Bits Bucket for January 3, 2015
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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Armed Israeli settlers assail US officials
http://www.politico.com/story/2015/01/israeli-settlers-stones-us-consulate-general-vehicle-113940.html
Israeli settlers stone two cars belonging to US consulate staff
http://www.theguardian.com/world/2015/jan/02/israeli-settlers-stone-two-cars-us-consulate-staff
US security staff reportedly unholster weapons during standoff in Jerusalem between US consular party and far-right settlers from illegal West Bank outpost
If the Consular Party was part of the Obama-Jarrett pro-islamist wing of the neo-communist movement, who can blame them.
#FundamentalTransformationOfTheWest
Shrieking tree monkey sighted…
“Armed Israeli settlers assail US officials”
The middle-east is home to abrasive people. When I was in business in California I dealt with Arabs, Jews, Hindus, Persians, Turks, etc., and all of them were difficult customers who appeared distrustful of anything and everything, and they could argue endlessly.
The United States is squandering its prosperity there and our security at home.
What if they had a police slowdown, and nobody noticed?
Is New York police’s ‘virtual work stoppage’ a boon for critics?
Anthony Zurcher
By Anthony Zurcher
Editor, Echo Chambers
Such seems to have been the case in New York City last month, as police officers apparently began a deliberate work slowdown - labelled a “virtual work stoppage” by the New York Post, which first reported the numbers (independently confirmed by the BBC).
For the week of 22 December, citywide traffic tickets dropped 94% from the same period in 2013. Court summons for low-level offences, like public intoxication, also dropped 94%. Parking tickets were down 92%. Overall arrests were down 66%, as well.
Several writers point to a particular line in the Post piece - that police are now “turning a blind eye to some minor crimes and making arrests only ‘when they have to’” - as prime evidence of ongoing police overzealousness.
“Well, we can only hope the NYPD unions and de Blasio settle their differences soon so that the police can go back to arresting people for reasons other than ‘when they have to’,” Scott Shackford of the libertarian Reason magazine wryly notes.
One of those “other” reasons numerous critics on the left and right point to is the financial boon for city coffers that comes from fines and court fees generated by law enforcement.
The police slowdown “shines a light on the use of police officers to make up for tax shortfalls using ticket and citation revenue”, writes Rolling Stone’s Matt Taibbi.
“It’s wrong to put law enforcement in the position of having to make up for budget shortfalls with parking tickets, and it’s even more wrong to ask its officers to soak already cash-strapped residents of hot spot neighbourhoods with mountains of summonses as part of a some stats-based crime-reduction strategy,” he continues.
What if these latest developments show that the New York police can “safely cut arrests by two-thirds”, asks the Atlantic’s Matt Ford. The implications are immense, he says. Fewer people could be arrested and sent to prisons that often have brutal conditions.
http://www.bbc.com/news/blogs-echochambers-30659528
http://rt.com/news/219495-rome-police-sick-new-year/
Italian cops are staging a “sick-out” to show their displeasure over their pay and benefits. As the banksters step up their looting of the physical economy while demanding ever-greater “austerity” for the 99%, ordinary citizens are going to be squeezed between paying ever higher costs for dwindling public services, while public union goons resort to blackmail to get what they want.
Karl Denninger had some pointed advice for the police recently, basically saying if they want respect, they need to start acting like their real mission is to protect and serve the public.
http://www.theburningplatform.com/2015/01/02/shut-up-officer/
And a lot of the cops on-duty deaths are from traffic accidents from bad weather conditions or drunk drivers. Cop unions pimp these deaths out disgracefully.
Cop unions also turn a blind eye to corruption and unlawful behavior among the thin blue line. So, for the most part, do the so-called “good” cops who don’t want to break ranks with their “brothers.”
as part of a some stats-based crime-reduction strategy,” he continues ??
That sums it up right there….And, the more crimes you have the more police you need right ?? Thats the way the San Jose police union worked it…
LOL, you mean like up in NYC? Even more interesting, a drop in crime. Makes ya wonder who is really creating the crime.
In Mexico, most of the high-level drug cartel capos are former cops, and Mexican federal authorities have been forced to disband entire municipal police departments due to collusion with organized crime. Somehow I’m not surprised.
Yet another Mexican narco hitman arrested who, unsurprisingly, was a former police agent.
http://www.borderlandbeat.com/2015/01/seido-targets-hitmen-in-bcs-part-3.html
I dunno why DeBlasio doesn’t go all Ronald Reagan on ‘em. Now THERE would be a moment.
Yeah, I’d love to see NYC after that!
Get rid of the statist police and their nanny state laws.
Act local, know thy neighbor.
http://peacekeeper.org/
“their nanny state laws”
That’s the main problem, the cops are charged with enforcing the draconian nanny state laws forced on an unwilling citizenry by progressives.
#FundamentalTransformationOfAmerica
Even nanny statist Bloomberg’s own site published an article that says all about it.
http://www.bloombergview.com/articles/2014-12-04/law-puts-us-all-in-same-danger-as-eric-garner
‘The legal scholar Douglas Husak, in his excellent 2009 book “Overcriminalization: The Limits of the Criminal Law,” points out that federal law alone includes more than 3,000 crimes, fewer than half of which found in the Federal Criminal Code. The rest are scattered through other statutes. A citizen who wants to abide by the law has no quick and easy way to find out what the law actually is — a violation of the traditional principle that the state cannot punish without fair notice.
In addition to these statutes, he writes, an astonishing 300,000 or more federal regulations may be enforceable through criminal punishment in the discretion of an administrative agency. Nobody knows the number for sure.
Husak cites estimates that more than 70 percent of American adults have committed a crime that could lead to imprisonment. He quotes the legal scholar William Stuntz to the effect that we are moving toward “a world in which the law on the books makes everyone a felon.” Does this seem too dramatic? Husak points to studies suggesting that more than half of young people download music illegally from the Internet. That’s been a federal crime for almost 20 years. These kids, in theory, could all go to prison.’
What can you and I do about this? Vote? No. This has been going on for decades and the function of Congress and your state level legislatures are to CREATE more laws, Piling laws upon laws. So many, that like Nutcase Pelosi said they don’t even bother reading what’s in them, they just vote like robots.
There has to be massive peaceful protests in every city of nanny statism.
But the phrase “good luck with that” of course applies. The increased police brutality in the USA is unfortunate, but it is making people ask more questions. “Why was a man executed for selling cigarettes? What was the law he violated? Why does NYC have that law? Why do we keep getting more and more laws? Do we really need all these laws?” And when a plurality realizes that they break laws every day and are in danger of being killed no matter what skin color, peaceful protests at all state capitals and city halls and Washington D.C. will occur.
California is best at it;
In 2015, a number of new state and local laws will go into effect … California will add over 930 new laws in 2015…
+1. I recall an interview with the author of “Three Felonies a Day” where he said most Americans unwittingly commit multiple acts for which they could be jailed without even realizing it. That is a sobering thought, especially in a climate where if a prosecutor wants to lay someone low, by fair means or foul, an innocent person wanting to mount a vigorous legal defense would face the very real prospect of going bankrupt doing so, as well as the likelihood of judicial recriminations against them for not plea-bargaining out.
Thanks Dave. I googled it. I’m trying to find how many are enacted in Arizona. I guess the news hasn’t posted that yet.
How many laws were repealed when the 930 new laws were enacted? Probably fewer than 10.
For instance, here’s one the Oklahoma knuckleheads enacted this year
http://thefreethoughtproject.com/oklahomas-solution-crime-lawmakers-ban-hoodies/
http://www.foxnews.com/official-polls/index.html
I’m sure GWB must have had a high approval rating 6 years in among the Republicans, just as Obama is enjoying a 79% approval rating by Democrats. Poll taken by Faux News one month ago.
A free man should be able to rape, pillage, and burn in this country, as god intended! Stupid nannycrats!
Not always that simple, Bill. I had to call code enforcement because a neighbor’s dog barked incessantly and they refused to do anything about it. I rather enjoyed having “statist police” slap them with a summons giving them three days to deal with the problem, which has since become a lot more tolerable.
“Commodities broke first because there was the direct link to actual rather than imagined activity; inflation breakevens next; followed by the yield curve in November 2013. Either stocks have permanently decoupled, continuing exclusively within the realm of central bank omniscience that has been rebuked time and again, or there will be a Period G where full harmony is restored; that is everyone’s greatest fear.”
Last year was a good one to have a portfolio heavily weighted towards dollar-denominated paper assets and light on the real assets everyone has piled into as dollar inflation hedges.
“Last year was a good one to have a portfolio heavily weighted towards dollar-denominated paper assets and light on the real assets everyone has piled into as dollar inflation hedges.”
You better believe it mister. Cash baby cash.
Commodities Head for Record Losing Run on Oil to Dollar
By Sharon Cho and Morgane Lapeyre
Dec 31, 2014 5:57 AM PT
Photographer: Jamie Schwaberow/Bloomberg
Commodities headed for the biggest annual loss since the global financial crisis in 2008, retreating for a record fourth year, as a global glut spurred a rout in oil prices and a stronger dollar cut the allure of raw materials.
The Bloomberg Commodity Index (BCOM), which tracks 22 products from crude to copper, fell 0.9 percent to 105.1845 points at 8:53 a.m. in New York, after dropping to the lowest level since March 2009 earlier today. It’s lost 16 percent this year, with crude, gasoline and heating oil the biggest decliners. A fourth year of losses would be the longest since at least 1991.
Energy prices retreated in 2014 as a jump in U.S. drilling sparked a surge in output and price war with OPEC, which chose to maintain supplies to try to retain market share. The dollar climbed to the highest level in more than five years as a U.S. recovery spurred speculation that the Federal Reserve will start to raise borrowing costs next year. Commodities are set for a volatile year in 2015, with crude oil poised to extend its slump, according to Australia and New Zealand Banking Group Ltd.
“What we’re seeing is that supplies from North America have really outpaced worldwide demand growth and as a result, we have a supply glut,” Andy Lipow, president of Lipow Oil Associates LLC in Houston, said by phone. “And that of course has put pressure on prices over the last several months. And as a result, it’s dragging down commodities indexes as well.”
…
By the way, U.S. residential real estate is one such real asset in the group of inflation hedges to which I refer. It’s a bit early to say whether prices have gone the way of commodities yet, as headline real estate price indexes reflect current sales results with a lag.
Perhaps HA will have a second opinion to offer on this.
No. Last year was a good year to have commodities and their stocks particularly palladium and oil the first six months of the year and then lock in profits. While we may predict an entire year for fun, smart people don’t trade like that, just like a battle plan never survives the first engagement, you adjust to changing conditions, and I did and I did fine.
So, you cashed in on commodities in June? Good for you, and for keeping it a secret with all that crowing about growth to the moon!
Proverbs 6:18.
“Proverbs 6:18″ = “Proverbs 16:18″.
“…and for keeping it a secret with all that crowing about growth to the moon!”
Exactly! Even more secretive than Alan Turing was in ‘The Imitation Game’.
This is not my investment blog and no one asked me to tell them what I was doing in June. Besides I have already stated this a few weeks ago, how I used the writing of calls to protect positions.
*Bald - faced LIAR alert*
Dan, I think you’re one of those people that doesnt realize that when people act like they believe you, they’re really just trying to get you to stop embarrasing yourself in front of them.
Last year was a good one to have a portfolio heavily weighted towards dollar-denominated paper assets and light on the real assets everyone has piled into as dollar inflation hedges.
According to the Vanguard site, the best sectors were its long term government bond funds VBLTX, VLGSX, and VUSTX.
19%, 25%, 25%.
But large company stock funds were second best., handily beating intermediate bonds, short term bonds, and cash equivalents. Even my international stock funds, very poor performance in 2014 did better than my short term bonds.
VGSLX (Vanguard REIT Index Admiral) posted a 30.32% return for 2014.
International equities did not do well in 2014, but I will continue to dollar cost average into them. When the US$ is high, non US$ denominated investments are cheaper.
I’m following the same approach going forward, especially in light of the strong dollar.
Thanks Ol’ Bubba - I missed about the REIT. I know W-A-B is into that one as well. So am I.
And international stock funds are also an important part of the portfolio to DCA to.
“But large company stock funds were second best…”
My category of ‘dollar-denominated paper assets’ was meant to include these valuable electronic corporate ownership certificates, which represent claims on retained earnings + future corporate profit flows.
Good batch of charts’n'graphs, and an explanation of their relative importance, here:
http://www.slate.com/blogs/moneybox/2014/12/11/oil_falls_below_60_a_barrel_who_s_in_trouble.html
“There are at least three numbers that you have to remember when we talk about whether falling oil prices are a problem for a country:
The fiscal breakeven: The oil price necessary for a government to avoid running a budget deficit.
