Bits Bucket for December 28, 2014
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Yesterday there were a couple of articles posted on the instability of the too big to fail banks. So the question that concerns me is the following.
Are too big to fail banks at risk now? Will they be allowed to fail?
Are regional banks any safer? How do we research their soundness?
What about the stability of small local credit unions? How to assess if they are being prudent and are safe?
Not a single bank can be allowed to fail. It will lead to contagion that destroys all of humanity and the apocalypse. Therefore there needs to be more QE and quick.
DID DEFLATION CAUSE HOUSING TO CRATER IN 2008?
Of course it did. And it’s gaining momentum once again.
You better believe it mister. I got some of the best financial deals of a lifetime between 2008 and 2010 cash. I only buy necessities now. Awaiting the next leg down to buy big ticket items at 50% off or more.
“Are too big to fail banks at risk now? Will they be allowed to fail?”
Ponder your question and you will discover that the answer lies within.
(Hint: If it is too big to fail then failure is not an option.)
‘Clinton remains a favorite of Wall Street from her time representing New York in the Senate. At a recent conference sponsored by the New York Times’ DealBook, Goldman Sachs chairman and CEO Lloyd Blankfein said he had “always been a fan of Hillary Clinton” and argued it was important for political leaders to have relationships with key institutions. “I certainly don’t think it’s a virtue to declare a big segment of the economy off limits,” he said.’
http://finance.yahoo.com/news/clinton-economic-approach-under-scrutiny-132904740–finance.html
Goldman Sachs was Obama’s #2 contributer. If you like your crony capitalism, you can keep your crony capitalism.
“Why Wall Street Loves Hillary
“She’s trying to sound populist, but the banks are ready to shower her campaign with cash”
http://www.politico.com/magazine/story/2014/11/why-wall-street-loves-hillary-112782.html#ixzz3NDjKPBHS
On this blog, in this post, the jokes write themselves:
“The bottom line for Wall Street, says this executive—echoing many others—is that Clinton understands that America’s much-maligned financial industry wants to be part of the solution to the country’s problems. ‘Everybody who makes money feels a shared responsibility,’ he continues.
Bahahahahahahahahaha …
“’Everybody sort of looks at her with a lot of optimism because they feel she doesn’t mind making hard decisions. She’ll do what she needs to do, but it’s not a ‘Let me blame you.’ It’s, ‘Hey, here’s what you’ve got to do.’ And I think that’s very different.’”
Bahahahahahahaha ..
“During a speech last December at the Conrad Hotel, in New York, her message could not have been more different from Obama’s hot, anti-Wall Street rhetoric: “We all got into this mess together, and we’re all going to have to work together to get out of it.”
http://www.politico.com/magazine/story/2014/11/why-wall-street-loves-hillary-112782.html#ixzz3NDw3Kn00
‘Everybody who makes money feels a shared responsibility,’ he continues.
Yeah, that’s so preposterous it’s funny!
‘Everybody who makes money feels a shared responsibility,’
They must have missed the remainder of the quote:
‘Everybody who makes money feels a shared responsibility,’ … to ensure that the scamming of Main St by Wall St does not come to an end.
I’ve wondered why the central bankers are so willing to bail out Wall Street, and backstop and support it. And the reason is simple: It’s trickle down economics. And Wall Street is the only “industry” about which they have a shadow of a clue.
So, what does Wall Street do?
• It tries to insert itself into every transaction, trying to take a cut, from metals warehousing, to housing, medical, education debt, which is de facto government insured.
• It sells logical constructs of questionable value.
• It allows betting on a gargantuan scale.
It’s heavily parasitic. And yet, this is sector which is has the deepest hold on the bought Congress, and the central bank.
I don’t know how it plays out, but the current policies are stagnation-inducing and wealth-concentrating.
Predicted 2016 Wall Street sponsored showdown:
Democan — Hillary Clinton
Republictrat — Ted Cruz
Wake up west coast you lazy bums.
No wonder in NY we get more done by 10 am than you folks do all day.
Do any of you really think they will raise interest rates by 1/4% in 2015?
I wonder how much hosing savers is compensating for home loan losses?
Why is it that falling housing prices are showing up all over the country?
Do any of you really think they will raise interest rates by 1/4% in 2015 ??
Yep…Drop in oil probably now guarantees it…Question really is, how many time will they raise it and the BIG Q is will they touch it at all in the election year of 2016…
Are lower oil prices or the jobs in the energy industry more important to GDP?
Lower prices result in more jobs.
Wake up west coast you lazy bums ??
Okay…I am reporting in….
Denver Donks 45 Oakland AIDSers 10
I don’t know rj…I think it will be closer than that…
The Donks are in free fall. I predict they will lose their first playoff game.
I predict they will lose their first playoff game ??
Well, if they win today they will get a bye…Their next game will be at home which they are very tough in and although I agree that their play of late has been shabby at best, I would not bet against Peyton at home…I guess the real question is will their defense show up…
The Broncos best shot at a Super Bowl was 2 years ago when they melted down against Baltimore in the playoffs. Nobody was beating Seattle last year, and it looks to probably be the case this year as well.
Broncos 46
Raiders 14
Good call.
Broncos 47
Raiders 14
Did the much feared Cina slowdown blow over, as AlbqDan predicted it would?
China (gotta work on my smartphone text editing!)
Can you use the JT extension on your phone browser? I would be lost with it…
Can you use the JT extension on your phone browser? I would be lost with it…
I couldn’t get mozilla for Android to install it, but haven’t looked into why.
See that yonder brick wall? Hit the accelerator pedal and keep speeding up yer car in that general direction until you hear a scraping sound.
Loose lending is the ticket for unlimited economic growth.
