Bits Bucket for September 21, 2014
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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Maryland Housing Demand Nosedives 15% YoY
http://files.zillowstatic.com/research/public/State/State_Turnover_AllHomes.csv
“REALTOR AND NOTARY CHARGED IN FRAUDULENT INVESTMENT SCHEME”
http://newvietnamese.net/news/investment/south-bay-realtor-and-notary-charged-in-fraudulent-investment-scheme.html
If you own a mercedes, bmw or audi or volvo, a jalopy owns you.
Goldman’s Former Head Of Housing Research Predicts Housing Crash, Recession Within Three Years
Tyler Durden’s
Submitted by Tyler Durden on 09/17/2014
http://www.zerohedge.com/…head-housing-research-predicts-housing-crash-within-three-years - 142k -
P.S. your link did not work. here you go
http://tinyurl.com/ndfj4tj
‘for the first time since the Great Recession home flippers lost money, before taking re-hab costs into account, in some of the largest real estate markets in the country, namely Las Vegas, New York and San Francisco.’
Great prediction here. What’s already happening will happen. Most everything you need to know about the future can be understood by correctly seeing what is occurring in the present. I’m flying out to north Texas on Wednesday. When I was there a month or so ago, a couple told me about the house they bought 2 years ago for 200k, and a similar recent sale nearby went for 300k. Sure, happens all the time with houses, doesn’t it? The only thing I said to them was, don’t refi the cash out.
“Great prediction here. What’s already happening will happen.”
I’ve pointed this out before, and will do it again: The most accurate ‘predictions’ simply announce to the masses what is already occurring but not yet widely publicized.
Once it’s widely known, then it becomes “news”.
‘Once it’s widely known’
It’s the recognition. Like the Dallas example; 50% in 2 years? And that’s not even as extreme as some other places. I was trying to point out the other day that a million $ median in San Francisco indicates a crash is coming. This statistic is widely known, too.
50%? In Texas? No way.
“50%? In Texas? No way.”
Denial ain’t a river in Egypt…
That article is not even predicting a crash by modern housing crash standards:
“predicting at least a 15% crash in home prices in the next three years”
Ridiculous tripe. The article from the other day was 5 percent monthly decline in PHX. That’s annualized 60 percent.
This is how precarious things are that some ex Goldman shill thinks a 15 percent decline over 3 years is a crash. Probably a deliberate distraction piece.
I agree on this. I think the 15% haircut prediction is mild compared to what it’s going to be.
Remember he’s probably referring to the aggregate nationwide. An overall average of 15% takes into account that many areas will see little change while others will see up to 30-40% decline.
I’m not saying he’s right or wrong, just that he’s not necessarily focused on the extreme bubble areas as we tend to do here.
What was the overall Case Shiller decline at the previous bottom from the previous top?
Iftheshoefits, yes I tend to agree. But nationwide I would still expect more than 15%. I would think more like 20% nationwide and 40% in California.
Don’t forget, the guy is 24. He’s intelligent and would be easily dismissed by the mainstream if he predicted something like 30%. I think he is holding back on his estimate on purpose for that reason.
There used to be a guy on Los Angeles radio name Mo Ansari who had a financial show where he talked mostly about the stock market and the overall economy. I remember distinctly in 2006 during the World Cup between Italy and France this dude was talking about how the real estate downturn which was already happening was not a big deal and that prices wouldn’t decline by more than 10%.
I never tuned in to that guy after that.
Now we got Mo Credik.
‘There used to be a guy on Los Angeles radio name Mo Ansari who had a financial show where he talked mostly about the stock market and the overall economy.’
When I used to listen to KFNN, his show was often on. I’ve come to the conclusion that the majority of finance talk show hosts are just seminaring their wares. Ric Edelman is the latest one, but at least I find him entertaining but totally a tool.
If house prices go down 15%, then they will go down 40%. The fear will make it happen.
Does your scenario take into consideration mo credik to prop up collapsing home prices?
Thanks for the lead to a wonderful post. I haven’t even read a third of it yet. The 24 year old former head of housing is a highly educated young man. I will continue on this today.
But my early comments are
1) I thought we are still in a recession because even the MSM is talking about recovering still. If you are in the recovering stage, you are still under the effects of the illness.
2) Cash is king. Cash is precious. Seriously this time. I recommend setting a target amount of cash and T-bills and never fluctuate below that from now on. What I’m doing now is not really tapping my cash at all but selling my former company stock (the batch of shares I bought in 2008) every few weeks to replenish my cash and keep my credit card paid off.
“Cash is king. Cash is precious. Seriously this time.”
BINGO
Have you guys taken into consideration the Fed’s policy to avoid deflation at all costs (including deliberately weakening the dollar at strategic moments)?
This touches on something that’s really important, IMO, and isn’t clear. That’s a potential recession. I was talking about all this recently with someone, and as we went through scenarios, we often came back to the recession question. I can think of many ways a downturn might not be as bad. The least appealing is, so many are unemployed or under-employed, that not as many will lose jobs. (You’re already on the floor, so falling down isn’t too bad). People have left house ownership by the millions, so not as many new defaults. You get the idea.
So lets say house prices fall, maybe a little, maybe a lot. Say stock prices fall, same questions. Consumer no likey - recession. Some job loss has to happen. Some new foreclosures are going to happen too.
Let’s put on a skeptical hat: we’ve already got a bunch of people on the dole. Unemployment is still high, wages are down, and they could go down some more. With a panicked consumer, these retailers that are struggling close up. The really ugly scenario is that several global housing bubbles look to be turning over at the same time. Is this a coincidence, or are they connected? What could connect them, the flood of easy money created to fight off the scaries a few years back? It did all happen around the same time, and we promptly saw new highs in several global RE markets. Some of this is policy, like in New Zealand, Singapore, Hong Kong, Malaysia: these central banks are fighting housing bubbles.