The accounting breakeven (or what most people just call the “breakeven”): The oil price necessary for an oil drilling project to be profitable
The cash cost: The oil price necessary for drillers to keep their pre-existing projects operating.
As this graph from Morgan Stanley (posted by Business Insider) nicely illustrates, the Middle East indeed has the lowest breakeven prices—generally falling well beneath the $40-a-barrel mark. The number can be far higher in other parts of the world, such as Russia, or in America’s shale basins.“
Are you this clueless or just this unwilling to admit your wrong? Russia has some of the lowest costs, excluding royalties, in the world according to your own chart. It is the government that takes the royalties in Russia and the royalties decline with the price of oil. Something you would know if you knew anything about oil production which clearly do not.
The tell us what you know “about oil production”.
Give us a field and well head development estimate.
According to the charts here, Russia is about in the middle of the spectrum of world oil production costs. For instance, look at the chart titled “Crude Cost of Production”, you will see Russia at $51/bbl, and onshore middle east at $27/bbl. In the cash cost chart Russia is again much more expensive (around $45/bbl without royalties) than the middle east (who are mostly under $20/bbl). With royalties added in, Russia is among the most expensive producers.
” It is the government that takes the royalties in Russia”
That sums up the problem quite well.
No because that is not the chart of present production that is the chart if production rises. To increase production Russia does have to turn to things like oil shale. BTW, it has more shale oil than the U.S. However, for present production go to the third chart and you will see that the cash costs are less than $10 a barrel and that production is in fields that will last for decades and have a decline rate of 2 to 3%. Meanwhile, we lose most oil shale production in this country with oil less than $70 and the wells decline by 35% within six months. Unfortunately, Obama’s advisors did not seem to understand the economics any better than you do. If Obama had understood the economics he would not have started an oil war which he is clear to lose.
Cratering prices is a great topic.
Newport Beach, CA Sale Prices Turn Negative YoY; Plummet 8% QoQ As Sketchy Mortgages Implode
http://www.zillow.com/newport-beach-ca/home-values/
” BTW, it [Russia] has more shale oil than the U.S.”
Wrong again, but don’t let that stop you.
A 2008 estimate set the total world resources of oil shale at 689 gigatons — equivalent to yield of 4.8 trillion barrels (760 billion cubic metres) of shale oil, with the largest resource deposits in the United States
wikipedia
No once again you are wrong since I research past wikipeida:
http://www.financialsense.com/contributors/guild/world-has-more-shale-oil-reserves-than-previously-thought
BTW, there is a big difference between shale oil and oil shale but either you or any of Obama’s advisors would know the difference.
Neither you nor Obama would know the difference
2015 Prediction: AlbqDan’s imaginary battle with Obama will continue 24/7, from January 1 through December 31.
And whac will continue to defend everything Obama does no matter how stupid. He still will not admit that Obama is responsible for the Fed’s present policies despite appointing all the voting members.
With the rising dollar/falling ruble and falling oil prices, I need to ask this: At what point does an investment in Russia become a prudent value investment for a long term investor?
My reasoning is that eventually the markets will revert to the mean and in this case we have at least two depressed markets: the ruble and oil.
As a retail investor, what investment vehicle would you use to execute this? All I have found so far is the Russian Market ETF (RSX).
I agree with your logic but I have not investigated enough to suggest a fund.
“…eventually the markets will revert to the mean…”
Don’t forget: In the long run, we are all dead.
And you still we be waiting for the right time to buy in San Diego.
Your preferred report says this:
“In short, the usefulness of hydrocarbons in the ground depends fundamentally on political and economic conditions above the ground. And here, the advantage is still with North America.”
Does not change the cost estimate by one cent. It is not only my favorite chart it is the only one that purports to state the costs of present production. You just cannot admit you were wrong can you, it is just impossible for you, you are just like Obama and that is why this country is in such peril.
” It is not only my favorite chart it is the only one that…”
Glad to see you’ve found a favorite, while ignoring its own statements about viability (which negate your point), and ignoring the fact that the question wasn’t about Russia’s shale oil, but about their overall cost of oil production, which as all the charts show, is much higher than the middle east. You just can’t admit you’re wrong, can you? You’re like Obama in that sense, or his sissy-buddy Putin, who likes to rub lotion on Obama’s back when they have their secret vacations together.
“You just can’t admit you’re wrong, can you? You’re like Obama in that sense,…”
Soul brothers!
I have provided numerous graphs showing Russia has a $30 plus cost advantage over shale oil producers in the U.S. Even your own graphs support my assertions but both you and whac never let facts get in your way. However, the drill rig counts ever week support me not you. The U.S. industry is collapsing while Russia raises production.
“…never let facts get in your way…”
I find your posts long on carefully-chosen facts and short on thought.
The Year Of Crater
Back to Libya, the discussion has began:
http://www.news24.com/Africa/News/France-wants-action-on-Libya-20150103
It is all about the Benjamins:
http://www.iraqinews.com/features/iraq-recovers-billion-dollar-frozen-funds/
One more prediction. I predict that Goon will convert to Islam and one of his future wives has not even been born yet:
http://www.arabianbusiness.com/no-minimum-age-for-marriage-of-girls-grand-mufti-576044.html
Greenwood, CO Sale Prices Crater 17% YoY As Housing Correction Looms
http://www.zillow.com/greenwood-village-co/home-values/
Denver, CO Sale Prices Sink 5% YoY As Demand Falters In Cities
http://www.zillow.com/denver-co-80224/home-values/
http://oilprice.com/Energy/Oil-Prices/Did-The-Saudis-And-The-US-Collude-In-Dropping-Oil-Prices.html
Gotta love all of the conspiracy theories afloat these days!
Have you ever considered that perhaps oil is crashing due to simple economic fundamentals: Too much supply and too little demand, for instance?
A 1% over supply leads to a 50% price correction, yea that is just supply and demand. We barely have more oil in storage this year than last, this is not a supply and demand story, this is about Obama trying to make war on Putin, when Putin has at least 30 IQ points on him. Obama is already losing this war. By March, the U.S. shale oil industry will be so severely damaged Obama will have to concede and Russia with cash costs of production below ten dollars a barrel (see odd fellow link) will be untouched.
That’s great but overflowing tank farms and cratering demand portends more than a 1% “oversupply”.
Housing Dan Housing!
Monterey County, CA Asking Prices Nosedive 19% YoY; Sellers Slash Prices On Cratering Housing Demand
http://www.zillow.com/monterey-county-ca/home-values/
1% over supply? Try cratering demand, especially in China. I’ll be curious to see how you will try to explain away the China crater in the years ahead. Oh, I know, its all Obama’s fault, isn’t it?
He’ll still be blaming everything on Obama in the eighth year of Hillary’s reign.
I predicted around 7% growth for China for both 2014 and 2015, I have already been proven right for 2014 contrary to those predicting collapse and still see around 7% growth for this year. If the U.S. collapses which is very possible, China might hit as low as 6.8% but that still is around 7% growth, but I think the round figure is very important to China so they probably will just increase stimulus to hit 7% on the nose.
No that would like you and Obama blaming his failures on Bush or Lola blaming them on Reagan.
Your predictions slip and slide with changing facts.
When one is foaming at the mouth, such rational thought does not exist.
CA Housing Demand Lower Today Than Anytime Since 1998
http://files.zillowstatic.com/research/public/State/State_Turnover_AllHomes.csv
Without fog a mirror there is no organic demand at current prices. Wages do not support it.
Housing Demand Craters YoY In 34 Of 36 States
http://files.zillowstatic.com/research/public/State/State_Turnover_AllHomes.csv
Want to destroy demand and business? Just raise prices.
Once again, the UK and European press reports stories on predatory oligarchs that our corporate-owned MSM won’t touch.
http://www.independent.co.uk/news/world/americas/sex-slave-case-prince-andrew-may-regret-friendship-with-financier-who-had-dark-secret-9955061.html
I read that yesterday. These people HAVE GOT TO GO. They’re complete scummy perverted clowns, really the dregs of the earth and there they are, running the show. We need a French Revolution on an international basis.
Where’s Guillotine Renovator?
“These people HAVE GOT TO GO.”
Wrong! The people have got to be milked.
Bahahahahaha … they’ve got the bucks but they haven’t got the sense. An enterprising sort of person such as this Epstein guy is showing us the way.
This kind of corruption with impunity in high places is going to continue, because the sheeple - 95% of the electorate - have given it their sanction by voting for the status quo.
“This kind of corruption with impunity in high places is going to continue …”
Yes! And this is the beauty of it! It will continue because this is who these people are! Bahahaha … they cannot help themselves!
Do any of you pukes on this message board understand just how much FUN lies is store for the rest of us as theses guys get exposed for what they are and for what they do?
Bahahahaha … I have seen the future and I have seen the profits and I can almost hear the laughter.
My blades are sharp,
my machines well-oiled,
we lie at the ready,
’til consciences are roiled.
“Epstein required Jane Doe 3 to describe the events that she had with these men so that he could potentially blackmail them.”
I like it. It’s another version of the game of Gotcha.
Bahahahaha … if you ever decide to play somebody else’s game then you had better understand the rules.
Bahahahahaha … with all these miniaturized cameras about that appear to be buttons and other obscure things a person that can to position himself with the right people and the right circumstances and with such things as youtube readily available to download some interesting videos into …
… well, I will stop there and allow some imagination to take place.
Once again, the UK and European press reports stories on predatory oligarchs that our corporate-owned MSM won’t touch.
A very quick check of Google News shows that this story is on the websites of CNN, ABC, Fox and others.
I’m looking forward to watching this story unfold!
I’m looking forward to watching this story unfold!
+1. With top-dollar PR spin-meisters calling the beat!
It has all the makings of a slow-motion train wreck—and based on our presence here, I know how much we all love those!
Excerpt from a link that is about to post. This is why I am very skeptical about reports in the MSM about the imminent collapse of China etc. The MSM operates as the propaganda arm for the banksters in this war. Thus, we are “taught” that 7% growth in China is a collapse but 3% growth in the U.S. is a boom. An 18 trillion dollar government debt is no problem for the U.S. but China with a government debt less than a fifth of that level adjusted for GDP is in imminent danger of a debt collapse. Or that Russia is similarly in trouble despite low government debt and high foreign exchange reserves.
“Today the US-backed wars in Ukraine and in Syria are but two fronts in the same strategic war to cripple Russia and China and to rupture any Eurasian counter-pole to a US-controlled New World Order. In each, control of energy pipelines, this time primarily of natural gas pipelines—from Russia to the EU via Ukraine and from Iran and Syria to the EU via Syria—is the strategic goal,” Global Research wrote in an Oct. 26 post.
A decline from 14% GDP to 7% GDP is a collapse.
Remember…. Falling prices are your wallets best friend and good for the economy.
So Dan, how are you going to explain away China’s “ghost factories”?
http://www.zerohedge.com/news/2015-01-02/chinas-illusion-prosperity-exposed-forget-ghost-cities-meet-ghost-factories
I just don’t understand the importance. China is cutting back on steel production. However, local governments do not want the plants officially closed. If the story said they were claiming ten thousand workers were working and nobody was there, I would see a real problem. All over the world, the actual shutting down of plants is much more difficult than here.
“I just dont understand the importance.”
That pretty much says it all.
Easy to be sarcastic but why does it impact the big picture at all that China will grow about 7% this year despite restructuring? Yes, these factories are being shutdown more slowly than the central government would like and certainly longer than a free market would close them but they are closing. I remember China actually buying old steel plants in the U.S. which used 1940s technology and this was in the 1980s, the cheap labor, iron ore and met coal made them still competitive. This has ended and the need to close, it is not a huge story.
Cutting them up shipping them to China and reassembling them was quite a feat.
Why do you continue to believe that China is growing at 7%? Its obviously just a number they pick out of thin air. Electricity usage, import data, commodity prices, all point to a much lower number. And much of the “growth” is just wasteful spending on yet more empty apartment buildings. China had a chance to build a real economy, and they blew it thanks to a greedy and incompetent communist party. Why you continue to act as a mouthpiece for their propaganda, I don’t know.
Electricity usage? OK. I see numbers coming from China that show 3 to 4& growth in usage which is less than 7% growth. However, I look at the U.S. and I see flat to 1& growth for us but we are claiming 5% growth, so I think their numbers are a lot more consistent with their growth than our numbers and perhaps increased efficiency explains both but China has more room for efficiency gains. Why would lower commodity prices mean they are not growing at 7%, the capacity of the mines increased faster than the demand no other reason for the price decline except for oil which was clearly manipulated. The import data is consistent with lower costs and the fact they have increased electricity production using solar, wind, nuclear and hydro (actually just set a world record on that one google it), facts are stubborn things and repeating them is not propaganda. I see the MSM spinning stories to promote our economy but spinning the same point differently for China.