Investing 12/27/2014 @ 7:18PM
China Gives Up On Housing Bubble
Kenneth Rapoza Contributor
I cover business and investing in emerging markets.
If Beijing is to be trusted on its view of the housing market there, then the bubble has deflated without a pop. As a result, the Chinese government will scrap restrictions on second-home purchases. For wealthy Chinese, it´s time to invest again.
Home prices are set to decline further next year and cities that still restrict multiple-home purchasing policies are expected to make it easier for investors to buy real estate, a report by an economic think tank at the Chinese Academy of Social Sciences said on Friday.
The property downturn since the beginning of the year prompted most of the cities that had restrictions to start easing them. There are now only five cities where the restrictions on second homes: Beijing, Shanghai, Guangzhou, Shenzhen and Sanya.
The first- and second-tier cities have entered a relatively oversupply period. Home prices would continue to drop and restrictions are expected to be eased completely,” Zou Linhua, a researcher with the think tank told the China Daily.
Investors watch China´s housing market closely. A weak housing market, forced that way by law makers in Beijing, meant problems for housing developers, and possibly even lenders that have a lot of real estate debt on their hands. Investors see this as bearish. Yet, at the same time, a housing bubble was also seen as bearish because it gave investors concern of the possibilities of restrictions and financial crises down the ride. If the restrictions do not lead to rabid speculation and over supply, investors might return to the real estate and financial heavy iShares FTSE China (FXI) exchange traded fund, which has struggled to remain in the $40s since 2010.
This lifting of restrictions could be good news for FXI shareholders. Financials and real estate account for 48% of FXI´s sector holdings.
According to data from the National Bureau of Statistics, home sales in the first 11 months of the year fell by 9.7% from a year ago, while residential property investment grew by 10.5%. First- and second-tier cities are expected to lead the recovery by the second half of 2015. Smaller cities would see the recovery in the second half of 2016, the report said.
China International Capital Corp, the country´s largest investment bank, is bullish on housing. The bank said that China´s loose monetary policy would return national home sales to “growth” from “contraction” in the second quarter next year, and annual sales would grow by 3%.
…
“Economists generally believe that deflation is a problem in a modern economy because it increases the real value of debt.”
This is the reason you want to liquidate and get out of debt and hold onto every dollar you’ve got.
ft dot com
December 28, 2014 11:42 am
China zombie factories kept open to give illusion of prosperity
Jamil Anderlini in Beijing
A worker walking on steel rods in a steel market©Getty
In the shadow of a group of enormous smokestacks and abandoned foundries, a peeling sign welcomes visitors to the Wenxi Steel Industrial Park.
But in the nearby village, the working-age men and many of the women have gone, leaving only the elderly and the very young.
“If you cut down the big tree, all the small trees around it will die,” says 69-year-old Wang Peiqing, referring to the collapse of Highsee Iron and Steel Group, which operated the foundries before its recent closure devastated the economy of a once-prosperous corner of Shanxi province in central China. “The entire region relied on the steel mill; now the young people have to go and look for work across China.”
Highsee stopped paying its 10,000 employees six months ago. Local officials estimate the plant supported indirectly the livelihood of about a quarter of Wenxi county’s population of 400,000. Highsee was the biggest privately owned steel mill in Shanxi, accounting for 60 per cent of Wenxi’s tax revenues. For those reasons, the local government was reluctant to allow the company to go out of business, even though it had been in serious financial difficulties for several years.
“By 2011 Highsee was already like a dead centipede that hadn’t yet frozen stiff with rigor mortis,” says one official who asks not to be named because he was not authorised to speak to foreign reporters. “More than half the plant shut down, but it was still producing steel even though its suppliers wouldn’t deliver anything without cash up front and it was drowning in debt.”
Across the vast expanses of China, similar experiences are playing out, with thousands of companies in heavy industrial sectors plagued by chronic overcapacity that should be going bust instead being propped up by local governments.
With enormous power over courts, state-owned banks and local administrative departments, Communist party officials across China are prepared to go to great lengths to support the biggest failing employers in their jurisdictions.
It was only last month, four years after Highsee began to flounder, that the company was finally allowed by the government to initiate bankruptcy proceedings.
In the past month alone Chinese media have reported on at least nine large steel mills that appeared to be suspended in limbo after halting production but which are forbidden from going formally bankrupt.
“There are large numbers of companies across China that should go bankrupt but haven’t done so,” says Han Chuanhua, a bankruptcy lawyer at Zhongzi Law Office, a Beijing legal practice. “The government doesn’t want to see bankruptcy because as soon as companies go bust, unemployment spikes and tax revenues disappear. By stopping companies from going bankrupt, officials are able to maintain the illusion of local prosperity, economic growth and stable taxes.”
The outstanding volume of non-performing loans in the Chinese banking sector has increased 50 per cent since the beginning of 2013, according to estimates from ANZ, the Australian bank, but the sector-wide NPL ratio remains extremely low, at just over 1.2 per cent.
In private, however, senior Chinese financial officials admit the real ratio is almost certainly much higher, obscured by local governments trying to prop up companies.
China is on track for its slowest annual growth this year since 1990, when it was still under international sanctions in the wake of the Tiananmen Square massacre. After years of frenetic growth and construction, the slump in China’s real estate sector has created severe problems for upstream industries such as steel, glass and cement that are already suffering from chronic overcapacity.
In the case of steel, Chinese production trebled between 2006 and 2013. The country produced about a third of the world’s steel output in 2006; by 2012 it had risen to about 50 per cent. Such overproduction, combined with slower Chinese demand, meant the price of iron ore, the crucial ingredient to making steel, slumped 46 per cent between July 2011 and July 2014, according to the World Bank. On current trends, China is likely this year to experience its first full-year outright contraction in steel consumption since 1995.
