Bits Bucket for January 19, 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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can stocks continue to climb a wall of worry or does reality set in this year?
S&P 500 P/E ratio is 19 vs. long-term average of 15. Overvalued but not screamingly so; there’s been a record influx of foreign cash into the US stock market, which could drive it higher.
pe of 19? yeah right
when you rig earnings through buybacks and non gaap accounting you put put a lot of lipstick on a pig.
alcoa has a pe of 70.
now everybody has 1 time charges which are actually expenses.
A lot of the numbers seem real rigged to me.
Revenue growth has been flat.
Its like the guy on the barstool telling me how great of an investment gopro is. pe of 176. Now that is a classic shoeshine moment.
Comment by azdude
A lot of the numbers seem real rigged to me.
Saw this the other day (maybe here!):
It’s Earnings Season—–So Here Come The Crooks, Led By Alcoa
Stocks are tricky, these valuation measures aren’t that useful. Buying overvalued stocks with skyhigh p/e’s can be profitable if they become even more overvalued. One can also lose money on a value stock with a p/e of 6 if the p/e drops to 4. It really comes down to whether or not there’s more buyers after you’ve taken a position.
Hold onto every dollar you’ve got. You’ll have fewer tears of misery and more dollars in the end.
Heard an interview by the Motley Fool…a guy who writes for them interviewed a bunch of strategists. Each of them predicted that the S&P 500 would be higher by the end of 2015.
A substantial number of them (all of them?) thought they were being contrarian in that opinion.
This is the case for a ‘large, sharp correction’
Kristin Cwalinski
Saturday, 17 Jan 2015 | 9:08 AM ETCNBC.com
Pain in the market may just be getting started, according to Raoul Pal of the Global Macro Investor.
“The chance of a large sharp correction? Absolutely, because volatility is there and people will be forced to reduce risk, ” Pal said on CNBC’s “Fast Money.” “I would put that as a reasonably high probability that the S&P falls possibly from here down to the 1,800 level.”
Pal thinks there will be a lot of volatility in the market this year and currency volatility will be the driving force. He expects the sharp currency moves that have happened globally to hit the U.S. equity markets.
A violent move in the Swiss franc on Thursday shook investors as the Switzerland National Bank removed its cap on its currency relative to the euro. The cap was in place to prevent the franc from gaining ground against the euro while Europe remained in recovery mode. Switzerland has been a beacon of financial stability throughout the euro zone’s recession.
Brokerage and financial firms reported millions of dollars of losses from the sudden gains in the Swiss franc on Thursday and that may not be the end of it.
Currency swings are an issue at home with the U.S. dollar on a tear over the past year.
“The biggest risk to U.S. equities is if the long dollar trades unwind. If that happens, then you may see people unwinding their stock positions as well,” said “Fast Money” trader Brian Kelly of Brian Kelly Capital.
Pal also believes a strengthening dollar will be part of the U.S. market downfall this year,
“People are underestimating what a strong U.S. dollar can do and oil is just one of those things.” Oil is down nearly 10 percent so far this year and that’s after a 45 percent drop in 2014.
…
It would be interesting to see who made a boatload of money on the swiss franc depegging. You know there were people that did. All you heard on the tv was people who lost bigtime.
As usual no one saw it coming.Some people were wiped out overnight.
“Some people were wiped out overnight.”
I haven’t heard of any jumpers yet.
Is this the year the EU dissolves?
The only country that really gains from the Euro is Germany. That said, the only country likely to leave the EU this year is Greece.
the only country likely to leave the EU this year is Greece.
Wildcards are early elections…France, Italy and Spain. National Front (Marie LePenn), 5 Star (Beppe Grillo) and Podemos are all leading if such elections were held today, and first thing on agenda is bye-bye Euro. Not 100% assured, but I think >50% chances of each occuring. 2015 could be a WILD year indeed.
Greece can have elections whenever. If Syriza actually acts in a way that would force Greece out of the EU, they’ll hold new elections and Syriza will lose to ND. PASOK getting ultra-low vote totals is not going to last forever and they will gladly give ND the votes to form a ruling coalition.
Basically Syriza can only exist like it does bc voters don’t think real negative consequences would happen, bc of the batshit system where new elections can be called, unlike in the US where the length terms of office are set in stone.
Liberace!
IIRC Greece has had multiple opportunities, via elections, to leave the Euro. They’ve stuck with it. I think the populace doesn’t trust itself or the people it elects to maintain any kind of fiscal discipline or lack of corruption. A stable currency and a stable economic framework brings a host of benefits, along with the costs.
That said, the only country likely to leave the EU this year is Greece.
Will Greece leave the EU, or will it just leave the Euro?
With the ECB a prisoner of financial markets, Greeks are pulling their deposits rather than risk a Cyprus-style “bail-in” (legalized theft of their savings to pay the banksters’ gambling debts).
http://wolfstreet.com/2015/01/18/fears-of-next-cyprus-trigger-bank-runs-in-greece/
Rut Roh! Again, electronic assets are causing people who own them to sweat. They should have gold.
How long will the chinese subsidize the middle class in the US?
How long is it going to be good for china to keep mopping up dollars by printing money?
Sure they export more stuff to us but it is inflationary for them by pegging.
What is going to change this peg? Why would they finally unpeg?
At some point will it be beneficial for the chinese people to have a more valuable currency rather than export stuff to us? Will it be other trading partners or is it possible for american companies to be more competitive with chinese products?
I keep reading about some companies in the US bringing manufacturing of their product back home. One was lincoln logs. At some point the chinese workers will want more money as inflation rises there.