“The MSM operates as the propaganda arm for the banksters in this war.”
You are fairly brimming with conspiracy theories this morning. Did you drink too much on New Year’s Eve?
Six corporations control virtually every notable media outlet in this country. The symbiotic relationship between the oligarchs who control the corporations who own these media outlets, and the oligarchs on Wall Street, is not a “conspiracy”; it is a verifiable fact.
In order for the chinese to sell us cheap stuff they have had to peg their currency to us. The central bank has had to print a lot of currency to mop up all the excess dollars that have resulted. That is why they have 3 trillion in dollar reserves. In order to protect those reserves from the printing press in US they are buying gold.
The other option they had was to let their currency float. the problem with that is the exports to the US would suffer. So the choice they really had is sell a lot stuff to the US cheap or not sell much.
It is the beggar thy neighbor method. Devalue your currency and get exports but create inflation at home. It works best when you are exporting a lot more than you import.
Do you think the chinese want to eventually stop creating inflation via this relationship?
‘reports in the MSM about the imminent collapse of China etc. The MSM operates as the propaganda arm for the banksters in this war’
So there’s this vast conspiracy/war going on and this blog has been taken in by it’s propaganda because I post about the housing bubble there? Or is there some nuance to you’re views, because it seems to be shifting.
When you say MSM, you must mean largely the US establishment press. I wouldn’t say sending Lesley Stahl over there to oh and ah at the empty cities that much reporting. Then follow-ups by Bloomberg and the NYT that pretty much are the same thing. When I’m trying to find material on China, I read hundreds of Chinese and regional articles. I have to because their press is so controlled, it’s rare anything new gets out.
As for war, maybe we are infiltrating China with our corporations and jobs? They buy our expensive real estate because they don’t know we are going to take it from them when the time is right? Your “world view” as the egg heads like to say, doesn’t fit with mine. I see an oppressive, communist country that wouldn’t have a pot to piss in if the “new world order” hadn’t let them in the the WTO. They build empty cities because they are largely run by idiots, and proving that central planning is yet again, discredited.
our “world view” as the egg heads like to say, doesn’t fit with mine. I see an oppressive, communist country that wouldn’t have a pot to piss in if the “new world order” hadn’t let them in the the WTO. They build empty cities because they are largely run by idiots, and proving that central planning is yet again, discredited.
Testify, Brother Ben. In the words of Lenin, we sold the Chinese the rope they’ll one day hang us with.
They’ll hang themselves first.
Testify, Brother Ben. In the words of Lenin, we sold the Chinese the rope they’ll one day hang us with.
Actually, I agree. However, that does not address the issue on whether the news reports are to be believed. Even bad systems can produce amazing results. Saying no country advanced science more quickly that Hitler’s third reich is not an endorsement of Nazi Germany. To me, Putin is trying to bring back the glory of the Russian empire including restoring the Russian Orthodox church. I do not consider him a threat to the U.S. China, I do consider a threat, so policies such as Obama’s that have forced Russia to turn to China and thus have created a stronger China are counterproductive and in fact our dangerous.
’so policies such as Obama’s that have forced Russia to…’
These are neocon policies. Obama is just a doorman for the real PTB.
“Obama is just a doorman for the real PTB.”
It was his turn.
I think his job is to park their cars.
Ben, just one question do you really believe that the shadow inventory of China is greater than the shadow inventory of the U.S. adjusted for population? I do not. Thus, I believe that there is little difference from buying a “vacation” home in the U.S. and “investing” in one of these ghost cities which may or may draw people after the high speed rail project is finished.
Yes, the unused inventory in China is much larger. And it looks more and more like it will never be used. Second homes are a terrible waste of money. Why not stay in a resort? We’ve been over this many times.
“And it looks more and more like it will never be used.”
What will become of China’s many unused high rise ghost apartment towers? Will they remain largely empty until the next big earth quake crashes them to the ground?
Among other problems, it seems as though they have put in place a very costly maintenance burden with precious little economic benefit to justify the expense.
“What will become of China’s many unused high rise ghost apartment towers?”
Here’s a hint:
https://www.google.com/search?q=bodie+ghost+town&biw=1600&bih=775&source=lnms&tbm=isch&sa=X&ei=YQ6oVNfHEsawogSF4oBY&ved=0CAYQ_AUoAQ
And another hint.
Yes, the unused inventory in China is much larger
The number I hear for China is fifty million units, since their population is four times larger that is like 12.5 million here, so I don’t believe it is out of line. If you have different numbers I would like to see them.
Amazing (from 2009):
Ever see a 12 story building just fall over?
Jeebus, look at those “pilings”. This stuff will rot in the sun if it doesn’t fall over first.
Wow…Nice engineering eh…
Those bastards are holler!
I’ve driven thousands of piles in my career……friction, end bearing, steel, wood, H, minis, dwy-dags, tiebacks, post tensions….. and not a single one was holler. Not a one.
In most cases, by the time the reasons for those high rises to collapse come to light, the builders will be dead, gone and forgotten.
Second homes are a terrible waste of money. Why not stay in a resort ??
Or AirB&B….Or HomeAway…These are the latest creative destruction options that, along with changing demographics & ethic mix is going to torpedo many 2nd home locations..Its already happening…IMO, Other than a few area’s,its a big mistake to purchase a rural 2nd home unless you are going to use it and its so cheap it makes it a no-brainer…
“China’s reserves are now more than 50 times bigger than they were at the start of 1996, the year of the earliest available readings in data compiled by Bloomberg. The holdings surged as the country became the world’s largest exporter, assisted by the central bank’s dollar purchases that helped limit gains in the currency. China has shown “some renewed willingness” to allow appreciation, the U.S. Treasury said yesterday in a report, while adding that the yuan “remains significantly undervalued.”
It really seems that if the yuan did appreciate that the chinese stuff wouldn’t be as cheap here but then they wouldn’t be buying as many treasuries to allow our debt. Politicians have chosen debt over jobs?
If China didn’t buy our bonds, someone else would, especially now that “safety” is becoming an issue. Its a myth that China is paying for our deficits. Nothing would help this country more than China selling off it’s bonds. But they can’t. They’re basically screwed as far as their foreign reserves are concerned. Thanks for all the stuff, China. Here’s some worthless paper in exchange. And BTW, were moving our factory to Vietnam. Have a nice day.
why is the FED buying them if you think there is the great market for bonds?
Someone else would buy all these bonds at these yields?
AZ, if low bond yields are such a problem, why does China keep buying them?
China has been cutting back for years, but as such a huge holder it knows it cannot cut back too quickly without losing money on the investments.
they have to keep buying them cause they peg their currency.
If they didn’t peg their exports to the US would crater cause prices here wouldn’t be cheap.
I think you need to understand this relationship a little more.
No they have not been “cutting back.” If they are cutting back, where are they putting their dollars? They have no choice but to buy more US. Bonds, either directly, or more recently, through third parties, for as long as they want to keep selling us their stuff. When the bond buying stops, the party is over for China.
They have been buying gold and investing money in other countries.
Dman, don’t let the facts get in your way, no one else that consistently disagrees with me does:
http://www.scmp.com/business/china-business/article/1431266/china-cuts-us-debt-holdings-amid-fed-taper
Nothing like a timely article to bolster your position!
China really screwed their own pooch, selling off their Treasurys at the onset of one of the best years on record for the asset class.
I have to wonder if AlbqDan has followed more recent news on Treasury bonds than February 2014 articles?
BOND REPORT: 10-year Treasury Yield Posts Biggest Yearly Drop Since 2011
By Dow Jones Business News, December 31, 2014, 02:43:00 PM EDT
By William Watts, MarketWatch
Investors had widely expected yields to rise in 2014
NEW YORK (MarketWatch)–Treasurys advanced Wednesday, pushing yields lower as U.S. government debt posted its biggest one-year rise since 2011.
The yield on the benchmark 10-year Treasury note (10_YEAR) fell by around 2 basis points to 2.173% in holiday- shortened trading Wednesday. The yield dropped 0.857 percentage point over the course of the year, marking the largest one-year drop since 2011. Yields fall as bond prices rise.
Markets are closed Thursday for the New Year’s Day holiday.
Yields were widely expected to rise in 2014 as the Federal Reserve moved toward ending its quantitative easing program and began laying the groundwork for an eventual rate rise. While the Fed did complete its bond purchases in October and analysts are penciling in a rate rise for 2015, yields declined over the course of the year
See: Yes, 100% of economists were dead wrong about yields.
…
Dollar appreciation made the picture even worse for overseas investors who dumped Treasurys early in one of the best years on record.
OK now you can complain about it coming from a conservative source:
http://www.newsmax.com/US/debt-currency-reserves-holdings/2014/12/29/id/615383/
Perhaps you missed this article that I posted late yesterday. Note this news coincides with other news that oil prices continue to slide.
UPDATE: Treasury yields extend drop after ISM data
1-2-15 10:27 AM EST
By William Watts, MarketWatch
German 10-year bund yield drops to 0.5%
NEW YORK (MarketWatch) — Treasurys gained ground Friday, dragging yields lower, taking cues from lackluster U.S. economic data and a further fall in German bund yields.
The yield on the 10-year Treasury note (10_YEAR) dropped nearly 5 basis points to 2.126%, according to online trading platform Tradeweb. The two-year yield (2_YEAR) fell 0.3 basis point to 0.673%, while the 30-year T-bond yield (30_YEAR) dropped 4.8 basis points to 2.701%. Yields fall as bond prices rise.
Treasury prices saw their biggest annual rally in three years in 2014, defying consensus forecasts for yields to rise as the Federal Reserve moved to end its bond purchases. The rally resumed as investors trickled back from Thursday’s New Year’s Day holiday, with yields extending their drop after the Institute for Supply Management said its manufacturing index fell to 55.5% in December from 58.7% a month earlier.
Economists surveyed by MarketWatch had forecast a reading of 57%. A reading of more than 50% indicates growth in activity.
“This is disappointing…and follows the trend seen elsewhere around the world today. Nonetheless, it still suggests that the US economy is growing strongly, roughly at trend of around 3%, which is well above the rate seen in other mature developed economies,” wrote James Knightley, economist at ING.
…
If they choose to dump U.S. Treasurys while values continue to rise in both dollar and exchange-rate adjusted terms, the ongoing loss is their prerogative.
China’s financial system is a giant ball of string, where companies “guarantee” the loans of other companies, with multiple loans being secured by the same assets. Tens of billions of dollars are being handed out to zombie companies that are living on life support, by shadow banks that guarantee huge rates of return to millions of unsuspecting Chinese citizens. It’s all a fraud at this point. Chinese GDP numbers are even more laughable than ours. Once even one large loan is called in, the ball will unravel. Don’t you think it’s odd that defaults are almost non existent in a country with massive over capacity? The government knows what will happen if the wrong thread is up pulled. And so will the world, soon enough.
seems like a house of cards doesn’t it?
“Don’t you think it’s odd that defaults are almost non existent in a country with massive over capacity?”
Yes. And it is quite surprising that our self-proclaimed China experts persistently miss this.
China Daily says not to worry about it.
I am only interested in data not opinions.
“I am only interested in data not opinions.”
Wrong. You ignore data, and pass your opinions off as fact. Oh, and how you LIE…
Sh!t happens.
Markets
China Property Developer Defaults on HSBC Loan
Kaisa Warns It May Struggle to Pay Off Other Debt
China’s real-estate firms borrowed heavily from overseas lenders in recent years to expand domestically, but are now suffering. Shown, a construction site in Beijing. Reuters
By Enda Curran, Fiona Law and Chester Yung
Jan. 2, 2015 5:31 a.m. ET
HONG KONG—Chinese property developer Kaisa Group Holdings Ltd. has defaulted on a loan from HSBC Holdings PLC and warned it may struggle to pay off other debt, adding to the company’s woes after a string of executive resignations.
Late Thursday, the Hong Kong-listed company said it hadn’t repaid a $52 million loan to HSBC after the U.K. bank asked for the cash back following the resignation late last month of Kaisa’s chairman, Kwok Ying Shing. The loan has a clause that provides for full prepayment if the chairman resigns.
Efforts to seek comment from Kaisa were unsuccessful. HSBC declined to comment.
China’s real-estate firms borrowed heavily from overseas lenders in recent years to expand domestically, but are now suffering as China’s property market cools and home prices fall.
Kaisa’s offshore bond prices tumbled on Friday, pushing up yields to more than 50%. The company’s shares have been suspended from trading since December.
Analysts said Kaisa has sufficient cash to make the HSBC repayment but will likely need to renegotiate terms with the lender. As of June 30, Kaisa had about six billion yuan ($967 million) in short-term debt and 9.38 billion yuan in unrestricted cash, Standard & Poor’s said last week.