While overcapacity and competition hit Highsee hard, a local official also blamed the company’s owner, Li Zhaohui. Mr Li was just 22 when he took over the running of the company in 2003 after his father was killed by a gun fired by an enraged business associate. Mr Li has gone missing in recent months and could not be contacted by the Financial Times.
“The government’s plan is to sell off the plant quickly and restart production just like before, even though the steel market is in such bad shape,” says an official who asks not to be named.
“The problem is that it owes at least Rmb10bn [$1.6bn] and probably much more than that. We don’t know where we’ll find someone who can pay all that off.”
…
“The government doesn’t want to see bankruptcy because as soon as companies go bust, unemployment spikes and tax revenues disappear. By stopping companies from going bankrupt, officials are able to maintain the illusion of local prosperity, economic growth and stable taxes.”
For anyone who cares to take a look, the is what a borrowed-money economy looks like.
HOW MANY YUANS HAVE BEEN PRINTED SO YOU CAN GO DOWN TO HARBOR FREIGHT TOOLS AND BUY CHEAP WRENCHES?
“The problem is that it owes at least Rmb10bn [$1.6bn] and probably much more than that. We don’t know where we’ll find someone who can pay all that off.”
Can you say “Poof”?
Across the vast expanses of China, similar experiences are playing out, with thousands of companies in heavy industrial sectors plagued by chronic overcapacity that should be going bust instead being propped up by local governments.
I remember this happening in Mexico in the 70’s. Large firms that were basically bankrupt were propped up by the government to preserve jobs, in many cases they were nationalized. It worked for several years, until inflation went out of control and everything came crashing down.
China’s Industrial Profits Drop Most in Two Years Amid Slowdown
By Bloomberg News
Dec 26, 2014 11:34 PM CT
Photographer: Brent Lewin/Bloomberg
China’s industrial profits fell the most in two years last month, the latest data to show a deepening slowdown in the world’s second-biggest economy as pressure grows on the nation’s central bank to ease monetary conditions.
Total profits of China’s industrial enterprises in November dropped 4.2 percent from a year earlier, the National Bureau of Statistics said today in Beijing. That followed October’s 2.1 percent decline and a 0.4 percent increase in September. It’s the biggest slide since August 2012, when profits slumped 6.2 percent.
Mired in industrial overcapacity, factory-gate deflation and a housing slump, China is headed for its slowest full-year economic expansion since 1990. A Chinese factory index fell to a seven-month low in December, while growth in aggregate financing, the broadest gauge of credit, trailed estimates in November, and imports unexpectedly dropped amid weak demand.
China’s benchmark Shanghai Composite Index rallied 2.8 percent yesterday — extending a two-day gain to 6.2 percent, the strongest in five years — amid speculation the government will further ease monetary policy to support the economy after cutting interest rates last month.
…
can you explain how uncle fed has exported inflation to china?
China’s trade growth seen falling short of target in 2014
SHANGHAI Sat Dec 27, 2014 12:31pm GMT
Trucks loaded with cargo containers are seen at Ningbo Zhoushan Port, Zhejiang province, December 7, 2014. REUTERS/Stringer
Credit: Reuters/Stringer
(Reuters) - China’s trade will grow 3.5 percent in 2014, implying the country will fall short of a current 7.5 percent official growth target, according to a report on the Ministry of Commerce’s website that was subsequently revised to remove the numbers.
The initial version of the report published on the website on Saturday, which quoted Minister of Commerce Gao Hucheng, was replaced with a new version that had identical wording but with all the numbers and percentages removed.
The Commerce Ministry did not answer calls requesting comment on the reason for the change.
China’s trade figures have repeatedly fallen short of expectations in the second half of this year, providing more evidence that China’s economy may be facing a sharper slowdown.
Foreign direct investment will amount to $120 billion for the year, the earlier version of Ministry of Commerce report said, in line with official forecasts. The earlier version of the report also said outward non-financial investment from China could also come in around the same level.
That would mark the first time outward flows have pulled even with inward investment flows in China, and would imply a major surge in outward investment in December given that the current accumulated level stands slightly below $90 billion.
The earlier version of the report also predicted that retail sales growth would come in at 12 percent for 2014, in line with the current average growth rate.
In a separate report, the Chinese Academy of Social Sciences predicted that real estate prices in Chinese cities would continue to slide in 2015, with third- and fourth-tier cities hit hardest. But it said the market would have a soft landing as local governments take action to provide further policy support to the market.
…
YOU NEED TO WRITE A BOOK:
HOW TO RECOGNIZE AN ASSET BUBBLE FOR DUMMIES
FWIW, why are you shouting?
Heard on the Street
China’s Cuts Bleed Into Stocks
Investors at a brokerage in China’s Anhui province on Dec. 23. Reuters
By Alex Frangos
Updated Dec. 26, 2014 2:54 a.m. ET
Beijing is playing Secret Santa with the banks.
In the latest move to push cash into the economy, China rejiggered how it calculates rules on loan-to-deposit ratios for the nation’s lenders.
What came as a surprise wasn’t that banks now have an enlarged regulatory deposit base to loan against, but that the banks won’t have to hold a portion of those additional deposits with the central bank. The deposits in question are those that asset managers and securities firms keep at the banks. Previously, these deposits weren’t counted in rules that determine how much banks can lend.
The action is in effect a stealth cut to the reserve requirement ratio, one of China’s key macroeconomic management tools. It comes as borrowing conditions have failed to respond to both the previous interest rate cut and the large amount of temporary liquidity the central bank had injected into the country’s lenders. While an imperfect measure of borrowing costs, China’s one-week interbank rates shot up to 5.7% earlier this week from 3% a month ago.