What’s up with Chinese stocks? Temporary dip, or turning point?
Chinese Stocks Are Getting Obliterated
Mike Bird
Jan. 19, 2015, 8:25 AM
Shanghai’s composite index of the biggest stocks in China just had its worst day since the middle of 2008, when the financial crisis was still getting into full swing.
The index, which was a world-beater last year, just had all of its gains so far this year wiped out in just a few hours: Stocks were down by 7.7% at the close, after dropping by as much as 8.3% during the session.
…
Behind the 8% plunge in China’s stock market
2 Hours Ago
The Associated Press
Chinese stocks plunged Monday after the country’s securities regulator rapped three major brokerages for continuing to lend money for stock purchases in violation of rules. As punishment for extending so called “margin trading” contracts, the brokerages are forbidden to offer credit to new customers for three months.
How much did shares fall?
At one point Monday, the Shanghai Composite Index was down 8.3 percent. It later trimmed that to a loss of 7.7 percent. Share prices of brokerages were hardest hit, with some falling by the daily loss limit of 10 percent. Despite the sharp fall, the Shanghai Composite Index is still up 55 percent in the past 12 months and up 33 percent for the past three months.
Why did the market fall so much?
Investors and analysts see the penalties against the brokerages as foreshadowing more curbs on credit-financed trading by China’s government. Authorities want to stop the stock market’s boom over the past year from turning into a bubble that could damage the broader economy. The Shanghai Composite surged 54 percent last year, partly because of easy credit that investors used to finance their trading. Market selloffs can also become self-reinforcing as other investors sell because of fear they will suffer even greater losses if they do nothing.
…
Is the China share selloff a teapot tempest?
Leslie Shaffer
12 Hours Ago
CNBC.com
China’s margin lending crackdown may have spurred a sharp knee-jerk selloff, but analysts aren’t convinced it’s anything more than a minor hiccup in the mainland’s bull market.
“This is not a day to be a bull on the equity market,” Tim Condon, head of research for Asia at ING Financial, told CNBC. “But I think this will be a transitory blip and monetary accommodation will return as a driver and share prices will continue to move higher over the course of the year.”
Admittedly, it’s quite a large blip: the Shanghai Composite dropped as much as 6.4 percent in intraday trade Monday after rallying more than 50 percent last year as retail investors piled in, accounting for around 80 percent of trading volume.
…
You keep bringing up articles about china. Are they going to impact us by their ponzi economy deflating?
If they are how is it going to effect us? Can we profit from this?
I really think this currency peg issue is the thing to focus on. Everybody thinks its going to continue forever. Look at the costs associated with pegging.
Its not just the inflation the PBOC creates to buy dollars but also the cost to hedge their dollar reserves against money printing in the US.
If you have 3 trillion dollars of reserves and inflation goes up 10% there goes 300 billion down the tubes.
How much of the chinese economy is exports to the US?
If you have 3 trillion dollars of reserves and inflation goes up 10% there goes 300 billion down the tubes.
Tha’ts a pretty simplistic analysis. If inflation goes to 10%, the new issues that they are buying will have much better yields. And you only lose on the older, lower-yielding issues if you sell them. My guess is that China largely just holds to maturity and rolls over.
“And you only lose on the older, lower-yielding issues if you sell them. My guess is that China largely just holds to maturity and rolls over.”
How would holding on to your losses rather than selling make them go away?
How would holding on to your losses rather than selling make them go away?
I thought you understood bond investing, PB.
The current market value of a bond may show a significant decline due to an increase in interest rates; however, assuming the issuer is still making good on its commitments, the bond will still pay the face value when it matures, as well as any coupon payments along the way.
The market may value it at a reduced value, but who care if you aren’t selling it and the issuer still pays as promised? You decided that the yield was acceptable when you bought it, right? Its yield hasn’t changed—only the market yield has changed.
Oh I see…it doesn’t matter if the value of your bonds crash. So long as you never sell, you never need to realize your losses. Makes perfect sense.
Oh I see…it doesn’t matter if the value of your bonds crash. So long as you never sell, you never need to realize your losses. Makes perfect sense.
Right; the value to you, in terms of coupon and principal payments, remains the same as when you purchased it, regardless of how the market value may fluctuate.
Obviously that only applies to bonds where the issuer is paying as promised and likely to continue to do so; if the market is valuing it lower due to underlying issues that may affect payment, then clearly it could affect even the long-term holder who wants the promised coupon and return of principal. That case doesn’t apply to Treasuries, though, since the USG can print up more dollars with which to retire any dollar-denominated debts.
“Right; the value to you, in terms of coupon and principal payments, remains the same as when you purchased it, regardless of how the market value may fluctuate.”
That is known as nominal value.
However, the flaw in your logic has to do with the usual reason for bond yields to steeply increase, which is an unanticipated increase in inflation. Holding on to long-term bonds during a period of higher-than-expected inflation is a great way to lose a great deal of real value, in terms of the purchasing power of money. Of course, if the yield increase accurately prices in a premium for anticipated future inflation, you would do no better nor worse by selling your bonds rather than holding on while the expected real value of future payments steadily decreases.
Historical reference: 1966-1980
Where are Get Stucco and Cantankerous Intellectual Bomb Thrower?
It just doesn’t seem like a balanced thread with only PB and the Whackster offering commentary.
+ 100
China economic growth is slowest in 24 years
By William Kazer
Published: Jan 19, 2015 10:10 p.m. ET
China’s economic growth slipped to its weakest level in a quarter century in 2014, though growth in the final quarter came in higher than expected, amid nagging problems of overcapacity, a weak housing market and lower global demand.
