” said Robert Smith, a Realtor with Centennial Realty in Valencia. “It’s really being driven by sellers, in my opinion. They are listing their properties way too high. I don’t want to say they are greedy …. but they always add another 10 to 15 percent on top of what the fair market value is. But buyers are not fooled by it. And as soon as we reduce the price the home sells within a couple weeks.”

Comment by Whac-A-Bubble™
2014-08-15 06:23:27

That was down 1.4 percent from June and down 12.4 percent from the 23,253 homes sold a year earlier.

The region’s median home price dipped 0.5 percent in July to $413,000, although it was up 7.3 percent from the year-ago price of $385,000.

The June 2014 median price of $415,000 for the six-county region was the highest since January 2008 when it also stood at $415,000.

Take home: California home prices reached pre-crash peak bubble levels last month, after which both prices and sales began to tumble. And remember, folks, this is the red hot summer sales season.

Just wait until the market’s seasonal slowdown this fall, followed by the ice cold winter solstice sales season…you ain’t seen nothin’ yet.

Comment by rms
2014-08-15 07:11:08

“Just wait until the market’s seasonal slowdown this fall, followed by the ice cold winter solstice sales season…you ain’t seen nothin’ yet.”

I’m wondering about the possibility of a prolonged drought and how that will affect the phoney So CA housing recovery?

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Comment by Puggs
2014-08-15 13:03:34

Probably means people start paying their water bill with Visa or Master Card??

Comment by "Auntie Fed, why won't you love ME?"
2014-08-15 14:46:49

Don’t be silly, Whac. House prices only go up.

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Comment by Whac-A-Bubble™
2014-08-15 00:45:25

California home sales decline amid tight market
Associated Press
August 14, 2014
FILE - This Jan. 23, 2013 file photo shows a real estate sign in front of a home in Downey, Calif. California home sales declined in July 2014 compared to the same time the previous year as buyers struggled to find something they could afford in the tight market, a research firm said Thursday, Aug. 14, 2014.

SAN DIEGO — California home sales declined in July compared to the same time last year as buyers struggled to find something they could afford in the tight market, a research firm said Thursday.

Statewide 39,608 new and resale houses and condos sold in July — an 8.7 percent drop from July 2013, CoreLogic DataQuick said.

The rate of rising year-over-year prices also is no longer at double-digit rates like last summer.

“The more spectacular annual price gains of a year ago — over 20 percent — seem far back in the rearview mirror now,” said CoreLogic DataQuick analyst Andrew LePage. “Looking ahead, such double-digit price jumps seem unlikely unless there’s a burst of pent-up demand, perhaps triggered by more robust income growth, a loosening of mortgage credit or a significant move in interest rates.”

The sharpest drop in sales was in Southern California.

About 20,000 new and resale houses and condos sold last month in the six-county Southern California region, marking a 12.4 percent decline from July 2013.

A total of about 8,474 new and resale houses and condos sold last month In the nine-county San Francisco Bay Area. That’s down 9.3 percent from July 2013 when 9,339 homes sold.

The numbers were based on transactions that closed in escrow and were reported by county recorder offices.

Cash deals have also fallen, indicating that fewer investors are snapping up bargains.

Comment by Housing Analyst
2014-08-15 04:03:17

Collapsing demand.

Comment by azdude
2014-08-15 08:54:29


Comment by Housing Analyst
2014-08-15 16:20:14

youre enraged. :mrgreen:

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Comment by Whac-A-Bubble™
2014-08-15 00:46:25

Is China housing still always going up these days?

Comment by Whac-A-Bubble™
2014-08-15 00:48:47

Apologies in advance for this post which mentions China and GDP…

Asia News
China Home Sales Fall
Property-Loosening Measures by Some Local Governments Have Yet to Make an Impact
By Esther Fung
Updated Aug. 13, 2014 4:24 a.m. ET

SHANGHAI—Housing sales in China in the first seven months of the year fell 10.5% to 2.98 trillion yuan ($484 billion), signaling that property-loosening measures rolled out by about 30 local governments haven’t yet made a meaningful impact.

Sales were 2.56 trillion yuan in the first half of the year, down 9.2% from the same period of 2013, according to data released by the National Bureau of Statistics Wednesday.

July is typically a seasonally slower month for housing sales and analysts said they are awaiting sales data in August and September for signs a turnaround is in the works, but the continued fall in sales remains a cloud on China’s economic prospects.

Consumers are staying on the sidelines on expectations for further falls in prices, property agents said.

Housing sales in July fell 17.9% on a year-over-year basis and 28.2% from June, according to calculations by The Wall Street Journal from data issued by the National Bureau of Statistics. The bureau doesn’t issue data for individual months.

Some economists were surprised by the weakened sales momentum, especially since more local governments made it easier for home buyers to purchase their second or subsequent homes.

“What I can’t really understand is why the housing sales were down so much,” said Wei Yao, an economist at Société Générale. “A lot of local governments had eased home purchase restrictions. Of course, it’ll take some time for the measures to show effects, but still I’m surprised by how sluggish sales were in July,” she added.