Why the central bank opted against a straight cut to the reserve requirement ratio is unclear. There has been no official announcement of the move. One theory is it didn’t want to signal a broader easing move to the public for fear of pumping up an already bubbly stock market.
If that was the plan, it didn’t work. Much of the fresh liquidity unleashed in recent months is going straight into the stock market. The Shanghai Composite, already the best performing major index in the world, has risen another 6% in the two days since the news of the latest move leaked, putting up more than 50% for the year.
More ample credit should keep the stock market moving. Margin lending is now above 1 trillion yuan (nearly $161 billion) on the Shanghai and Shenzhen exchanges for the first time, a doubling in less than four months.
Stopping such an epic stock market climb will likely only come when the credit taps start closing. For now, Beijing seems to be finding novel ways to ease, and so investors see little reason to pull back.
…
Is the Fed your Secret Santa?
IS THE PRICE OF A COMMODITY FALLING ON LACK OF DEMAND REALLY DEFLATION?
DEFLATION: a decrease in the amount of available money or credit in an economy that causes prices to go down
I’M NOT SEEING A DECREASE IN THE MONEY SUPPLY HERE GUYS REGARDING OIL PRICES.
WHAT DO YOU REALLY CALL THE DROP IN OIL PRICES?
“Oil Slide Puts Central Bankers Over Deflationary Barrel”
http://www.bloomberg.com/news/2014-10-15/oil-slide-puts-central-bankers-over-deflationary-barrel.html
Remember…. A deflationary spiral(falling prices) is your wallets best friend.
No, but falling prices of everything might suggest there is less money.
THIS OIL TUMBLE HAS NOTHING TO DO WITH THE AMOUNT OF CURRENCY AVAILABLE. IT IS NOT DEFLATION BY THE DEFINITION.
INFLATION AND DEFLATION IS IN REGARDS TO THE CURRENCY SUPPLY.DID THE CURRENCY SUPPLY ALL OF A SUDDEN TUMBLE?
Deflation and falling prices is positively bullish and good for the economy.
“DEFLATION: a decrease in the amount of available money or credit in an economy that causes prices to go down.”
“… available money …”
That’s the key phrase.
Print up all the money you want to print but it won’t be spent if spenders can’t get their hands on it.
Here’s a money velocity chart:
http://research.stlouisfed.org/fred2/series/M2V/
If people are unable or unwilling to take on more credit, then there is a decrease in the supply of money. Remember that new money is created in the fractional reserve banking system by loaning it into existence.
Of course, I prefer the Austrian definition of inflation/deflation as it is more clear, but that’s not the world we live in.
Which is another way of saying “I can print 60 quadrillion and warehouse it. It has zero effect.”
~Collapsing demand~
Deflation and falling prices is positively bullish and good for the economy.
But not for those deep in debt. Deflation amplifies debt, particularly adjustable-rate debt like mortgages and credit cards. Still, it’s time to take our medicine…
“But not for those deep in debt.”
My favorite people.
“Deflation amplifies debt, particularly adjustable-rate debt like mortgages and credit cards.”
“… adjustable-rate debt …”
The Dotted Line Special, the gift that keeps on giving.
“Still, it’s time to take our medicine…”
It’s past the time, past the time to take our, er, … for others to take their medicine.
“I’M NOT SEEING A DECREASE IN THE MONEY SUPPLY HERE GUYS REGARDING OIL PRICES.”
Stay tuned. Wait until the money that was borrowed due to and based on the high price of oil goes poof.
demand for oil just does not crater overnight folks. I really think we have a combination of forces acting on oil prices:
1. lower demand
2. increase in supplies
3. investment banks liquidating oil positions
4. An epileptic seizure in the biggest country of energy consumption, construction mania and debt Ponzi (reported to you as slightly reduced growth).
If you look at the chart that A.Dan posted yesterday, the supply has increased roughly by 2mbpd against demand, which on average is about 90 mbpd. Thus the net increase is 2.2% in supply. The oil in storage is more or less a week’s global demand. So obviously something else is going on.
Maybe there was an edict to the speculators to get out or else.
If the idea was to screw up Russia’s & Iran’s economies, the repercussions to the US economy have been underestimated. As in any boom, the people that got in marginally are the ones that get affected first. As combo points out the borrowed-money economy that these marginal people resorted to in buying up houses in fracking zones in the US and oil sands in Canada will suffer.
Deflation amplifies debt, particularly adjustable-rate debt like mortgages and credit cards.
Why would it be worse for adjustable-rate debt? Those adjustable rates typically get adjusted down when interest rates are near-zero.
I would think that it would be worst for debt with a fixed, high rate of interest.
Maybe there was an edict to the speculators to get out or else.
Falling prices normally do cause the (long) speculators to GTFO.
“Why would it be worse for adjustable-rate debt? Those adjustable rates typically get adjusted down when interest rates are near-zero.”
Perhaps, perhaps not. You probably have you mind fixated on mortgage debt and had forgotten all about credit card debt.
“What the large print giveth, the fine print taketh away.”
The gift that keeps on giving: Just when you get a wee bit over your head in credit card debt - WHAM! - the rules change (my rules change) and then the interest rate you get charged goes way, WAY up.
Albdan is one of those shilling fools who thinks he can actually change economic reality by making up lies on blogs. The real question is: Why would somebody waste so much time on something so futile?
Will the oil price collapse have any labor market consequences?
“If you’re a country like Saudi Arabia, Kuwait or Iraq, which rely on oil as a major revenue source, the drop in oil prices can impact your country dramatically. The U.S. Energy Information Administration just estimated that next year’s OPEC oil export revenue (excluding Iran) will drop an incredible $257 billion to $446 billion. That’s off its peak of nearly $900 billion in 2012.”
