Bits Bucket for January 11, 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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Who will blink first in the game of oil glut chicken?
Iran and Venezuela Push OPEC to Stabilize Falling Oil Prices
By THE ASSOCIATED PRESS
JAN. 10, 2015
TEHRAN — Iran and Venezuela vowed Saturday to work together to stabilize falling global oil prices as Iran’s supreme leader accused “enemies” of using crude prices as a political weapon.
With President Nicolás Maduro of Venezuela by his side, President Hassan Rouhani of Iran urged members of the Organization of the Petroleum Exporting Countries, or OPEC, to “neutralize schemes by some powers against OPEC and help stabilize an acceptable oil price in 2015.” Mr. Maduro also called for OPEC’s cooperation in stabilizing oil prices.
Both Iran and Venezuela rely on oil prices to drive their respective economies. Oil prices have plunged more than 55 percent since June to less than $50 a barrel, placing a severe strain on the two countries.
Mr. Maduro is touring several OPEC nations to drum up support for a production cut to increase prices. He is to visit Saudi Arabia, the world’s biggest oil exporter, to discuss the oil market slump.
…
$1.83 last night in Phx area. Have there been any studies on the effects of deflation on Ponzi schemes?
None this large.
$1.77 in Dallas yesterday. I filled up my commuting car, prepaid in side $25. It wouldn’t all fit, I had to go back inside for a refund!
I love when that happens. OPEC loses, Starbucks cruises.
My little car, paid for a long time ago, likes inexpensive fuel! Maybe my next car will be a Corolla! Cuz just watch: things can reverse quickly. I suggest to those who think low oil prices are here for the next generation, go out and buy that 12 MPG SUV! How about that supercharged Challenger?
It is not a case of blinking, it is a case that with WTI below $50, there is very little shale oil production that can turn a profit. Particularly since many shale oil wells get much less than the WTI price. The glut was based on a projection that U.S. oil production would increase one million barrels a day, we will be lucky if production does not fall. I enjoyed filling up at $1.64 yesterday, but I know it is going to last as long as a donut in a police station.
Why would shale be profitable at all when conventional fields are profitable at $20 a barrel?
Why would shale be profitable at all when conventional fields are profitable at $20 a barrel?
Old declining fields, we have increasing demand and there is no new conventional oil at any where near that price,
New and old fields are still pumping like crazy and profitable at $20/barrel as demand falls.
You have no facts. Show me one new field producing at $20 a barrel.
It’s reality my friend. That’s why crude prices are down 50% and falling.
What are your losses so far?
BHI is doing fine, the people that bought the call options I wrote have the losses, by January 2016 the options will have expired, I will have both the recovered stock and their option money since the time premium will be gone. It is all good.
No no. Not degenerate gambler math. Your net loss.
That’s why crude prices are down 50% and falling
No, U.S. government intervention was the reason for the fall. On the futures market they are now rising. The oil traders that are now buying oil probably sold earlier due to their knowledge of government manipulation but they are now buying so they know something. They know both that sufficient oil to meet demand cannot be produced at these prices and they know when the government manipulation will ease enough to allow sufficient production.
I like that kind of intervention.
Remember…. Falling prices of all items to dramatically lower and more affordable levels is positively bullish, patriotic and good for the economy.
Down is up.
Conspiracy is not the simplest explanation, therefore it is unlikely the correct guess. Overcapacity and debt exhaustion everywhere. Ghost cities just aren’t what they were cracked up to be.
“No, U.S. government intervention was the reason for the fall.”
The HBB certainly hasn’t run out of conspiracy theorists!
What the smart money is doing which means just opposite what Whac is doing:
http://www.fool.com/investing/general/2015/01/11/crazy-way-oil-traders-plan-to-make-millions-on-oil.aspx
“… just opposite what Whac is doing …”
“These bearish bets were flooding into the market during the fall of 2014 as oil speculators were growing increasingly bearish on oil prices, with some betting that oil prices were on their way to $0.”
Hey Whac, were you betting that oil prices were on their way to $0?
No, but once prices landed below $50 I bought some shares of an energy mutual fund. It pays to have some of your assets parked in liquid dollar-denominated assets (i.e. not all tied up in an overpriced crap shack) in order to be able to capitalize on such opportunities when they arise.
Such an action is contrary to your posts glad I could educate you. I should be a special ed teacher. Heading off to flagstaff looking forward to an eia report on tracking which will be released tomorrow.
No, but once prices landed below $50 I bought some shares of an energy mutual fund.
Don’t you fear that the re-pricing of those share to reflect recent oil price changes may not be quick or efficient? Is it all about the implied expectations…
“Such an action is contrary to your posts glad I could educate you.”
You certainly have educated all who read here on the pitfalls of overconfidence in the predictive capabilities of one’s own crystal ball.
“Don’t you fear that the re-pricing of those share to reflect recent oil price changes…”
Yes. I invested half of what I have budgeted and retain the option to invest the other half after prices drop another 50% from here.
In case there is a third 50% drop, I will look into borrowing money to buy more.
In case there is a third 50% drop
what is the half life of an energy mutual fund? or for that matter a barrel of oil?
“what is the half life of an energy mutual fund? or for that matter a barrel of oil?”
I am missing the relevance of these questions to a short-term decision of whether to buy the dip. I’d have to guess the vast majority of oil barrels (99.9%+?) are eventually refined and distributed to end users long before a significant amount becomes unusable. And I don’t believe the half life of the typical mutual fund is anywhere near as short as my investment time horizon.
The only regret I have about buying a few energy shares last month is that prices are even lower now than when I bought. How does one know when a crash has reached bottom? I almost always am too early to the bottom fishing party.
“what is the half life of an energy mutual fund? ”
Were they stocks or futures seems to be the confusion.
Internationally diversified energy sector equities
Will Opec or the Yankees blink first in game of oil glut chicken?
8 January 2015 | By Michael Berry
US shale oil producers are locked in a game of chicken with Opec nations: who will blink first?
Schroders multi-asset fund managers Alastair Baker and Patrick Brenner say the dramatic fall of oil from about $110 six months ago to just over $50 yesterday pits Opec against US unconventional oil producers.
“The recent sharp falls in the oil price reflect OPEC putting the squeeze on non-OPEC producers (primarily shale oil), to see who will blink first,” the pair says.
Even at the $60 to $70 level where the oil price plummet stalled in late December, many Opec producers are running a loss selling their wares, Brenner and Baker say.
It has since fallen further to the $50 mark.
However, that price pain will be more keenly felt by North American shale companies because their wells have much shorter lifetimes than traditional oil drilling methods.
“[Shale oil wells’] annual decline rate is much higher at 70 to 90 per cent, compared to traditional wells at 3 to 5 per cent,” they say.
Many companies will be put under “severe financial” strain, which will hit the US high yield bond market – a good slug of which has been issued by energy firms.
But they are able to cut production quickly, which will bring stop oil’s slide and even support a rebound in the medium term, Brenner and Baker say.
“Shale oil as the swing producer has changed the oil market from one which experienced long periods of boom and bust, to one which can rebalance itself fairly quickly.
“We therefore expect price stabilisation and possibly even a rebound over the medium term.”
…
Nobama.
Nobush
See below link.
No-matter.
Do you really think it matters any more? Voting, not voting, Bush Obama, whatever?
Imagine an ant hill the size of a supermarket. All run for whom? Those queen ants (and kings) less than 1 percent.
^ x eleventy gazillion.
For Jeb Bush and Mitt Romney, a history of ambition fuels a possible 2016 collision
“As Bush, 61, and Romney, 67, explore presidential campaigns in 2016, they are like boxers warming up for what could become a brutal bout, sizing each other up and mulling whether or when to step into the ring.
Their early maneuvering reveals a level of competitiveness and snippiness that stems from a long history following similar career paths in business and politics prescribed by their dynastic families.
“We’re seeing the first shots of the war between clan Romney and clan Bush,” said Alex Castellanos, a Republican strategist who has worked for both men. “Both bring to the battle incredibly powerful fan clubs as well as wounds they have to heal. How ugly could it get? You’re only competing to lead the free world.”
http://www.washingtonpost.com/politics/for-jeb-bush-and-mitt-romney-a-history-of-ambition-fuels-a-possible-2016-collision/2015/01/10/255bfbaa-98f0-11e4-927a-4fa2638cd1b0_story.html
This is going to be a real pickle for corporate lobbyists. Which one will give them the most bang for their bucks? Between these two silver spoon fed trust fund babies, I don’t think it matters.
And on the other side? More of the same also DemMan.
Not quite the same. A higher minimum wage is enough to enrage trust fund babies. How dare the government tell them to give people living below poverty a few bucks more an hour? Why, working Americans don’t even have the initiative to go out and inherit everything they have from mummy and daddy. How lower class. Why can’t they be more independent, like all those big business conservative politicians who collect their paychecks, health care and pensions from the American taxpayer?
The minimum wage debate is silly and irrelevant. Counting Angels on the head of a pin.
“The minimum wage debate is silly and irrelevant.”
Not if you make it or pay it.
Not if you can’t get a job because the minimum wage is above the maximum value of your labor, or if the Fed’s anti-deflation program has kept the prices of basic needs, including shelter, out of reach of minimum wage workers.
Good point, if the cost of living goes down, the minimum wage gets better and better, even without being raised.
Viewed that way, the minimum wage works as a bulwark against deflation, as it gets raised in boom times, but never lowered in bad times, except by inflation.
“…the minimum wage works as a bulwark against
deflationemployment…”And please spare us the propaganda dressed up as scientific analysis…
Easy there, Prof. Going off caffeine?
If the employers make less because the employees make more, why is that a job killer?
I had plenty of caffeine today.
The problem is that if the government sets a floor on wages, anybody whose labor is worth less than the floor finds themselves either in the discouraged worker category, based on the observation that there are no jobs available to such an individual at the minimum wage or higher, or in the “off the books” labor market, where employers and employees can set a mutually agreeable wage below the legal minimum.
This is right out of an undergraduate economics text book — not rocket science.
The stupidity of ‘Muricans who would vote for either one of these neo-con oligarch crony-capitalists is mind-boggling. How do you protect yourself from the consequences of millions of cretins with voting privileges?
Yes. How did we get GWB? How did this happen, for a second term,no less? I can only tell you from my perspective, as someone who bitterly regrets voting for the guy in 2004. I voted for him because he was “NotGore”. Seriously, that’s how much of an idiot I was. I deeply, deeply regret it.