…
Maybe the real reason for the stock market to sell off has to do with the slowest growth in a quarter century?
Asia Economy
China Economic Growth Is Slowest in Decades
Economy Expanded 7.4% in 2014
As China’s growth rate falls to its lowest level in nearly 25 years, The WSJ’s Jacky Wong asks BlackRock’s head of China equities about the challenges China faces in 2015, and the tools officials have to address them.
By Mark Magnier, Lingling Wei and Ian Talley
Updated Jan. 19, 2015 9:46 p.m. ET
BEIJING—China’s economic growth slowed to 7.4% in 2014, downshifting to a level not seen in a quarter century and firmly marking the end of a high-growth heyday that buoyed global demand for everything from iron ore to designer handbags.
The slipping momentum in China, which reported economic growth of 7.7% in 2013, has reverberated around the world, sending prices for commodities tumbling and weakening an already soft global economy.
China’s economy grew 7.3% in the fourth quarter from a year earlier, the National Bureau of Statistics said, buttressed by targeted moves to ease borrowing. But it continued to face a housing glut, soaring debt and overcapacity in many industries, factors likely to erode growth in 2015.
…
China’s economy in worst downturn in a generation
Reuters | Jan 19, 2015, 05.59PM IST
A further slowdown in China could throw into risk chances of a revival in global growth in 2015. (Getty Images photo)
China’s economic growth rate is likely to cool further this year, restrained by sluggish lending, a housing slump and weak global demand, a Reuters poll showed.
The world’s second-largest economy is predicted to grow 7 per cent in 2015, and slow further to 6.8 per cent next year, according to the median consensus of over 40 economists polled Jan. 15-19.
On Tuesday, data are likely to show China’s economy expanded 7.2 per cent in the final quarter of 2014, the slowest pace since the depths of the global financial crisis.
Beijing is in the midst of its worst downturn in a generation, induced in part by government efforts to transform the economy away from a heavy reliance on investment and exports and towards consumption and services.
But a falling property market, brought on by oversupply and overinvestment fuelled by an unprecedented borrowing binge that helped China through the worst of the global crisis, was not planned.
…
Chinese stocks plunge - and new cracks in their housing bubble.
http://www.marketwatch.com/story/china-stocks-plunge-amid-regulator-crackdown-on-margins-2015-01-19
Are the swiss people better off cause their central bank is no longer printing francs to mop up euros?
Were the swiss people subsidizing the eurozone?
Yes, and yes, is my take after reading articles pro and con. With that said, I’m not the sharpest tool in the shed when it comes to the world of finance. Half the time I have no clue what the financial brainiacs are even talking about. A lot of this stuff gives me a headache just to read it, and I’m a fairly literate person.
It all looks so rigged and complex to me.
“Half the time I have no clue what the financial brainiacs are even talking about.”
Something that Greenspan loved to do.
Bahahaha … Congress required that Greenspan testify, now and then, about the happenings at the Fed … so he did!
And he did it in such a way whereby that nobody could understand what he was saying.
“Half the time I have no clue what the financial brainiacs are even talking about.”
Talk to someone who likes to “network” and you’ll get the same feeling.
“I know you believe you understand what you think I said, but I am not sure you realize that what you heard is not what I meant,” the Fed chief once told Congress.
Also,
“The Fed chief has said he does not target stock prices. But he has also said stock prices have a lot to do with inflation, which he targets daily.” — ibid
Also,
“History has not dealt kindly with the aftermath of protracted periods of low risk premiums.”
China, the Swiss Franc, Oil, Global Warming, Politics, blah, blah, blah.
Do NOT buy a house now. Prices are dropping. The New Home Builders will be conducting fire sales as the year plays out. As will flippers, hedge funds, and filthy stinkin Canadians (in Phoenix).
That’s right. I forgot about the Canadizing of Phoenix.
You’re in the drivers seat my friend.
Article 2: Abuse of Power.
(1) He has, acting personally and through his subordinated and agents, endeavored to obtain from the Internal Revenue Service, in violation of the constitutional rights of citizens, confidential information contained in income tax returns for purposes not authorized by law, and to cause, in violation of the constitutional rights of citizens, income tax audits or other income tax investigation to be initiated or conducted in a discriminatory manner.
(2) He misused the Federal Bureau of Investigation, the Secret Service, and other executive personnel, in violation or disregard of the constitutional rights of citizens, by directing or authorizing such agencies or personnel to conduct or continue electronic surveillance or other investigations for purposes unrelated to national security, the enforcement of laws, or any other lawful function of his office; he did direct, authorize, or permit the use of information obtained thereby for purposes unrelated to national security, the enforcement of laws, or any other lawful function of his office; and he did direct the concealment of certain records made by the Federal Bureau of Investigation of electronic surveillance.
(3) He has, acting personally and through his subordinates and agents, in violation or disregard of the constitutional rights of citizens, authorized and permitted to be maintained a secret investigative unit within the office of the President, financed in part with money derived from campaign contributions to him, which unlawfully utilized the resources of the Central Intelligence Agency, engaged in covert and unlawful activities, and attempted to prejudice the constitutional right of an accused to a fair trial.
(4) He has failed to take care that the laws were faithfully executed by failing to act when he knew or had reason to know that his close subordinates endeavored to impede and frustrate lawful inquiries by duly constituted executive; judicial and legislative entities concerning the unlawful entry into the headquarters of the Democratic National Committee, and the cover-up thereof, and concerning other unlawful activities including those relating to the confirmation of xxxxxxx xxxxxxxxxxx as attorney general of the United States, the electronic surveillance of private citizens, the break-in into the office of xx. xxxxx xxxxxxxx, and the campaign financing practices of the Committee to Re-elect the President.