Many Chinese investors who previously piled into the housing market are now looking at alternatives, such as wealth-management products or property abroad.

“The housing market isn’t doing well now and I don’t dare to buy any more homes,” said 34-year-old Li Jun, a Shanghai-based machinery salesman who bought an investment apartment in Hefei three years ago. “I regret buying that apartment now; the price is now lower than what I paid.”

Mr. Li said he might have to purchase another home near a school when he and his wife start a family, but said that would probably be his final home purchase.

The property sector is an important pillar for China’s economy, with related sectors such as construction, steel, chemicals and furniture accounting for as much as 23% of the country’s gross domestic product, according to data from Moody’s Analytics.

Comment by Blue Skye
2014-08-15 05:48:18

“with related sectors such as construction, steel, chemicals and furniture accounting for as much as 23% of the country’s gross domestic product…”

So what happens to the biggest fastest credit expansion in history when 1/4 of the turnover suddenly stops? It’s not as if the other 3/4 will just whistle along. What happens to a couple hundred million Fang Nu who suddenly have no salary to pay their crushing debts?

I still can’t grasp that bit posted a couple days ago about 250,000 corrupt government officials having been arrested. I am wondering if there is one to many zeros on that number.

Comment by Whac-A-Bubble™
2014-08-15 06:25:01

“…250,000 corrupt government officials having been arrested…”

Who is left to snap up California foreclosure homes in all-cash investor purchases?

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Comment by scdave
2014-08-15 06:41:53

Like ben has been telling us, HELO’s are resetting…50-80 billion are at risk…

HOME EQUITY LINES TO RESET.. “end of draw” (EOD) period. EOD is the point where consumers may no longer borrow funds from the line of credit and must repay the outstanding balance with fully amortized payments, i.e. payments of both interest and principal.


Comment by Ben Jones
2014-08-15 07:12:27

‘There are a lot of HELOCS. As of last December there were 15.9 million U.S. consumers with $474 billion in such debt. Still, the HELOC balance is small compared to other loans; over $8 trillion in outstanding home mortgages, $1 trillion in student debt, over $8 billion in auto loans, and $7 billion in credit card balances.’

Comment by Whac-A-Bubble™
2014-08-15 07:39:53

‘There are a lot of HELOCS. As of last December there were 15.9 million U.S. consumers with $474 billion in such debt. Still, the HELOC balance is small compared to other loans … over $8 billion in auto loans, and $7 billion in credit card balances.’

That left me scratching. How is $474 billion small compared to $8 billion or $7 billion?

I totally get the point about the gargantuan piles of U.S. mortgage and student loan debt. Still, $474 billion is arguably not small compared to the $1+ trillion in student loan debt — almost half as much.

Comment by Blue Skye
2014-08-15 07:45:04

OK, do the long math. It is millions.

Comment by goon squad
2014-08-15 08:17:30

When I sold HELOCs for TARP bank in 2004-2005, we would call customers with open HELOCs with low or zero balances to nudge them to refi other higher interest debt or to just blow money on something else. I even made Employee Of The Month in our department in January 2005 for being such a good debt pusher…

Comment by Blue Skye
2014-08-15 08:40:28

Oops I meant trillions. Guess it’s time to go fishing.

Comment by Guillotine Renovator
2014-08-15 14:56:16

“I even made Employee Of The Month in our department in January 2005 for being such a good debt pusher…”

Ummm, just curious- how is that any better than pigman himself?

Comment by oxide
2014-08-15 17:56:50

The difference is that goon only worked that job to support himself. If goon had won, say, a couple hundred grand in the lotto, he would have quit that day and looked for a more ethical job.

The pigmen on the other hand, already made their millions but they still keep robbing and cheating because they like it.

Comment by Whac-A-Bubble™
2014-08-15 00:52:24

ft dot com
August 12, 2014 3:40 pm
‘Return to rationality’ signals big shift in China’s housing market
By Josh Noble in Hong Kong and Gabriel Wildau in Hangzhou

As China’s real estate slump began to hit sales at the Champs Elysées development in the picturesque lakeside city of Hangzhou, the company building it responded with a price cut.

Angry homeowners gathered to protest, holding banners with slogans such as “Return my blood and sweat money!” as police formed a barricade around the office entrance. The residents relented eventually, perhaps with the creeping realisation that the days of making easy money in the Chinese real estate market are over.

People are returning to rationality,” says Chen Xuemei, sales manager at the Champs Elysées. “If they are starting a family and need a home, they will still buy. But people are no longer buying homes expecting to earn a big profit.”

China’s multiyear property boom appears to be grinding to a halt. Prices have dropped in many parts of the country, sales have dried up and new construction has fallen sharply as developers have retrenched.

A change in mindset among Chinese homebuyers – away from pure speculation towards a system based on fundamental demand for accommodation – is leading to a profound shift in the way the country’s housing market operates.

Previously parents told their kids: don’t squander your money . . . save it and buy a house. After you buy a house, save more and buy another house,” says Du Jinsong, property analyst at Credit Suisse, the bank. “Now even parents are saying: don’t buy houses any more – it’s not worth it. I think this is a very big change.”