Then there’s the bond market. I can’t help but feel the thinnest ice is under junk bonds. A few of these guys default, and the government bond markets could get spooked. This thing is looking a little rickety to me. And to top it all off, complacency is at an all time high.
“The really ugly scenario is that several global housing bubbles look to be turning over at the same time. Is this a coincidence, or are they connected? What could connect them, the flood of easy money created to fight off the scaries a few years back?”
That’s pretty much my take on the situation.
“This thing is looking a little rickety to me. And to top it all off, complacency is at an all time high.”
I guess that explains why I recently dumped my stock holdings, and successfully persuaded my relatively wealthier dad to do the same.
Nonetheless, I hear a still, small voice in the back of my mind expressing concerns that central bankers will continue to suppress fundamentals in order to keep stock markets propped up on a permanently-high plateau and to quash deflationary fundamentals. For how long such policies can continue to work, I have not a clue.
This is exactly my concern, that the PTB will continue with the pumping, QE, ZIRP plus, whatever to keep the party going and the fishbowl spiked.
But I don’t see it as a permanently high plateau. I just don’t think things work like that. A plateau is a failure. Stasis is a failure. The financial system is a yeild chasing shark that must constantly swim in those outsized yeilds to survive.
All those commodity traders, pension funds, hedge funds, flippers, currency traders, etc. owe their continued survival to the ability to find outsized profits somewhere. Standing still is death to them.
‘All those commodity traders, pension funds, hedge funds, flippers, currency traders, etc. owe their continued survival to the ability to find outsized profits somewhere. Standing still is death to them.’
This is why I am dribbing and drabbing through dollar-cost averaging into the market these days. I think there are plenty of days ahead to find market-corrected bargain prices. As much as it seems the market has got its shid together, ooops, it has one of those “nobody could of seen this coming” crashes or black swan events.
But aren’t you turning around and using your cash to buy those same stocks at today’s much-higher prices?
I predict a housing crash within one year, and a stock market crash last year.
“…and a stock market crash last year.”
Hindsight predictions are the most accurate, unless they are wrong.
‘The White House _ Office of the Press Secretary’
‘This isn’t America vs. ISIL. This is the people of that region vs. ISIL. It’s the world vs ISIL.’
‘When the world is threatened; when the world needs help; it calls on America. And we call on our troops.’
Wow, these 7,000 guys have sure stepped up to Dr. Evil status pretty quick. It’s been such a short time, we still don’t know what to call them. But now it’s the world against, whoever. We get to bomb Syria (regime change), like they wanted to a year ago, and re-invade Iraq, like they wanted to. Golly, it’s like Christmas time for the neocons. It’s almost like all these unlikely events came together just to advance their agenda.
Lets see…. by spring they’ll wheel out the WMD charade.
It’s going to take even more this time. WMD on our shores or border. People have scare/war fatigue. They need to ramp up the psyop.
There will need to be a shortage of Fruity Pebbles at the Speedy Mart.
They don’t even have to concoct stuff like that anymore. Remember how the Libya “no-fly zone” turned into around the clock missile bombardment and airstrikes? Bod a-bing, next thing you know, regime change!
‘The Islamic State of Iraq and Syria (ISIS) may be dominating the headlines and stealing attention with its prolific propaganda, but CBS News’ Bob Orr reports, another group in Syria — one few have even heard of because information about it has been kept secret — is considered a more urgent concern.’
‘Sources tell CBS News that operatives and explosives experts from Osama bin Laden’s old al Qaeda network may again present an immediate threat to the U.S. homeland.’
Sources tell, huh? You could start just about any wild story with that one. Then, at the bottom:
‘At the moment, U.S. officials say there is no specific, credible threat to the homeland.’
Creepy Orwellian language and all.
The French have escalated to name-calling. They may stick out their tongues next.
http://i100.independent.co.uk/article/isis-are-really-upset-with-the-french-governments-new-name-for-them–e1MHeltAVl
It all is like that Heinlein “Starship Troopers” movie. Except in that one it was a real enemy - giant spiders. In this real scenario, the brown skinned people are really no threat. But the government and its media lap dogs on the left and on the right are putting out headlines and newsfeeds of heads chopped off of poor schmucks who happen to be attracted to the knife blades of the criminals on the other side of the world. And somehow the USA must be involved and go to war for that reason. Very fascist.
And now, an anarchic dystopia.
The Kurds just issued a new “call to arms” (meaning “Onward Christian Solidiers.”)
http://www.reuters.com/article/2014/09/21/us-syria-crisis-turkey-kurds-idUSKBN0HG07D20140921
I know for a fact many Bible thumping social conservatives love all this and help the media fan the flames of a war between Christians and Muslims.
The worst threats have always been the evangelical Christians - allowing them access to toggle switches in nuclear silos, allowing them access to all the NSA spying - yes FBI is mostly Mormon conservative, is what I heard.
Best thing to do is the opposite of what they want. Being debt free and having lots of cash (and precious metals) and also renting - that is the real freedom. You free yourself from the state by not falling for the institutions of home moanership, religion, progressivism, marriage (it requires the state) and even pumped up stock markets. I know, I’m gung ho on stocks for the long run. But I have a low cost basis in mutual funds. I played the game the Fed wanted me to play, except I am smarter about it and am taking my winnings. In my own company stock I realized more gains than the principle I put in, so it’s cool with me.
The average low-IQ Christian Right voter would look at you in slack-jawed uncomprehension if you tried to explain the 1400-year-old conflict between the Sunnis and Shias that is behind a lot of the recent chaos in Syria and Iraq.
As would the average low IQ non-Christian voter.
They are hoping for the second coming.
FBI is mostly Mormon conservative
That sounds unlikely. Mormons are 2% or 3% of the population.
Selfish Hoarder provides a linky
http://www.businessinsider.com/11-surprising-things-you-didnt-know-about-mormons-2011-6?op=1
I have a hunch Mormons are overrepresented in the FBI, Border Guard and CIA, compared to their share of the U.S. population. (Generalizing here from what I have heard through the grapevine plus personal contacts in two of the tree above organizations; and I know the CIA doesn’t publicize its membership, either.)