Despite all that, how is this guy not impeached, isolated and exiled, knowing what we know now? After all the horror he unleashed on the country and the planet, how is he ensconced in a comfortable retirement when he himself ought to be consigned to the depths of the Guantanamo he created, along with his cohorts?
And how does it happen that his brother actually feels free to declare for the presidency, after his own role in the horror?
Next time vote for NotNotGore.
“The stupidity of ‘Muricans who would vote for either one of these neo-con oligarch crony-capitalists is mind-boggling.”
I feel the same way about anyone who applies for student benefits and/or loans and blindly drops their entire life’s information on the FAFSA database. I’d rather just pay cash, but what choice do the debt donkeys have other than submit?
How about Vacate the Vote 2016? I participated in the ‘14 version and signed up for the next one.
How losing 135 pounds actually made this food blogger’s life worse
“Scraping the sides of the mixing bowl, I began to notice just how satiny the fudge batter was. I made swirls and figure eights with my spatula. In transferring heaping spoonfuls of espresso-hued chocolate cream to the cake tins, I reveled in the lightness of texture, the airiness of what I was working with. A scoop in the pan, a scoop in the mouth. I then watched through the oven door as the cakes materialized, rising to fill their nine-inch pans.
Mitchell will go on to devour one slice, then another — and then many more — until she’s consumed her entire birthday cake in a single sitting. She was 20 years old at the time and tipped the scales at 268 pounds, according to her new memoir.
http://www.washingtonpost.com/blogs/style-blog/wp/2015/01/08/food-blogger-andie-mitchell-says-shedding-135-pounds-made-her-life-worse/
I’m not sure it says it made her life worse. She’s not fat any more. What it really shows is that it is a deep seated problem that requires more than just losing the weight often.
And she didn’t know enough to build in a cheat meal/day once a week. This is absolutely critical. Physiologically and psychologically.
when are we going to exhaust all these unemployed folks so the rate can go to 4%?
What do you call out of the folks who fell off the books but are out of work?
As far as I see it 100,000,000 not working. 450,000 left labor force in december.
100,000,000 /250,000,000 workforce = 40% out of work
Its time for someone to tell the truth.
“What do you call out of the folks who fell off the books but are out of work?”
Marks.
Corporations have record profits. Do you want the gov to force them to hire?
Got Trickle Down?
How does that work Lola?
Ron Paul: “Reality Is Now Setting In For America… It Was All Based On Lies & Ignorance”
“If Americans were honest with themselves they would acknowledge that the Republic is no more. We now live in a police state. If we do not recognize and resist this development, freedom and prosperity for all Americans will continue to deteriorate. All liberties in America today are under siege.
It didn’t happen overnight. It took many years of neglect for our liberties to be given away so casually for a promise of security from the politicians. The tragic part is that the more security was promised — physical and economic — the less liberty was protected.
With cradle-to-grave welfare protecting all citizens from any mistakes and a perpetual global war on terrorism, which a majority of Americans were convinced was absolutely necessary for our survival, our security and prosperity has been sacrificed.
It was all based on lies and ignorance.”
http://www.zerohedge.com/news/2015-01-10/ron-paul-reality-now-setting-america-it-was-all-based-lies-ignorance
“It was all based on lies and ignorance.”
Now you are homing in on the true beauty of it all.
Remember,
1. Dumb ‘em down.
2. Prosper.
‘The blanket demand that all wealthy individuals owe support to the poor through government welfare programs is not an example of equal justice under the law. It is an example of egalitarianism gone awry. Welfare, which is the use of force to transfer wealth from one group to another, is based on a moral principle of equality that in fact is not moral and does not work. The wealthy special interests, such as banks, the military-industrial complex, the medical industry, the drug industry, and many other corporatists, quickly gain control of the system. Crumbs may be thrown to the poor, but the principle of wealth transfer is hijacked and used for corporate and foreign welfare instead of wealth transfers to the poor.’
“The wealthy special interests, such as banks, the military-industrial complex, the medical industry, the drug industry, and many other corporatists, quickly gain control of the system.”
And we do this because, … because we can!
Again, and again, and again:
1. Dumb ‘em down.
2. Prosper.
Wasn’t it Rand who first talked about regulatory capture? Most leftists has no clue what it means.
RC doesn’t matter when your fundamental goal is free $hit at any cost.
Ron Paul in ‘08 was our last best hope, but ‘Muricans instead went for Hope ‘n Change and the even ghastlier neo-con Wall Street fluffer John McCain. Now in ‘16 our “choice” will be Hillary or Jeb. We are so screwed.
“Now in ‘16 our “choice” will be Hillary or Jeb.”
Plan A, Part 1.
“We are so screwed.”
Plan A, Part 2.
I used to think Ron Paul was a simpleton who blamed the Fed because it was easy, but danged if he wasn’t right all along. Until the cycle of bubble blowing is stopped, nothing will change.
This is why the intelligentsia don’t do so well when revolution happens.
This is also why revolution rarely happens.
Ron Paul dropping bombs! But what is the solution?
He says this “Before we can actually restore our liberties, we most likely will have to become a lot less free and much poorer.”
I think I might go back to community college and get another degree on the tab of taxpayers.
I can get a degree in interior design and stage some houses.
No, you will work to service your debt.
Enjoy!
“No, you will work to service your debt.”
And there it is!
He will work and I will reap.
Work? What is that? What does that odd word mean?
Work is what folks who were not directly on the receiving end of the Fed’s $4 trillion printing spree do to get money.
College has become such a profit motivated scam these days, community college is the only option for millions. If Obama’s plan puts some competition into the higher education monopoly, I’m all for it.
When government makes something “free” or heavily subsidized it…
Does this make this something better/worse and more expensive/less expensive.
You can look at health care, housing and the education system for examples.
One of 2banana’s favorite question liberals (that they never answer).
If you were given $50,000 that you HAD to invest for your retirement.
Would you:
1. Give it to the government to invest in your social security account?
2. Open an IRA/ROTH in your name and invest the money as you wanted?
The problem with that is that most Americans would most likely lose money if they were given the option of investing it, and they would end up being on the public dole anyway.
Yes - Americans are too stupid.
That is why we need bigger and bigger government - to take care of us.
“The problem with that is that most Americans would most likely lose money if they were given the option of investing it, and they would end up being on the public dole anyway.”
Of course the Wall street sharks are innocent; nothing personal, just business.
Maybe so, but tell millions of voters that they can either keep social security, or have their elderly parents move in with them because they lost all their money to Wall Street scammers, and how do you think they will vote?
SS doesn’t work.
$50k trickled into an account over 30 years doesn’t get you to a $400k annuity.
I paid $135,000. My employers paid $142,000. That might come close.
“That is why we need bigger and bigger government - to take care of us.”
That’s crazy talk. Look at how great a job Wall Street investment banks did of pumping money into subprime mortgage loans. We clearly should put all our trust in Wall Street to manage social security.
Is this the kind of plan 2banana’s bosses have in mind for our Social Security system? I’m sure either Jeb Bush or Mitt Romney could cut a deal to make it happen!
Wonkblog
The financial crisis in 5 words and one emoticon: “good find on the fraud :).”
By Matt O’Brien December 31, 2014
(AP Photo/Seth Wenig, File)
They had one job.
Bankers, you might remember, are supposed to lend money to people who can — I know this might sound quaint — actually pay them back. And preferably with interest. But during the housing bubble’s halcyon I’ll-Be-Gone-You’ll-Be-Gone days, bankers tried out an innovative new strategy where they loaned money to people who couldn’t pay them back, sold these time-bombs-disguised-as-mortgages to Wall Street firms who cajoled the less-than-competent credit ratings agencies into giving them their top-rated AAA seal of approval, and then unloaded most of this junk on investors who thought they were buying super-safe securities.
And then, when this edifice of bad debt and worse decisions inevitably came crashing down, the bankers turned around, shrugged, and said hoocoodanode.
That’s “who could have known” slurred together. This excuse, though, is risible. Now, it’s true that Wall Street banks didn’t always realize how toxic the waste they were peddling really was, and got stuck with some of it on their balance sheets. Those losses infected everything else, because they were big enough to make the banks, which had levered themselves up to absurd levels, look insolvent—setting off a run on the entire financial system and every financial asset. It was a fire sale, and nobody wanted to buy.
But just because Wall Street underestimated the size of the mess doesn’t mean they didn’t know they were making one. They did.
…
Return everyones contributions. Problem solved.
“…hoocoodanode…”
Nobodycouldaseenitcoming!
Here comes the barrage of plugs for Wall Street to take over the Social Security system. We can look forward to an ever-increasing pitch for this right up until the 2016 election and beyond.
Once Wall Street gains control of Social Security, you can look forward to another financial collapse in a few years, followed by the sad news that there isn’t even enough money in the coffers to provide for paltry Social Security benefit payments.
like obamacare, you mean?
Thank god the kool-aids haven’t wore off yet.
Frankly, YouTube is college’s competition these days. You wanna see a law passed that will make them quake in their boots? Require every institution that receives federal dollars to allow anyone to test out of any course or all courses and get the grade or degree they earn based on a blind test. Kind of like taking the bar exam cold. If you can do it and pass, boom, degree from Harvard. Heck, you can still make them pay even.
How about them apples?
Sounds like a great system for the average American, therefore it will never happen. It would be like hospitals posting the prices they charge, and being denied the pleasure of billing you whatever they want after the fact.
Ive been assassinated over 50 times on the internet.
Quit playing Call of Duty!
“I think I might go back to community college and get another degree on the tab of taxpayers.”
I am pretty sure you are disqualified if you can read this blog.
—————————————————————————
Obama to propose free community college
Gregory Korte, USA TODAY 6:01 a.m. EST January 9, 2015
WASHINGTON — President Obama will propose two years of free community college for American workers Friday, part of what the White House says is an effort to make community college as universal as high school is today.
Obama teased his community college proposal in a video uploaded to Facebook on Thursday and will deliver a speech Friday in Tennessee.
http://www.usatoday.com/…/news/politics/2015/01/08/obama-free-community-college/21466969/ - 100k -
—————————————————
Average college freshman reads at 7th-grade level
Published: 3 days ago
(CAMPUSREFORM) — The average U.S. college freshman reads at a seventh grade level, according to an educational assessment report.
“We are spending billions of dollars trying to send students to college and maintain them there when, on average, they read at about the grade 6 or 7 level, according to Renaissance Learning’s latest report on what American students in grades 9-12 read, whether assigned or chosen,” said education expert Dr. Sandra Stotsky.
Stotsky, a Professor Emerita at the University of Arkansas, served on the Common Core Validation Committee in 2009-10, during which she called the standards “inferior.” She claimed the Common Core left out the very standards needed to prepare students for STEM (science, technology, engineering, and math) careers.