China’s last property downturn in 2011 was met with concerted action from central government, including interest rate cuts.

This time, however, Beijing has held firm, leaving local governments – and property developers – to formulate their own responses. Those efforts are now in full swing, including price cuts, easier access to capital and the end of restrictions on multiple home purchases.

Last week the southern city of Foshan became the latest to announce an easing of restrictions for those seeking to buy multiple apartments, something analysts at credit rating agency Moody’s said should “release some of the pent-up demand for residential properties and reduce pressure on pricing”.

Fujian province announced a series of steps at the end of last month aimed at bolstering demand, including introducing tax incentives for property purchases, while the province of Sichuan even briefly flirted with subsidising mortgages.

Chinese home purchase restrictions

Of the 47 Chinese cities with home purchase limits at the start of the year, 34 have relaxed their policies, with a dozen removing controls altogether.

From the developers’ side, prices have been slashed and extra perks introduced for would-be buyers. Some have promised to repurchase homes if prices fall, or offered cheap loans to finance downpayments. The Champs Elysées development even gave bottles of Chanel perfume to those who came for viewings.

These supportive measures – which vary by city and by province – have already had some tangible effects. Though prices have continued to fall, transaction volumes surged in June as restrictions were eased in certain cities, providing developers with welcome cash and bringing some confidence back to the market.

However, many analysts say the responses won’t be enough to bring back the heady days of double-digit annual price growth and that the current inventory overhang will take at least a year to draw down. A recent survey of mainland developers by Standard Chartered presented a gloomy picture, with the bank declaring that the worst is yet to come for China’s property sector.

Comment by Blue Skye
2014-08-15 05:52:14

“a profound shift…”

Indeed. No one alive today who gets crushed by the credit contraction will be willing to take out a mortgage for a housing “investment” for the rest of their lives.

Comment by Whac-A-Bubble™
2014-08-15 06:26:01

You’d think people would have learned this lesson by now, wouldn’t you?

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Comment by X-GSfixr
2014-08-15 12:26:49

Depends on what “people” you are talking about.

Joe Q Public, and whoever has to pay for the eventual implosion, or the banksters/Ponzi-generators who walk away with the cash, and move on to the next batch of suckers.

Lots of countries in the world left to run the Ponzi/business plan.

It might end eventually. When you start seeing stories about mortgage backed securities and inflated real estate prices in Somalia and Sudan

Comment by Guillotine Renovator
2014-08-15 14:59:09

“You’d think people would have learned this lesson by now, wouldn’t you?”

I have no faith that people will ever learn. In fact, I think this dead cat bounce, echo bubble, whatever you want to call it, has reinforced the “real estate makes you rich” mentality. Like PT Barnum said “there’s a sucker born every minute.”

Comment by octal77
2014-08-15 07:20:37

Blue Skye

Oh, ‘come on. Don’t be such a pessimist!

New scientific data predicts that people will routinely live to be 100+ years old.

Plenty of time to pay off that mortgage!

Remember, life begins at 90!

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Comment by Whac-A-Bubble™
2014-08-15 00:54:42

China’s property slump
Friday, 15 August 2014 - 5:05am IST
Updated: Thursday, 14 August 2014 - 10:54pm IST | Agency: DNA

A property market crash in China could catalyse a global economic meltdown. Restructuring the sector might help avert the crisis

Chinese property markets currently are gripped by contrarian hopes and fears. The ordinary Chinese, mostly the young, are hoping that house prices will fall, while big developers who have spent fortunes building mammoth complexes, are anxious about their business. They have developed huge office blocks; they have also built residential properties. But these are luxury private homes and apartments, fit only for the rich. How pricey are they? Giving an indication of the prices at a sales fair in Hangzhou, a BBC report says: “The sales agents explain it is a “perfect apartment” for a three-person family — a family that can afford $900,000 (£530,000), that is.” This is proving to be a lethal combination.

With increasing frequency, reports are appearing about slides in property prices. In a way, this is the end result of government policy to rein in the run-away property prices of a couple of years ago. The authorities had clamped down restrictions on ownership of multiple homes and other kinds of properties. The banks were advised to insist on larger down payments for loans of property purchases. Overall, monetary policy was made more stringent and interest rates were raised for property loans. All those measures are now impacting the market and prices are falling. Coupled with this, the expectations that property prices will still fall are restraining people from buying just now.

But then, concern is mounting about the possibility of a crash in property markets, at the current rate. More so, because like everything else in China the scale of fresh construction still remains far too large. A property crash could be dangerous and it could hurt even the Communist Party leaders and important politicians. The government is actually looking forward to seeing prices fall, but then it should be slow and not gather momentum.

So the question uppermost in most minds: will there be a crash in the property market? Given the experience of United States following the sub-prime loans phenomenon and the overall banking crisis in Spain, Italy and other European countries following slide in property prices, a large scale reduction in property prices could usher in an overall macro-economic crisis. Is China facing a similar threat?

Comment by Guillotine Renovator
2014-08-15 15:01:54

“Restructuring the sector might help avert the crisis…”

The barn door has rotted and fallen off, the horses were turned into glue a decade ago, but sure, go right ahead!