The article says Mormons are 6 million in the US or about 2 percent of population. Even if they are 300 percent over represented in the FBI or CIA that is only 6 percent. Far from the agencies being mostly Mormon.
Maybe in a city like PHX with a much higher Mormon population than other metro areas there is a large overrepresentation, but I’d doubt it comes anywhere close to agencies being mostly mormon even there.
Mormons, FBI, CIA:
“Mormons are disproportionately represented in the CIA. A recruiter told the Salt Lake Tribune that returned Mormon missionaries are valued for their foreign language skills, abstinence from drugs and alcohol, and respect for authority.”
Read more: http://www.businessinsider.com/11-surprising-things-you-didnt-know-about-mormons-2011-6?op=1#ixzz3DzmSQZlb
“As democracy is perfected, the office of the President represents, more and more closely, the inner soul of the people. On some great and glorious day, the plain folks of the land will reach their heart’s desire at last and the White House will be occupied by a downright fool and complete narcissistic moron.”
- H.L. Mencken
Alternatively, we could have a dictator that rules with an iron fist and is a downright fool and complete narcissistic moron.
The really foolish, moronic attitude is an interest in the president’s personality instead of focusing on what the government does.
“what the government does”
#FundamentalTransformationOfAmerica
The number one constitutional responsibility of the Federal Government is to defend the country. The government is failing on all fronts; the border, immigration, visa’s, Radical Islamists, and communist/marxist insurgents. I suppose funding social welfare programs for non citizens is more important…god help us.
#Don’tBeheadMeBro
#Don’tRevolutionizeMeBro
#ClowardAndPiven
‘This isn’t America vs. ISIL. This is the people of that region vs. ISIL. It’s the world vs ISIL.’
Vegas has ISIL favored by 3 1/2 points.
‘When the world is threatened; when the world needs help; it calls on America. And we call on our troops.’
‘Merica, eff yeah!
Why do some people get to borrow at super low interest rates and then turn around and lend @20%?
What is stopping you from joining the party?
https://www.lendingclub.com/public/steady-returns.action
The music is going to stop and the party is going to stop. Prepare in advance. I hold my nose at individual stocks - they stink. Prices too high.
I think it’s the part where azdude can’t borrow at 0% with nothing but trash for collateral.
It’s what we do. And it’s what our customers want us to do.
With the understanding that this is a parody, people really do willingly sign up for such treatment such as this:
http://www.youtube.com/watch?v=qdFLPn30dvQ
They own the Federal Reserve Bank. You do not.
Do current lofty share prices on U.S. stocks accurately reflect the present and future economic outlook?
More Keynesian stimulus is on the way!
Money
G20: Low interest rates contribute to possible excessive risk in markets
September 21, 2014
Japan’s central bank governor Haruhiko Kuroda (right), laughs as he shakes hands with International Monetary Fund (IMF) Managing Director Christine Lagarde (centre) at the G20 Finance Ministers and Central Bank Governors Meeting in the northern Australian city of Cairns, in this handout picture taken September 20, 2014. ― Reuters
CANBERRA, Sept 21 ― Group of 20 finance chiefs and central bankers said low interest rates are contributing to a potential build-up of excessive risk in financial markets, even as monetary stimulus is needed to bolster uneven global growth.
“We are mindful of the potential for a build-up of excessive risk in financial markets, particularly in an environment of low interest rates and low asset price volatility,” the G20 officials said today in a communique released in Cairns, Australia. “We welcome the stronger economic conditions in some key economies, although growth in the global economy is uneven and remains below the pace required to adequately generate much needed jobs.”
The global economic recovery has faltered since a February G20 meeting in Sydney, as signs that Europe risks slipping into deflation offset more buoyant economies in the US and UK and the wealth effects of stock-market gains. In Asia, Japan’s revival is being blunted by a sales tax increase and concerns are mounting that China’s 7.5 per cent growth target for 2014 is becoming harder to attain.
“It is critical that we take concrete steps to boost growth and create jobs,” Australian Treasurer Joe Hockey, who hosted the meeting, told reporters after the communique was released. “We will use all levers available, including additional fiscal and monetary policy leverage where appropriate.”
…
Fed Focus
Thank Janet Yellen: stocks hit new record
By Paul R. La Monica
September 17, 2014: 5:46 PM ET
WASHINGTON (CNNMoney)
Wall Street is smiling. Although the economy is getting better, the Federal Reserve is probably not going to raise interest rates until the summer of 2015 at the earliest.
The Fed said Wednesday that it continues to believe rates should remain low for a “considerable time” after its bond buying program is complete — which should happen following its next meeting.
Investors were pleased. They sent the Dow to a record level in the afternoon — crossing 17,200 for the first time ever. The index closed at a new high of 17,157.
…
accurately reflect the present and future economic outlook ??
Money seeking yield with stop loss orders right behind each purchase…Thats why, when it comes unbuttoned, it falls so fast…
“… with stop loss orders right behind each purchase …”
Bahahahahahahaha … buy high and sell low.
In any other market people would want to buy low and sell high but with stop loss orders you will end up dong just the opposite.
Think abut this: If you really valued a stock so as you wanted to buy it at a certain price wouldn’t you want to buy more of it if the price dropped? Yes? You do this with just about everything else you buy so why don’t you do this with stocks?
Answer: Because people are smart.
Bahahahahahahahahahahahahahahahahaha
Bahahahahahahaha … buy high and sell low ??
When the stock rises you move the stop loss up Dude locking in your gains…Being a Banker I would have thought you understood that…On the other hand, bankers aren’t that smart…They are just pirates in brick ships…
If a manipulator wants to acquire some stock on the cheap then all he needs to do is move the price down to the level at which stops are located. It’s not hard to find these levels: It’s at some previous low.