“The key thing is whether the company is able to negotiate a waiver with HSBC,” said Yin Chin Cheong, Chinese properties analyst at CreditSights in Singapore.
Worries about the company’s offshore debt have been rising, with Moody’s Investors Service recently downgrading the property developer’s credit rating and Standard & Poor’s also warning about the company’s outlook last month.
…
China’s real-estate firms borrowed heavily from overseas lenders in recent years
It’s much harder to paper over the non-performing loans when they are to global lenders; domestic banks are much more cooperative…
Macau casinos getting mauled as Chinese high-fliers (aka embezzlers) find more prudent places to park their stolen wealth, i.e. California real estate.
http://wolfstreet.com/2015/01/03/what-macau-just-said-about-chinas-economy/
Do you guys think credit is the most important method that allows more currency to enter the system and thus create the inflation that is wanted?
It’s not working. Credit demand is cratering.
Not to mention supply. What banker wants to make loans at interest rates that don’t cover default risk + inflation?
“What banker wants to make loans at interest rates that don’t cover default risk + inflation?”
A banker that collects fees? Collecting fees for loaning out money that belongs to somebody else?
There are also the ‘heads we win, tails you lose’ too-big-to-fail high risk gambling games that investment bankers have to fall back on at times when interest rates are too low to profitably lend money.
“There are also the ‘heads we win, tails you lose’ too-big-to-fail high risk gambling games that investment bankers have to fall back on at times when interest rates are too low to profitably lend money.”
Bahahahahahaha … and this is all done in order to save the children.
If the mantra of Saving The Children ever stops working then maybe we’ll try out the mantra of Promoting World Peace.
Of course. Almost all new money is loaned into existence in a fractional reserve banking economy.
The problem is that the majority of people cannot service the existing debt they already have and thus the demand for new credit has evaporated. Money can only be loaned into existence if someone is willing to take on the loan.
In other words, does a warehouse full of newly printed money result in inflation if it sits in the warehouse in perpetuity?
“The problem is that the majority of people cannot service the existing debt they already have and thus the demand for new credit has evaporated.”
They just need to work harder that’s all, maybe pick up some after-hours part-time jobs. Maybe sell some blood or perhaps some excess body parts
They should keep in mind that their competition overseas will work much harder and for much less so they had better buckle down and get more, say, education so as to make themselves more valuable in the workplace, and, although this education-thingy is a bit expensive there ARE ways one can get the money now for education in exchange for some interesting, ah, terms.
Visit your local banker and MAKE IT HAPPEN!
Banks in the UK, at least, appear to be tightening their underwriting standards even to wealthy borrowers with substantial assets.
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/11310046/HSBC-the-latest-lender-to-block-mortgage-porting.html
This well-off couple, with their £189,000 mortgage on a £840,000 home, are just the latest to be turned down by a lender when they ask to “port” their mortgage.
California Housing Demand Plummets YoY In 54 Of 58 Counties
http://files.zillowstatic.com/research/public/County/County_Turnover_AllHomes.csv
Do those figures represent percentages of existing homes that turned over in each period?
bingo
If I get motivated, I’ll put together a chart later today and post it.
Excellent. I’m looking forward to it.
‘Despite the 4,000 troops stationed there, Lemonnier alone doesn’t begin to illustrate the full scope of our presence in the continent. As Nick Turse reported in Tom Dispatch, the U.S. military is involved in the affairs of more than 90 percent of African countries. A discreet mission creep in Africa has led to our government’s quietly building military infrastructure, expanding an intelligence network and training local militias.’
‘Without much fanfare or input from the public, U.S. military activity in Africa increased a whopping 217 percent from 2008 to 2013. This happened during a period supposedly defined by American isolationism and cuts to the military required by federal budget sequestration.’
‘What’s going on here? Why do elected officials give credence to the myth that U.S. military power is somehow fettered, when our troop presence looms large, even to the point of appearing overextended? Why does there seem to be a consensus in Washington that assumes a broad, expensive and invasive U.S. military presence to be a panacea?’
‘The answer lies in distinguishing the superficial differences in foreign policy debates from the actual policies favored by both parties. The reality is that U.S. foreign policy isn’t nearly as democratic as it should be and the elites forming it tend to pretty much agree on everything. This elite consensus then gets further constrained by the insatiable budget appetites of defense bureaucracy. These are the reasons intervention is so often presented by the defense and foreign policy establishment as entirely obvious and completely inevitable.’
‘It begins with a total disregard for public opinion when defense strategy is formulated. Exempting extreme situations, what the American people want just doesn’t matter all that much. A hawkish consensus in Washington between Democrats and Republicans, both championing shockingly similar interventionist ambitions, sets the terms of debate. The inertia of a bloated defense bureaucracy that protects its budget at all costs then sustains interventions. And so we find ourselves in places like Africa, which only an elite few ever want us to be in to begin with.’
http://america.aljazeera.com/opinions/2015/1/democrats-republicanswarhawks.html
“The reality is that U.S. foreign policy isn’t nearly as democratic as it should be and the elites forming it tend to pretty much agree on everything.”
Bahahaha … that’s because the elites own the show.
“This elite consensus then gets further constrained by the insatiable budget appetites of defense bureaucracy.”
Bahahaha … IOW, somebody else’s money.
“These are the reasons intervention is so often presented by the defense and foreign policy establishment as entirely obvious and completely inevitable.”
Bahahaha … somebody else’s money and somebody else’s blood.
Bahahahaha … the best part of this, from these so-called elete’s point of view, is that they get money handed over to them OVER HERE for nasty situations they cause to happen SOMEPLACE ELSE using as cannon fodder people they consider well beneath their social class.
So Al Jazeera doesn’t like us keeping an eye on Africa? If it’s any consolation, I’m sure an even bigger eye is watching Al Jazeera. BTW, isn’t alga zeera a form of pond scum?
Yeah, AFRICOM is “keeping an eye” on Africa like the Spanish kept an eye on the America’s.
The inertia of a bloated defense bureaucracy that protects its budget at all costs then sustains interventions. And so we find ourselves in places like Africa, which only an elite few ever want us to be in to begin with ?
There it is right there….Rand Paul is outing the military but is considered fringe…Maybe Bernie Sanders also…Why doesn’t a leading presidential candidate ever put the hammer down on the MIC ?? Because they can’t ?? If so, then we really know who runs this country don’t we….
‘Rand Paul is outing the military but is considered fringe’
This whole discussion is interesting because it touches on a serious real issue. Paul is a point; is he really challenging the world order, or has he already been sold into it? And the banker’s points; is it finance that “really” runs the show? Is it politicians, or CEO’s or spies, or Mason’s? Watch the CFR meetings on CSPAN. They sure act like they are in charge. When a wall street stooge makes policy to foam the runway for banks, it makes one think the real power is in the smokey back room deals. The longer I watch this stuff, it looks more like factions carving off what they can. I know this; the Empire is real. They have openly declared it. Some of them think they create the reality we live in. Does China go along to get along with this Empire, so they can dip their beak? Is Russia in trouble because the Empire has plans for it, or is the new pipeline treaty with Turkey a shock? I don’t know. But all Empires fail. All of them in history, have exhausted their economies.
Ever since Rand endorsed Mitt Romney, I’ve had trouble seeing him as anything other than a sellout and Judas goat.
I totally lost respect for Rand the moment he endorsed Romney. Rand is a tool.
You’re both pathetic.
“… Rand Paul is outing the military but is considered fringe …”
Beautiful work! The PTB have marginalized such distractions as Rand Paul by labeling him as “fringe”.
Bahahaha … and once he is successfully labeled as fringe then everything he says and everything he stands for is automatically discounted as being fringe.
Labels can be interesting:
An Arab-descent guy I know expanded my consciousness a wee bit by allowing me to examine the phrase “Arab terrorist” and examine how difficult it was to use the word “Arab” without following it up with the word “terrorist” - whether the terrorist word was actually spoken out loud or just thought of.
Either way, the MSM has fully conditioned us to think (a true misuses of the word “think” as it is being used here) and automatically associate Arabs with terrorists.
FWIW.
The Obama administration doubled down on Friday on its allegation that North Korea’s leadership was behind the hacking of Sony Pictures, announcing new, if largely symbolic, economic sanctions against 10 senior North Korean officials and the intelligence agency it said was the source of “many of North Korea’s major cyberoperations.”
It seems doubtful that North Korea will successfully hide its hacking activities behind racial slurs.
Yeah…wonder how that “monkey in the jungle” cheap shot went over with the DPRK’s African allies.
How is the U.S. housing outlook shaping up early in 2015?
By the tenor of the words of those who are already losing their shirts, not so well.
http://www.zengrenade.com/html-site/gallery/images/sj_rage.jpg
I don’t know, but in the UK, where the housing bubble is even more pronounced, mortage applications are dropping sharply as prices have become increasingly unaffordable and consumers are pulling back.
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/11321674/House-price-concerns-grow-as-mortgage-approvals-hit-a-17-month-low.html
Your Money
5 biggest threats to the housing market
By Les Christie @CNNMoney
January 2, 2015: 6:19 AM ET
CNNMoney’s 2015 Playbook: Housing
NEW YORK (CNNMoney)
Sure, plenty of housing experts and economists are expecting the housing market recovery to gain steam in the new year. But a number of factors could still derail the whole thing.
As we head into 2015, here are five things real estate watchers are keeping an eye on.
1. Big investors cash out.
…
2. Foreign buyers stop buying.
…
3. Incomes fail to keep up with home prices.
…
4. Lenders will be too skittish.
…
5. A sharp increase in mortgage rates.
…
6. Falling home prices deter buyers whose true motive was to capture home equity wealth effects.
You are p@ssing in the wind if you think rates are going up.
I was merely posting an MSM article there, not advocating its ‘findings.’
However, italicized point 6. was my own addition, as the article completely missed it.
what do you think is going to be the catalyst for QE4?
Can one snowflake cause an avalanche?
Rates are immaterial when demand for credit is cratering.
#2 would have the most impact around here I believe…
Its pretty obvious home sales are slowing. This run up seemed to happen over a longer period of time. Some areas have seen much more price increases than others. Some areas seem way overvalued to me such as the bay area and so cal. But locally I just don’t see the bottom falling out of the market. People still need a place to live. Rates are low.
Don’t you think the most vunerable asset class are stocks?
Bad approach.
Liquidate and hold onto every dollar you’ve got. They’re more valuable than anything else.
#3 has been in play for many years, building water behind a fragile dam.
That’s what I was about to say. Incomes haven’t kept up with house prices since the twentieth century.
yet prices continue to go up. If your sitting around waiting for that to happen you might be waiting a long time.
No need to sit around, just get yourself out of harm’s way.
http://www.jaha.org/FloodMuseum/history.html
Are you sure?
Granite Bay, CA Sale Prices Plunge 11% YoY; Sellers Slash Prices As Housing Demand Plummets To 20 Year Lows
http://www.zillow.com/granite-bay-ca-95746/home-values/
Well, I just got an email today about a price cut from Zillow. The house was in a new development being offered by a builder. Cut from $359,000 to $329,000.
That’s certainly enough to notice, especially if you bought a year or 6 months ago at $30k more.
But according to the shills, these are just cuts from wishing prices, not real sale price comps, so nothing to see here. Move along …
They’ll probably give you a pool instead of cutting the actual price.
U.S. News
Housing Market Enters 2015 Facing Affordability Pressures
The housing recovery slowed during 2014 and shows few signs of breaking out or slowing sharply during the new year. Here, a house hunt plays out in Mackinaw, Ill., last year. Bloomberg News
By Nick Timiraos
Jan. 1, 2015 1:34 p.m. ET
The U.S. housing market failed to provide the lift to the economy over the past year that many analysts expected. It enters a new year with few signs pointing to either a renewed breakout or a sharp slowdown.
New data released this week showed that contracts signed to buy previously owned homes rose to the third-highest level of the past year, the latest sign of how housing demand firmed up in 2014 after a sluggish start.
The National Association of Realtors said Wednesday that its index measuring pending home sales in November, reflecting sales that have gone into contract but haven’t yet closed, rose 0.8% from October and 4.1% from a year earlier on a seasonally adjusted basis. That represents the largest year-over-year gain for the index since August 2013.
But as a whole, the housing market fell short of expectations amid tepid demand, rising prices and continued complaints from buyers about the quality of inventory. “The market overpriced itself this year, and buyers are very price sensitive right now,” said Glenn Kelman, chief executive of real-estate brokerage Redfin.
Nela Richardson, the firm’s chief economist, said they expect the market to be less competitive this year. “Homes that had four offers now have one,” she said, although there is still “a lot of price pressure in a really small number of neighborhoods.”