Just one problem it assumes low oil prices will continue. Given what is happening in the oil shale areas and Libya( thanks Hillary) that is very doubtful.
Oil prices are at their lows, and continuing lower. Your arguments are empty.
The Saudis know the low prices will not last long no need to cut the budget:
Gulf stock markets rose on Thursday as Saudi Arabia released a 2015 state budget that will keep spending high, reassuring the region that economic growth is unlikely to be hurt much by the plunge of oil prices.
The Saudi budget envisions state spending at a record 860 billion riyals ($230 billion) next year, up 0.6 percent from the 2014 budget plan.
That would be the smallest rise in over a decade, but much better than the possible spending cuts that the markets were worrying about early this month. A 145 billion riyal budget deficit would be covered by the government’s huge reserves.
“The fact that spending is expected to be steady is positive for confidence, especially regarding their investment programme,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
http://www.arabianbusiness.com/stock-markets-rise-as-saudis-maintain-spending-in-2015-budget-576502.html
Exit Region IV
Everyone Must Check Out
FEMA Regional Offices
Region IV Atlanta, GA
AL, FL, GA, KY, MS, NC, SC, TN
“Atlanta”
I get to spend two hours at the Atlanta airport today, looking forward to the parade of regional obesity
Go to Google, type in “Atlanta airport obesity” and, presto!
https://www.google.com/search?q=atlanta+airport+obesity&biw=1600&bih=775&source=lnms&tbm=isch&sa=X&ei=sk2gVNnPI4rToASF1oLACw&ved=0CAcQ_AUoAg
I am sitting at the “crossroads” of Concourse A and there is actually quite a bit of eye candy strolling through here today
I’ve noticed that in Atlanta myself in the past… Southern women do have a tradition of paying attention to “packaging”.
I’ve never been to an airport with a lack of eye candy. They seem to be a magnet for it.
Not much thigh-gap at the bus station.
“If you have to borrow for 15 or 30 years, it’s not affordable nor can you afford it.”
Now to pile on the losses…..
Renton, WA Sale Prices Plunge 15% YoY; Inventory Grows As Sellers Slash
http://www.zillow.com/newcastle-wa-98056/home-values/
“The housing bubble will end in tears for for those holding rapidly depreciating houses.”
Frisco(Dallas/FW), TX Sale Prices Crater 13% YoY; Price Declines Sparks Selloff
http://www.zillow.com/frisco-tx-75034/home-values/
“Get what you can get for your house today because it’s going to be much less tomorrow for many years to come.”
Virginia Sale Prices Turn Negative YoY Statewide; NoVa Leads With Largest Declines
http://www.zillow.com/va/home-values/
Can you afford to lose tens of thousands of dollars on a depreciating asset like a house?
Medford, OR Sale Prices Turn Negative On Year; Post Double Digit Decline QoQ
http://www.zillow.com/medford-or/home-values/
AS THE VALUE OF YOUR FIAT CRATERS, ASSETS LIKE STOCKS AND HOMES WILL HELP U AVOID LOSSES.
Is that true even if it is only cratering fiatscos that prop up the value of assets like stocks and homes?
IT WORKS UNTIL THE BUBBLE IN ASSETS PRICES POPS. THEN YOU LOOK FOR A FLOOR AND DO IT ALL OVER AGAIN.GREAT EXCUSE TO PRINT SOME FIAT.
How does that work when the price floor is far lower than the previous price floor?
If you take on mortgage debt at current massively inflated housing prices, you’ll enslave yourself for the rest of your life.
“Debt is bondage.”~ Suze Orman, May 11, 2013
Hartford County, CT Sale Prices Dive 6% YoY; Plummet Double Digits QoQ As Housing Price Declines Widen Nationally
http://www.zillow.com/ct/home-values/
A ‘housing recovery’ is falling prices to dramatically lower and more affordable levels by definition.
Steamboat Springs, CO Sale Prices Crater 5% YoY and 19% QoQ As Speculators Seek Fast Exit
http://www.zillow.com/steamboat-springs-co/home-values/
Houses are never investments. Houses are a loss and depreciate, always.
Santa Cruz County, CA Sale Prices Sink 3% YoY As Speculators Dump Properties And Slash Prices
http://www.zillow.com/santa-cruz-county-ca/home-values/
Why buy a house when prices are falling?
Riverside, CA Sale Prices Plunge 6% YoY As Price Declines Spread Across State
http://www.zillow.com/home-gardens-ca-92503/home-values/
Tens of millions of excess empty and defaulted houses in an environment of deflating housing prices.
http://www.inman.com/2013/07/08/whats-next-for-gen-rent-and-californias-shadow-inventory/
“Leslie Appleton-Young, chief economist for the California Association of Realtors, updated attendees at this year’s Awesome Females in Real Estate conference with the latest economic trends from both California and the nation. The California foreclosure funnel is much worse than it looks on the surface, primarily due to the ‘underwater’ inventory. Appleton-Young broke it out in the following way: 435,000 delinquencies; 117,000 in foreclosure; and 61,000 bank-owned. At the current rate of 18,000 distressed sales per month, this means there are 34 months of shadow inventory.”
“When you add the ‘underwater’ category of 2.1 million homes and add it to the other three categories, you now have approximately 10 years of shadow inventory as opposed to 34 months. As Appleton-Young noted, ‘If you don’t have equity, you’re not a homeowner.’”
http://www.inman.com/2013/07/08/whats-next-for-gen-rent-and-californias-shadow-inventory/
Buying one of these excess empty or defaulted houses while prices are falling and inventory is ballooning at these grossly inflated prices is a horrible proposition.