Alex, who is Richard Nixon?
He was a corrupt American President, about 5 or 6 corrupt presidents and 40 years ago.
Who is Barack Obama?
“not even a smidgen of corruption”
Yet the most corrupt in US History.
He facilitated all 6 fake moon landings.
Check down below there are Americans who think MLK was the first African American to walk on the moon.
Is the combustion product of hypergolic fuel as toxic as the fuel itself?
Specifically a 50/50 mix by weight of hydrazine and unsymmetrical dimethylhydrazine and N2O4 oxidizer?
Blah blah blah.
Iceland alone in the western world is standing up for its citizens against the banksters.
http://market-ticker.org/akcs-www?post=229753
.Because lukewarmists have to be lukewarm
http://www.theregister.co.uk/2015/01/19/no_scientific_consensus_on_2014_hottest_year_on_record_claims/
Did ebola just sort of disappear?????
http://www.foxnews.com/politics/2015/01/19/us-built-ebola-treatment-centers-reportedly-sit-empty-in-liberia/
Wow no kidding. One month the number of cases were projected to grow to the sky; the next month nary a mention in the MSM.
By the way, something similar happened with respect to the SARS outbreak in 2003, as the number of cases grew exponentially at the outbreak, only to stop growing entirely a short time later.
Except there wasn’t a rushed investment to create SARS treatment centers just in time for them to not be used.
Link: newgeography dot com/content/004829-international-housing-affordability-2014
“The just released 11th Annual Demographia International Housing Affordability Survey shows the least affordable major housing markets to be internationally to be Hong Kong, Vancouver, Sydney, along with San Francisco and San Jose in the United States.”
The article contains a link to the New Zealand Herald website, which has an interactive map of the data. I thought it was pretty cool, but I love maps.
There’s one thing about comparing median incomes to median housing prices that seems flawed to me. If the housing ownership rate in the U.S. is 63% to 66%, and we assume that the poorest households are chronic, long term renters, wouldn’t it make more sense to compare a higher income percentile to the median house price?
For argument’s sake, let’s say the poorest 30% of incomes will never have the resources to own a house, leaving 70% of households as the real market. If we take the mid point of the 30th percentile and 100th percentile of incomes the result is the 65th percentile of incomes.
Here’s the takeaway: isn’t it a more accurate measure of affordability to compare the median housing price to the 65th percentile of incomes?
What is your point?
Read the last sentence.
Considering resale housing prices are priced 3x over long term trend and 2x construction cost(lot, labor, materials and profit), there is no discussion of “affordability”. “Affordability” is a realtor marketing technique to scam the public.
And remember…. If you have to finance it for 15 or 30 years, it’s not ‘affordable’ nor can you afford it.
Have you ever gone a day without posting here at least a dozen times?
Is this your full time job?
You are the biggest shill on this site.
Stick with the data my friend. Data.
So your point is houses are more affordable by your statistical canard?
Why did we go from an economy based on production of working people to an economy heavily dependent on rising asset prices such as stocks and homes?
When did this happen and why did it happen? Growing up I never remember such focus on stock and homes prices.
I don’t think of it as more or less affordable. The concept he describes helps explain how it can come to pass that prices are so high and incomes are not.
Now do you really think incomes are going to double to meet grossly inflated prices?
Of course not.
Prices will continue cratering until they meet incomes. That’s how markets work.
Why did we go from an economy based on production of working people to an economy heavily dependent on rising asset prices such as stocks and homes?
For a second there I though that you were talking about declining birth rates.
When did this happen and why did it happen? Growing up I never remember such focus on stock and homes prices.
Part of it is due to the replacement of defined benefit pensions with self-managed 401k and IRA plans.
Part of it is due to the replacement of defined benefit pensions with self-managed 401k and IRA plans.
+1. We are all speculators, now…
And in the balance hangs our freedom and leisure, or our enslavement and toil.
Heck of a way to organize an economy. Gamblers gonna gamble. And the house always wins.
“…isn’t it a more accurate measure of affordability to compare the median housing price to the 65th percentile of incomes?”
Wouldn’t that approach tend to ignore your hypothetical ‘30% of incomes’ who ‘will never have the resources to own a house’? And how would it reflect those like some on this board who do have the resources to buy a house but choose less risky investment allocation strategies?
I think you will see the flaw in your approach if you imagine that 90%, not 30%, could afford to buy a home; in that case, your affordability measure would only reflect the top 10% wealthiest members of society’s housing budgets, ignoring a huge affordability problem.
Couldn’t afford to buy
..
As I note above, don’t think of it as an affordability measure, but think of his way of thinking as a way to understand the market.
In your world example (90% can’t buy), homeownership rate is probably VERY low, say 10-20%. In that world, you could scream that homes are very unaffordable as measured by income median, but you would be wrong in assuming that prices are going to collapse–because home may very well be affordable for the small percentage who are actually buying them.
Is this situation desirable? No. Is it a possible stable market? Yes.
Prices are already falling for that reason and due to the massive excess inventory of defaulted and empty houses.
This is an issue of mispricing.
A discussion of the magnitude of the adjustment is another topic altogether and starts to get into the weeds and down the rabbit hole. That’s not my intention here. My intention is to point out that the two data metrics are misaligned.
My point is that comparing median incomes to median housing prices seems to be skewed and some sort of adjustment to align the populations would result in a more accurate measure.
Some people walk, others ride mass transit, and some operate their own vehicles. All of these are examples of transportation solutions and usually the solution is a function of one’s income.