…
If rapid U.S. housing price appreciation sent investment demand into overdrive the past few years, why would slowing appreciation at Echo Bubble prices lead to an increase in sales?
Makes absolutely no sense!
Business
Home sales projected to increase as prices level
Jan. 2, 2015
Updated 9:38 p.m.
BY JEFF COLLINS / STAFF WRITER
Per a new forecast, U.S. home sales will rise 9 percent this year.
U.S. home sales will rise 9 percent in 2015 as home prices continue to level off, CoreLogic reported in a recent housing outlook.
The Irvine-based housing data firm projected sales will reach 5.8 million transactions this year, up from 5.3 million in 2014. The increase, if it materializes, follows sales declines in 11 of the past 13 months, National Association of Realtors figures show.
Homebuilding is also expected to pick up steam. CoreLogic projected that U.S. housing starts will grow 14 percent in 2015 to 1.1 million new homes.
Mortgage rates will remain at the historically low levels of the past 31/2 years. Interest for 30-year fixed loans will rise to 4.3 percent this year, up from 4.2 percent in 2014, the firm predicted.
“Stronger economic fundamentals mean demand for housing is expected to increase,” CoreLogic said in a statement.
…
“Stronger economic fundamentals mean demand for housing is expected to increase,” CoreLogic said in a statement.
Those people have some strange notions don’t they?
Housing Demand At 20 Year Lows
http://www.zerohedge.com/news/2014-12-17/mortgage-applications-tumble-citi-warns-oil-drop-risks-housingjobs-slump
Home sales projected to increase as prices level.
They just can’t bring themselves to write the word “fall” can they?
New version of the Joshua Tree Extension posted, which takes an alternate/less blunt approach to ignoring users. Give it a try, and if you don’t like it, there’s a preference in the extension settings to enable the old behavior.
For those who aren’t familiar, the JT Extension makes it easy to identify new comments since your last visit, allows you to ignore users, and will ensure you don’t look like a “looser” for forgeting to close your html tags.
Get the extension here
There are a couple of (minor) known issues that will get patched in the next week or so.
Thanks to those that helped test!
Thank you and I endorse your creation and encourage everyone to use it.
drumminj…I have not used this yet but I would much like to…Bluto in comments section says that it also eliminates some other posters for what ever reason which I would not want to do..Can you refine this so it can be applied to a select poster ??
Do u want to screen HA posts?
Alot of people scream at my posts.
Are you wearying of AlbqDan’s factoid-long, thought-short posts?
The problem is that if you filter out the drivel, you have no idea what the people countering the drivel are talking about.
That’s one reason I don’t filter.
Me too; another is that the “Next” button makes it super quick-n-easy to skip over repetitive tripe of anyone I’m tired of reading. Why block them permanently when the next more-interesting comment is just a tap away?
If you’ve not installed/tried it yet, why are you wanting me to modify it?
Install it. Try it. If it works for you, great. If not, I’m happy to hear feedback, but remember it’s a free tool I develop in my spare time.
It’s worth noting you can use all the other functionality without ignoring anyone, and there are a handful of settings to control behavior.
Exactly. There is some howling and whining going on. The scores of users who have installed your app are quite happy with it and it performs well.
If not, I’m happy to hear feedback ??
Which is why I said that Bluto in the comments section said it was also eliminating other posts…Thanks for your effort…I will just stay with the time tested recourse….Ignore it and scroll by…
Yeah it’s just as easy to ignore the posts. Never let the trolls live in your head, rent-free.
Thanks for your effort…I will just stay with the time tested recourse….Ignore it and scroll by…
I think it would be worth your effort to try it…you can always uninstall it if you don’t like it. However, I think you will…
Actually I’m back to using the JT extension, in response to my review at the FF JT extension page drumminj recently took the time to add an option to only hide a post from a given person but NOT hide the responses to it…that works really well for me and I’m not missing posts from people I do want to read as I was with the original version. If you do want to see a hidden post you only need to click on it. I try to use the extension sparingly so as to avoid “confirmation bias” but there are a few posters who NEVER post anything I want to see (yet post with abandon) and the JT extension is a godsend in those cases. Will revise my review, am a big fan of the new version.
Is this Mozilla only?
Colleyville(Dallas), TX Sale Prices Plunge 6% YoY; Inventory Balloons As Flippers Slash And Panic
http://www.zillow.com/colleyville-tx/home-values/
Most lucrative occupation for 2015 and beyond?
Shirt salesman.
http://image19.spreadshirt.net/image-server/v1/products/10676245/views/1,width=378,height=378,appearanceId=1/White-Cute-Cartoon-Donkey-Kid-s-Shirts-.jpg
And I’ll have green shirts for the Lolas.
if you had 3-4 trillion dollars in the bank and you had to leave them there how would you protect them from inflation?
What inflation?
Potomac, MD Sale Prices Crater 6% YoY As Housing Price Declines Resume
http://www.zillow.com/potomac-md/home-values/
Leave them there and enjoy the predicted increase in the value of the dollar for 2015.
They could possibly benefit from that in the short run. But wouldn’t you want some downside insurance on that amount of currency?
Its like stocks. People might not believe in the sustainability of the rally but they participate and have stops and downside insurance.
Whereas some people just lost all confidence and got out of the game. It seems option 1 was the better choice in hind sight.
“Its like stocks. People might not believe in the sustainability of the rally but they participate and have stops and downside insurance.”
Bahahahaha … I LOVE stops. Stops are SELL orders.
Bahahaha … if your intent is to buy high and sell low then set some orders to sell at a price that is lower than the price you bought and - sure enough - somebody (or a bunch of somebodys) will pounce on the price and drive it down to the point where your sell order is executed and - presto! - they get to cover at your expense.
If you really - REALLY - thought highly enough of a company so as you wanted to buy its stock then why would you want to sell it if the price dropped? If the price dropped wouldn’t this be and incentive to buy MORE of the stuff rather than sell off what you already owned?
Totally agree with Mr. Banker:
If you believe in a company’s future prospects, then buy the dip when the price falls without hesitation. It’s like when tomatoes go on sale at Von’s — an opportunity to get more for your money. And in the case of stocks, you are certain to make still more money when the price eventually goes back up to even higher levels than before.
Stop loss orders just give your valuable stocks away to others when they go on sale.
You mean three or four hundred, right? The question that should be considered by people with big debts now is how to prepare for life after liquidation. If you couldn’t get out of debt deliberately over the past ten years, you’re going to face a more sudden, less voluntary process.
“If you couldn’t get out of debt deliberately over the past ten years, you’re going to face a more sudden, less voluntary process.”
You just described my favorite sort of people: Debt slaves forever.
They work, I reap.
Forever and ever and ever and ever and ever …
“Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.”
— Norm Franz
“… but debt is the money of slaves.”
And there it is. At some point you would think that these debt slaves would eventually catch on and would free themselves of bondage but (thank you, God) they never do.
if you had 3-4 trillion dollars in the bank and you had to leave them there how would you protect them from inflation?
If I had that much money I don’t see how I could worry about anything, even if inflation ate away at that horde of cash.
Would you like anything else?
No thank you, check please.
US Debt Soars By $100 Billion On Last Day Of 2014, Hits Record $18.14 Trillion
An increase of $136 billion in the month of December and $790 billion for all of 2014
by Zero Hedge | January 3, 2015
It seems like it was only yesterday when we reported that, in yet another sleight of hand for the US Treasury and Social Security Administration, US debt rose by $32 billion on the last day of November sending total US debt above $18 trillion for the first time ever. As we further noted, it also meant “that total US debt has increased by 70% under Obama, from $10.625 trillion on January 21, 2009 to $18.005 trillion most recently.”
Fast forward to today when we are happy to report that according to the US Treasury, America’s debt-funded spending spree, while supposedly slowing down if looking at the declining monthly budget deficit report, never actually has.
As of the last day of 2014, total US debt soared by $98 billion in one day (driven again by Social Security debt surging on the last day of the month to a record $5.117 trillion), and closing off 2014 with a new all time high total of $18.141 trillion in Federal debt - an increase of $136 billion in the month of December and $790 billion for all of 2014.
“The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents - #43 added $4 trillion by his lonesome, so that we now have over $9 trillion of debt that we are going to have to pay back — $30,000 for every man, woman and child. That’s irresponsible. It’s unpatriotic.”
- Barack Obama
#ThingsThatMakeYouGoHmmm
Let’s be realistic. This really took off under Reagan. There’s no way the national debt was ever going to be repayed once the supply siders took over.
yeah its been building for years but the growth is exponential. the clock is ticking faster.
The only way to contain it now is to contain the interest relative to revenue.
But the end result is collapsing demand and falling prices.
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/
There are no supply siders. There are debt junkies and pocket liners. It’s what Nancy called “life as we know it”.
This really took off under Reagan. There’s no way the national debt was ever going to be repayed once the supply siders took over ??
A OMB director resigned because of it and is still pounding the table today about it…
After “being taken to the woodshed by the president” due to his candor with Atlantic Monthly’s William Greider, Stockman became concerned with the projected trend of increasingly large federal deficits and the rapidly expanding national debt. On 1 August 1985, he resigned OMB and later wrote a memoir of his experience in the Reagan Administration titled The Triumph of Politics: Why the Reagan Revolution Failed, in which he specifically criticized the failure of congressional Republicans to endorse a reduction of government spending to offset large tax decreases, in order to avoid the creation of large deficits and an increasing national debt.
Reagan: 1.5 trillion to restore the economy, win the cold war and actually increase middle class wages
Obama: eight trillion and now we are getting back into wars he claimed he won and the middle class has actually fallen further behind.
Obama is the debt master.
Of course, Obama has two more years to run up his “win”.
Nice try Adan…Pretty weak argument really…Check what happened in September 2008 and who was president at the time and for the 7 years and 9 months leading up to it…Is that your foot-in-mouth Adan ??
Reagan did not inherit stagflation from Carter? Before Carter pulled if off most economists did not even believe it was possible to have both high unemployment and high inflation. No one really even knew how to fight it. I remember the Nation actually was gloating it was glad Reagan won since he was doomed to fail trying to fight both at the same time.
how how more years can we kick the can down the road so there are no defaults on the debt? That is what really matters at this point.There are two options really:
1. print a sh@tload of money to keep buying bonds
2. Default and let some folks get some haircuts
Yes, but politicians will always pick number 1 until they create hyperinflation.
Or … pick number 3, which is to allow some to get haircuts and some of us to get bailed out.
allow some to get haircuts and some of us to get bailed out.
Ding, ding, ding!!!
This is the favored approach of the political class, as it transfers more power to pick winners and losers into their hands.
You guys are preoccupied with the titular heads. We have a big problem and it is that our government is staffed by criminals. They need to be reformed. Arguing about which is the worst or most stupid is pretty superficial.
+eleventybillion.
Reagan: 1.5 trillion to restore the economy, win the cold war and actually increase middle class wages
Please tell me you don’t actually believe this shit…
“Please tell me you don’t actually believe this shit…”
Don’t tell me you’re doubting Saint Ronnie’s magic?
Hell hath no fury like a climate change scientist defunded
How Congress Snuck Changes to U.S. Environmental Policy into the New Budget Bill
The $1-trillion bill keeps agencies from acting on clean air and water and energy
December 17, 2014 |By Joshua A. Krisch and Josh Fischman
A lot of those 11th-hour mandates will affect science and environmental policy. The U.S. Environmental Protection Agency, for example, got $8.1 billion. That’s $60 million less than last year and the agency now has to operate at its smallest budget since 1989. But even that money comes with conditions. Although agriculture is a major source of atmospheric methane, Congress forbade the EPA from using its funds to require farmers to report greenhouse gas emissions from “manure management systems.” And the agency is no longer permitted to regulate farm ponds and irrigation ditches under the Clean Water Act.
Here are a few of the key riders and their effects in different areas:
Environment
The EPA is not only forbidden from regulating cow manure, it cannot require farmers to obtain permits for gas emissions from cow belches and farts, which the agency says is a major methane source.
The U.S. Fish and Wildlife Service cannot take many of the steps required to prevent the extinction of the Gunnison sage grouse, despite the bird’s continued decline.
Pres. Obama is not allowed to fulfill his pledge to give $3 billion to the United Nations Green Climate Fund, designed to spur other countries to respond to global warming.
Energy
The Export–Import Bank, the U.S.’s official export credit agency, must loan funds to companies to build coal-fired power plants overseas, reversing a previous ban.
The Department of Energy cannot develop and enforce new standards for more energy-efficient lightbulbs.