Wait until circumstances are favorable and then begin a selling campaign so as to push prices to the stop-loss level and then cover as the stops are triggered.
Easy money.
Plus, once the manipulator starts doing his selling his actions draw in others who also sell short and the combined effort of all this selling pushes down prices - pushes prices way, way down - and drives prices down to the point - past the point - of fear, panic and terror, and this - THIS - is the point where one should go long - not only cover but go long.
Assuming, of course, the stock is one worth buying in the first place.
Rinse, repeat, rinse, repeat, rinse, repeat …
Note that this selling-that-is-designed-to-trigger-further-selling works to shake loose weak longs: It does not work to shake loose solid, committed longs because solid, committed longs do not use stop-loss orders.
Solid, committed longs see price declines as buying opportunities, not selling opportunities.
I want a buying opportunity.
When the sheeple are receiving free helpful advice from the MSM on whether to ‘buy, sell or hold,’ you know the stock market is nearing a top.
Sunday Journal
Buy? Sell? Or Hold?
After a Robust Stock-Market Rally, Time to Look at the Big Picture
By Gregory Zuckerman
Sept. 20, 2014 8:05 p.m. ET
Large U.S. stocks and airline shares. Companies making sand for fracking and small biotech shares.
These diverse pockets of the market have enjoyed some of the most impressive gains in a strong year for stocks. But investors face challenging questions as they prepare for the year’s home stretch. Which of these hot sectors is worth considering now that they’ve already run up, and which are ripe for profit-taking? And what areas of the market have underperformed but might be primed for a rebound?
The overall market has done well this year, though big stocks have trounced small stocks and foreign shares. The S&P 500 index, which tracks the largest companies, is up 8.8% through Friday, including dividends, thanks to resilient growth in the U.S. and robust profit margins.
…
Weren’t savvy San Diego households buying more affordable homes in Riverside County, trading a long commute for a bigger house, just before the last crash?
To my recollection, these outlying homes took a much larger hit in value than smaller homes inside the San Diego city limits. But then it has been five or so years already, so memory fades…
Are these homes worth 65-mile commute?
By Jonathan Horn
10:33 a.m. Sept. 19, 2014
Jennifer Kelly cooks dinner as her husband Patrick sits nearby while in their new home in Murrieta on Tuesday. Jennifer Kelly cooks dinner as her husband Patrick sits nearby while in their new home in Murrieta on Tuesday. — Hayne Palmour IV
If you work in San Diego, you can drive home each day to a new house in a planned development for $350,000.
The modern homes are about 2,000 square feet, have four bedrooms, expansive kitchens, oversized closets, walk-in pantries and two-car garages.
So what’s the catch? A 65-mile, each-way commute, which takes you into Riverside County. That’s where state-of-the-art homes are being constructed with creature comforts like central air conditioning, granite countertops, and landscaping included.
“It’s the best feeling in the world to come home to a house like this,” said Jennifer Kelly, 33, a Mission Valley-based health insurance case worker who moved to a new home in Murrieta in June. “I know an hourlong drive seems like a lot, but for me, especially (after fielding health insurance) complaints, by the time I get home I have already let go of work.”
…
If the commute is @ 65 mph its probably not to bad…Its the grid-lock that turns it into a nightmare….
“Its the grid-lock that turns it into a nightmare….”
An the grid-lock will intensify as the newly-built houses fill up with commuters.
And as the newly-built houses fill up with commuters the roads leading from point A to point B will have to be widened and widening a road means lots of “Road Work Ahead” signs, and such signs might as well read as “More Grid-lock Ahead”.
Sign me up.
Just to get out of SD and up over the hill there is always gridlock.
Try 30 mph on I-15 north at rush hour, unless there is an accident (a frequent occurrence).
After 5 minutes of that commute, you have let go of work and become consumed by traffic.
It does take your mind off work, though, in corroboration of the savvy thirty-something Temecula owner’s assertion.
Dang, once again, bubble history repeats. Unbelievable.
People are smart.
Those who fail to learn the lessons of (very recent) history are doomed to (soon) repeat the same mistakes.
Murkiest a was fraud central last time and “values” there were destroyed by the previous collapse. Now they are pumping that junk again. And only 2000 sq foot? LOL that is small for Murrietta.
And 65 miles from SD is not 65 minutes. It is more like 2 hours considering traffic. You are better off going on welfare so you can see your kids.
Damn autocorrect. Murkiest a = Murrietta
“You come out here, you get more open spaces, backyards, bigger homes, and I think it appeals to families that say, ‘Hey, I want a backyard, I want to have a bedroom for every child,’ and it’s a more-affordable way for them,” said Mark Torres, who leads Lennar’s Inland Empire division.
Key-phrase: “I want…”
Every time I think about California, I think about that scene in ‘2012′ that shows literally the land mass tipped on its side. Don’t think about modern day Poncho Villas or Terminator drones. No, I picture a biblical epic of no proportion ever witnessed.
http://wolfstreet.com/2014/09/21/eu-caves-to-powerful-scandal-infested-finance-paradise-the-city-of-london/
There’s been a common misconception doing the rounds in Europe – namely that whatever is good for Brussels and Frankfurt must by extension be bad for the City of London, that small incorporated area of London known as the Square Mile that is uniquely powerful and at once unaccountable. The basic premise behind this flawed assumption is that with the creation of a single supervisory mechanism for all of Europe’s disparate banking sectors, including the UK – set to occur at the end of October – the City’s see-no-banker-evil, hear-no-banker-evil regulatory environment will lose much of its appeal.
However, as I reported previously (here and here), the stone-cold reality is that the EU’s new banking regulation is primarily aimed at increasing the concentration and consolidation of Europe’s financial sector, to the obvious and exclusive benefit of Europe’s biggest banks, including British banking behemoths such as HSBC and Barclays. In its ongoing negotiations for the Transatlantic Trade and Investment Partnership (TTIP), the European Commission is doing everything it can to water down banking regulations on both sides of the Atlantic, in the process even outdoing its U.S. counterparts.