Housing is in its most base form is nothing but shelter. Moving beyond the basic need for shelter housing becomes a consumer good, and beyond that, a status symbol for some.
Call me old fashioned and frugal, but I don’t think migrant strawberry pickers (or any other occupation for that matter) should be looking to buy a level of housing beyond their means.
The rabbit holes are these discussions that detract from the issue of price. Which is precisely what you’re doing here.
Let’s address the mispricing issue which is near universal across every single business but especially as it relates to mortgages, houses, etc.
If the housing ownership rate in the U.S. is 63% to 66%, and we assume that the poorest households are chronic, long term renters, wouldn’t it make more sense to compare a higher income percentile to the median house price?
Yes, it does make sense.
I made the same point here on the HBB back in 2006/7, IIRC.
That said, median income is a much easier statistic to obtain. And it’s probably “close enough”, even if it ends up being closer to the 33rd percentile of the pool of homebuyers. The ratio between median income and median house price should still be relatively stable unless there is a huge shift between the 50th percentile and the 66th percentile.
But if you are in a market where the homeownership rate is closer to 50% (California is at 54%), is the ease of obtaining the statistic outweighed by it’s lack of usefulness?
Now overlay the fact that Prop 13 in California allows many people to stay in the house in which they raised their family long after they retire (and have little income)–a significant number of the 54% have below substantially below median income levels.
How useful is the median income test then?
But if you are in a market where the homeownership rate is closer to 50% (California is at 54%),
How much has that ratio fluctuated over time, RW?
I would argue that the ratio should still be relatively comparable over time. There have always been retirees with low incomes in the homeowner pool—that isn’t new and different. So across a sufficiently large population, the ratio should still be meaningful.
Per FRED (St. Louis Fed), from 1984 until today:
CA homeownership rate:
Was about 54% from 1984 to 1990. Then went up a couple of points to 56% by about 1993. Then roughly flat until about 1999-2000, then increased to 60% by about 2005. Then steadily fell back down to 54% by about now.
I think people need to take care when looking at median income/median home price measures (especially if they are trying to predict direction of prices based on that measure). All else equal, it could be a good comparative measure as you note. However, all-else is frequently not equal.
If the homeownership rate is substantively different, then the measure is less useful for comparative purposes. If interest rates are substantially different from one comparison point to another, likewise.
Said another way, comparing median price/median income is less useful if you are comparing Alabama (74% homeownership) to CA (54%) today, or the same measure in CA in 1984 (10-year over 10%) vs. today (despite the homeownership rate being about the same).
FRED is garbage data anyways.
What’s more important is the fact that current sale prices are 3x higher than long term trend.
PIC-
The reason I raise Prop 13 in the context of this conversation is that while it is quite common for retirees to still own a home with low income in every state, it is less common for property taxes to remain very low by statute. If property taxes keep going up, it increases the likelihood that people downsize, move to cheaper neighborhoods, etc. All else equal, abolishing Prop 13 would increase the number of sales of more expensive homes (thus increasing the supply of more expensive homes on the market…and driving down prices).
With 70 million boomers just beginning to expire leaving another 35 million excess empty houses, the only neighborhood they’re moving to is the graveyard.
Data Rental_Fraud data.
While those boomers are retiring, living out their retirement, and ultimately, like all of us, dying, there will be people who are kids now, who will go to college, get a job, get married and have kids.
The combination of the two results in a continually increasing population–which requires a continually increasing amount of shelter.
With population growth at all time record lows and 25 million excess empty houses and another 35 million on the way, I don’t think anyone is too concerned with more “shelter” Rental_Fraud.
Meanwhile in Latin America……
http://www.miamiherald.com/news/local/news-columns-blogs/andres-oppenheimer/article5232387.html
CraterRage® Photo Of The Day
http://goo.gl/xjxeYK
Looks like a Green Bay fan, IMHO.
It’s a millennial who just realized his leased Golf GTI, iphone contract and rent on the urban loft exceeded his pay by $1,000/month. Oh, and the deferred student loans are due next month.
+1 The millennials won’t be funding any boomer retirement plans.
Richest 1 Percent To Own More Than Half Of The World’s Wealth By 2016
http://www.reuters.com/article/2015/01/19/us-davos-meeting-inequality-idUSKBN0KS0SW20150119
As a moderate Dem, I applaud capitalists who create wealth the old fashioned way. OTOH, I despise rent-seekers.
As a moderate Dem, you are one of the 95% of the electorate who bend over and spread their cheeks for the Wall Street-Federal Reserve looting syndicate and their crony capitalism. Get back to your grazing, sheep.
And more than two people on this blog worship E Warren, because she talks against corporations, even though she supports the export-import bank
http://www.usatoday.com/story/opinion/2014/09/29/export-import-bank-elizabeth-warren-fdr-corporations-column/16385923/
Just like Republicans who talk small government and turn around and support big defense.
The 2016 election between Democrats and Republicans will be another yawner with the 2 or 3 people worshipping their Warren God even though she has dirt.
“Fauxahauntas” Warren (about as Indian as I am) has gotten fawning reviews in the MSM as a [phoney] champion of the middle class, but her list of contributors (go to open secrets dot org) tells a different story.
http://www.ocregister.com/articles/great-352668-warren-elizabeth.html
+1 Pocahontas appreciates the soft money.
“I despise rent-seekers.”
How do you define “rent-seekers”?
I’ll help refine my question:
Do you consider my parents “rent seekers”, who worked a middle-class life, worked their a$$es off for many decades, saved diligently (401k, IRA, etc.), and are now looking to earn a return on their saved capital as the primary way to fund their retirement?
and are now looking to earn a return on their saved capital as the primary way to fund their retirement?