Transportation
The Transportation Department cannot fund most of its current light-rail projects.
scientificamerican.com/article/how-congress-snuck-changes-to-u-s-environmental-policy-into-the-new-budget-bill/
“The U.S. Fish and Wildlife Service cannot take many of the steps required to prevent the extinction of the Gunnison sage grouse, despite the bird’s continued decline.”
How many billions of dollars are needed to write one letter to the Colorado Fish & Game and say “maybe you should cut back on shooting those grouse for a while”?
His Royal Glibness
Random thoughts on the passing scene.
By Thomas Sowell
January 1, 2015 12:00 AM
It tells us a lot about academia that the president of Smith College quickly apologized for saying, “All lives matter,” after being criticized by those who are pushing the slogan, “Black lives matter.” If science could cross breed a jellyfish with a parrot, it could create academic administrators.
When the political Left wants to help the black community, they usually want to help the worst elements in that community — thugs they portray as martyrs, for example — without the slightest regard for the negative effect this can have on the lives of the majority of decent black people.
If anyone in the mainstream media is at a loss for what New Year’s resolution to make, try this: Stop “spinning” or censoring stories about race, and try telling the plain truth, if only for the novelty of it.
— Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University. His website is http://www.tsowell.com. © 2014 Creators Syndicate Inc.
http://www.nationalreview.com/article/395468/his-royal-glibness-thomas-sowell - 166k -
“All lives matter”
This is true! All lives DO matter. It’s just that some lives matter more that others.
Think George Carlin and his statement about Private Clubs and its membership and perhaps you’ll catch on to what I am talking about.
Or (door number two), drop on by your local bank branch and ask them for the Dotted Line Special and maybe discuss its merits over a free cup of coffee.
George Carlin and his statement about Private Clubs and its membership ??
Just watched it…I think he did this in 2007…
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CB4QtwIwAA&url=http%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3Di5dBZDSSky0&ei=-C2oVOazI8-coQSum4HwBg&usg=AFQjCNGQBb9LykuEVR_iwmUm82Sa-thBRQ&sig2=M4Xqn5nbaBfOgj0IbX6nvw
If a white commentator said that, you could predict a metaphorical lynching in the MSM would ensue.
“Customers who used to wager on casino tables are probably now sitting at home betting on stocks,” said Tai Hui, Hong Kong-based chief Asia market strategist at JPMorgan Asset Management. “Investors are levering up on margin trading, or ‘using a small knife to cut a large tree.’”
Ten warning signs of a market crash in 2015 - Telegraph
http://www.telegraph.co.uk/…/11322623/Ten-warning-signs-of-a-market-crash-in-2015.html - Similar pages
21 hours ago
“The UK stock market is in its 70th month of a bull market, which began in March 2009. There are only two other occasions in history when the market has risen for longer. One is the period leading up to the great crash in 1929 and the other before the bursting of the dotcom bubble in the early 2000s. ”
Is it really the QE money doing the magic or the suppression of other alternatives that forces people to chase stocks?
Comment by phony scandals
2015-01-03 09:58:41
Ten-warning-signs-of-a-market-crash-in-2015
telegraph.co.uk/finance/economics/11322623/Ten-warning-signs-of-a-market-crash-in-2015.html
“The markets are an ever and everything discounting mechanism and the product of the behavior of all their participants and, of course, not everybody can win. In order for every market to function, the majority of the participants have to lose. This majority is usually the uninformed and ignorant crowd, who rather relies on hot tips or even sheer luck like a gambler, instead of doing some homework and spending an extra buck for valuable and useful information. ”
Ar you going to lose this time too?
You just described the housing market of the last 18 years. How much does one have to throw at a depreciating asset like a house to realize his losses?
Miami, FL Sale Prices Plummet 8% YoY; Dive 14% QoQ and 8% MoM
http://www.zillow.com/miami-fl-33134/home-values/
DUMB MONEY?
Dumb borrowed money.
It’s not clear where that quotation came from but it is overly simplistic, logically bankrupt, economically wrong and a pretentious crock of hooey. There. I feel better.
The idea that markets are a zero sum game is an urban myth that won’t die. The markets are not the product of the behavior of all participants: in fact, only a tiny percentage of participants buy or sell on any given day, while the vast majority have paper gains or losses. Furthermore, dividend reinvesting, currency fluctuations, currency supply, stock buybacks, etc. mean that the “sum” in “zero sum” is volatile and changes everyday.
In truth, markets can be positive sum games (majority “win”) under bullish conditions and negative sum (majority “lose”) under bearish.
Sure, that is a valid point: in the aggregate, the owners of all of the equities together own all of the companies that are listed. And the value of those companies, in aggregate, fluctuates with economic conditions, and the owners win or lose together. Fair enough, as far as that goes.
But the portfolio _changes_ that all of those owners make—the trading, if you will—is definitely a zero-sum game. At different points in time, some are buyers of shares in any company, and a corresponding number must be sellers of share (in order for anyone to buy, someone has to sell). All of those changes that the owners make are a win for someone and a matching loss of participation for someone else—or vice-versa. That portion is classic zero-sum.
New home loan helps lower-income borrowers build equity quickly
By E. Scott Reckard
January 2, 2015
Grace and Armando Ong were among millions of Americans who lost their homes during the housing crisis.
Today, the Azusa couple are in the vanguard of borrowers taking advantage of a new loan that helps lower-income borrowers build equity fast — and protects them against any future crash in values.
All with no down payment, no closing costs and no mortgage insurance. The Ongs’ real estate agent, Jill Medley, called it “the best loan in the history of real estate.”
The key feature of the so-called wealth-building home loan is a sharply reduced interest rate on a 15-year term. Instead of requiring a down payment, banks allow borrowers to use their money to pay interest upfront, often called “buying down” the rate.
For their $400,000 house, the Ongs used what would have been a 4% down payment — $16,000 — to instead buy down their rate to 0.5%. In little more than three years of monthly payments, the couple will have more than 20% equity in the home, assuming the property value stays the same.
That more than doubles the equity they would build with the same amount down on a 30-year Federal Housing Administration loan at the going rate of 3.25%.
The Ongs pay only about $150 more each month than they would have paid under the longer-term loan, which would include a hefty mortgage insurance payment.
“The American dream is a reality,” said Grace Ong, a registered nurse at an area hospital.
The loan was unveiled in September by Edward J. Pinto and UCLA researcher Stephen D. Oliner, resident fellows at the conservative-leaning American Enterprise Institute. A key liberal housing advocate, Bruce Marks of the Neighborhood Assistance Corp. of America, or NACA, joined with them to promote the loan.
The new loan aims primarily to help low- and moderate-income borrowers seeking to buy modestly priced homes. They cannot own any other property and are required to live in the one- to four-unit properties that they purchase.
In Southern California, the NACA program sets a maximum price of $400,000 for a single-family home, and $697,696 for a four-family property, so most purchases would be in lower-priced inland areas. Wealthier folks could get the loan, but they would have to buy and live in the low- or moderately priced neighborhoods.
http://www.latimes.com/business/realestate/la-fi-equity-building-mortgage-20150103-story.html#page=1
“Today, the Azusa couple are in the vanguard of borrowers taking advantage of a new loan that helps lower-income borrowers build equity fast — and protects them against any future crash in values.”
“… and protects them against any future crash in values.”
Bahahahahaha … why, its a miracle!
“All with no down payment, no closing costs and no mortgage insurance. The Ongs’ real estate agent, Jill Medley, called it “the best loan in the history of real estate.”
Bahahahahaha … I love this blog.
I dunno…….hearing about stuff like this makes my head hurt.
Ongs= No fixing stupid
And a Maine community bank has started making no-down-payment mortgages at unsubsidized rates. Androscoggin Savings Bank of Lewiston had closed two of the 15-year loans and had four or five more in its pipeline in mid-December, said Joseph Ferris, Androscoggin’s vice president for mortgage lending.
Borrowers pay 3% of the loan amount to Androscoggin to receive a 1.75% fixed interest rate the first seven years. The rate rises to 5% in years eight through 15.
“We’ve got real estate agents up here begging to come talk to us about it,” Ferris said.
http://www.latimes.com/business/realestate/la-fi-equity-building-mortgage-20150103-story.html#page=1
“’We’ve got real estate agents up here begging to come talk to us about it,’ Ferris said.”
Get ‘em hungry enough and you get them begging.
The game of Gotcha can be played in various ways, with various players.
(Anyone ever notice how realtors do all the running around while bankers get sit back and wait until the realtors have their selected marks salivating and foaming at the mouth and anxious as hell to sign a dotted line - ANY dotted line - that is set before them?)
Marks work, and realtors work, and bankers … what do bankers do?
Bahahahahaha … bankers reap, that is what bankers do.
And reap, and reap, and reap … they reap all the way to the bank, and they also reap when the leave the bank.
Life is good.
Grace and Armando Ong were among millions of Americans who lost their homes during the housing crisis.
Today, the Azusa couple are in the vanguard of borrowers taking advantage of a new loan that helps lower-income borrowers build equity fast — and protects them against any future crash in values.
Some people are unteachable…
“……in the vanguard of idiotic US Americans stepping up for another round of keester sex with no lube….”
Fixed
OTOH, maybe they are the smart ones. The homemoaners seem to be the recipients of whole truckloads of bailouts.
The Ongs, or rather their banker, can do this secure in the knowledge that if their home price crashes, another bailout is assured, thanks to the ‘Muricans who voted for Obama, McCain, and Romney, all of whom supported and enabled such bailouts.
In little more than three years of monthly payments, the couple will have more than 20% equity in the home, assuming the property value stays the same.
Haha! Good luck with that…
I am thinking about changing my name from phony to Armando Ong.
“Grace and Armando Ong were among millions of Americans who lost their homes during the housing crisis.”
“The American dream is a reality,” said Grace Ong, a registered nurse at an area hospital.
New home loan helps lower-income borrowers build equity quickly
Lolz! There isn’t 100 points of IQ between these three peeps.
The loan was unveiled in September by Edward J. Pinto and UCLA researcher Stephen D. Oliner, resident fellows at the conservative-leaning American Enterprise Institute. A key liberal housing advocate, Bruce Marks of the Neighborhood Assistance Corp. of America, or NACA, joined with them to promote the loan.
Fleeced from the left!!! Fleeced from the right!!!
AEI is the same neo-con outfit that promoted the invasion of Iraq and “regime change” all over the Middle East.
“Fleeced from the left!!! Fleeced from the right!!!”
Why do you hate children?
“Fleeced from the left!!! Fleeced from the right!!!”
“Why do you hate children?”
Grace Ong appears to be well past her childbearing years and Armando Ong looks as though he may need to see his doctor to ensure that he would be healthy enough for sex.
Although they would both need maternity care, pediatric care and prenatal care coverage in their ObamaCare Health Insurance plan.
I love this division of society, or politics, or whatever that is termed “Left” and “Right” in that they are both aspects of the same thing just as “heads” and “tails” of a nickel are both aspects of the same thing.
You could argue that “heads” of a nickel is better than “tails” or vice-versa and I will whole heartily support your argument - as long as I get to own the nickel.
AirAsia news…….today comes the news that AirAsia was not supposed to be flying the route in question. Comments are mostly of the “weather doesn’t know what day it is” variety.
Yeah, but……ATC guys run computer simulations on this
Maybe the airspace in question is saturated during that time. Especially at the altitudes needed for storm avoidance. And/or there were so many flights requesting diversions, ATC was unable to honor AirAsia’s request for altitude/course changes. Like getting stuck on freeway traffic.
honor AirAsia’s request for altitude/course changes ??
Yeah…You know more about this that I but I did fly a tiny bit…When you fly above ceiling max, doesn’t your stall speed increase dramatically ??
Bitcoin price dropping faster than an intern’s panties in the Oval office in 1990s.
$300.88 currently. Was $315 yesterday.
Palladium will soon be rising faster than something else in the WH.
Buy the dip!
Borrow the money if you have to! Don’t let this opportunity slip on by!
(Bahahahahahahahaha)
With palladium you have two main sources, South Africa, falling apart with electricity shortages and Russia. Minor players in NA include SWC and PAL. I trust SA to mess up with their government, worked well last year and I trust it will again this year.
Agreed. I bought up some North American Palladium (PAL) when it dropped to .12 recently. Seems like a prudent hedge for a metal with good investment and industrial demand.
A dip in bitcoin prices may eventually prove permanent. Think beanie babies and pets dot com, not gold.
Capitulation time has not started yet. But I’m wondering what happens when the miners shut down? The Bitcoin mining operations used to be possible with basic desktop PCs. Then you had to get the graphics card for games. Now you have to have the ASICs for mining. In this type of mining, bitcoins will be rare to come by. So people who buy bitcoin could expect weeks instead of days. And the Bitcoin ATMs, which are springing up now will be “out of order” and just take up space. The scarcity of new bitcoin itself could drive it back up.