Read more at http://www.wnd.com/2015/01/average-college-freshman-reads-at-7th-grade-level/#B08XvV2u2YolG6ka.99
“Average college freshman reads at 7th-grade level.”
1. Dumb ‘em down.
2. Prosper.
Mr. Banker, please tell me a joke, make it a one-liner.
Okay, listen up:
No Child Left Behind.
Bahahahahahahahahahahahahahahahahahahahahaha
“1. Dumb ‘em down.”
“2. Prosper.”
“And basically, call it the stupidity of the American voter or whatever, but basically that was really really critical for the thing to pass…”
Jonathan Gruber
Three, four decades ago these students did not have to go to college or finish high school if they did not have the aptitude. They had jobs in mining and manufacturing available to them that paid a sufficient wage to buy a house and raise a family. Now, there are a fraction of these jobs available. And somehow, every parent thinks that their kid deserves to go to college whether they can finish it or not - hence the debt trap.
Add in grade inflation and every one is pushed through the high school and college. In the end a majority of the kids, although well meaning, just do not have the aptitude to do decent jobs that require them to read & write decently let alone STEM jobs.
“I am pretty sure you are disqualified if you can read this blog.”
I took a year off from school and worked in a factory building audio equipment. I then went to Community College for a year before transferring… some of my best profs were in CC, including my English and Economics teachers.
And don’t forget the branch campuses for many state universities that allow you to go locally for 2 years before transferring to main campus. Saves a lot of money, allows adjustment to freedom post high school but without the partying as much.
Lots of options if you reject the lie being sold to you.
“Lots of options if you reject the lie being sold to you.”
Correct.
The Blue Plan applies to much more than living on a boat.
Average college freshman reads at 7th-grade level
Instead of sending the woefully-unprepared to community college, perhaps we should set up useful incentives in the high-school system?
For example: welfare payments to the literate that are higher than to the illiterate.
Another Drudge link about Sky Wizard bullying
“Jews are fleeing terror-hit Paris because of growing anti-Semitism in France, one of Britain’s most influential Jewish journalists said today.
Many are moving to Britain or to Israel, according to a report published in the newspaper last year.
18 months ago France had around 500,000 Jewish residents - the largest population in the EU - but this may now be below 400,000, Mr Pollard’s newspaper said.”
http://www.dailymail.co.uk/news/article-2903600/Every-single-French-Jew-know-left-Paris-Editor-Britain-s-Jewish-Chronicle-claims-people-fleeing-terror-hit-French-capital.html
France is trading 500,00 Jews for 5 million Muslims. I wonder how that will work out for them?
Jews overwhelmingly vote for and support liberal and left-wing candidates who are invariably proponents of unrestricted immigration and multiculturalism. Maybe French Jews should’ve been more careful about who and what they voted for.
Same with American Jews.
The promise of socialism and more free sh*t will override individual and cultural survival.
Yes, just look at all those liberal Jewish voters in Israel clamoring for more Palestinians to immigrate to Jerusalem.
And they sucker you into mindless wars in mideast.
Netenyahu would live for us to go to war with Iran, but so would the neo-cons and the whacky end-timers in the evangelical movement, not to mention the cable news companies whose ratings would soar. Nothing brings in the advertising revenue like a scrolling list of the days casualties.
What the F Netandyahoo doing in Paris unity parade? A guy who runs an apartheid state in unity parade. Man o Man, we truly live in Orwellian times.
There it is.
That’s the national anthem of both our Israeli and Saudi “allies”: Onward Christian Soldiers.
when and how can the PBOC stop printing and imposing massive inflation on their people?
As in the US, this is about a central bank concentrating wealth and power in the hands of a corrupt and venal .1%. Who gives a rat’s ass about the rest?
Will this be the year that you finally buy a house?
Will prices drop by that much?
No way. The year 2019, maybe 2020 will be the top of this cycle (maybe 5% to 10% higher), so if you are waiting for a bottom, it will likely take another 3 years after the apex, so buy more real estate in 2022 to 2023.
There is no “cycle” anymore Jingle_Fraud.
Sure HA, cause according to you, prices will go down forever! HA, Ha, ha, ha, ha…..
No Jingle_Fraud. Prices will continue falling until they meet the long term trend.
Unless prices overshoot the long-term trend to the downside, as they usually do…
you’ll be cryin on the bankruptcy courthouse steps long before that JFraud. And that’s your best case scenario. Worst case is the authorities find it all out.
The first thing the banks do when someone files bankruptcy is look for any signs of fraud on mortgage and credit card applications. The bankruptcy code does not look kindly on fraudsters.
Did you just live thru the last 5 years?
Exactly. The only thing the “banks” look for is to drag out foreclosures for years so they can charge exorbitant servicing fees. Did you not just live thru the last 7 years?
25 million excess empty and foreclosed houses are a problem eh Jingle_Fraud?
No, I was recently brought back from the dead by a necronomical ritual based on goat’s blood and chanting the theme song to Gilligan’s Island. Why, did I miss some thing?
I was just talking to an LA realtor who said the same thing - “this cycle has another 5 years to top out.”
It was at a showing for an apartment in a very popular area that has been on the market for three months with zero offers and two price reductions.
Perhaps the Realtor™ will turn out to be correct, provided the Fed can extend-and-pretend rate increases for another five years.
But given the cratering of oil and other commodities, I don’t believe it is possible to predict the collateral damage which may spill over into housing and other real assets. And I’m pretty sure your friend is oblivious to this side of the picture.
Napa County, CA Housing Demand Plummets 21% YoY
http://www.zillow.com/research/data/
More bewailment of Sky Wizardry, as reported by real journalists at the New York Times
After Terrorist Attacks, Many French Muslims Wonder: What Now?
“Since the attack Wednesday on the offices of the satirical newspaper Charlie Hebdo, several mosques across France have been hit by bullets or small explosive devices. Many more have been tagged by racist graffiti. In Corsica, a severed pig’s head was hung on the door of a prayer hall, the police reported.
Those actions followed weekly marches by tens of thousands in Germany, demonstrating against what they call the Islamization of Europe, the firebombing of a mosque in Sweden and warnings by British officials about a rise in Islamophobia.
But for France, the bloodletting in and around Paris that left 17 victims dead — including at a Jewish supermarket — has heightened concerns that the country teeters at a tipping point and that there could be a far more open, and potentially more violent, confrontation with its Muslim communities.”
http://www.nytimes.com/2015/01/11/world/europe/french-muslims-worry-about-backlash-after-charlie-hebdo-attack.html
A tipping point?
How do you say “Go Time” in French, LOLZ
The Hollowcaust is a state religion throughout the western world; if you question it you will be attacked.
Why not offer Islam the same state protection?
Because they are not as white or rich.
Spook, what the hell is “hollowcaust?” Are you one of those WWII deniers?
No, Im a WW2 questioner.
“History will be kind to me for I intend to write it” –Winston Churchill
“Large Upcoming Wave Of $300B In CMBS Maturities Could See More Interest Only Defaults”
http://www.sfindustry.org/news/io-trend-in-cmbs-raises-concerns
“CMBS Delinquency Rate Posts Biggest Increase in Two Years”
http://www.prweb.com/releases/October2014/CMBSDelinquencyReport/prweb12295203.htm
“Leverage in CMBS Deals Surging Toward 2007 Levels”
http://www.bloomberg.com/news/2014-10-29/leverage-in-cmbs-deals-surging-toward-2007-levels-moody-s-says.html
Overlevered. Rising delinquencies.
How many pension funds are at risk of imploding?
“Slow Motion Repeat of Housing Collapse”
http://www.mortgagenewsdaily.com/11032014_hamp_foreclosures.asp
“The foreclosure crisis hasn’t receded, it was intentionally delayed by government manipulation.”
Buckle up cowboy because you’re in for the ride of your life.
THERE it is, right there. The foreclosure crisis was intentionally delayed. Which is why one guy I know has been living mortgage free in his home for five years.
At the beginning of the “crisis”, there was a small window of time where it was possible to get a “deal” on a home if you wanted one. I spoke to one fellow who was very, very bitter about that fact that he’d paid a quarter of a mil for his house when the one across the street from him sold for $80,000. But that didn’t last long here in this part of Florida.
The memo went out, and only investment groups were able to pull off stuff like this, in bulk. If you were a single buyer, you were ignored. And so the market was pumped up by an artificially created scarcity.
Manipulation of supply and manipulation of interest rates created a conduit(path to financial hell)for speculators to over pay.
Notice how even the NAR manufactured(massively inflated) transaction data fell YoY?
That has been my experience in Calif. Made several offers in 2011/2012, all on houses at about $250K, but 100% cash flippers and speculators got every one of them. With $50K down the mortgage would have been right around $1000/mo vs. the $1500/mo I pay for rent. Similar houses are now going for about $400K…but the market does appear to be stalled, very few new flips are appearing, and I’m starting to see a trickle of foreclosures again. 2015 will be interesting locally…
Be thankful you didn’t pull the trigger in 2011/2012. You’d be underwater by now.
Ditto, I’ve seen a bunch of new notices of default in my area circa Nov and Dec 2014. Fewer completed flips too, though there are some half-finished flips that have been listed lately and look desperate.
“Which is why one guy I know has been living mortgage free in his home for five years.”
Deadbeats = SMART
Renters = SUCKERS
So many acronyms, so little cash.
Did you read the comments to that article? Hilarious!
Is private debt the economy-killer?
Government Debt Isn’t the Problem—Private Debt Is
The Roaring Twenties, the Japanese boom of the ’80s, and the U.S.’s in the early 2000s have one thing in common: They were debt-fueled binges that brought these economies to the brink of ruin.
Note that, in the years prior to the [current] crisis… federal debt wasn’t growing dramatically as a fraction of GDP. So the big post-crisis standoff between Democrats and Republicans over the federal debt wasn’t focused on the big problem.
What was the big problem? Look at the line representing private debt. It clearly is not parallel to the GDP line and, indeed, reflects a rapid growth of private debt relative to GDP.
Time and again, that’s the story we found: A major financial crisis is preceded by a runup in private debt relative to GDP. In fact, there seems to be only one other ingredient required for a crisis: that the absolute level of private debt is high to begin with. We found that almost all instances of rapid debt growth coupled with high overall levels of private debt have led to crises.
Until the moment of reckoning, things may seem wonderful. Rapid private-debt growth fueled what were viewed as triumphs in their day—the Roaring Twenties, the Japanese “economic miracle” of the ’80s, and the Asian boom of the ’90s—but these were debt-powered binges that brought these economies to the brink of economic ruin.