Comment by Whac-A-Bubble™
2014-08-15 00:56:56

Friday, 15 August 2014 07:54
China’s economic recovery momentum FALTERS AGAIN

Recovery momentum in June failed to carry over into July, as shown by China’s softening data in industrial output, investment and retail sales, which underscored the fragility of the economy’s exogenous momentum.

Except for industrial output growth, which met market expectations, all other key data fell short, despite the government’s introduction of stimulus measures in May.

Institutions are slightly divergent in their analysis of the slowdown, with some suggesting not to “read too much” into a monthly fluctuation, while others argue the upsurge in June may mark an end to the rebound.

Li Huiyong, chief economist with Shenyin & Wanguo Securities, said although the industrial output growth has slowed by 0.2 percentage point from June to 9 per cent, the increase was still higher than the 8.9 per cent average rise in the April-June period, and was the second highest point this year.

“Investment and consumption slowed from June but still kept an overall decent shape. Signs are apparent that the economy is stabilizing,” Li said.

But other institutions voiced a pessimistic outlook. Analysts with Haitong Securities even said the economic rebound is already over.

“Overcapacity and deleveraging in the corporate sector depressed the manufacturing investment. … The economy became languid after a roaring second quarter. The rebound may be over and the growth will continue to ease in August,” Jiang Chao and Gao Yuan from Haitong wrote in a note.

Comment by Whac-A-Bubble™
2014-08-15 00:59:01

Investing 8/03/2014 @ 2:43PM
Real Estate Oversupply Becoming Bigger Problem For China

If you build it they will come. Eventually. That’s been the mantra of Chinese real estate developers and their lenders who have been throwing them buckets filled with yuan for the past several years. Now, an oversupply problem in second and third tier cities promises to derail the economy by as much as one percentage point, the International Monetary Fund has warned.

How important is real estate to the Chinese economy? In the year 2000, real estate accounted for around 5% of China’s GDP. By 2012 it rose three times to 15%, according to the IMF’s calculations. It certainly did not decline in 2013 and 2014, despite Beijing working overtime in forcing a market correction. The IMF did not have data for the last two years.

The real estate market appears to be undergoing a correction. While a slowing of investment and construction by as much as 10% would definitely reduce growth from 7.5% to 6.5%, an orderly adjustment is still factored into the IMF’s baseline scenario.

Comment by RioAmericanInBrasil
2014-08-15 10:23:20

The heck with China. If they fall, they fall. And if they do it will affect me. (Sort of) Brazil will get a big “Bang Ding Ow”.

That’s the problem when the west (especially the USA) gives away its industrial base to mostly one country. It causes massive distortions in various economies.

What I think is really happening is that the advanced nations do not need as many jobs as before and never will need the number of jobs to fit the population. Ever. Now we saw this in the 60’s and 70’s where we were showed cartoons on how technology etc would lead us to a life of leisure and less work, but that view (of all of us benefiting from the productivity gains) is now framed as “socialism” in order for the very few (the very rich) to reap the very real gains in productivity. This whole “producers” and “parasite” “free sh!t army” propaganda has been shoved down our throats for 30 years and especially in the past 10. There is no “free-shit army” without massive productivity gains being captured only by a few. Americans work there a$$es off when there are good jobs and the rewards for working their a$$es off.

A lot of the “free sh!t” propaganda is infused with race and hating on those that are “different” from us, but I think a lot of that is to cover up the big picture which is (unlike the past) the productivity gains have been totally unequally shared. And the history of America was most of us sharing in productivity gains to a much greater extent than we do now.

IMO, there will never be the amount of decent jobs to fit the USA population as in the past. Ever. This is the natural result of technology and off-shoring. What the he!! did we think would happen? So the biggest question going forward is what to do about that.

Comment by RioAmericanInBrasil
2014-08-15 10:52:17

Yea, I know the grammar and spelling mistakes, but I don’t care. I write fast. Cheers Amigos! Have a great weekend.

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Comment by Puggs
2014-08-15 13:48:20

“Word Crimes”

Comment by Whac-A-Bubble™
2014-08-15 01:02:17

Is the eurozone being dragged into deadly spiral of deflation?
Spain slipped into deflation in July, while prices fell more sharply in Portugal. Photo: Reuters
By Szu Ping Chan
2:52PM BST 14 Aug 2014

It’s official. Portugal, Greece and Spain are in deflation - while Italy isn’t far behind.

Prices in the three eurozone nations fell in July, while overall inflation in the currency bloc was confirmed at just 0.4pc, down from 0.5pc in June. This represents the lowest level in almost five years.

Prices in Greece fell by an average of 0.8pc in July, according to Eurostat, while prices in Portugal and Spain fell by 0.7pc and 0.4pc respectively. In Italy, the inflation rate was zero.

Deflation is bad for two reasons. Firstly, falling prices leads to people putting off purchases. If they believe a TV will be cheaper next month, they’ll wait for the price to fall. If people stop shopping, retailers are forced to slash prices further, which leads to declining profits, lower wages and companies shedding staff.