When 20 million become de facto legal in the next few months and can legally work will there be a glut of nannys and maids? Will everyone in San Diego be able to afford a cook and a house cleaner?
Only until they become DNC entitlement voters.
I do wonder what percentage are already on or receiving some type of welfare or food stamps or something. Do the children of illegals qualify for WIC ? They aren’t denied an education if they are here regardless of status, so I can’t see them being denied things like WIC, but I really don’t know.
Will there not be an explosion in public assistance costs because they are already receiving it to some extent?
Does anyone here actually know about this?
Hope they do home care for elderly in 30 years~
In 30 years? Why would they? They’ll be old themselves or 30 years into a career. Their kids won’t do it either. That’s the next wave you are thinking of.
Y’all discussing Amy’s ‘pool of 1st time home buyers’ again?
Ukraine’s previous oligarch-run, pro-Putin regime, having emptied the treasury of more than $70 billion, was overthrown by a new oligarch-run regime. Naturally, Ukraine is on the verge of “total economic collapse” and the banksters who loaned billions to a kleptocracy - foolish in a non-crony capitalist economy - are now lining up to be paid, per usual, by US and EU taxpayers.
http://www.businessinsider.com/ukraine-is-on-the-brink-of-total-economic-collapse-2014-9
Has the prospect of paying for your daughter’s insanely overpriced education at a college or university, then graduating into an oligarch-looted speculative economy with massive debt, got you down? No worries, the oligarchs can make “arrangements” with willing serf girls.
http://www.businessinsider.com/how-americas-sugar-daddies-are-financing-college-education-2014-9
Are you sure this is new?
Sounds to me like a close variant of the world’s oldest profession.
Wells running dry can’t be good for CA’s Central Valley real estate.
http://hosted.ap.org/dynamic/stories/U/US_CALIFORNIA_DROUGHT_DRY_TOWN?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-09-21-10-04-27
Sunday comics, courtesy of TBP.
http://www.theburningplatform.com/2014/09/21/sunday-funnies-29/
More and more municipalities turn to “civil forfeiture” to balance the books, Constitution be damned.
http://www.bbc.com/news/blogs-echochambers-29228851
Santa Clara County, CA Housing Demand Plunges To 2008 Levels
http://files.zillowstatic.com/research/public/County/County_Turnover_AllHomes.csv
Some things never seem to change.
http://jessescrossroadscafe.blogspot.mx/2014/09/upton-sinclair-brass-check.html
These quotes are from The Brass Check which was written by Upton Sinclair in 1919.
A brass check was a token purchased by a customer in a brothel and given to the woman of his choice. Sinclair saw the moneyed interests of his day holding brass checks with which to purchase politicians, journalists and their editors, and other thought leaders of the day.
For twenty years I have been a voice crying in the wilderness of industrial America; pleading for kindness to our laboring-classes, pleading for common honesty and truth-telling, so that we might choose our path wisely, and move by peaceful steps into the new industrial order. I have seen my pleas ignored and my influence destroyed, and now I see the stubborn pride and insane avarice of our money-masters driving us straight to the precipice of revolution.
What shall I do ? What can I do — save to cry out one last warning in this last fateful hour? The time is almost here — and ignorance, falsehood, cruelty, greed and lust of power were never stronger in the hearts of any ruling class in history than they are in those who constitute the Invisible Government of America today.
Imagine, if you can, the feelings of a workingman on strike who picks up a copy of the Wall Street Journal and reads:
‘We have a flabby public opinion which would wring its hands in anguish if we took the labor leader by the scruff of his neck, backed him up against a wall, and filled him with lead. Countries which consider themselves every bit as civilized as we do not hesitate about such matters for a moment.’
Year by year the cost of living increases, and wages, if they move at all, move laggingly, and after desperate and embittered strife. In the midst of this strife the proletariat learns its lessons ; it learns to know the clubs of policemen and the bayonets and machine-guns of soldiers.
Day by day the money-masters of America become more aware of their danger, they draw together, they grow more class-conscious, more aggressive. The [first world] war has taught them the possibilities of propaganda ; it has accustomed them to the idea of enormous campaigns which sway the minds of millions and make them pliable to any purpose.
American political corruption was the buying up of legislatures and assemblies to keep them from doing the people’s will and protecting the people’s interests; it was the exploiter entrenching himself in power, it was financial autocracy undermining and destroying political democracy.
By the blindness and greed of ruling classes the people have been plunged into infinite misery ; but that misery has its purpose in the scheme of nature. Something more than a century ago we saw the people driven by just such misery to grope their way into a new order of society; they threw off the chains of hereditary monarchy, and made themselves citizens of free republics.
And now again we face such a crisis only this time it is in the world of industry that we have to abolish hereditary rule, and to build an industrial commonwealth in which the equal rights of all men are recognized by law.
The oligarcy’s preeminent propaganda mouthpiece, the NYT, is starting to fret about the sheeple waking up.
http://www.nytimes.com/2014/09/21/upshot/in-scotland-and-beyond-a-crisis-of-faith-in-the-global-elite.html?_r=1&abt=0002&abg=1
In Scotland this week, a measure to become an independent country and end the United Kingdom as we know it failed, but it would have succeeded with a swing of just 5 percent of the vote. Earlier in the week, a right-wing anti-immigration party in Sweden claimed its largest-ever share of parliamentary votes. And in the United States, new census data released this week showed that middle-income American families made 8 percent less last year, adjusted for inflation, than they did in 2007.
What these stories have in common is this: They lay bare a crisis of faith in the global elite.