The situation in China is particularly alarming…
http://www.theatlantic.com/business/archive/2014/09/government-debt-isnt-the-problemprivate-debt-is/379865/?utm_medium=Discovery&utm_source=Outbrain&utm_campaign=excerpt#disqus_thread
Yes indeed. Wait until tens of millions of average Chinese find out that their empty apartment/investment that they bought with their life savings is worth absolutely nothing.
rental ? cash flow brother!
“Wait until tens of millions of average Chinese find out that their empty apartment/investment that they bought with their life savings is worth absolutely nothing.”
These hard working “yella fellas” have been getting screwed by dynasty for so long that evolution has made them squint-eyed at birth.
At last count there were 1,357 million Chinese altogether. If only tens of millions of Chinese ” find out that their empty apartment/investment that they bought with their life savings is worth absolutely nothing”, will the rest even care?
Pro-po-ga-n-da
“Lynn Helms, Director of the North Dakota Department of Mineral Resources explains to the House Appropriations Committee that at least half of its shale regions are already below breakeven.”
http://www.zerohedge.com/news/2015-01-10/north-dakota-mineral-resources-dept-admits-half-its-shale-regions-below-breakeven
Seems to be a big variation in breakeven
You first have to know that the WTI price is not paid in that region. If they say they need $50 at the well head, they need WTI to trade at $65 or higher.
“Loan Officer Indicted In Large-Scale Mortgage Fraud”
http://www.nj.com/ocean/index.ssf/2014/12/jackson_loan_officer_indicted_in_large-scale_mortgage_fraud.html
“The indictment said that during the scam that ran from January 2011 to January 2013″
Phony appraisals, kickbacks and pay offs. Sound familiar?
“Stricter Lending Rules Haven’t Curbed Lying Mortgage Applicants”
http://www.businessweek.com/articles/2014-12-16/stricter-lending-rules-havent-curbed-lying-mortgage-applicants
“Seventy-four percent of fraud cases reported to LexisNexis Risk Solutions last year included a falsified application, according to an annual report (PDF) on mortgage fraud, up from 61 percent in 2011. (The rate was 70 percent in 2008.”
“Falsified Mortgage Applications on the Rise”
http://www.nytimes.com/2014/12/14/realestate/falsified-mortgage-applications-on-the-rise.html?_r=0
Bay Area Real Estate Agent Charged In Bank Fraud And Money Laundering Scheme
http://www.mercurynews.com/my-town/ci_26652984/danville-real-estate-agent-charged-bank-fraud-and
“Bay Area Real Estate Agent Charged In Bank Fraud And Money Laundering Scheme”
From the comments: “A realtor doing something fraudulent and criminal? isn’t that how they make their money?” –JR
How’s your Region?
It’s cratering. Yours?
The Ponzi continues.
It’s erect.
More fun watching a leftist government trying to deliver electricity:
http://www.fin24.com/Economy/Load-shedding-is-job-shedding-DA-20150111
Or detergent, or toilet paper….
http://www.bloomberg.com/news/2015-01-09/venezuelans-throng-grocery-stores-on-military-protection-order.html
Customer: “How much are you asking for a gallon of milk?”
Storekeeper: “Ten dollars”.
Customer: “What! That’s an outrage! The store down the street is only charging five!”
Storekeeper: “So why don’t you buy your milk from them?”
Customer: “I just came from there. They’re out of milk.”
Storekeeper: “Okay, here’s what I’ll do: The moment I run out of milk I’ll lower the price down to five dollars, just for you.”
HA!
But progressives will then just protest and make the government DO SOMETHING!
Of course, government DOING SOMETHING is how we got into this mess…
I know iraq, afghanistan, syria, libya, yemen, isil al are bright examples of our gobmit doing something.
It’s alright if you’re funneling taxpayer money to the defense industry to pay for jet fighters and coffins. Spending taxpayer money is only bad when it goes toward helping the schmucks who do all the working and dying.
Here is the semi-coherent Sarah Palin justifying, in her infamous 2008 interview with Katie Couric, her and John McCain’s support to bailing out Wall Street with taxpayer money and why we must prop up the plutocracy regardless of what it costs We the People. And some deluded fools still consider Palin a Tea Party darling.
https://www.youtube.com/watch?v=mKakxNRxe6g&spfreload=10
The free sh*t army votes and they vote for more free sh*t
Money to maintain the electrical grid? Money to build more power plants?
That ain’t free sh*t.
And those people who get this money won’t vote for the liberal/progressive/communist/ANC party in charge.
So f*ck them.
The Free Sh*t Army in Detroit is demanding free water as a “human right.” It’ll only snowball from here.
There is PLENTY of FREE WATER in the Detroit River.
What the democrat FSA voters in Detroit want is clean and purified clean water delivered right to their house. For free. As much as they want.
And the democrat FSA voters in Detroit also want their sh*t water taken away, right from their house and treated. For free. As much as they can sh*t.
The FSA votes!
Unlike the oil companies that dont want free access to people’s property so they can build a pipeline across it. Oh wait….
This is a tough one.
One one hand you have an insane public union with insane pensions and an insane contract that I am SURE mentions vacation time.
On the other hand you have an insane progressive socialist mayor who is so far left he makes Karl look good.
And writing these tickets is NOT about safety. It is about REVENUE. It’s all about the money.
Eh - starve the beast!
So far - this has not affected NYC housing prices!
———————
NYPD cops told no vacations until work slowdown ends
New York Post | Jan. 11, 2015 | Shawn Cohen
It’s a slowdown showdown.
At precincts across the city, top brass are cracking the whip on summons activity and even barring many cops from taking vacation and sick days, The Post has learned.
Throughout the city, precincts are being ordered to hand up to borough commanders “activity sheets” indicating the number of arrests and summonses per shift, sources told The Post.
“Police officers around the city are now threatened with transfers, no vacation time and sick time unless they write summonses,” one union source said.
“This is the same practice that caused officers to be labeled racist and abusers of power.”
Indeed tough choice, unions we hate but support the brutality.
“’Police officers around the city are now threatened with transfers, no vacation time and sick time unless they write summonses,’ one union source said.”
Any cop with just a wee bit of imagination could really have a lot of fun with this one.
You want summonses? Bahahahaha … are you maybe gonna be a bit particular regarding just who gets the summonses and what they are for?
Bahahahahahaha … does anyone on this blog, besides myself, realize that cops know “where the bodies are buried”?
George Zimmerman arrested on aggravated assault charge….LOL
Well he is a “White Hispanic”.
You don’t see this kind of thing with Asian Hispanics.
Volvo liberals will soon be driving Chinese made cars:
http://www.chinadaily.com.cn/business/motoring/2015-01/11/content_19290082.htm
you are such a sour grape.
Lolacado. Whats new in the meat packing district?
Volvo’s problem is Subaru ate their lunch, and their market share with it. Being made in China isn’t going to do much to salvage their rep, either.
It’s a real Saab story.
It’s a real Saab story.
The new Subarus r oil burners. Faulty piston ring design to get better gas mileage
“President Obama bragged Thursday it was ‘no accident’ that the housing market rebounded under his administration, saying his economic policies helped usher in a construction boom and the lowest foreclosure rate since 2006. The president used the speech to announce that he was slashing the fees charged by the government to insure federally backed mortgages — a move the White House says could save 800,000 homeowners an average of $900 per year.”
This is true. He did it by loading the Fed with money printers. For those with financial or real estate assets, times have never been better. But, this is not real growth. Therefore, it will end in inflation. At that point, stocks will fall but real estate will continue to rise.
I can ask $50k for my 10 year old Chevy pickup but where is the buyer at that price?
So it is with housing.
The FED in coordination with the ECB and BOJ are running a Ponzi. That is what is going on. If they print enough money, prices will rise rapidly on everything, but your wages will rise slower, so everyone gets poorer except for the rich. That is what the central banks are doing.
However, this will end in a disaster … just a question of when.
Where is the demand?
Hint: It’s at the bottom of a bottomless crater.
Exactly and I am calling it a Ponzi every since I started to post on this blog. But the disaster will be hyper inflation and not deflation since they can always print more money to stop deflation. Once the inflation begins they cannot raise interest rates sufficiently to stop it since with an 18 trillion plus debt even a few percentage points leaves us bankrupt.
Prices are falling my friend.
Printing money to buy bonds to keep govts running is what they are doing to be more precise.
This can go on a long time. Japan is going on like 25 years of this. As long as the debt remains serviceable it continues.
The treasury needs money to pay the bills. It gets taxes and it can sell treasuries to borrow.
To keep the debt serviceable the fed helps to buy bonds to suppress the interest rate and which the treasury has to pay to borrow. It seems they had to buy bonds after the crisis cause the private market could not absorb all the treasuries needed to mop up the problems. especially at the high bond prices and low yields.
If the deficit gets under control we would not have to borrow as much. But adding a trillion to the deficit each year only adds to the interest bill. If we keep adding a trillion/ year in 10 more years it will be 28 trillion in the hole.
I just don’t see how interest rates can go up that much cause it would make the debt unserviceable.
You have two choices:
1. Have the fed keep rates low by buying bonds and suppressing yields.
2. Let the market set the rates and risk the treasury losing control of the ability to manage the debt.
I just cant see rates going up substantially for years. They might raise it a 1/4 % for the hell of it. Then go back down.
The debt has gotten so huge that everyone has to sacrafice interest on savings to help pay.
So where in the game is the real ponzi?
End Result: Collapsing Demand
“This can go on a long time. Japan is going on like 25 years of this. As long as the debt remains serviceable it continues.”
Another End Result: Protracted Deflation
Cant buy new stuff if u are still paying for the old stuff.
Didn’t Bush proclaimed the same $hit in 2003-2006? How did that turn out?
So Obama is taking credit for the current housing bubble? I bet they won’t be running the tape of that speech in his presidential museum.
Bush, Obama, same thing.
The blockchain will become much bigger than Bitcoin. In terms of comparing Internet to blockchain, think of it like the year 1989. Mostly computer gear heads heard of Internet back then.
http://www.forbes.com/sites/anthonykosner/2014/12/31/tech-2015-block-chain-will-break-free-from-bitcoin-to-power-distributed-apps/
An international super fiat cannot survive without an international super government.
Thanks, Bill! That’s truly mind boggling and a path to freedom.
NP. Did you see that part on page three how they showed the way to make a marriage contract without government? This is what de trailing is all about. Technology of the block chain is going to make government obsolete. BTW the “Mastering Bitcoin” book is not shy about promoting Bitcoin payments for software contract work. In a year or two the payment addresses will be anonymous, though tied into trusted nodes. I am using some of the same trusted attestation technology at work.