Of course, falling prices are not necessarily a bad thing. Mario Draghi, the president of the European Central Bank, has said that in the short term, it can help hard-pressed consumers.

However, the main reason deflation is a threat to economies is because it makes debt payments more expensive. Companies are at risk if they are unable to pay their debts given the lower revenues and profits seen from deflation.

For nations like Greece and Italy, which have racked up huge debts, this is a serious problem.

Deflationary spirals can quickly take hold, where falling consumption and investment causes prices to fall even further. Just ask Japan, which only started to emerge from the shadow of deflation last year. It fell into the trap in the 1990s.

The outlook is worrying.

Growth is slowing down. Official data on Thursday showed the eurozone stagnated in the second quarter, while an ECB survey published on Thursday suggested that growth for the rest of the year would be weaker than previously expected.

Last week, Mr Draghi told his monthly news conference that the bank’s policymaking Governing Council was “unanimous in its commitment” to use measures including QE if necessary.

“Our monetary policy stance remains, and will remain, accommodative, and I can only reaffirm that the Governing Council is unanimous in its commitment to also use unconventional measures, like ABS purchases, like QE, if our medium-term outlook for inflation were to change,” he said.

Comment by Whac-A-Bubble™
2014-08-15 01:04:49

Did you dump your bonds too soon?

Bloomberg News
U.S. 30-Year Bond Yields at Almost One-Year Low Before Auction
By Susanne Walker
August 14, 2014

Treasury 30-year bond yields traded at almost the lowest level since June 2013 before an auction of the debt as investors sought a refuge amid weaker-than-forecast economic data in the U.S. and Europe.

The $16 billion in 30-year bonds scheduled to be sold today yielded the least in 15 months in pre-auction trading. Treasuries fell earlier as the Labor Department reported claims for jobless benefits in the U.S. rose to a six-week high last week. Economists lowered their forecast for the 10-year note yield at year-end to below 3 percent.

“The expectations were for a more optimistic view on claims, which has not come to pass,” Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, said after the Labor Department report. “The biggest source of demand right now is from overseas.”
Video: German Bond Yields Hit Record Low: Bloomberg Brief

Current U.S. 30-year yields fell as much as three basis points, or 0.03 percentage point, to 3.21 percent before trading at 3.24 percent at 12:32 p.m. New York time, according to Bloomberg Bond Trader data. They touched 3.18 percent on Aug. 8, the lowest since June 2013. The price of the 3.375 percent bond due in May 2044 was 102 17/32.

Ten-year yields fell to 2.39 percent before trading at 2.42 percent. Five-year note yields dropped one basis point to 1.57 percent.

The 10-year note yield will end 2014 at 2.92 percent, according to the median forecast of economists surveyed by Bloomberg from Aug. 8-13. The previous estimate was 3 percent.

Comment by polly
2014-08-15 04:42:15

A top mortgage industry executive explains why banks don’t want to take a chance on some borrowers​

The whole thing is worth reading, but I particularly like this Q & A:

DE: As a former FHA commissioner, can you tell us how FHA is faring in this environment?

DS: We are clearly seeing a shift away from certain products by the larger institutions. FHA is a prime example. FHA is stepping up its pursuit of pay-backs. If a loan goes to default, goes to claim and FHA finds a mistake in the file, you are subject to treble damages, or three times the outstanding balance of the loan. The risk is very significant. It’s why you hear cries from people like Jamie Dimon.

Comment by Whac-A-Bubble™
2014-08-15 06:31:42

Jamie Dimon’s $13 Billion Secret
The inside story of JPMorgan Chase’s landmark mortgage settlement
William D. Cohan
August 13, 2014 | This article appeared in the September 1-8, 2014 edition of The Nation.

In the end, the abject fear of Ben Wagner got Jamie Dimon to cave.

For much of 2013, Dimon, the chairman and chief executive of the formidable JPMorgan Chase & Company, was telling anyone who would listen that it was unfair and unjust for federal and state prosecutors to blame him and his bank for the manufacture and sale of mortgage-backed securities that occurred at Bear Stearns & Company and at Washington Mutual in the years leading up to the financial crisis. When JPMorgan Chase bought those two failing firms in 2008, Dimon argued, he was just doing what Ben Bernanke, Hank Paulson and Timothy Geithner had asked him to do. Why should his bank be held financially accountable for the bad behavior at Bear and WaMu?

It was a clever argument—and wrong. Dimon’s relentless effort to spin his patriotic story soon collided with the fact that Wagner, the US Attorney for the Eastern District of California, had uncovered evidence that JPMorgan itself was guilty of many of the same greedy and irresponsible behaviors. Piles of subpoenaed documents and e-mails revealed that JPMorgan bankers and traders had underwritten billions of dollars’ worth of questionable mortgage-backed securities that Dimon had been telling everyone had originated at Bear Stearns and WaMu. Worse, the bad behavior had occurred on Dimon’s watch.

Comment by Raymond K Hessel
2014-08-15 17:56:34

Yet not JPM officers will ever be criminally charged or see the inside of a prison cell despite their massive swindles.