Sounds like “rent seeking” alright!!
“Rent seeking” == the word du jour to use for demonizing those who have a cent of capital to their name, and would like to see a return on said capital.
Rent seeking is using the government to gain wealth without creating any new wealth. It’s not about investing, except maybe in lobbyists, lawyers, and politicians.
So if I own a property, for example, and I seek to earn a reasonable rent from that, then that isn’t “rent seeking”?
Odd.
Maybe you need to pick a new word to describe the corrupt manipulation of return by government intervention, then—as there is nothing wrong with seeking a reasonable rent.
Can’t we just call it ‘corruption’? Or ‘government capture’?
Crude Oil Drops on Iraq Output While Swiss Stocks Advance
By Stephen Kirkland and Julia Leite
Jan 19, 2015 8:41 AM PT
Oil fell after Iraq said it’s producing a record amount of crude. Switzerland led gains in European stocks and the franc weakened, while Chinese shares tumbled the most in six years as regulators cracked down on margin lending.
West Texas Intermediate oil slid 2.2 percent to $47.61 a barrel at 11:27 a.m. in New York. The Swiss Market Index jumped 3 percent, rebounding from a one-year low, as the Stoxx Europe 600 Index added 0.1 percent. The Shanghai Composite Index fell 7.7 percent and China’s credit risk rose to a 10-month high. Japan’s 10-year bond yield dropped to a record. The franc fell against the euro a second day, while Denmark’s krone led gains among major currencies as the central bank cut its deposit rate. U.S. markets are closed for Martin Luther King Day.
…
As I reported last week Iraq is double counting its exports. The MSM has not caught it yet, but the smart money has and will be buying since counting Kurdish oil twice does not produce any real barrels.
Keep an eye on Saudi Arabia.
http://globalguerrillas.typepad.com/globalguerrillas/2015/01/saudi-arabia-on-the-edge-of-an-abyss.html
Has anything has changed yet?
Federal Employees Who Don’t Pay Their Taxes ‘Should Be Fired’
http://www.fedsmith.com/2012/01/24/chaffetz-federal-employees-who-dont-pay/
I would rather have a choice: Either fire them or repeal the 16th amendment.
Federal employees who are a waste of other people’s taxes should also be fired.
Sorta dumb to fire the employee as they will no longer have a source of income to pay the back taxes. It would be a lot smarter to simply garnish their pay.
Who owns or controls the Federal Reserve?
Google is your friend. Hint: it has no accountability to the 99%.
If the Fed Has Nothing to Hide, It Has Nothing to Fear
The American people have suffered long enough under a monetary policy controlled by an unaccountable, secretive central bank
by Ron Paul | Infowars.com | January 19, 2015
Since the creation of the Federal Reserve in 1913, the dollar has lost over 97 percent of its purchasing power, the US economy has been subjected to a series of painful Federal Reserve-created recessions and depressions, and government has grown to dangerous levels thanks to the Fed’s policy of monetizing the debt. Yet the Federal Reserve still operates under a congressionally-created shroud of secrecy.
No wonder almost 75 percent of the American public supports legislation to audit the Federal Reserve.
The new Senate leadership has pledged to finally hold a vote on the audit bill this year, but, despite overwhelming public support, passage of this legislation is by no means assured.
The reason it may be difficult to pass this bill is that the 25 percent of Americans who oppose it represent some of the most powerful interests in American politics. These interests are working behind the scenes to kill the bill or replace it with a meaningless “compromise.” This “compromise” may provide limited transparency, but it would still keep the American people from learning the full truth about the Fed’s conduct of monetary policy.
Comment by phony scandals
2015-01-19 13:41:25
If the Fed Has Nothing to Hide, It Has Nothing to Fear
infowars.com/if-the-fed-has-nothing-to-hide-it-has-nothing-to-fear/
Realtor.com
Sale price: $15.375 million
Monthly payment: $59,576*
Amenities:
12,705 square feet
7 bedrooms
10 bathrooms
1 acre
Oscar Award-winning actor Matt Damon has sold his Miami Beach mansion, according to Realtor.com. It was originally listed for $20 million in 2013.
Called “Maravilla,” Damon’s estate is on a double lot on Biscayne Bay and features a gourmet kitchen, rooftop terrace with views of the property and bay, home theater, wine cellar and a pool house with summer kitchen.
*Editor’s note: To calculate the monthly principal and interest, we used the average rate on a jumbo mortgage in Bankrate’s survey for the week of Dec. 10, 2014, when the sale closed. We assumed a 20 percent down payment. Use Bankrate’s mortgage calculator to figure out your monthly payment.
Read more: http://www.bankrate.com/lite/real-estate/sold-celebrity-house-matt-damon-1.aspx#ixzz3PHu6KqMs
Follow us: @Bankrate on Twitter | Bankrate on Facebook
Hmm… paid $14.5 million 10 years ago and dumped 3 million more in it.
Helluva investment there Matt.
“This is a great all-purpose sporting/hunting knife that has served me well over the years. Need the money now, so, it has to go.”
Another eBay ad, “Need the money now…”
Music to my ears!!
That leased car you got suckered into last year? Yeah, half price baby!!
I see adds like that on craigslist too. As a seller you don’t want people to know your desperate right?
lol….. larry fink is a joke. What a deluded man.
Video: Some Americans Think Martin Luther King Just Died
First African-American to walk on the moon?
by Paul Joseph Watson | January 19, 2015
Almost three decades after Americans first observed Martin Luther King Day, some beachgoers in San Diego believe that the civil rights leader only just died, with others thinking that King was the first African-American to walk on the moon.