“If you don’t have equity, you’re not a homeowner.”
Equity is such an elusive thing in a volatile market, when you are a debtor.
“You see…. The price floor for housing is far lower than the price floor reached in 2010″
Exactly.
It’s another day of this for our increasingly underwater housing speculators.
http://s296.photobucket.com/user/saihukaru/media/Gif%20Funny/dapdaunhanh.gif.html
Cryptocurrency is big. The biggest is Bitcoin of course. But there are also others such as DogeCoin, LiteCoin. A Facebook friend floods me with all sorts of links and videos a day about developers and developments worldwide to improve the technology.
There are very bright young people in the development site and very articulate. I’m listening to a video of an interview of a 21 year old college dropout who works for Ethereum and developed an interface for higher level development for BitCoin.
Meanwhile ATMs (BTMs?) are springing up all over the world for BitCoin. Robocoin has a whole bunch. A couple of them will open in L.A. There are several other ATMs in the USA, such as in Texas, Las Vegas…
http://blog.robocoinkiosk.com/
This, too, shall pass.
Bitcoin maybe. Crypto Currency, not. Yesterday Ben posted a bunch of predictions from famous industrialists that were 180 degrees off. You also have to understand the advantages of cryptocurrency in preserving financial privacy present a very compelling force toward improving it.
In the early 90s this work just started. Then it seemed to disappear for ten years and then Bitcoin was launched in 2009.
Seems ZeroHedge’s opinion is that Gold will trump Bitcoin
http://www.zerohedge.com/news/2014-06-27/bitcoin-vs-gold-infographic
The equivalent in the 50s was wooden nickels.
And like wooden nickels, the potential limitlessness of the variety and number of different cybercurrencies is likely to continuously push their value towards zero even faster than the value of fiat currencies approach zero.
The more cybercurrencies come on line, the less valuable bitcoin will become, as more and more, it will represent just another cryptocurrency on a long list of choices instead of a one-of-a-kind alternative to fiat money.
https://www.youtube.com/watch?v=WMQg546agpU#t=59
Very entertaining. Sadly, the information is fallacious and many of those who buy into it hook, line and sinker are destined to lose their shirts.
Why do Banks Fear Bitcoin? (Bitcoin Documentary)
Cool Link and info bill. Thanks!
WHAT DO YOU CALL COLLAPSING DEMAND AS A RESULT OF PRICES BEING ARTIFICIALLY HIGH DUE TO SPECULATION?
Deflation of course.
“WHAT DO YOU CALL COLLAPSING DEMAND AS A RESULT OF PRICES BEING ARTIFICIALLY HIGH DUE TO SPECULATION?”
Poof?
The total external debt of china is below $900 billion, it may be growing slower but it still is growing around 7% per year. Wages are rising at around 10%. The fiat countries and their friends in the media may attack China and Russia because they are about to introduce gold convertible currencies but it does not change the fact, it is the fiat currency countries that are about to collapse not them.
http://www.chinadaily.com.cn/business/2014-12/27/content_19180594.htm
“Wages are rising at around 10%”
These sugar coated turds are priceless. For wages to keep rising in a shrinking debt ridden factory shuttering workers not getting paid economy would be a miracle, or a lie.
The reason profits are down in China is because wages are rising 10% per year, it is also why profits are at record levels in the U.S. since wage growth has been anemic. Funny how that works.
Here are the inflation adjusted numbers, the 10% number was the nhttp://money.cnn.com/2014/12/04/news/economy/low-wage-growth/ominal number:
sorry for the bad post, 10% is the nominal number, here is the inflation adjusted numbers:
http://money.cnn.com/2014/12/04/news/economy/low-wage-growth/
because they are about to introduce gold convertible currencies
That’s hilarious! Because such a promise is just that—merely a promise, empty words.
Ask yourself: if they can choose to add such a guarantee now, what prevents them from dropping such a convertibility guarantee some time in the future, when it becomes inconvenient?
In other words, my prediction is that they will behave exactly like the USGov behaved multiple time throughout our “gold standard” history. A promise is a promise—nothing more. Depend upon it at your own peril.
BTW, the Chinese stock market are reaching multi year highs and the currency is quiet strong:
http://www.chinadaily.com.cn/china/2014-12/27/content_19179490.htm
from same source but a few days ago, many on this board are being manipulated by the MSM which cherry picks stories from China to paint a very distorted picture of a very dynamic economy. But the total picture is a country producing over a million jobs per month:
BEIJING — China’s job market has proved resilient despite slowing economic growth with more than 13 million new jobs expected to be created this year, said a senior Chinese official.
China’s registered urban jobless rate will remain at a “relatively low” level, Yin Weimin, China’s human resources and social security minister, said Thursday at a work conference, without giving a specific figure.
The new jobs numbers will beat the government’s full-year target of at least 10 million jobs. China’s gross domestic product (GDP) expanded 7.4 percent year on year in the first three quarters.
At the end of September, China’s urban registered jobless rate stood at 4.07 percent, lower than the annual employment control rate of 4.6 percent targeted by the government. China added 10.82 million jobs in the first nine months.
Yin’s remarks mean that more than 2 million jobs are expected be created in the fourth quarter.
so is any drop in price deflation?
China has deflation in its ppi but not its CPI. Imported goods are much cheaper, not because China is not growing but because it is not growing as fast as Brazil and Australia thought it would so they developed too many iron ore mines. However, the lower inputs are actually positive for China and its expanding trade surplus demonstrates that fact.
“BTW, the Chinese stock market are reaching multi year highs”
Speaking with a Chinese accent now too, huh?