‘BTW the “Mastering Bitcoin” book is not shy about promoting Bitcoin payments for software contract work.’
Will folks taking this approach still pay income taxes on their earnings?
Good question. It also gets complicated by 1) the physical address of the payer and the physical address of the paid. If the physical address of the paid is not known, that probably leaves the taxes up to the payer. But if the payer was based in a nation with no income tax it becomes very murky.
Could the payee simply set up a Bitcoin account in some undisclosed address in the Cloud, then receive payment from offshore clients with corporate addresses in no-tax states?
Potentially. I would not doubt people are doing this type of stuff already in some form. Anyone selling information: software, law, financial advice, you name it, that has information as a product can be arranged more discreetly than ever.
You can create your own Bitcoin address, essentially a wallet, without setting up an account. Bit address.org does that.
I fooled around with that application, created a wallet, sent a Bitcoin payment to it, and then wondered how to send fro the wallet? Well that is where you get less privacy. You need to import the wallet into an application such as Blockchain.info
Whie yes there is supposed security, I would never put much USD equivalent into a paper wallet or a wallet on my smartphone.
But the nice thing about a bit address.org wallet is that it is very secure. You can create as many as you want. And now that it is in blockchain.info you can make a Bitcoin payment from it.
A smart person would put both shared and private address in a text file and OpenSSL-encrypt it wth AES CBC and a pass phrase. Then store the file on a thumb drive. Suppose a car dealer accepts Bitcoin payment. Create a bit address wallet, move the amount of Bitcoin from your vault to your bit address wallet, put the encrypted addresses on a thumb drive. At your destination you put the thumb drive into your OC and OpenSSL decrypt it. Open the URL for blockchain.info, import the private address of this wallet, and you have your Bitcoin’s ready to send to the car dealer electronically. Between point a and the car dealer your car’s driver was stopped by a cop. But the cop was not interested in your thumb drive. Your real physical wallet had $100 USD. Not enough for making the asset forfeiture worthwhile. But the cop does not know you have the equivalent of $60,000 USD. Your driver gets the citation for broken taillight and you go to the dealer.
Bitcoin will put an end to revenue generation by road pirates.
I next need to learn how to make a vault.
How does one come to trust things untested?
Not too long ago, MBS were the most trusted things on the planet.
With the Fed and the Treasury Department supporting and guaranteeing their value, what’s not to trust?
I am new on the block chain. For now trust is consensus-based. It kind of makes sense. It is eloquently anarchy, though based on mathematics. The decentralized anonymous trust is a level beyond. I have mastered direct attestation using trusted computing methods. The next step up is direct anonymous attestation. That is very difficult for me to grasp. The step above that is decentralized anonymous attestation. Even more technically involved. This is where Bitcoin is tied in. Lots of intimidating mathematical symbols to grasp in the white paper.
Bill, you’re a smart guy. Beware of things that are both “new” and couched in language that is made up by the insiders. Beware things that have “levels”. Beware things that smack of bipolar disorder. & etc. just sayin.
True. I am moving very slowly. My advantage is that I know the importance of air gapping the vault. Whether Bitcoin drops precipitously is really beyond my control and is another matter, I have already had long conversations with prople I never physically met about Bitcoin. One is hinting on me getting involved in networking. I have been scammed on MLMs before and my aim is not to get rich. My aim is to have more financial privacy diversifying off of precious metals. I am a gear head and my aim is to learn and make a decent living with the technology. Not to make other people rich off of me.
“Bitcoin, the greatest scam of all time?”
Time will tell, IMO.
http://www.nationaljournal.com/tech/bitcoin-the-greatest-scam-of-all-time-20140922
BTW, if you go to Google and type in “bitcoin scams” you will receive 8,120,000 hits.
Oh yes take it from an ex fraudster who knows nothing about cryptocurrency to pronounce it as the greatest scam of all time.
Do yourself a favor and borrow “Mastering Bitcoin so that you can know what you are talking about.
To be a bigger fraud than the USD which you worship, Combo, it’s gotta lose more than 97% of its value from day one.
LOL - the fraudster does not even know what he’s talking about. He did not mention Litecoin, Dogegoin, Darkcoin or the others which are the same concept and based on the block chain. If he knew what the subject matter is, he would say all the crypto currencies based on block chain are the scams of all time. That in itself should be the secondary flag. The primary one is he’s a scammer, probably paid by the banksters.
I enjoyed that fact that in their marriage contract it was the first between a person and a robot.
The distributed approach as apposed to a hierarchical approach is a tough sell to people of my generation, but my grand kids grok it immediately. I didn’t realize the scope of this problem until I was involved in a distributed network control project a few years ago. It worked beautifully, but met incredible resistance from almost everyone for two reasons.
The first is that they couldn’t get their heads around the fact that there was no central controller. This question came up in almost every meeting.
The second reason was that once they grasped that a central controller was not needed, they realized that it would make entire organizations obsolete.
Decentralization is natural when it comes to interactions between adults. My hope is to reduce hierchies. Maybe to just family situations where the parent(s) run the household and spdecides for their children.
JaCrispy
Carbonazis
No wood for you
Government Officials Cracking Down on Preppers
by Michael Snyder | SHTFPlan.com | January 11, 2015
Why would the government want to punish people that are just trying to work hard, become more self-sufficient and take care of their families?
For example, people have been burning wood to heat their homes since this country began. And this is still very common in rural areas. But the Obama administration does not like this at all. The Obama bureaucrats at the EPA fear that our little wood stoves may be contributing to “global warming”, so they have outlawed the production and sale of 80 percent of the wood stoves that are currently in use. The following comes from a recent Forbes article…
It seems that even wood isn’t green or renewable enough anymore. The EPA has recently banned the production and sale of 80 percent of America’s current wood-burning stoves, the oldest heating method known to mankind and mainstay of rural homes and many of our nation’s poorest residents. The agency’s stringent one-size-fits-all rules apply equally to heavily air-polluted cities and far cleaner plus typically colder off-grid wilderness areas such as large regions of Alaska and the American West.
While EPA’s most recent regulations aren’t altogether new, their impacts will nonetheless be severe. Whereas restrictions had previously banned wood-burning stoves that didn’t limit fine airborne particulate emissions to 15 micrograms per cubic meter of air, the change will impose a maximum 12 microgram limit. To put this amount in context, EPA estimates that secondhand tobacco smoke in a closed car can expose a person to 3,000-4,000 micrograms of particulates per cubic meter.
Most wood stoves that warm cabin and home residents from coast-to-coast can’t meet that standard. Older stoves that don’t cannot be traded in for updated types, but instead must be rendered inoperable, destroyed, or recycled as scrap metal.
Does that make you angry?
It should.
calm down
https://www.youtube.com/watch?v=en1uwIzI3SE
“Does that make you angry?”
Actually, if it makes my neighbor quit smoking me out with his wood stove on winter days, and making my dog and cat’s coats smell like smoke when they come in, I might be into it. A few more neighbors like him, and I might as well live in Beijing, or Victorian London.
Soon We Will All Be Kansans
The new GOP congress just… can’t… let… go… of that ‘ol trickle down theory
“Brownback brought Laffer to Kansas to prove to Republicans that by using what is known as “dynamic scoring,” the state could take a healthy budget surplus and add in a billion or so dollars for give the tax cuts for the rich and the state would be awash in revenue and a job creation boom. The results are that Kansas’ credit has been downgraded several times, the state is hemorrhaging revenue, and the state’s schools are broke. The details of Brownback’s trickle down disaster have been reported [and give] a rough idea of the economic ruin Congressional Republicans are about to wreak on America by using Laffer’s failed “dynamic scoring” to justify trickle down tax cuts for the rich.” (PoliticsUSA.com)
If anyone still believes in trickle down, a 12-step recovery program is available.
Still looking for free stuff.
Heh, under Bush’s “trickle down” tax cuts for the rich, the “free stuff” went to the uber-wealthy. You see, tax cuts given to the rich when the budget is in deficit must be financed with Treasuries, which are paid for by you and me. The tax cuts were a massive wealth transfer from the middle class to the 1%. Scam of the century.
Still too stupid to see they’re a distinction without a difference.
And you’ll still look for freebie.
Is the plan to siphon free stuff from the Middle Class to the Upper and Lower classes starting to crumble?
Record 92,898,000 Americans Not In The Workforce
by Caroline May
9 Jan 2015
A record 92,898,000 Americans 16 years and older did not participate in the labor force last month, according to data released by the Bureau of Labor Statistics.
The BLS defines people not in the work force as people 16 years and up who are not employed and haven’t “made specific efforts to find employment sometime during the 4-week period ending with the reference week.” The labor force participation rate — or the “The labor force as a percent of the civilian noninstitutional population” — also dipped back down to 62.7 percent, from 62.9 percent in November.
September also saw a labor force participation rate of 62.7 percent, however prior to then, the last time the rate hit 62.7 percent was in February of 1978.
…
Romo or Rodgers?
Rodgers
Mary Ann
Peyton or Andrew?
Mary Ann
Andrew.
Russell in the end.
“It’s the cleanest shirt in the dirty laundry.”
http://www.zerohedge.com/news/2015-01-11/fed-losing-if-not-already-lost-control
Long article with some repetition but I understand his point: Ron Paul on what to expect in 2015 - zerohedge.
http://www.zerohedge.com/news/2015-01-10/ron-paul-reality-now-setting-america-it-was-all-based-lies-ignorance
Sorry I did not see goon’s post above.
Dont bother waiting to save more for a down payment because you will lose out on appreciation while you save:
http://www.10news.com/news/stable-strong-real-estate-market-ahead-in-2015-01032015
Is all this starting to sound familiar?
This is really looking more and more like a casino.
“Perhaps this disconnect can shed some light on a topic that central bankers are desperately trying to keep hidden in the shadows: Falling consumer prices are good for the consumer and the economy, but they are bad for central banks looking to maintain asset bubbles and for governments looking for a graceful way to renege on their debts.”
http://www.europac.net/commentaries/hurts_so_good_when_exactly_are_falling_prices_bad
“Central banks understand that interest rates cannot go up. At zero interest rate you can carry debt for a long time. But Mr. Jakobsen argues that the real challenge is if the central banks become successful in raising interest rates. That, he says, will cure everything. However,every single goal stated by central banks and policy makers actually makes things worse. According to Jakobsen, what needs to happen is to have low interest rates for a considerable time and have the real economy take over. If the haircuts do not take place, the world will face a huge risk where a collapse in the long-term debt cycle would take place.”
http://www.zerohedge.com/news/2015-01-11/steen-jakobsen-warns-things-are-about-take-different-turn-2015
Haircuts are what we need!