Grifters gotta grift.
http://www.telegraph.co.uk/news/uknews/crime/11110937/Unbelievable-world-of-the-banker-desperate-to-hide-benefit-fraud.html
Mount up, taxpayers. We got us another failed state to sink billions into “nation-building” (just don’t look to closely at who gets the contracts, and profits), and more Somali Democrat-for-Entitlements huddled masses to resettle in the liberal bastion of Minnesota.
http://www.theguardian.com/world/2014/sep/20/united-nations-fears-somalia-food-shortages-famine
Famine is stalking Somalia after a year of poor rains and heavy fighting, with more than a million lives at risk and little sense of urgency from the international community, the top UN envoy to the country warned.
Three years ago food shortages killed 260,000 people.
Many of the warning signs ahead of that disaster have appeared again this year, including poor rainfall, large numbers of people fleeing their homes, and roads blocked by the extremist al-Shabaab group.
Fleckenstein calls out CNBC permabull talking-head barbie on the stupidity of “investing” in the Fed’s ponzi market.
http://www.businessinsider.com/fleckenstein-responds-to-cnbc-interview-2014-9
What more is there to say?
whats interesting is that these rich insiders that rig the market sit and watch there wealth go up as the workn smuck sees his wealth go down.
Another mentally-disturbed Iraq war veteran in the headlines.
http://www.zerohedge.com/news/2014-09-21/knife-yielding-veteran-sniper-rushes-white-house-wants-warn-obama-atmosphere-collaps
craytor
CRAAAAAAAAAAATERRRRRRRRRRRRRRR!!!
Rut-roh. Another Chinese bursting-bubble story.
http://www.talkmarkets.com/content/news/chinese-bubble-bursting?post=49413&utm_source=taboola&utm_medium=referral&utm_term=bloomberg
“Buybacks are not a return of capital to shareholders – they are partly a leveraged speculation on shareholder’s behalf, partly a strategy to enhance per-share earnings by reducing share count, and partly a way to reduce the dilution from stock-based compensation to corporate insiders. Moreover, repurchases move in tandem with corporate debt issuance, which is another way of saying that the history of stock buybacks is one of companies using debt to buy their stock at overvalued prices.”
They’re a dime a dozen these daze.
ABQDan doesn’t even bother trying to refute them any more!
Recent disrupted Islamist beheading plots causing the Aussie public to do a U-turn on gun control, after previously accepting a draconian mass disarmament pushed by their oligarchs.
http://market-ticker.org/akcs-www?post=229429
region viii appears to be losing to region x, if this continues i will starve tomorrow
I’ll swing by and leave some groceries and canned goods on your porch. Anonymously of course.
Donkeys wearing out their hooves with all the punting.
You can eat cake.
tied with 0:18 left? the fleahawks are going down
Donkeys fell into a crater. They’ll feel right at home won’t they…
Yep.
Mourning a loss of food. Papa John’s 50% deal was a large two topping and an order of cheese sticks for $10.80 Including tax.
Who will pay full price to toss these slices of Papa John’s pizza into their mouths? Not the broke @ss losers buying $500,000 starter homes.
I saw a little of that game.
How come they picked up the flag when the Fruit Bats jumped offside? How do they do that? Seal the call under executive order? Lose the e-mail?
Carroll Pete was sure happy about that bad third down call.
Officiating was sketchy for sure.
One of my neighbors was moving out last night. I hope the house goes up for sale. If it does, it will be the third one with a sign on one street. I’m pretty sure it’s not a rental.
Phx, bby.
I have an off-topic question:
Is the American electorate really up for opening the closet on these skeletons? (Post soon to follow…)
I, for one, certainly hope not. Of course, the zombiefied California electorate is certain to willingly ignore these issues, for the irresistible prospect of electing the first president of the female gender persuasion.
Don’t do it!!! Better prospects will present themselves in the near term. Don’t settle for a first female presidency which is predestined to be rife with scandal and cronyism.
Independent counsel investigation
The charges arose from an investigation by Independent Counsel Ken Starr. Originally dealing with the failed land deal years earlier known as Whitewater, Starr, with the approval of United States Attorney General Janet Reno, conducted a wide ranging investigation of alleged abuses including the firing of White House travel agents, the alleged misuse of FBI files, and Bill Clinton’s conduct during the sexual harassment lawsuit filed by a former Arkansas government employee, Paula Jones. In the course of the investigation, Linda Tripp provided Starr with taped phone conversations in which Monica Lewinsky, a former White House Intern, discussed having oral sex with Clinton. At the deposition, the judge ordered a precise legal definition of the term “sexual relations”[2] that Clinton claims to have construed to mean only vaginal intercourse. A much-quoted statement from Clinton’s grand jury testimony showed him questioning the precise use of the word “is.” Contending that his statement that “there’s nothing going on between us” had been truthful because he had no ongoing relationship with Lewinsky at the time he was questioned, Clinton said, “It depends upon what the meaning of the word ‘is’ is. If the—if he—if ‘is’ means is and never has been, that is not—that is one thing. If it means there is none, that was a completely true statement”.[3] Starr obtained further evidence of inappropriate behavior by seizing the computer hard drive and email records of Monica Lewinsky. Based on his conflicting testimony, Starr concluded that Clinton had committed perjury. Starr submitted his findings to Congress in a lengthy document (the so-called Starr Report), and simultaneously posted the report on the internet, replete with lurid descriptions of encounters between Clinton and Lewinsky.[4]
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Dubai property prices show signs of cooling
12:30 AM
22 September 2014
Visitors inspect Mall of the World at Dubai Properties section at the exhibition of Global Cityscape 2014, at Dubai International Convention and Exhibition Centre yesterday. Dubai property price rises, at close to 30% year-on-year, had been among the highest in the world throughout 2013 and the first part of 2014, causing many - including the UAE central bank - to fear a repeat of the local market crash of 2008-9, which saw prices slump more than 50%.
Dubai’s booming property market is showing signs that it may be cooling off, industry data showed yesterday, after two years of soaring prices that had drawn warnings of possible overheating from the International Monetary Fund.