US institutional “investors” in emerging markets getting a first-hand primer in the pitfalls of investing in a corrupt, crony capitalist, faux socialist-run economy.
http://www.businessinsider.com/corruption-in-brazil-the-big-oily-2015-1
No. Lola always said we should be following Brazil and adopt similar policies.
“For 30+ years, Western countries have been papering over the decline in living standards by issuing debt. In its simplest rendering, sovereign nations spent more than they could collect in taxes, so they issued debt (borrowed money) to fund their various welfare schemes.
This was usually sold as a “temporary” issue. But as politicians have shown us time and again, overspending is never a temporary issue. This is compounded by the fact that the political process largely consists of promising various social spending programs/ entitlements to incentivize voters.”
“For 30+ years, Western countries have been papering over the decline in living standards by issuing debt. In its simplest rendering, sovereign nations spent more than they could collect in taxes, so they issued debt (borrowed money) to fund their various welfare schemes.”
Yes, it was a true miracle!
“This was usually sold as a ‘temporary’ issue.”
Offering strong evidence that People are Smart.
“But as politicians have shown us time and again, overspending is never a temporary issue. This is compounded by the fact that the political process largely consists of promising various social spending programs/ entitlements to incentivize voters.”
An astonishing revelation!
“This is why Central Banks have done everything they can to stop any and all defaults from occurring in the sovereign bonds space. Indeed, when you consider the bond bubble everything Central Banks have done begins to make sense.
1) Central banks cut interest rates to make these gargantuan debts more serviceable.
2) Central banks want/target inflation because it makes the debts more serviceable and puts off the inevitable debt restructuring.
3) Central banks are terrified of debt deflation (Fed Chair Janet Yellen herself admitted that oil’s recent deflation was an economic positive) because it would burst the bond bubble and bankrupt sovereign nations.”
This is exactly why rates wont go up that much.Time to buy a house?
“Time to buy a house?”
Yes, it is always time to buy a house. Go see Amy today and GET IT DONE!
(The dotted lines await.)
How are the prospects looking for a quick resolution to the Eurozone crisis in 2015?
Capitol Report
Greek euro exit would be ‘Lehman Brothers squared’: economist
Published: Jan 3, 2015 2:07 p.m. ET
Bloomberg
Martin Feldstein, professor of economics at Harvard University
By Greg Robb
Senior economics reporter
WASHINGTON (MarketWatch) — A decision by a new Greek government to leave the eurozone would set off devastating turmoil in financial markets even worse than the collapse of Lehman Brothers in 2008, a leading international economist warned Saturday.
A Greek exit would likely spark runs on Greek banks and the country’s stock market and end with the imposition of severe capital controls, said Barry Eichengreen, an economic historian at the University of California at Berkeley. He spoke as part of a panel discussion on the euro crisis at the American Economic Association’s annual meeting.
The exit would also spill into other countries as investors speculate about which might be next to leave the currency union, he said.
“In the short run, it would be Lehman Brothers squared,” Eichengreen warned.
He predicted that European politicians would “swallow hard once again” and make the compromises necessary to keep Greece in the currency union.
“While holding the eurozone together will be costly and difficult and painful for the politicians, breaking it up will be even more costly and more difficult,” he said.
In general, the panel, consisting of four prominent American economists, was pessimistic about the outlook for the single-currency project.
Jeffrey Frankel, an economics professor at Harvard University, said that global investors “have piled back into” European markets over the last years as the crisis ebbed.
Now, there will likely be a repeat of the periods of market turmoil in the region and spreads between sovereign European bonds could widen sharply.
Kenneth Rogoff, a former chief economist at the International Monetary Fund and a Harvard professor, said the euro “is a historic disaster.”
“It doesn’t mean it is easy to break up,” he said.
Martin Feldstein, a longtime critic of the euro project, said all the attempts to return Europe to healthy growth have failed.
“I think there may be no way to end to euro crisis,” Feldstein said.
The options being discussed to stem the crisis, including launch of full scale quantitative easing by the European Central Bank, “are in my judgment not likely to be any more successful,” Feldstein said.
…
GOTCHA!
“‘I think there may be no way to end to euro crisis,’ Feldstein said.”
Bahahahahahahahahahaha … and I’ll bet there will be numerous claims that nobody could have seen this coming.
Winston Churchill — ‘Never let a good crisis go to waste’.
Bahahaha … reportedly it was December 7, 1941 that was the happiest day in Winston Churchill’s life.
Or, if there is no crisis readily available then with a little imagination maybe a crisis can be invented:
“You furnish the pictures and I’ll furnish the war.” – William Randolph Hearst, January 25, 1898
I think Donald Trump is a good example of how to live very high on the hog by borrowing money.
Life is short.
You’re just like him Lolacado.
Casey said the same stuff in 1979 or 1980: To Get out of Dodge.
http://www.caseyresearch.com/cdd/doug-casey-getting-out-dodge
People who went to the backwoods and all into gold and silver lost a good deal of potential wealth they could have had if they had most of the money in the stock market.
On Facebook I see more gloom and doom “police state” this and that. I repost here too. Truly frightening and rather than leave the USA I think the citizens do a lot to reverse the pendulum when the time comes. The pendulum was reversed in 1980. It may or may not be free choice by the elected officials to deregulate, de-nannystate and get rid of the Patriot Act and NDAA. The popularity of the elected officials is sliding more and more. The number of registered Republicrats is declining. The number of votes among eligible voters is declining. The GP is pissed but don’t want anything to do with government. In my situation I do not believe government has any authority. So we march into the capitals and city halls and occupy them until this draconian police state is turned from miltarized to Barney Fife.
So we march into the capitals and city halls and occupy them until this draconian police state is turned from miltarized to Barney Fife.
Who is “we”? The same great, inert mass of the hopelessly stupid who voted for “hope ‘n change” or the even more excreable GOP alternatives? Have fun storming the castle….
Debt monger pimping for NAR
http://www.azcentral.com/story/news/politics/2015/01/03/obama-phoenix-visit-housing-market-abrk/21231155/
Veteran And Former Cop Sues After Guns Confiscated Because He Sought Treatment For Insomnia
Chuck Ross
Reporter
3:15 PM 01/02/2015
A veteran of the U.S. Navy and decorated retired police detective is suing New York Gov. Andrew Cuomo and other state officials for infringing on his constitutional rights after his pistol permit and four handguns were confiscated after he voluntarily sought hospital treatment for insomnia.
“Nurse’s notes” from Montgomery’s stay show no documentation of mental health issues.
“Patient has no thoughts of hurting himself. Patient has no thoughts of hurting others. Patient is not having suicidal thoughts. Patient is not having homicidal thoughts,” the notes read.
A psychological assessment labeled him “mildly depressed,” but otherwise determined “there is no evidence of any psychotic processes, mania, or OCD symptoms.”
“Insight, judgment, and impulse control are good,” the assessment reads.
Montgomery’s suit also states that a hospital psychiatrist told him “You don’t belong here” and “I don’t know why you were referred here.”
Four days after leaving the hospital, New York State police sent a letter to the Suffolk County clerk’s office stating “has been adjudicated as a mental defective or has been involuntarily committed to a mental institution” and that he was prohibited from possessing any firearms.
The next day, Montgomery received a call from an officer at the Suffolk County Sheriff’s Department informing him that his guns would have to be confiscated.
Montgomery says that on May 30, the Suffolk County Sheriff’s Department showed up to his house and confiscated his pistol license and four handguns — Colt .38 revolver, Derringer .38, Glock 26 9mm, Smith & Wesson Bodyguard 380.
dailycaller.com/…/ - 92k -
One of the tragedies of this is that combat veterans, in particular, who may have some significant mental health issues, might be deterred from seeking help for fear it’ll mean lifetime disarmament - especially for those who live in sketchy areas.
“The Ongs’ real estate agent, Jill Medley, called it “the best loan in the history of real estate.”
Whatever became of all the folks who used to post here to warn that the dollar was going to be inflated away to nothing? They seem to be running in short supply these days.
Foreign Exchange
Dollar Surges to 11-Year High Against Biggest Rivals
Greenback Propelled by Expectations the Federal Reserve Will Increase Rates
By Ira Iosebashvili and Ian Talley
Updated Jan. 2, 2015 6:55 p.m. ET
Investors snapped up dollars, pushing the greenback to its highest level against major currencies since September 2003, as they ramped up bets the U.S. economy will pull ahead of the rest of the world this year, with the Federal Reserve in the driver’s seat.
But as the value of the dollar rises against the currencies of some of the country’s biggest trading partners, so do the risks to America’s manufacturing and tourism sectors and to broader financial markets, economists and industry officials say. Another worry: The dollar’s gain reflects concerns about weakness in China, Europe and Japan that could become a drag on U.S. growth.
The WSJ Dollar Index, which tracks the U.S. dollar’s performance against 16 other currencies, opened the year on Friday with a 0.8% rise. That gain builds on a 12% rally in 2014 that bolstered the allure of U.S. stocks and bonds.
Propelling the rally is anticipation of the Fed’s first interest-rate increase in almost a decade, a move widely expected to come this year. The Fed is preparing to raise rates from near zero amid steady improvement in the U.S. economy and labor market since the financial crisis.
The Fed is poised to tighten credit just as other central banks, such as the European Central Bank, are weighing expansions of easy-money policies. Higher benchmark interest rates tend to boost a currency as investors, in search of bigger returns, convert cash into that currency.
“U.S. economic outperformance is at the forefront of this rally,” said Alan Ruskin, head of G-10 foreign exchange strategy at Deutsche Bank in New York. “This year will likely be when we finally see the rate hikes that will separate the U.S. from much of the world.”
…
“Whatever became of all the folks who used to post here to warn that the dollar was going to be inflated away to nothing?”
One of them (Aladinsane) apparently went to New Zealand.
I think their forecasts were such that by now we would be burning enormous quantities of dollar bills so as to keep warm.
and interest rates would be sky high.
Are there any signs yet in early 2015 that the oil rout is ending?
If so, I’m missing them.
Al Arabiya
The crude reality of declining crude oil prices
Saturday, 3 January 2015
Hisham Melhem
The crashing price of oil, which dominated the world of energy in the last six months, and promises to stay with us for much of 2015, has brought cheers to American consumers and tears to the oil tsars of Russia, Iran and Venezuela in particular. If the price of oil remains in the neighborhood of $60 per barrel (bbl) for much of this year, the economic impact on Russia, Iran, Venezuela and maybe Iraq, Algeria, Nigeria and Libya could be ruinous. The sharp decline in oil revenues could force both Russia and Iran to review and maybe reduce their financial and material support for the Assad regime in Syria. Some optimists speculated that the crude reality brought about by the changing energy landscape may force Iran to show more flexibility in its nuclear negotiations with the P 5 + 1 in return for a quicker process of sanction relief. The precipitous fall in the price of oil has forced governments all over the world as well as the international financial institutions to review their investments and risk assessments for 2015 and beyond.
The foreign currency reserves that Saudi Arabia, the United Arab Emirates and Kuwait have accumulated will help them navigate the turbulent markets in the immediate future, but even these economies will be forced to adjust their balance payments and maybe cut back on subsidies and social programs, in the absence of a market “correction” that would restore the price range that prevailed in the last 5 years. A sustained low price of oil could lead a country like Venezuela to default on its debts, a severe contraction in the Russian economy, and dramatic and unprecedented consequences on the Iranian economy, which is – like Russia’s economy- already teetering because of painful international sanctions. In Iraq, Libya and Yemen, very low oil prices could plunge these countries deeper into violence. So far, the three largest economies in the world; the United States, China and Japan (two major importers of oil) have benefitted from the decline of oil prices. However, if the current low price prevails for some time, this could impact those American companies that have invested large resources in the production of shale oil in States like Texas and North Dakota, who incur higher production costs.
…
which is – like Russia’s economy- already teetering because of painful international sanctions.
That is such propaganda Russia is being hurt by the falling oil prices but the sanctions were merely an inconvenience. Monday, BHI will announce we lost at least thirty or forty drilling rigs and the jobs that went with them both direct and indirect. Over a year it will cost us about 200,000 barrels a day production. This will be over very quickly with Putin stronger than ever and the U.S. economy much weaker.
“This will be over very quickly with Putin stronger than ever and the U.S. economy much weaker.”
CLICK!
Let’s all remember what AlbqDan said today so we can remind him in early 2016!
Not surprising you are clueless.
he is a doom and gloomer no matter what you say. been kicking tires for 10 years.
Oh my dan. You could be more helpful here. Just give him a link to the Communist Party China Daily so he can have great insights like you do. Don’t be selfish.
Not surprising you resort to ad hominem attacks and backpedaling when the data don’t support your ossified economic world view.