Comment by Blackhawk
2014-08-15 07:21:44

“Lenders are putting policies in place for self-protection. All you have to do is read the headlines about the massive legal settlements against the largest lenders for loans they made that went into default. There’s been very aggressive enforcement in response to the housing bust, to bad mortgage programs that should have never been created, and to lenders who did the wrong thing, many of which are now out of business. And there’s no end in sight.”

A friend in the title insurance business said that the new laws hold the mortgage companies responsible for mortgages that fail early in the term. So they tighten the standards while the economy is sputtering and people are trying to make ends meet.

I’m shocked that home sales are slipping. Not

Comment by goon squad
2014-08-15 05:59:36

The Eric Holder false flag operation has already been scripted

“DHS’s seven page report entitled Domestic Violent Extremists Pose a Threat to Government Officials and Law Enforcement points to the recent murders of two Las Vegas law enforcement officers as evidence that there is a “growing trend of anti-government violence compared to the previous four years and inspired by perceived government overreach and oppression”

Got 7.62×39?

Comment by ibbots
2014-08-15 06:19:05

There was an anti govt crazy who apparently thought it was go time here in Dallas this week. Fortunately no one got hurt.

Comment by goon squad
2014-08-15 06:51:44

Rand Paul: We Must Demilitarize the Police

Comment by RioAmericanInBrasil
2014-08-15 10:56:47

Rand Paul: We Must Demilitarize the Police

In Brazil there is the “Military Police” that patrol the streets, the “Civil Police” that do the investigations and the “Federal Police” that do what Feds do.

USA’s police look like we’re more of a Banana Republic than Banana Republics.

What an aggressive, have-and-have-not sh!thole we’re becoming.

Comment by goon squad
2014-08-15 12:28:10

the badge lickers and uniform fetishists are losing control of the narrative.

and this is a good thing…

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Comment by reedalberger
2014-08-16 00:35:11

“What an aggressive, have-and-have-not sh!thole we’re becoming.”

Thanks to knit cap wearing clueless CPUSA types and the college professors that fill their minds with progressive politics and propaganda.


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Comment by rms
2014-08-15 07:22:26

“…and inspired by perceived government overreach and oppression”

Why on earth would Joe Sixpack get that idea?

Comment by "Auntie Fed, why won't you love ME?"
2014-08-15 15:17:17

So Eric is basically saying that there is an increasing perception of government overreach and oppression. I wonder what might cause that.

Comment by reedalberger
2014-08-16 00:36:44


Comment by goon squad
2014-08-15 06:44:27

The future belongs to Lucky Ducky

“Wal-Mart Stores Inc’s latest struggles to revive U.S. sales, following a disappointing Commerce Department report earlier this week, add to evidence that the economy isn’t recovering as quickly as expected.

The company posted stagnant same-store sales today in its second-quarter earnings report, marking the sixth straight period of no growth.”

Comment by Whac-A-Bubble™
2014-08-15 06:48:36

Aug. 14, 2014, 12:42 p.m. EDT
More quantitative easing to come?
By L.A. Little

In 2009, quantitative easing was introduced to our vocabulary as extraordinary measures became commonplace in the aftermath of the 2008 financial crisis.

Leaving aside the causes of the crisis, the Fed sprang into action, initiating the most massive expansion of the Federal Reserve’s asset base — buying up what has come to be called toxic assets and stashing them away deep in their now overflowing vaults.

Historically, the relationship between bond prices and gold have always been negatively correlated but that all changed with quantitative easing. Since 2009, the relationship has been reasonably well correlated.

Over this five-year period, both bonds and gold have tended to work in the same direction, which isn’t intuitive. We can probably thank quantitative easing for that.

Comment by X-GSfixr
2014-08-15 12:18:37

“….quantative easing was introduced into our vocabulary…..”

Because calling it what it was, “printing money and giving it to the banksters” might have led to pitchforks and torches.

Or probably not.

A discussion today with my neighbors was enlightening. In their minds, all of the overboard police response in Fergeson is justified, because “those people looted/burned down a QuikTrip”.

(Never mind that Quik Trip is a big corporation, who has priced into the business plan the risk of the occasional store being looted/burned down)

When I suggested that there may be a time where the situation in this country for the average white/suburban resident might require/compel them to burn down an corporate edifice or two, I was assured that they wouldn’t do it, because “they weren’t brought up that way”

The same folks that assure us that they will go down with guns blazing, if the government comes for their guns.

In the meantime, the story changes from “innocent black teenager/kid, minding his own business, gets into confrontation with cop and ends up dead for no reason” morphs into “large black guy rolls into convenience store, takes stuff off the shelf, threaten clerk who tries to stop him, gets shot when confronted by police officer”…… which story is the truth? If so, it kinda changes the scenario, doesn’t it?

Of course the bleeding hearts are saying either “(A) has nothing to do with (B)” or “There is no death penalty for shoplifting” (easy enough to say by those who haven’t had stuff stolen from them by people who only get a wrist slap, assuming they get caught at all)

It isn’t the shoplifting, it’s how it allegedly went down. If people are allowed to just stroll into your business/work/house, and dare you to stop them as they walk off with your stuff, we are going to have a lot more to worry about than whether real estate is overpriced or not. And the mindsets of the people involved.