Civil forfeiture will become increasingly common and arbitrary as government funds itself through grabbing the assets of its citizens.
http://www.zerohedge.com/news/2014-12-28/civil-asset-forfeiture-final-stage-collapse-empire
Breaking news: “We have NOBODY in Washington representing the people any more.”
Bahahahahahahahahaha …
“It is all about them v the people.” bahahahahahaha.
“This is why we will see a rise in third-party activity for 2016.”
Bahahahahahahahahahahahahahahahahahahahahahahahahahaha.
No, we won’t see a rise in third parties. The sheeple will still keep voting for the status quo, then wonder why nothing changes.
Agreed. There is one direct approach to stop its profitability: Cryptocurrency.
Cryptocurrency, eh? Yeah, that’ll do it.
(snark)
Again …
1. Dumb ‘em down.
2. Prosper.
The average Joe doesn’t bother to backup the photos and docs on his PC. I don’t see how these same people will be able to manage and protect their bitcoins.
The dumb ones do not protect them. They are the losers. My work is in the crypto background so I know what precautions to take.
The dumb ones do not protect them. They are the losers.
And the winners in this are… the other bitcoin holders?
Now that I think about it, bitcoin that poof out of existence are essentially deflationary in nature.
Interesting to investigate what is going on in Bitcoin. I was in Venice Beach today and checked out the only BTC ATM there. It is inside a deli (with a hippie-ish name of course, since it is Venice Beach) There was a sign on the ATM. It was down. Two other customers, a man and woman were there. They were also intending to use it and were disappointed. We made small talk and it turned out they are also libertarians.
Libertarians were most of the Internet users back in the early 90s. Libertarians are also pioneers of Bitcoin. Makes sense. In ten to fifteen years, you scoffers will be using some form of cryptocurrency.
The statist pigs and badge lickers in Nebraska and Oklahoma can’t stop all of the marijuana money flooding back into Colorado
“F*** Tha Police” — N.W.A.
I want a cheap house and I don’t care if people lose jobs to make it happen.
Right on.
Job loss = cheap house.
Amy says Bodie is ready when you are.
https://www.google.com/search?q=bodie+ca&biw=1600&bih=775&tbm=isch&tbo=u&source=univ&sa=X&ei=0DCgVKOqI8q1oQSFpYGQDQ&sqi=2&ved=0CDcQsAQ
people want cheap imports regardless if the neighbor loses their job.
No one cares if their neighbor becomes unemployed. The oil patch workers seem to think that we should care that they’re losing their six figure jobs, but they didn’t care when other lost their jobs or when the cost of filling the tank or heating the house went through the roof.
Money from a boom should be saved, because it will be needed in the bust. Most people leverage against any money made in a boom and are thereby ruined.
Most people leverage against any money made in a boom ??
Because leveraging in a boom makes you even more money…Its called Greed….
If you own a house, you want your neighbor to remain employed. Otherwise, he or she will go into foreclosure, dragging the value of your house down with it, causing you to lose equity.
This is the problem with pure individualism — we need to have at least some concern for the well-being of our fellow Americans because the economy is not a vacuum. How well we do is partially dependent on how well others do. There is some interconnectedness.
“The value” is meaningless considering it wasn’t worth it in the first place.
Remember…. houses are consumption items that depreciate rapidly.
I am hearing rumblings that walmart xmas sales cratered.
Good.
Region VIII
http://www.denverpost.com/news/ci_27212493/marijuana-use-increases-colorado-according-new-federal-survey
Or perhaps fewer people are afraid to answer survey question honestly about using something when it is legal, as opposed to when it is illegal.
Ding ding ding!
Son Pays Off His Parents Mortgage As A Christmas Gift!
http://www.youtube.com/watch?v=4S8JNLgQdWY
when will the stock market party end?
Dow 20,000 by Dec 31, 2015 !!!
Just saw youtube re: Vegas market titled “Where have all the buyers in Las Vegas Gone”.
I like the question, but haven’t included link because it’s not answered. There’s some charts. However, I did learn that it’s a good time to buy AND sell.
“Our own view is that the rich are likely to keep getting even richer, and enjoy an even greater share of the wealth pie over the coming years. We think rising profit margins will keep profit growth strong, and equities are at any rate undervalued. And the rich tend to be disproportionately exposed to the equity markets. While there are challenges to this, not least through populations/the political process demanding a more “equitable” share of the wealth, in the short term we think the trend of the rich getting richer is likely to persist. Plutonomy related stocks should, we think, continue to see strong demand and inflation-beating pricing power.”
https://www.youtube.com/watch?v=fQE4bqDRbn8
Sounds like the tsunami tide of real estate investment that washed into Las Vegas in 2013 is washing back out to sea.
It’s hardly the first time that ever happened in Las Vegas. In fact, hasn’t it already happened several times since the onset of the Housing Bubble?
Punchline: Despite the outgoing investment tsunami tide, it’s still a great time to buy or sell a home in Las Vegas. Contact the Realtor™ in the YouTube for details.
Damn straight! The party is NOT over, a beer run is in progress and the refreshments will arrive shortly. The new relaxed lending standards are going to fix things right up and oddly enough they were announced in Las Vegas (and in a casino at that)
http://finance.yahoo.com/news/new-mortgage-standards-setting-up-another-crisis-133738354.html
http://www.wsj.com/articles/what-happened-in-vegas-1413934406
The party is NOT over
Local radio RE show agent has an investor client who wants to “put $25 million to work” here in Las Vegas at the start of next year.
However, here’s a comment in the Las Vegas Review Journal three weeks ago. It will take more than $25 mil to clean up this mess.
Las Vegas home prices tick up 1.1 percent (Dec. 9)
Punchline: Despite the outgoing investment tsunami tide, it’s still a great time to buy or sell a home in Las Vegas. Contact the Realtor™ in the YouTube for details.