Americans Forget Martin Luther King and What He Did - First African …
http://www.youtube.com/watch?v=S-znXUMp0qk - 209k - Cached - Similar pages
7 hours ago … Americans Forget Martin Luther King and What He Did - First African American to Walk on the Moon!?
Last year was better.
Forgetting Martin Luther King and His Legacy - YouTube
http://www.youtube.com/watch?v=_-6RlheSQkM - 410k - Cached - Similar pages
Nov 11, 2013
http://www.zerohedge.com/news/2015-01-19/next-time-around-feds-are-going-have-confiscate-stuff
Enjoy the $2.50-a-gallon fill-ups while you can, grasshoppers, because when the current crop of fast-depleting shale oil wells dries up, that will be all she wrote. When all those bonds held up on their skyhook derivative hedges go south, there will be no more financing available for the entire shale oil project. No more high-yield bonds will be issued because the previous issues defaulted. Very few new wells (if any) will be drilled. American oil production will not return to its secondary highs (after the 1970 all-time high) of 2014-15. The wish of American energy independence will be steaming over the horizon on the garbage barge of broken promises. And all, that, of course, is only one part of the story, because there is the social and political fallout to follow.
America is preoccupied checking their Facebook feed to be bothered with such macro events.
America is preoccupied going after “Mooslums” who chopped off the heads of three people while cops in American cities offed an average of three citizens per day in 2014 alone.
Good post. What is really going on is Saudi Arabia is throwing a hail Mary post to try to take down Iran because it will soon be apparent that power is shifting to the Shiites. Yemen is another example of this. The Saudi’s oil fields are playing out. But for the politics, it would want to cut oil production to get the maximum price for its oil as it runs out. Instead it jumped on the opportunity that Obama offered them to combine to try to hurt Iran and Russia (who supports Syria and Iran). When the oil starts to run out, Iran will be support the Shiites in Saudi Arabia to push out the monarchy. Saudi Arabia has never been a true friend to the U.S. but we have protected their monarchy and in return they use their oil production to support us when asked. They would never wage war on shale oil producers if we did not green light lower oil to punish Russia.
Putin must be very happy about the demise of an industry that could have kept oil prices reasonable for years if Obama had not overreached and driven oil prices to well below costs:
MELBOURNE, Jan 19 (Reuters) - BHP Billiton Ltd may be forced to slash its planned $4 billion spending this year on U.S. shale wells and book writedowns on its shale assets as it battles plunging prices for its biggest earners iron ore, oil and copper. The mining giant, which has cut capital spending for the past two years, needs further savings to have enough cash to meet a promise not to reduce its dividend, analysts and investors said, with some tipping it could slice its U.S. onshore drilling budget in half. The spending cuts could come as soon as Wednesday, when BHP will release its December quarter operational review. U.S. onshore drilling, the biggest single item in the company’s capital budget, is seen as the easiest target after a 41 percent plunge oil prices, 16 percent drop in iron ore prices and 12 percent drop in copper prices over the past three months. Other candidates for cuts in its $14.2 billion capital and exploration spending plan could be its longer-dated projects like BHP’s Canadian Jansen potash project and Australian Olympic Dam copper expansion study. “When you are pushed up against the wall you have to make some difficult decisions, so all those things are possibilities. Commodity prices are falling very quickly, very sharply,” said Richard Knights, an analyst at London-based investment bank Liberum. Shale drilling is much easier to shut than conventional oil and gas wells as individual wells are smaller, making it a logical target for cuts. It is not expected to cut spending on its conventional wells in the Gulf of Mexico. Writedowns on the shale assets, which BHP acquired in 2011 for $17 billion when gas prices were much higher, are also inevitable, analysts and investors said, based on a much weaker outlook for forward prices. BHP declined to comment on Monday on the possibility of expenditure cuts or the outlook for it shale business. The Anglo Australian giant’s attributable profit in the year to June 2015 is forecast to slide 23 percent to $10.7 billion, according to Thomson Reuters I/B/E/S. As of June 30, 2014, the company valued its onshore U.S. business at $26.95 billion, after taking a $2.8 billion writedown on some of its shale gas assets in 2012. - See more at: http://www.rigzone.com/news/oil_gas/a/136832/BHP_Tipped_To_Cut_US_Shale_Spend_To_Shore_Up_Dividend_Promise/?all=HG2#sthash.zIM0g9gP.dpuf
P.S. Gasoline is not $2.50 but $1.54 at Costco in Albuquerque.
The suckers who are paying full retail for new SUV’s today or gonna get clobbered!!
And just recently I saw that Toyota dropped its smallest Scion, the IQ. Not that I would buy that one. Corollas and Camrys are fine enough. But I am thinking the temporary drop in the price of gasoline made such a small car unprofitable.
Come on people, load up on Escalades! Ha Ha!
HA ha. Fur shur! I’d drive the Sequoia now when gas is cheap and then drive the IQ when gas goes over $3. Now that’s HYBRID!
This article explains at the end that the nice thing is Americans are well-armed.
AR-15 is one of the most popular firearms sold in the USA.
5-6 USD a barrel.
“AN EFFECTIVE cartel requires three things: discipline, a dominant market position and barriers to entry. The Organisation of the Petroleum Exporting Countries lacks all three. Its members cheat on their quotas. It supplies only 30% of the world’s oil—too little to exercise control. New producers abound.