Comment by goon squad
2014-08-15 12:24:50

the actual circumstances of this event are irrelevant.

the only thing that matters is how al sharpton can make money from it.

Comment by rms
2014-08-15 16:35:46

“the actual circumstances of this event are irrelevant.”

+1 In the ghetto Michael Brown was on track to be an American president.

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Comment by Guillotine Renovator
2014-08-15 15:07:56

If that guy in the convenience store is the same one who got capped by the cops- good riddance. There is no use in society for those thugs.

Comment by "Auntie Fed, why won't you love ME?"
2014-08-15 15:29:51

I think it’s more about how the police have morphed into a military-type org. The peops are the enemy of the 0.1% who actually believe that “they” are paying for the police to protect them against us. The police, on the other hand, would likely shoot the 0.1% just as quick. The training is on that level.

Comment by Guillotine Renovator
2014-08-15 16:44:00

The police are a problem, but this thug just pulled off a robbery and the people are protesting his shooting. IMO, if you rob, loot, etc., you’ve put yourself in harm’s way.

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Comment by rms
2014-08-15 16:51:05

“IMO, if you rob, loot, etc., you’ve put yourself in harm’s way.”

+1 In California you’d be excused from jury duty on the spot!

Comment by MightyMike
2014-08-15 17:44:11

The police are a problem, but this thug just pulled off a robbery and the people are protesting his shooting.

No, people are protesting his murder.

Comment by Guillotine Renovator
2014-08-15 18:46:28

“No, people are protesting his murder.”

So a guy can just walk around thuggin’ and muggin’ and hitting cops and when he gets shot it’s a problem? I don’t THINK so.

Comment by Oddfellow
2014-08-15 20:07:35

Lets not get confused. There are 2 separate issues.

Number 1: Did the cop have reasonable cause to shoot the guy?

Number 2, completely separate: Do people have a right to protest without being met with police officers in military vehicles, wearing full combat gear, aiming military-grade weaponry aimed at them?

If you can’t separate those two clearly different issues, you shouldn’t be allowed on a jury.

Comment by Selfish Hoarder
2014-08-15 19:44:46

More QE would hold down the gold prices because the bond sellers would prefer to get the income off their bonds than to go for gold, which does not earn a dividend.

In several times when rates went up, gold went up. 1976 to 1980 was one glaring instance. And after 1980 when rates went down and drifted down over 20 years gold prices went down.

Rates at rock bottom and staying rock bottom is a hold for gold, not a sell. Why? Because they are rock bottom and cannot go lower. It is a time to steadily accumulate gold, platinum, silver, and palladium, along with cash, lots o’ cash.

Comment by Whac-A-Bubble™
2014-08-15 22:41:39

“In several times when rates went up, gold went up. 1976 to 1980 was one glaring instance.”

Yes, in a period of runaway inflation with no Fed-sponsored interest rate suppresion (aka quantitative easing), gold and interest rates will go up in lockstop. Gold demand increases as it is an inflation hedge, while interest rates increase to price in an inflation premium.

“And after 1980 when rates went down and drifted down over 20 years gold prices went down.”

Once Volcker broke the inflationary fever in 1982, deflationary pressures took hold and drove down interest rates and gold prices.

Comment by Whac-A-Bubble™
2014-08-15 22:43:35

P.S. This time there is no inflation; my guess is the Fed could end QE and interest rates would still drop, as deflationary pressures are the main force currently in play.

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Comment by Housing Analyst
2014-08-16 03:26:38

And your guess is 100% correct.

Comment by ultramegaok
2014-08-15 08:23:11

HONOLULU (AP) — Hawaii’s largest health insurer is pulling out of the small-business side of the state’s troubled health exchange, leaving the Hawaii Health Connector with only one insurance company for employers to select.

The Hawaii Health Connector has been plagued with problems from its inception. Its open-enrollment period was delayed because of technical problems. Then it enrolled just 10,800 people and earned just $40,350 in its first six months, far below the $320,000 it expected. It was awarded more than $200 million in federal grants, but it couldn’t get by without a $1.5 million appropriation from the Legislature. Now, Connector officials are working on reducing expenses.

HMSA reported year-to-date loss of $8.4 million Thursday. It blamed its $30 million first-quarter loss on the Affordable Care Act and said it made up some of that loss in the second quarter.

Comment by Can_Bubble
2014-08-15 11:34:03

Michael Brown is huge! He’s almost the size of the guy from The Blind Side. Guys that big can’t be getting into it with police.

Comment by goon squad
2014-08-15 12:21:06

if obama had a son, he would probably not look like michael brown.

Comment by X-GSfixr
2014-08-15 12:37:35

Yeah, it makes the “teenager minding his own business gets whacked by the cops” meme a little harder to believe. Especially when you have (alleged) store videotape.

The “black people get pulled over more than white people” is another rest-of the-story deal. Don’t know how it is around your nabe, but everyone who I see driving like an idiot (90mph plus in 60mph zones, 60 on residential streets, running stop signs, etc) happen to be black about 80% of the time.