Droughtists gonna drought.
WEATHER
Drought-stricken Southland gets light rain
From slick roads in the Inland Empire to a wet day at the beach, just about everyone in the Southland got some rain Saturday.
KABC
By Melissa MacBride
Sunday, January 11, 2015 07:34AM
STUDIO CITY, Calif. (KABC) –
Rain continued to fall across most of Southern California into Sunday morning. It wasn’t a downpour, but a widespread, steady rain — the kind that warrants the use of windshield wipers and slows down traffic.
Heavy rain was spotted in Bakersfield, Ventura and Oxnard with some areas picking up nearly 2 inches of rain.
“I think, us Los Angeles natives, we hate the rain, but I’m happy that I’m not in the East Coast right now so I’ll take the rain over the snow,” said Eliza Armor of Studio City.
…
No matter how much it rains we will still pay more for water. Thats just the way it goes. Plant succulents they grow with very little water and as long as it doesnt freeze look cool. perfect for san diego.
From a new condo listing description in my area this week -
“most desirable S facing orientation lends itself to owner users or speculators.”
I’ve NEVER seen the word “speculator” in a listing. Sounds like they’re getting desperate.
Collapsing prices are the path to financial stability.
Legal challenge shows rocky path to ECB money-printing
By John O’Donnell
FRANKFURT Sun Jan 11, 2015 3:04am EST
The famous euro sign landmark is photographed outside the former headquarters of the European Central Bank (ECB) in Frankfurt, late evening January 8, 2015. REUTERS/Kai Pfaffenbach
(Reuters) - A landmark legal opinion this week will remind the European Central Bank of the limits it faces as it advances towards money printing, while a tumbling oil price saps inflation in debt-strained Europe.
With expectations high that the ECB is on the verge of buying government bonds with new money to shore up the economy, an influential adviser to Europe’s top court will give his view on Jan. 14 about an earlier unused bond-buying scheme.
It is the latest chapter in a long-running and increasingly bitter dispute about quantitative easing (QE) between the ECB and Germany, the largest member of the 19-country bloc, that is likely to limit the size or scope of such a program.
As the debate continues, the euro zone economy is all but grinding to a halt. Germany is expected to announce modest growth on Jan. 15 for last year.
In the United States, fresh data on rising employment as well as retail sales is set to show just how much its recovery has overtaken Europe.
“The global economy is at a precarious point,” said Jacob Kirkegaard of Washington think tank, the Peterson Institute.
“The falling oil price is a huge shot in the arm. …”
Oil’s second-biggest collapse on record has taken the price of a barrel of benchmark Brent crude to around $50 from $115 in the middle of last year.
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I can’t wait for the Fed-blown Ponzi to collapse and true price discovery to reassert itself.
Is it possible the oil price collapse represents round one of this?
Do very high levels of foreign ownership of U.S. stocks reduce the impetus for the Plunge Protection Team to prop up prices?
Or does the PPT protect foreign investors’ stock market holdings the same as they would U.S. investors’?
The Tell
Foreign ownership of U.S. equities hits 69- year high
Published: Jan 9, 2015 3:00 p.m. ET
The U.S. stock markets’ globalization trend will remain intact in 2015.
By Sue Chang
Markets reporter
The U.S. stock markets are globalizing, and the British and Canadians are leading the charge.
Foreign ownership of U.S. stocks totaled 16% in 2014, the highest in 69 years since such records have been kept, according to a Goldman Sachs report.
The equity markets’ global diversification trend is expected remain intact in 2015, said Goldman’s Amanda Sneider. She didn’t elaborate on specific numbers.
Britons and Canadians were the biggest foreign investors in U.S. stocks, each accounting for 12%, while Japanese investors checked in at 6%. Another one-third were from tax havens such as Luxembourg, Switzerland, and the Cayman Islands.
…
Oops.
“copper for delivery in March fell to an intra-day low of $2.738 per pound, touching levels last seen end-September 2009″
“China consumes almost half the world’s annual copper output and a worse than expected 3.3% drop in factory gate prices in December was interpreted as further evidence of inactivity in the country’s real economy. While consumer prices showed a small uptick, producer prices in China have now fallen for 34 months in a row.”
Did you fall for the Fed’s headfake on a 2015 interest rate hike?
Market Extra
So much for midyear: bond market now expects 2016 Fed rate hike
Published: Jan 9, 2015 3:38 p.m. ET
By Joseph Adinolfi
News editor
NEW YORK (MarketWatch) —The spread between short-term and long-term U.S. Treasury yields, known to bond investors as the yield curve, has widened during the past two sessions—a sign that bond investors now expect the Fed to begin raising interest rates in 2016.
The Labor Department said Friday that the U.S. economy added 252,000 jobs, but reported that hourly wage growth in the U.S. declined by 0.2%. One analyst said the wage-growth figure was “horrible.”
The weak wage growth sparked a discussion about whether the Fed — which has promised that any decisions about the timing of a rate hike would be justified by economic data — might be willing to wait another 12 months or more before raising the short-term Fed funds rate for the first time since 2006.
The spread between two-year and 30-year Treasury has widened by about 12 basis points since Wednesday, after tightening by about 146 basis points in 2014, according to Tradeweb data.
Ian Lyngen, a government-bond strategist at CRT Capital Group, said that the recent steepening of the yield curve was mainly due to investors moving back into short-term Treasurys.
Short-term Treasurys are more sensitive to the Fed’s interest rate policy decisions than longer-duration bonds.
“The outperformance of two and five year Treasurys is consistent with the notion that there is some rethinking of the Fed going on,” Ian Lyngen, government-bond strategist at CRT Capital Group LLC.
Charles Evans, the president of the Chicago Fed, reiterated his view that the Fed should wait until 2016 to raise short-term interest rates. “I just don’t see why we should be in a hurry to move off our current accommodative policy,” Evans said in a Friday interview on CNBC.
Evans expressed a similar sentiment Wednesday when he said the U.S. might not hit the Fed’s target inflation rate until 2018.
…
yeah a 1/4 point rate hike just for sh@ts and giggles.
This has turned into a big game thinking the fed has the power to create jobs and run the economy.
Interest rates have been zero for years and it still isnt working.
Also part of this zero interest rate plan is to force people into the stock market chasing yield cause there is none in safe assets like bonds and savings accounts.
It all also focuses on increasing asset prices like stocks and homes.
Is increasing asset prices going to put people to work?
Remember:
printing money only changes the claims on existing wealth
Might be a profit here, even thought it is impossible.
“Arrested Development” star Jason Bateman and his wife, Amanda, have sold a home in Hollywood Hills West for $2.228 million.
The Midcentury Modern-style residence, with walls and doors of glass and a stacked-stone fireplace, came on the market in early November at $2.25 million and closed in less than two months.
The charming 1953 home features an open-space floor plan with beamed ceilings, hardwood and stone flooring and a kitchen with a long island/breakfast bar. There are four bedrooms and 2.75 bathrooms in 2,879 square feet of living space.
He and his wife bought the property in 2002 for $885,000, records show.
hmmm…. After they spent 1.3 million in renovations.
Hows that investment working out Lola?
What’s not to like about collapsing gasoline prices?
Gas-price slide to tangle economic data
Published: Jan 11, 2015 11:47 a.m. ET
By Steve Goldstein
D.C. bureau chief
The slide in gas prices will be reflected in a host of economic reports.
WASHINGTON (MarketWatch)—Aren’t declining gasoline prices supposed to be good news for the economy?
They certainly are to households not employed in the energy industry, but it might not seem so from the one of the biggest economic indicators due for release this week.
On Wednesday, the Commerce Department is set to report retail sales for December. It’s the most important month of the year for retailers, but economists polled by MarketWatch are expecting a flat reading, and quite a few say a monthly decline wouldn’t be a surprise.
PNC Financial’s Stuart Hoffman and WSJ’s Spencer Jakab discuss December’s employment report and the economic signals it sends for 2015.
That’s because of the tremendous drop in gasoline prices. Gasoline stations are a key component of the retail sales report, so their revenue quite naturally will fall as prices at the pump decline.
So rather than the headline, economists say to examine other elements of the report.
“Apart from gasoline, we anticipate solid sales in December, reflecting strong holiday shopping,” said Peter D’Antonio, an economist at Citi.
“The drop in sales at gas stations actually provides the cost savings for the expected gains in spending in coming months.”
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If you’re holding the bag on shale play junk bonds or a counterparty to hedged shale production, there’s a lot not to like, i.e. your impending insolvency.
Which is more important;
A) My Wallet
B) Some degenerate gambling trader
Would any of the HBB’s resident degenerate gambling traders please weigh in here?
Energy fracking
The shale oil revolution is in danger
by Shawn Tully
January 9, 2015, 5:00 AM EST
The shale oil revolution is providing a great gusher of profit, jobs, and swaggering entrepreneurship. It epitomizes the optimism surrounding America’s economic recovery.
Indeed, the rise of hydraulic fracking from Montana to Texas to Pennsylvania has lifted U.S. oil production mightily, from 5.6 million barrels a day in 2010, to a current rate of 9.3 million. And until late last year, it was widely accepted that our output would keep rising in 1 million barrel-plus annual leaps for years to come.
The recent drop in oil prices poses a major challenge to the frackers. But oil producers, Wall Street analysts, and most industry experts claim the setback will be brief and minor.
Don’t believe them.
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Isn’t it mainly a matter of apologizing to investors for losing their money, then moving on to the next bubble?
I’m gonna guess that there are a lot of accidental bag holders, in the junk bonds, in the steel mills and their bondholders, in the automotive plants, the builders and sawyers & etc.
Then we get to the bag holders in and of the magical, mystical, mythological land of the dragon that was supposed to use up all this surplus capacity and then some, forever and forever.
I’m looking forward to watching certain HBB China bulls’ failed forecasts crumble further.
Western Australia’s mining boom ebbs along with China’s economy
A reclaimer works in the Yandicoogina stockyard and loading a conveyor with high grade iron ore in Western Australia’s Pilbara region. (AFP/Getty Images, Rio Tinto)
By Don Lee
* With China’s slowing economic growth, one of the biggest mining booms in Australian history is over
* Like oil prices, the fall in iron prices reflects a continuing increase in supply as demand slows
* Perth is likely to ride out the mining decline, but smaller towns in Western Australia might not
Joe Norton, a large man with a sun-burnt face, digs into a plate full of beef, potatoes, carrots and Brussels sprouts at Searipple, a mobile-home camp in Australia’s western frontier.