Ed Zachary
crater
oakland = crater
papa john’s for breakfast, lunch, and dinner tomorrow
Tampa Bay Buccaneers are on the clock
Remind me to never leave this Region again
You can keep Region IV
“Remind me to never leave this Region again”
Toto, I’ve a feeling we’re not in the Region next to Kansas anymore. We must be over the Region IV!
and it’s that if I ever go looking for my heart’s desire again, I won’t look any further than my own backyard; because if it isn’t there, I never really lost it to begin with.
There’s no place like Region VIII; there’s no place like Region VIII; there’s no place like Region VIII…
there’s no place like Region VIII…
Go donks!
UT-SanDiego
Commentary
It’s time to lift the crude oil export ban
Jeremy M. Martin & Alexis Arthur
05:13 p.m. Dec 26, 2014
It is the time of year for never-ending holiday cocktail parties and forced conversations. But this year one topic is sure to provide common ground: cheap gasoline at the pump. Is there more universally well-received news in the United States than gas prices in free-fall? For those heading out on holiday road trips, the elation is palpable. But alongside discussions of the downward price spiral and economic debates over stimulus and long-term impacts, one issue should continue to receive attention in 2015: Lifting the ban on crude oil exports from the United States.
For almost 40 years, oil producers in the United States have been effectively banned from exporting crude oil. The policy, enacted in 1975, came in response to the Arab oil embargo and was aimed at reducing the United States’ vulnerability to the volatility of the international oil market and intended to keep crude oil at home for domestic consumption.
It bears mentioning that 1975 was also the last time that U.S. oil reserves surpassed 36 billion barrels. And today’s reserves look set to continue rising, albeit at a slower pace.
There are minor exceptions to the current ban on crude exports, but they only account for small amounts of oil. But against the backdrop of the U.S. energy revolution and booming shale oil production, there is a strong impetus to lift the ban, particularly if the U.S. wants to convince the world that it truly supports free trade in energy. Indeed, recent exports of condensates point to the reality that companies will find ways to move the U.S. energy bonanza to markets outside the U.S.
Those efforts should be allowed and supported, not made the exception to the international energy trade rule.
U.S. Secretary of Energy Ernest Moniz spoke aptly when he noted that the energy world we live in today has changed dramatically since the ban was imposed and thus a review is in order.
In the last several weeks, our energy world has been even further shaken up. The price of crude has dropped more than 45 percent since summer, with Brent around $60 a barrel and the U.S. benchmark — West Texas Intermediate — below $60 to about $56. Some economists fear prices could drop below $50.
…
Why would “economists fear ‘could’ drop”?
Falling prices is a good thing and any economist worth his salt knows it.
I frankly don’t know why economists who work at central banks pretend deflation is a bad thing. Does that have to do with the fact that their clients (banks) lose money in times of deflation?
‘Experts doubt North Korea was behind the big Sony hack’
Surprise, surprise, surprise…
ft dot com
On Wall Street
December 26, 2014 1:24 pm
How (not) to break the ice at parties
Tracy Alloway
Try asking: ‘What’s all the fuss about the central banks?’
As many readers grit their teeth and prepare to spend the post-Christmas lull in various states of satiety and sobriety, making awkward chit-chat with tenuously related family members, I am here to remind you that things could be much, much worse.
You could be at the Christmas party from hell, as constructed by the personal investor strategist of a certain large asset manager who earlier this month recommended a series of “conversation starters” aimed at sparking discussion of 2015’s potential investment themes with non-professional investors.
As far as goals go, luring random party attendees into financial discourse is perhaps a laudable one. Unfortunately the results of the exercise are more likely to inspire your conversation partner to lacerate themselves with the nearest available corporate Christmas card just so they might have a viable excuse to leave.
Consider this gem meant to be kept in one’s “back pocket” for seasonal social gatherings: “What’s all the fuss about the central banks?”
Where to begin? Clearly the difficulty is not so much in the subject matter — the levels of irony encouraged by post-millennial society mean that pretty much anything is fair game for a conversation nowadays — but in the framing of the question.
Asking “What’s all the fuss about the central banks?” leaves far too much flexibility for responders. You could be trapped for hours if some economist happens to wander by as you casually introduce the topic.
Even if you manage to accurately size-up your target as the type of Average Joe at whom the query is presumably aimed, it is too open-ended for even this correspondent to attempt to answer (though I like to think that I would down my eggnog with a flourish and say something clever about liquidity withdrawal).
Unfortunately, the suggested icebreakers get worse from there.
“So thrilled that the US economy is the top global performer. How are you going to leverage this good news?” To which clearly the only acceptable answer is: “By insisting that my stock broker begin every phone conversation by reciting the pledge of allegiance and ending them with a vigorous fist-bumping chant of USA! USA! USA!”
Another: “Inflation isn’t keeping me up at night — for now. How are you going to prepare?” Well, friend, with a medicine cabinet full of sleeping pills and a stack of 2015 investment outlooks by the bed in case the pills don’t work. I might dip into the pills now if that’s OK?
More video
And any awkward silences are a thing of the past once we reach: “Hello again volatility. Looks like we’re heading into a more normal bumpy ride with stocks. How are you planning to keep your eyes on the long-term goal, paying no heed to ups and downs?” (I am unsure if this is addressed to an actual anthropomorphic personification of volatility. If it is, I would imagine volatility to be the type of person who would smile serenely then sprint out of the room screaming at the top of their lungs about a gamma trap.)
…
Are falling oil prices the best for of financial stimulus to come along since the end of quantitative easing?
…form of…
phony scandals
hodor
LOL…
Falling oil prices are a good start to deflate the ponzi scheme.