Property price rises, at close to 30% year-on-year, had been among the highest in the world throughout 2013 and the first part of 2014, causing many - including the United Arab Emirates central bank - to fear a repeat of the local market crash of 2008-9, which saw prices slump more than 50%.
But average residential rents fell 1% in the third quarter, their first decline since 2012, pressured by weaker demand during the holy month of Ramadan and a rise in new home supply, a report by real estate investment firm CBRE said.
A separate report by property consultant JLL showed that residential rents and sales rose 2% and 1% in the same period, slower than the respective 3% and 6% increases posted in the second quarter.
“Driven by tighter government regulations and an increasing mismatch between buyer and seller expectations, the residential sector is now experiencing a welcomed period of stability,” the JLL report said.
JLL added it expected rents and sale prices to remain relatively stable over the rest of 2014, “with the market behaving in a more sustainable and healthy manner”.
The data is the first to suggest that the Dubai real estate market might by cooling off after soaring since 2012, and will be used by the authorities in the emirate as evidence that measures taken to prevent speculation driving up prices are beginning to impact.
Dubai’s Land Department doubled last year the fee it charges on property transactions to 4%, while new lending limits on mortgages were introduced by the UAE central bank.
The CBRE report yesterday showed the fall in rents wasn’t uniform but was affecting some of Dubai’s more fashionable areas which had experienced the biggest rises, including Downtown Dubai - the area encompassing the world’s tallest building, the Burj Khalifa - where they dipped by an average of 3%.
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Chinese buyers are snapping up Australian homes, but for how long? Photographer: Ian Waldie/Bloomberg
Asian Economy
Irrational Exuberance Down Under
Sept 22, 2014 12:50 AM EDT
By William Pesek
Lindsay David’s new book on Australia deserves a medical disclaimer: Reading this will greatly raise your blood pressure.
In “Australia: Boom to Bust” David sounds the alarm about an Australian housing bubble he argues makes the 12th-biggest economy a giant Lehman Brothers. His thesis can be boiled down to the number 9 — the ratio of home prices to income in Sydney. The multiple compares unfavorably to 7.3 in London, 6.2 in New York and 4.4 in Tokyo (Melbourne is 8.4).
Housing is one of the three pillars of the Australian economy, along with financial institutions and natural resources. Politicians and investors alike, David writes, don’t get “how deeply intertwined and connected” these sectors are and “how they can easily take each other down in a domino effect.” The most obvious trigger would be a Chinese crash that simultaneously hits bankers, miners and households hard.
I caught up with David in Sydney last week at a Bloomberg conference where I helped grill Treasurer Joe Hockey about these very topics. When I asked Hockey point blank whether Australia faced a huge property bubble, he dismissed the entire premise out of hand.
“It is just an easy mantra for international commentators and for analysts based overseas to say, ‘Well, there’s a bit of a housing bubble emerging in Australia’,” Hockey retorted. “That is a rather lazy analysis because fundamentally we don’t have enough supply to meet demand.”
Two hours later, Australia’s central bank raised concerns about “speculative demand” that “could amplify the property price cycle and increase the potential for property prices to fall later.” If not exactly Australia’s version of the “irrational exuberance” warning that will forever color the legacy of former Federal Reserve Chairman Alan Greenspan, that’s still pretty strong language from a Group of 20 central bank.
The Reserve Bank of Australia wasn’t rebutting Hockey; its concerns about an overheated housing market came in the minutes of its Sept. 2 meeting. Lazy analysis on the part of RBA Governor Glenn Stevens? Hardly. Nor are the folks at the Bank for International Settlements snoozing on the job when they warn Australian housing is among the most overvalued anywhere.
There’s something dangerously wrong when Australia’s top economic official is blowing off fears of asset bubbles and heightened leverage. Sure, David’s analysis can be hyperbolic in places. His bet that at least one of Australia’s big-four banks will go bust, Lehman-style, or get nationalized puts him a bit out of the mainstream. On the other hand, Hockey’s acerbic dismissal of the danger smacks of hubris. Home prices are seen rising between 8 percent and 12 percent in 2015 in Sydney and roughly 9 percent across Australia’s major cities. How can that make sense, in an already frothy market?
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Asia Stocks Drop With U.S. Futures, Commodities on China
By Nick Gentle and Jonathan Burgos
Sep 21, 2014 9:22 PM PT
Photographer: Andrew Harrer/Bloomberg
Lou Jiwei, China’s Finance Minister, said growth in Asia’s largest economy faces downward pressure.
Asian stocks fell, led by Hong Kong shares, and U.S equity-index futures tumbled with commodities amid speculation China may accept slower growth. Bonds rallied after officials from the world’s biggest economies warned of rising financial risks, and silver plunged.
The MSCI Asia Pacific Index dropped 0.6 percent by 1:19 p.m. in Tokyo, as the Hang Seng Index retreated 1.3 percent on elevated trading volume. Standard & Poor’s 500 Index futures lost 0.5 percent. SoftBank Corp. drove Japanese shares lower. The yen climbed 0.2 percent as yields on government bonds from the U.S., Japan and Australia slid. South Korea’s won rebounded from a five-month low. Silver slumped with copper and nickel in London and Brent oil slid 0.5 percent.
China’s Finance Minister Lou Jiwei said growth in Asia’s largest economy faces downward pressure and reiterated that there won’t be major changes in policy in response to individual economic indicators. Group of 20 finance chiefs and central bankers said low interest rates could lead to a potential increase in financial-market risk, as major economies rely on monetary stimulus to bolster uneven growth. U.S. housing data is due today.
Lou “gave a real hint that the recent policy easing may actually be quite limited,” Stuart Beavis, head of institutional equity derivatives at Vantage Capital Markets in Hong Kong, said by phone. “We’re not just going to see this wall of money thrown at the Chinese slowdown.”
The Hang Seng Index is heading for its lowest close in about two months as the number of shares traded surged about 50 percent compared with the 30-day average for the time of day. A gauge of Chinese companies listed in Hong Kong slipped 1.8 percent in a third straight retreat. The Shanghai Composite Index fell 1.5 percent.