It isn’t the tastiest food in the world, the 54-year-old says, but it’s free, provided by his employer, iron mining giant Rio Tinto.
So is most everything else in his life: all his meals, a Fleetwood-manufactured house with microwave and flat-screen TV, a round-trip ticket every Friday to fly home, and not the least, his $180,000 salary.
Not bad for a man with an eighth-grade education doing semi-skilled work on railways transporting iron ore.
Yet the gig probably won’t last a lot longer, Norton reckons. Some of his fellow miners already have been sent packing as the company downsizes its contracted workforce. “They’re cleaning the fat,” he says.
With China’s slowing economic growth, one of the biggest mining booms in Australian history is over, leaving behind a trail of jobless workers and struggling local businesses in places such as Karratha, which thrived in recent years but is now at risk of becoming a ghost town.
China’s once-insatiable appetite for iron, copper and other metals led to such a surge in commodity prices that even manhole covers were stolen from streets in some countries to be sold for scrap. Exports from mineral-rich nations such as Australia soared, sending the cost of an ordinary three-bedroom home here to a million dollars.
Today, China’s weaker growth has sent government budgets reeling. Currencies once bolstered by surging investments and exports to China are tumbling. Unemployment is shooting higher.
It’s a problem around the world, from Brazil to Indonesia to South Africa. Australia, in particular, is feeling the pain.
“Australia’s economy is not the golden goose it used to be,” says Adrian Hart, a mining and infrastructure expert at BIS Shrapnel, a research and forecasting firm in Sydney.
An expected slowdown in shipments of coal and iron ore, as well as related investments, is likely to shrink tax revenue and government royalties, putting more strain on public spending.
“Now that the mining boom is over, all this virtuous cycle is turning the other way,” Hart says.
The price of iron ore slumped nearly 50% over the last year to about $70 a metric ton. Like oil, the decline in iron prices reflects a continuing increase in supply as demand slows. Rio Tinto and other mining giants have used the price slump to put the squeeze on smaller, less-efficient rivals. But they, too, may eventually feel the pinch.
Australia is the world’s largest producer of iron ore. Most of it goes to China, which accounts for about two-thirds of iron ore sales in overseas markets. But analysts are predicting a softer demand for iron in the years ahead as China tries to cool its housing and industrial production.
A similar if less dramatic scenario is playing out in Australia’s huge coal region in the east, where the boom is also over.
In Australia’s west, places such as Perth, the region’s largest city and the hub of the iron and petroleum industry, have been especially hard hit.
“A lot of people are out of work,” says Lachlan Walker, chief executive of Tetra Tech Proteus, a Perth unit of global engineering services firm Tetra Tech Inc. in Pasadena. Walker says he has halved his staff from two years ago, to about 120.
…
It’s not likely to be pretty.
So long as China has unlimited resources to bail out banks and other financially collapsing organizations, it’s turtles all the way down!
Analysts fear China financial crisis as deflation looms
Below-target inflation further sign of weakening
Pudong financial district of Shanghai, China. Beijing is expected to come up with more stimulus measures to avert a sharp economic slowdown. Photograph: Carlos Barria/REUTERS
Julia Kollewe and Angela Monaghan
Friday 9 January 2015 12.19 EST
China’s inflation rate picked up slightly in December but remained sharply below the official target, signalling persistent weakness in the world’s second largest economy as a US investment bank warned that a credit crunch in China is “highly probable” this year.
Annual consumer inflation edged up to 1.5% last month from 1.4% in November, according to the National Bureau of Statistics, still less than half the 3.5% target.
Economists said there was a chance China could slip into deflation, increasing the likelihood that policymakers at the People’s Bank of China would respond by further cutting interest rates. The Bank cut rates for the first time in more than two years in November in an attempt to boost the economy.
“Deflation this year is definitely a risk,” said Minggao Shen, economist at Citi in Hong Kong. “We continue to argue that deflation provides more room for policy easing.”
Economists polled by Reuters are predicting China’s annual economic growth slowed to 7.2% in the fourth quarter, the weakest since the depths of the global financial crisis. Full-year growth is expected to be below the official 7.5% target.
Bank of America Merrill Lynch predicted that a credit crunch in China is highly probable this year as slowing economic growth prompts a surge in bad debts.
Chinese president Xi Jinping this week trumpeted the “new normal”, referring to slower growth as the government tries to rein in the credit boom – which has led to a debt of $26tn – and rebalance the economy from its overreliance on exports and investment towards consumer spending.
Bank of America Merrill Lynch strategists David Cui, Tracy Tian and Katherine Tai argue: “Few countries that had grown debt relative to GDP as fast as China did over the past few years escaped from a financial crisis in the form of significant currency devaluation, major banking sector recap, credit crunch and/or sovereign debt default (often a combination of these).”
The analysts believe the government has unlimited resources to bail out banks and other organisations as the debts are mostly in renminbi, and the country’s central bank can always print more money.
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Indian economy to grow at 7% this year; slowdown in China: PwC
By PTI | 11 Jan, 2015, 02.35PM IST
NEW DELHI: With India expected to ‘turn the corner’ on the back of structural reforms, its economy is projected to clock 7 per cent growth in 2015 even as China would see an economic slowdown, says a study.
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It is likely to be pretty predictable.
What comes after the biggest credit expansion in history? China! What comes after the biggest credit expansion in China? India!
Is that meant to be serious or satirical?
Dumb question of the day: Will China eventually experience an Enronesque implosion which nobody could have seen coming?
Why China Will Implode: Its A Monumental Building Aberration, Not An Economy
by David Stockman • May 15, 2014
The thing to understand about China is that it is not just another booming EM economy that is momentarily struggling to cool-down its excesses in fixed asset investment and make a transition to some kind of more “normal “consumer-based economy. That comforting notion represents an odd-confluence of propaganda from the comrades in Beijing and hopium from Wall Street stock peddlers.
In fact, China is a grotesque economic aberration that bears no relationship to prior economic history or any conventional economic models-–not even to the export-mercantilism model originally developed by Japan, and which has now proven itself wholly unsustainable. Instead, China is a nation that has gone mad building,speculating and borrowing on the back of a credit bubble so monumental (and dangerously unstable) that its implications are resolutely ignored by observers deluded by the notion that China embodies a unique economic model called “red capitalism”.
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China’s Weak Builders Get Weaker as Agile Flags Debt Woes
By Bloomberg News Oct 14, 2014 11:52 PM PT
China’s weakest developers are getting weaker as Agile Property Holdings Ltd. (3383) became the latest company to struggle with debt repayments.
The number of publicly traded real estate firms with liabilities exceeding equity jumped to 133 out of 334, from 57 in 2007, Bloomberg-compiled data show. Notes of Guangzhou-based Agile were the worst dollar bonds in the industry in Asia in the past month losing 136 percent in annualized terms, after its chairman was confined by prosecutors and it tried to extend loan maturities. The yield premium on China property debt has risen 44 basis points since Sept. 30, the most in emerging Asia after Indonesia, according to Bank of America Merrill Lynch indexes.
Concern is mounting that financial stress may “spill over” to builders that have a similar background or geographic coverage as Agile, Moody’s Investors Service said, after home sales plunged 11 percent in the first eight months. China’s real estate notes slid 0.3 percent in October, after a 1.6 gain last quarter, Bank of America indexes show.
“Strong players will get stronger and weak players will remain weak,” said Kaven Tsang, Hong Kong-based senior analyst at Moody’s. “Default risks of very small, liquidity-strapped property companies will be high.”
Financing Stress
Concerns have spread that more Chinese property companies may fail to pay obligations since closely held Zhejiang Xingrun Real Estate Co., located south of Shanghai, collapsed in March under 3.5 billion yuan ($571 million) of debt.
Chinese Premier Li Keqiang has taken steps to prevent a sharper decline in the real estate industry as he seeks to meet a target for economic growth of about 7.5 percent this year.
…
Since this prediction failed to pan out so far, it logically follows that it will never, ever come to pass.
Asia Pacific | ANALYSIS
Apocalypse near? ‘Year of the Bear’ implosion haunts China
Pessimists say multiple signs point toward an impending implosion
by Vidya Ranganathan
Reuters
Apr 11, 2014
SINGAPORE – “It’s like a horror movie. People like to watch but don’t want to be in it,” quipped economist Andy Xie about his popular lectures where he predicts a collapse in China’s property and stock markets.
The former Morgan Stanley economist is among the more moderate of the bearish voices that have predicted the “China crash” since the late 1990s. The more extreme doom-mongers have been forecasting everything from a property meltdown and debt crisis to full-blown economic recession and even political revolution.
Yet China has consistently defied the odds, projecting itself as a single-party-led export powerhouse with absolute hold over its financial system and a government with deep pockets. Investors have been rewarded with a decade of double-digit economic growth and a property market that has multiplied several times over the years.
But this year seems different. Rising funding costs, a more volatile yuan currency, money market liquidity crises and companies defaulting on bond payments, which is rare for China — all have raised concerns that this could be China’s “Year of the Bear.”
…
Why China implosion fears may be overblown:
–Folk Wisdom
Market Pulse
Australia stocks fall, as energy and iron-ore names weigh
Published: Jan 11, 2015 6:44 p.m. ET
By Michael Kitchen
Asia editor
LOS ANGELES (MarketWatch) — Australian stocks started the week with losses early Monday, taking cues from softer oil and iron-ore prices, as well as Wall Street’s lower finish at the end of the previous week.
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“China is a grotesque economic aberration…”
Oh my. That is going to give our downupdan an upset stomach.
David Stockman rocks!
UK lenders weeding out mortgage-holders they no longer want.
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/11336328/Now-millions-face-mortgage-porting-woes-when-moving.html
Some people are making some dumb moves. Check out this home … purchased for 900K 1 year ago. Add a remodel. Presto. 1.5M. Multiple offers. This is a direct result of the central bank Ponzi. The central banks will stop at nothing and will print and print till inflation is running hot. This will have a very bad ending. One possibility is skyrocketing inflation that triggers a war.
https://www.redfin.com/CA/Costa-Mesa/1600-Aliso-Ave-92627/home/4587171
What are the losses on the remodeling?
sweat equity is manifest destiny my friend.
I see its pending sale. a greater fool showed up with an offer and it was accepted. Caveat emptor!!!!! Got Termites ?