He just told you it is a great time to buy a house with a big mortgage in California. Are you sure he is the village idiot? Maybe it is all the rest of us!
I did not say it was a good time to buy in California. That is all you guys can do is to distort what I say. I said he would still be waiting to buy when he died. He missed his opportunity to buy and if another presents itself, he will miss that as well.
You’re backpedaling again.
No you try to distort and I have to repeat. I said months ago, actually the day I left the board for a while I understand why people would not buy a house in California today but there was a good time and you missed it, being a permanent bear does not impress me.
I’ve made no posts for or against the idea of buying a home in California in years, but feel free to make crap up when the facts aren’t available to support your positions.
Considering anyone who bought a house in CA in the last 15 years is screwed, any time to strike was decades ago.
Do any of you doom and gloomers actually have any ideas about actually making any money?
Dan is turning a profit and has bought a house. Sounds like a solid guy to me.
Last and only time I bought here was in 1996. And I won’t buy again until when and if prices reach a similarly affordable level.
Never mind what nonsense Sh!thouse poet and AlbqDan spew.
Pick yourself up off the floor and cheer up Poet.
And remember…. Falling oil prices and commodities, falling housing prices just makes your dollars ever more valuable.
Here’s a poof chart:
http://finviz.com/futures_charts.ashx?t=CL&p=d1
Charts like that make you wonder how much money AlbqDan is losing while he repeatedly assures all who read here that a return to $100/bbl oil is right around the corner!
Don’t own oil but do own BHI which clearly is anticipating a bottoming of oil. As I have said before I wrote leaps on it late june early July, they have strike prices around 70 for 2016, some high sixties some low seventies.
He will have miraculously have ex post facto invested on the continued decline of oil and proved himself right once again. About that time, he will call us all idiots for not predicting contraction in China, claiming that we never actually asked him what he thought!
Looking forward to more ad hominem attacks from AlbqDan to cover up his investing blunders every day of 2015! Plus the start of a new round of Rasmussen poll predictions for a Republican election victory in 2016…
I hope I live to see the death of these two gangs, the Rep and the Dems. May an honest man arise. We are not quite ready, but near to ready for a hero.
Looks like Tsipras (lefty-commie likely to be Greece’s next elected leader, God help them) just throw down the gauntlet to Germany and the EU. All of the ECB’s extend and pretend may have just entered the end-game.
http://www.zerohedge.com/news/2015-01-03/gloves-come-germany-says-grexit-manageable-tsipras-demands-greek-debt-writeoff
From China Daily, a partial reason why less coal was needed, bigger reason their explosion in production from wind, solar and nuclear:
YICHANG - China’s Three Gorges Power Plant generated 98.8 billion kilowatt-hours (kwh) of electricity in 2014, beating the world record for hydropower generation set by Brazil’s Itaipu hydroelectric plant, according to the China Three Gorges Corporation on Thursday.
Though with a much smaller installed capacity, Brazil’s Itaipu hydroelectric plant has long been the champion of world hydropower generation. It generated 98.6 billion kwh of electricity in 2013.
The China Three Gorges Corporation said 98.8 billion kwh is the equivalent of saving 49 million tons of coal consumption and preventing the emissions of carbon dioxide by 100 million tons.
The Three Gorges Power Plant, the world’s largest hydropower station, has an installed capacity of 22.5 million kw. The Itaipu hydroelectric plant has an installed capacity of 14 million kw.
china has done amazing things in the past 25 years.
Let’s hope they built it better than the tipped-over 12-story building on the hollow pilings.
A stock tip for early 2015: Buy ACHN.
http://finviz.com/quote.ashx?t=achn
A stock tip for early 2015: Buy ACHN.
I think I remember you saying that early in 2014 as well. Wow, looking at that chart, I should have listened!
Isn’t increasing oil output when prices are in an epic slide rather like shooting yourself in the foot?
Business
Oil prices keep falling with crude hostage to oversupply
2015/01/02 13:44 CET
“$100 a barrel crude oil prices are in the rear view mirror, at least for a couple of years”
As trading resumed following the new year break, benchmark Brent crude oil slipped below $56 a barrel on Friday.
After the savaging in the second half of last year, oil prices remain hostage to overproduction.
Brent has slumped to its lowest in more than five years, as top exporter Saudi Arabia and other large Gulf producers have declined to cut production in the face of fast-growing US shale oil output, despite pleas from other members in the Organization of the Petroleum Exporting Countries (OPEC).
“With no production cuts in the offing and a significant demand response years away, oversupply looks to be with us for a while,” said RBN Energy analyst Rusty Braziel in a note. “$100 a barrel crude oil prices are in the rear view mirror, at least for a couple of years.”
However, traders said there are investors who are placing buy orders betting prices will bounce back a bit this year as expensive oil projects are put on hold or cancelled.
At the same time we learned that Russia’s crude output last year hit a post-Soviet record high at an average of 10.58 million barrels per day.
Much of the increase came from non-state owned small producers. They increased their output by 11 percent.
Exports to China reached a new high, up 43 percent on the year as Russia seeks to diversify its energy customers.
Oil and gas revenues fund about half of Russia’s budget.
The country’s economy is slipping into recession partly because of cheap oil.
…
Can you find something more interesting than this oil story? You are beating a dead horse here. How about educating us on on why the deficit and debt really matter. Lets try and make some money instead of being a monday morning qb? Can we get ahead of something here and actually turn a profit?
“Lets try and make some money instead of being a monday morning qb?”
Sounds like a good time to go see Amy.
“Can we get ahead of something here and actually turn a profit?”
Profit? Turn a profit? Go see Amy and then come to see me and maybe we’ll discuss this profit thing.
The odds are quite good that at least one of the three of us should do some of this here profiting.
BTW, the coffee will be hot and it will be waiting. So will the dotted lines.
Poet…. it’s pretty easy. Just hold onto your cash and stay out of debt and watch your cash become more valuable with each passing day.
It’s the story that keeps on giving!
It also meshes nicely with the China collapse story.
Something completely different but quiet interesting:
(IraqiNews.com) On Saturday, the Security Committee in the Council of Salahuddin province revealed that unidentified aircrafts dropped weapons and equipment for ISIS southeast of Tikrit, indicating that there are countries that want to keep Iraq under the ISIS occupation.
Committee Chairman Jassim Al Jabara said in an interview for IraqiNews.com , “Our sources of intelligence received reports that unidentified aircrafts dropped weapons and munitions to the ISIS organization near Dour district (25 km south-east of Tikrit).”
Jabara added “This is not the first time ; an unknown aircraft dropped weapons and munitions to ISIS in Yathrib area south of Tikrit, several areas in Salahuddin, and in Mosul,” adding that, “We do not know to which source those aircrafts belong yet.”
Jabara continued, “There are countries that seek to keep Iraq under the ISIS occupation, and want to keep terrorism in Iraq by perpetuating the war through the fuel prices, and by providing terrorists with weapons and gear, after the victories achieved by security forces and the people,” pointing out that, “Our battle continues and its goal is victory.”
The economy cannot withstand higher interest rates anytime soon. there will be no rate hikes in 2015 folks. Asset prices will crater if rates go up.
The interest you would have got on your cd’s is going to the bailout fund and the next election. Get use to it !
You have to take some risk to get some yield. Stocks , homes , bonds, commodities, art, gold, land, fx , or just bury your fiat in the back yard.
Keeping the interest on the debt manageable is the most important goal right now.
Just wait until oil collapses another 50%, then park some cash there. It seems like a sure thing, if you are patient.
HES and CVX are still a long way above my limit buys.
Falling oil prices an advantage; but onus on India, China & Japan to arrest their own slowdowns
4 Jan, 2015, 11.25AM IST
By Sreeram Chaulia
…
Sounds as though $50+/bbl oil is just what the doctor ordered for American consumers and oil producers to prosper. Where is the downside with oil prices right where they are for an extended period of time?
Gas price glee vs. oil reality
Ron Baselice/Staff Photographer
Ashlee Kleinert, owner of Ruthie’s Rolling Cafe, is saving more than $60 each time one of her four food trucks is filled up with gasoline. The savings helps balance her budget as the cost of beef rises.
Cheryl Hall
Published: 03 January 2015 06:37 PM
Updated: 03 January 2015 07:43 PM
Too much of a sweet thing can turn sour in a hurry.
Just ask Texans who saw plunging oil prices suck the wind out of a blowing-and-going economy in the mid-’80s.
That’s why many business owners are a tad anxious about the recent precipitous drop in oil prices even as they enjoy the unexpected windfall.
The economic power of oil and gas production in the Lone Star State has tripled in the past decade, accounting for 15 percent of the state’s economy, according to Dallas economist Bud Weinstein.
That’s less than energy’s 20 percent impact on the Texas economy at the height of the previous boom. But it’s enough to prevent local business owners and executives from being euphoric in responding to a recent survey by The Dallas Morning News.
For many, there’s a yin and a yang.
Dallas developer Craig Hall has a nearly completed 18-story office tower in the Dallas Arts District. He hopes rapidly escalating construction costs will be reined in and consumers will use their extra spending money to stimulate the economy.
But the chairman of Hall Financial Group also realizes that the bustling energy industry and the confidence it creates help fill up new property.
“Obviously the question is how long will oil prices stay down and how far will they go down,” says Hall, who got clobbered in the last energy bust. “There are a lot of new planned projects that might be wise to rethink.”
More than 50 business owners from a spectrum of sizes and industries answered the questions: Are lower energy prices good, bad or a mixed bag for your business? If the current price is good for your business or having little impact, do you worry that oil could go so low that it would hurt the overall economy?
Most say the drop has been good — often really, really good — for their companies. This is especially true for the gas-pump-dependent.
With gas selling for less than 2 bucks a gallon, Ashlee Kleinert, owner of Ruthie’s Rolling Cafe, is saving more than $60 for each fillup for her four food trucks over what she was paying this summer. Hers is a small-margin business, so that’s a big deal.
“The price decline also helps us mitigate the increasing costs of protein. Beef especially has become very expensive,” Kleinert says.
This good fortune is a tad ironic given that her 3-year-old company, a regular in the Klyde Warren Park food-truck line, is named for her grandmother, Ruth Hunt, wife of legendary oilman H.L. Hunt.
John Lacritz, owner of Nick of Time LLC, spends a lot of time in his Ford Explorer catering to the personal errands and needs of his clients. He’s saving $150 to $200 every month that gasoline stays below $2.
“As people feel more confident that these energy prices are here for a while, I think they will indulge in more personal services,” he says.
The consensus among economists and industry experts is that prosperity for the U.S. economy, the oil industry and the 32 producing states intersects somewhere in the $50 to $80 range. Much lower for any length of time, and all three might be thrown in reverse.
…
Turns out that low oil prices are also great for putting an end to global warming. Where is the downside?
Cheap oil hides global-warming fee, for now
By Dan McSwain
5 p.m. Jan. 2, 2015
FILE - In this Nov. 12, 2014 file photo, Lydia Holland replaces the gas nozzle after filling up at a gas station in Sacramento, Calif. The Energy Department on Tuesday, Dec. 9, 2014 again slashed its prediction for next year’s average price of gasoline across the U.S., this time to $2.60 a gallon. That’s 23 percent below the projected average for this year and the lowest since 2009. (AP Photo/Rich Pedroncelli, File) The Associated Press
A new state fee on gasoline designed to combat global warming arrived at the corner gas station on New Year’s Day, but tumbling oil prices are likely to insulate consumers for the time being.
It’s a lucky break for lawmakers who, concerned about political backlash, made a failed attempt to delay the fee.
The amount of California’s new fee is determined by a complex market for emissions rather than set by legislation. The market has been stable amid heavy regulation, yet critics say it could experience bouts of volatility that would send gasoline costs soaring.
Last year, as retail prices hit $4.30 a gallon, oil-industry trade groups warned the fee was a “hidden tax” that could add 70 cents a gallon or more.
However, this week the fee added just 10 cents a gallon to wholesale costs, based on November auction prices in the state’s “cap-and-trade” market that sets the fee.
And retail gasoline prices have declined from last year’s peak by nearly 40 percent, to an average $2.62 a gallon in San Diego, according to Automobile Club of Southern California surveys.
“All things considered, it’s clearly not going be a fuel apocalypse,” said Tom Kloza, global head of energy analysis for Oil Price Information Service, which is based in Gaithersburg, Md.
Even better for consumers, the stage is set for pump prices to keep drifting lower this month.
Gasoline is plentiful in California wholesale markets. And gas prices tend to lag swings in crude-oil costs, which have declined more than 50 percent since June.
“If the market was high and things were tight, then there’s no doubt that 10 cents would show up at the pump tomorrow. That’s not the case now,” said David Hackett, a veteran analyst and president of Stillwater Associates in Irvine.
…