Studies/surveys vs. your own eyeballs…….. who to believe?

Comment by Can_Bubble
2014-08-15 12:47:32

His family is very upset.

I’m sure they won’t settle for a penny less than $10,000,0000.

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Comment by "Auntie Fed, why won't you love ME?"
2014-08-15 15:38:58

Everyone drives like that where I live.

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Comment by Guillotine Renovator
2014-08-15 18:50:42

People drive insanely fast in the Phoenix area. I’ll never forget being stopped at an intersection waiting for the light to turn green when, just as it turned, a small pickup truck with a hot dog cart entered the intersection against a red light at 65 mph, and t-boned an unsuspecting lady. The truck literally jumped 8 feet off the ground, then came back down. It is a wonder nobody was killed.

Comment by rms
2014-08-15 16:39:40

“Don’t know how it is around your nabe, but everyone who I see driving like an idiot (90mph plus in 60mph zones, 60 on residential streets, running stop signs, etc) happen to be black about 80% of the time.”

+1 You’re firing on all cylinders, X-GSfixer.

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Comment by Puggs
2014-08-15 13:58:23

“Spend less than you make and you’ll always come out ahead”

You got that right!

Comment by phony scandals
2014-08-15 15:39:08


Twice-deported foreign national attacked by angry father wielding machete


In a report that went largely glossed over by the establishment press, an illegal alien hailing from Honduras broke into a Florida home over the weekend and attempted to sexually assault a young child, a case underscoring the fact that criminal elements are actively exploiting the United States’ lax immigration laws.

Last Saturday, police arrested 47-year-old Pampilio Alvarado Flores, a Honduran citizen living illegally in Orlando, after he allegedly broke into the home of an acquaintance “and sexually assaulted a child while his parents and siblings slept nearby,” reported NBC local affiliate WESH.

Upon hearing the sound of a diaper being opened, the child’s father woke up, grabbed a machete and chased Flores, who took off running down the street.

“[T]hat guy’s lucky to be alive,” a neighbor told WESH. “As far as I can see the man don’t deserve no liberty at all.”

An ICE public affairs officer revealed to Infowars that Flores had been deported from the United States twice before, once in 2001 and again in 2008.

He now faces three criminal charges, lewd or lascivious molestation, burglary, and sexual battery on a child, a crime which could put him behind bars for life.

The incident comes amid reports that the Obama administration violated federal law when it released some 600 detained illegal immigrants “whom had criminal convictions” within the past year.

According to a federal report published last week concerning “ICE’s Release of Immigration Detainees,” 2,211 aliens were released in June 2013 ahead of sequestration budget cuts, 617 of which were criminals.
Additionally, “at least two-dozen ‘aliens’ were released by Immigration and Customs Enforcement even though they were in a ‘mandatory detention category’ (After an internal review, ICE later redetained them.),” writes former CBS reporter Sharyl Attkisson.

“This report provides more evidence that our nation’s immigration laws are being flagrantly disregarded,” Okla. Sen. Tom Coburn stated following the report’s release. “Americans need to be assured the problems within ICE that led to the dangerous release of illegal aliens will be fixed and DHS and ICE will never again violate the law by releasing known criminals into our streets.”

Two weeks ago Infowars documented the shooting death of off-duty Border Patrol officer Javier Vega, Jr. in South Texas, who died while trying to defend his family from two illegal alien bandits attempting to hijack his vehicle. It later emerged that, between the two illegals, they had been already deported a total of six times.

In July, we also reported on the murder of a homeless man in Suitland, Maryland, who was beaten and stabbed to death by six illegal alien gang members outside of a shopping center after merely getting into an argument with a young woman.

While the release of criminal illegals poses a huge risk to national security, border agents patrolling the nation’s porous southern border are also struggling to capture other foreign criminal elements who prefer to enter the country undetected.

“…The aliens that are getting away are not the juveniles or the family units because they are turning themselves in at the first sight of agents,” a border agent who works in the RGV Sector said in an email to Infowars.

“The ones we are losing are convicted felons, aliens from special interest countries, and other high risk individuals. We are so overwhelmed and preoccupied by the flood of juveniles and family units that we cannot use our resources to catch the more serious aliens.”

Comment by goon squad
2014-08-15 17:13:53

This is exactly the “fundamental transformation” that you voted for…

Comment by Raymond K Hessel
2014-08-15 17:05:22

As more and more people wake up to the pointlessless of voting in the Oligarchy’s Republicrat kabuki theater, TPTB are trying to maintain the semblance of legitimacy by luring in the sheeple with prizes for their meaningless votes.

Comment by Raymond K Hessel
2014-08-15 18:02:08

George Carlin makes his usual incisive connection between a selfish ignorant citizenry and the Republicrat politicians they elect.

Comment by phony scandals
2014-08-15 18:33:10

Time to snore in Region IV

Comment by Housing Analyst
2014-08-15 19:16:04

Tune into the HBB early tomorrow for some fresh charts on housing data that is sure engage and enrage.

Comment by Whac-A-Bubble™
2014-08-15 23:00:11

Looking forward to drinking coffee and ogling new outrageous charts.

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