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How large a dip in the stock market would it take to lure you into buying?
20%?
30%?
50?
Upside
Don’t Be Lulled By the Stock Market’s Smooth Ride
It’s Been a Long Time Since the Last Correction—And That’s a Reason to Plan for the Next One
By Morgan Housel
Sept. 19, 2014 11:29 a.m. ET
The Dow Jones Industrial Average closed at a new record high on Thursday. Getty Images
After a five-year surge, the Dow Jones Industrial Average hit a new all-time high this past week. If you were along for the ride, congratulations.
But here’s what’s unnerving: It has been more than 700 trading days since the Dow closed 10% below its previous high. That is the fourth-longest run without a drop of that size, known as a correction, since 1929, according to data from S&P Capital IQ.
Some notable market skeptics have abandoned their bearish views. And bearish sentiment among investing newsletters recently hit the lowest level since 1987, according to Bespoke Investment Group, a research firm in Harrison, N.Y.
All this is making some contrarian investors nervous that the market is primed to take a tumble.
“Investors have clearly grown weary of worrying about risky scenarios that never seem to materialize,” Seth Klarman, who runs the $27 billion Baupost Group hedge-fund firm in Boston, wrote to investors this summer. “The higher the level of valuations and the greater the level of complacency, the more there is to be concerned about.”
Nobody knows when the market might turn. The 1990s bull market lasted more than twice as long without a correction.
But the longer we go without a stock-market pullback, the harder it will be for investors to handle when it inevitably occurs. A stable market breeds complacency. Complacency breeds bad investing behavior. Bad investing behavior breeds regret.
Now is a good time to remember that the past few years of smooth sailing aren’t normal. Since 1950, the S&P 500 has suffered a decline of 20% or more sometime during the year in about one-fifth of all years, according to Chicago-based investment-consulting firm Marquette Associates. About a quarter of all years saw a retreat of 10% to 15%.
Yet, when adjusted for inflation and dividends, U.S. stocks increased more than 90-fold during this period, according to data from Yale University economist Robert Shiller.
Once you realize how normal and inevitable market volatility is, you might think of it differently when it comes. It might look less risky, and more like the cost of admission to achieving the market’s long-term returns.
Here are a few things to keep in mind when thinking about how to react to the market’s next inevitable correction.
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Journal Reports
How to Play the Real-Estate Market
Housing Has Seen a Remarkable Recovery, but its Foundations Look a Little Wobbly
By Gregory Zuckerman
Sept. 21, 2014 4:56 p.m. ET 0 COMMENTS
Is it too late to catch the real-estate rebound?
Just a few years after suffering its worst downturn since the Great Depression, housing has seen a remarkable recovery. Skimpy interest rates, pent-up demand and lower prices have sparked gains of about 20% in the median price of new and existing homes over the past two years.
The Dow Jones U.S. Select REIT Index—which covers a number of investment vehicles—has climbed about 150% since the beginning of 2009, roughly matching the Standard & Poor’s 500, including dividends.
But the market’s foundation is starting to wobble. In June, home prices fell 0.2% compared with May’s levels, according to the seasonally adjusted S&P/Case-Shiller Home Price Index tracking the 20 largest cities. It marked the second consecutive monthly decline. The dip the month before marked the first time in about three years that prices fell on a monthly basis.
True, prices for June rose 8.1% compared with last year, and data tracking the sentiment of home builders has improved. But every city in the U.S. has seen home prices rise at a slower annual rate lately. Mortgage applications to buy a home recently fell to their lowest levels since February, refinance applications were the weakest since 2008, and housing starts dropped in August.
“The pace of slowing…has been somewhat more abrupt than we had expected entering the year,” says Michael Gapen, a senior economist at Barclays, who says there’s “downside risk” to his bank’s expectation that home prices will rise as much as 8% this year.
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Oh, no, please — not the ‘death cross’! Anything but the ‘death cross’!!!
Time to worry? Russell 2000 ‘death cross’ looms
September 19, 2014, 3:05 PM ET
Look out, the Russell 2000 is getting mighty close to achieving the dreaded “death cross” — a technical pattern that occurs when the 50-day moving average falls below the 200-day moving average (the purple line is the 50-day, the green is the 200-day). Needless to say, there’s some notable alarm on Twitter.
The divergence by small caps is certainly seems worth noting.
But does this mean the stock market is inevitably setting up for a crash? Technical analyst Ryan Detrick says it’s no slam-dunk.
In a blog post, he notes that since December 1988, the Russell has seen 19 death crosses. He found that while the Russell underperformed in the immediate aftermath of a death cross, it actually performed better than after the chart formation’s supposedly bullish opposite, the so-called golden cross. (Read the whole thing to see Detrick’s tables).
He notes that an investor who shorted the index after the last death cross in 2011 would have been down 19% by the time it had reversed, while someone who shorted all 19 signals would have lost an average of 5.55% and made money only four times. The bottom line, Detrick says, is that while the death cross could mark the start of a big downtrend, it’s not a “clear-cut bearish signal.”
–William Watts
Caixin
China state media see rare internal fight … over rate cuts
Published: Sept 22, 2014 12:26 a.m. ET
By Wang Yuqian
BEIJING (Caixin Online) — The Xinhua News Agency and People’s Daily have crossed swords over which has more faith in policy makers’ determination to push through economic reforms and whether it is fine to cut interest rates, a rare public display of friction for the state media outlets.
Fears that China is falling short of the government’s growth target for this year and calls for strong stimulating policies such as reducing interest rates have gained momentum, after August’s weak economic data were published, an article published by Xinhua’s website said on Sept. 16.
“Looking back at the past few months, voices like this were heard at home and abroad almost every time monthly and quarterly economic data came out,” the article says. “This means the speakers do not see clearly the ‘new norm’ of China’s economy and lack faith in the reform that China has been pushing forward with force.”
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