Modern 1960s looking thing. All white yuck
Portland, OR Sale Prices Dive 4% YoY; Plunge 18% QoQ As Foreclosures Ramp Up
http://www.zillow.com/portland-or-97216/home-values/
“Most of the companies are based in Ciudad del Carmen, on the Campeche Bay in the Gulf of Mexico, and were told this week that contracts wouldn’t be renewed with Pemex, as the world’s ninth largest oil producer is known. Job losses could rise to 50,000″
http://www.bloomberg.com/news/2015-01-08/mexico-cuts-10-000-oil-service-jobs-as-pemex-funds-fall.html
Newport Beach, CA Sale Prices Turn Negative On Year As Demand Plummets To 20 Year Low
http://www.zillow.com/newport-beach-ca/home-values/
Something is wrong with Zillow. Here is a Newport Beach home purchased Dec 13 for 1.27M. Add a flipper remodel. Sold for almost 1.9M 11 months later. There are many more of these in Newport Beach where the flippers are making a fortune.
https://www.redfin.com/CA/Newport-Beach/1714-Skylark-Ln-92660/home/3560457
Thanks to the FED, these flippers are running up prices and stuffing the FED money into their pockets. This will end in a financial disaster. The ending will be so bad that no one will want cash.
Something is wrong with Redfin. It’s a NAR affiliated site.
What are the net losses as a result of these renovations?
I see what the Zillow problem is. You are looking at the Zillow Home Value Index which is some computer generated estimate. But, if you go to the graph, and you select Median Sales Price, you see that is headed up. So, actual Medial Sales Prices are headed up while the Zillow Home Value Index is headed down. Clearly, Zillow has a problem.
But, that does not change anything. The central banks are running a Ponzi and it should end in a total economic disaster. Scares the heck out of me. When the currency collapses because of the money printing, it will be scary. Massive inflation. No food. No police. No utilities. I often think about relocating to a south pacific island … hoping I relocate before it is too late.
“I often think about relocating to a south pacific island … hoping I relocate before it is too late.”
That plan might not have worked out too well in the 1930s; maybe this time is different?
This is the first time in history the central banks have all printed fiat currencies. This is something new the world has never seen. In the short term, hard assets like real estate will do fine. But just for the short term. When the currencies collapse, look out. This will be a new chapter in human history. I am scared.
In the short term, real estate will benefit. In the long term, we will all suffer. Possible any real estate gains in the short term will do nothing for you in the long term. In the long term, we are all screwed.
“In the short term, real estate will benefit.”
Starting when…in 1997?
It is benefiting now. However, it might be a waste of time investing in real estate for a profit. If you do all of that, you will have paper profits until the currency collapse occurs. Then, it will be an ugly world and real estate will make no difference. It will be survival. You might be better off just renting and enjoying the world before the big financial crisis hits. Just make sure you plan your exit.
Why? The dollar is increasingly more valuable with each passing day.
“Every 1% increase in interest rates means $100 billion more in interest payments on the US debt. This is money that the US doesn’t have (we recently issued $1 trillion in new debt simply to cover payments on old debt that was coming due).”
http://www.zerohedge.com/news/2015-01-11/fed-focused-only-one-thing%E2%80%A6the-bond-bubble
So what? You are the King of HELOC clowns, or did you have a change?
Brentwood(Los Angeles), CA Sale Prices Dive 9% YoY; Underwater Sellers Walk Away
http://www.zillow.com/los-angeles-ca-90049/home-values/
Put that PJ pizza D-O-W-N ! Yeah, that means you, Peyton.
Oil implosion continues…down 1.63% on foreign (non-U.S.) markets and approaching $47/bbl.
Region VIII - No More 50% Off Pizza
AlbqDan’s basic argument about a near-term return to $100/bbl oil completely ignores the role of collapsing demand in equilibrating supply at a new, lower price level. The shrinkage in quantity supplied is part of the normal equilibrium adjustment process in response to a negative demand shock. The resulting drop in supply is a response to the demand collapse to bring supply and demand in line at the new, lower equilibrium price.
That he doesn’t understand something so basic about equilibrium adjustment suggests he either never took undergraduate economics or else failed the course.
Contrary to AlbqDan’s claims, it looks as though oil futures are still cratering.
Futures Movers
Oil loses more ground as Goldman Sachs cuts outlook
Published: Jan 11, 2015 11:19 p.m. ET
By Michael Kitchen
Asia editor
LOS ANGELES (MarketWatch) — The drumbeat of losses for crude-oil futures resumed with the open of electronic trade early Monday, as various analysts sounded pessimistic notes about the commodity’s outlook.
In Globex action during East Asia trading hours, West Texas Intermediate crude oil for February (CLG5, -1.70%) was down 66 cents, or 1.4%, at $47.71 a barrel. The move followed a 0.9% loss during Friday‘s regular session on the New York Mercantile Exchange.
The Monday pullback came after some sharp cuts by Goldman Sachs to its oil-price projections. The bank’s energy analysts slashed their 2015 forecast for Nymex crude to $47.15 a barrel, down from $73.75 a barrel, according to Dow Jones Newswires. For 2016, they called for $65 a barrel, against a previous forecast of $80 a barrel.
For the current quarter, Goldman put the price at $46 a barrel, down from $75.
“Our expectations are that the oil market could remain in a deep contango for about a year without hitting any significant storage constraints,” Dow Jones quoted Goldman Sachs as saying. “Contango” refers to longer-dated futures trading above the expected spot prices for the respective delivery dates — This, in turn, implies that the price for those futures will fall as the delivery date approaches.
Meanwhile, rival Brent North Sea crude oil for February (LCOG5, -1.42%) suffered a slightly larger drop early Monday than did Nymex, weakening by 73 cents, or 1.5%, to $49.38 a barrel.
Brent had similarly experienced deeper losses than Nymex crude on Friday, and Citi Futures analyst Timothy Evans said this was because “demand is seen as weaker in the international market, and much of the supply adjustment to lower prices is expected to take place in the U.S.”
Goldman Sachs also make sharp revisions to its Brent price estimates, tipping a 2015 price of $50.40 a barrel, compared to its previous $83.75-a-barrel forecast. For the current quarter, they cut the outlook to $47 a barrel from $85 a barrel.
Monday’s early moves came ahead of a trio of closely watched monthly reports due later in the week, starting with the Department of Energy on Tuesday, and followed by the Organization of the Petroleum Exporting Countries (OPEC) on Thursday, and the International Energy Agency on Friday.
Previewing the reports, Citi’s Evans wrote: “On balance, we think demand for 2015 may be revised slightly lower as that’s our sense of the overall macroeconomic developments of the past month. This could be offset or even exceeded by a cut in the non-OPEC supply outlook, as we certainly are seeing a sharp reduction in U.S. drilling activity.”
…
Saudi prince: $100-a-barrel oil ‘never’ again
Maria Bartiromo for USA TODAY
7:49 p.m. EST January 11, 2015
Saudi billionaire businessman Prince Alwaleed bin Talal told me we will not see $100-a-barrel oil again. The plunge in oil prices has been one of the biggest stories of the year. And while cheap gasoline is good for consumers, the negative impact of a 50% decline in oil has been wide and deep, especially for major oil producers such as Saudi Arabia and Russia. Even oil-producing Texas has felt a hit. The astute investor and prince of the Saudi royal family spoke to me exclusively last week as prices spiraled below $50 a barrel. He also predicted the move would dampen what has been one of the big U.S. growth stories: the shale revolution. In fact, in the last two weeks, several major rig operators said they had received early cancellation notices for rig contracts. Companies apparently would rather pay to cancel rig agreements than keep drilling at these prices. His royal highness, who has been critical of Saudi Arabia’s policies that have allowed prices to fall, called the theory of a plan to hurt Russian President Putin with cheap oil “baloney” and said the sharp sell-off has put the Saudis “in bed” with the Russians. The interview has been edited for clarity and length.
…
Dollar Slips on Wages as Oil Drops; Chinese Stocks Drop
By Nick Gentle and Emma O’Brien
Jan 11, 2015 10:17 PM PT
The dollar fell for a second day after an unexpected drop in U.S. wages clouded the outlook for interest rates, and crude oil resumed declines. Billionaire Li Ka-shing’s Cheung Kong Holdings Ltd. surged in Hong Kong after a reorganization, while Shanghai shares retreated.
The greenback weakened against most major peers by 2:14 p.m. in Hong Kong as the Australian dollar added 0.5 percent and the euro gained 0.2 percent. Cheung Kong surged 15 percent, while the Shanghai Composite Index headed for its biggest three-day drop in 18 months. Standard & Poor’s 500 Index futures fluctuated. Oil slid at least 1.4 percent in New York and London. Gold advanced 0.5 percent as copper traded near the lowest since 2009. Japan’s markets are closed today.
…
Get ready for more oil price declines.
Oil Producers Betting on Price Drop With OPEC Not Curbing Output
By Dan Murtaugh
Jan 11, 2015 8:10 PM PT
The oil industry was listening as OPEC talked down crude prices to a more than five-year low.
Drillers, refiners and other merchants increased bets on lower prices to the most in three years in the week ended Jan. 6, government data show. Producers idled the most rigs since 1991, with some paying to break leases on drilling equipment.
Companies are hedging more and drilling less amid concern that the biggest slump in prices since 2008 will continue. Oil dropped for a seventh week after officials from Saudi Arabia, the United Arab Emirates and Kuwait reiterated they won’t curb output to halt the decline.
“Producers are desperately hedging their production in a drastically falling market,” Phil Flynn, a senior market analyst at the Price Futures Group in Chicago, said by phone Jan. 9. “They’re trying to lock in prices because they are convinced that the market will stay down for a while.”
…
Economics & Finance 1/11/2015 @ 11:11AM
Halving The Price Of Oil Makes Keystone XL More Important, Not Less
Tim Worstall Contributor
Whether you’re in favour of the tar sands being exploited for the crude oil in them or against the very idea, the recent halving in the price of oil makes the Keystone XL pipeline more important, not less. The basic economic concept here is that the transport costs of that oil drive a wedge between the production at the wellhead (OK, tar pit, not wellhead) price and the market price. As the global price of oil falls that wedge becomes a larger portion of that total price. And thus it looms ever larger in the decision as to whether to produce from the tar sands or to close it all down. Thus, if you’re in favour of exploiting Alberta you should be even more in favour of Keystone right now. And, of course, if you’re against that exploitation you should be even more against the pipeline.
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Dipping ever closer to $47/bbl…
I’m wondering if there is some price level which would trigger outright capitulation: $40/bbl? $30/bbl?
Would AlbqDan even admit the oil market is toast once prices drop below $25/bbl?
Depends how much DownzUp he drank that day.