That is the backdrop to OPEC’s decision last month to make no attempt to bolster the oil price, sending it below $70 a barrel—a near 40% drop since June. Saudi Arabia, its most influential member, could have sent the price up single-handedly by deciding to pump less. Unlike cash-strapped oil exporters such as Venezuela, the kingdom can afford self-denial: it has savings of $900 billion.
But Saudi Arabia can also weather a low price: its production costs are $5-$6 a barrel—the lowest in the world.Moreover, history suggests most of the gains from any cut in its output would go to other producers, who would sell their oil for more while increasing their market share. ”
http://www.economist.com/news/finance-and-economics/21635510-what-oil-cartel-up-making-best-low-price
Oxfam says top 1% to own greater than 50% of the wealth by 2016. I’ll predict by 2020 the top 0.1% will own 50%. Is it any wonder the velocity of money is grinding to a halt. We used up he wealth distribution the U.S. accumulated and now the U.S. is more and more resembling the rest of the third world full of poverty nepotism and control by the elite.
The rich are getting richer, the poor are getting poorer, and the middle class is going extinct, while the vegetables continue to vote for the crony capitalist status quo.
http://www.zerohedge.com/news/2015-01-19/spot-trend-richest-1-are-about-own-over-half-global-wealth
Pigmen gonna pig.
Everyone Must Check In
Jupiter, Florida
Constitution Free Zone
Region IV
Estimated median house or condo value in 2012: $236,001 (it was $140,700 in 2000)
Jupiter: $236,001
FL: $148,200
Mean prices in 2011: All housing units: $449,522; Detached houses: $549,631; Townhouses or other attached units: $292,506; In 2-unit structures: $261,777; In 3-to-4-unit structures: $265,736; In 5-or-more-unit structures: $340,193; Mobile homes: $149,962; Occupied boats, RVs, vans, etc.: $28,887
Median gross rent in 2012: $1,371.
Read more: http://www.city-data.com/city/Jupiter-Florida.html#ixzz3PIpo4TcO
Jupiter, Florida
Constitution Free Zone
Region IV
Single-family new house construction building permits:
1997: 201 buildings, average cost: $171,200
1998: 566 buildings, average cost: $156,300
1999: 653 buildings, average cost: $189,600
2000: 503 buildings, average cost: $221,200
2001: 560 buildings, average cost: $201,700
2002: 397 buildings, average cost: $276,300
2003: 634 buildings, average cost: $263,100
2004: 591 buildings, average cost: $241,900
2005: 772 buildings, average cost: $230,400
2006: 313 buildings, average cost: $333,500
2007: 162 buildings, average cost: $375,300
2008: 245 buildings, average cost: $336,900
2009: 134 buildings, average cost: $387,200
2010: 176 buildings, average cost: $320,000
2011: 196 buildings, average cost: $358,400
2012: 262 buildings, average cost: $344,800
Read more: http://www.city-data.com/city/Jupiter-Florida.html#ixzz3PIte81rq
Average sucker price maybe.
Racial breakdown of suckers in
Jupiter, Florida
Constitution Free Zone
Region IV
White alone - 45,578 (82.7%)
Hispanic - 7,173 (13.0%)
Asian alone - 1,102 (2.0%)
Two or more races - 631 (1.1%)
Black alone - 340 (0.6%)
Other race alone - 234 (0.4%)
American Indian alone - 75 (0.1%)
Read more: http://www.city-data.com/city/Jupiter-Florida.html#ixzz3PJF5o9ge
1998 566 buildings, average cost: $156,300
I wonder how many of these were cash out refied up to $350 by 2007 causing job loss and cancer for the original owner?
What do you think of the new proposal to tax the 0.1% on their capital gains at the same marginal rate the middle class is taxed on their labor income?
One question to ponder: Will discussion of this possible tax increase spark a race to the exit?
Yea like there is a chance in hell that this proposal would pass after an election that was a historical win for the Republicans.
However, had he proposed it when he had overwhelming majorities in the House and Senate, it would have caused a sell off. Perhaps why it was not proposed?
to me it should be backwards short term treat it like ordinary income then 20-15-10- 5%..the longer you hold it..no tax after 15 or so years
I’d have less of a problem with equating cap gains and ordinary income if your basis in your investments was indexed to inflation.
BTW, Simpson Bowles proposed something akin to this. They proposed making capital gains and ordinary income rates equivalent, but revenue neutral. The highest marginal rate they proposed was in the 20’s.
That would definitely get more money into the hands of the middle class, and take it out of the 0.1%.
ok so the cost basis of a 40 year home in 1975 $40K selling today at $500K but inflation adjusted it’s $193K that still could be a lot of tax if you bought in a very desirable area.
http://data.bls.gov/cgi-bin/cpicalc.pl
I’d have less of a problem with equating cap gains and ordinary income if your basis in your investments was indexed to inflation.
+infinity. If you end up with exactly the same value after inflation, there should be no tax due. The phantom tax that would accrue merely due to inflation is a horrible thought.
BTW, Simpson Bowles proposed something akin to this. They proposed making capital gains and ordinary income rates equivalent, but revenue neutral. The highest marginal rate they proposed was in the 20’s.
Perfect. I would definitely support it in this form. Revenue-neutral means that they would cut rates for wage-earners to balance out the gains due to the taxes on the seriously wealthy—who today pay a much lower rate than do we wage-earners.
2015 could be a year for gold to break through $1350 in USD. The POG is exploding in many other currencies worldwide. Out of sight, out of mind for those who are in USD assets. But the demand for gold is not falling at all it seems.
http://goldsilverworlds.com/price/gold-price-exploding-in-all-currencies-worldwide/
If Draghi launches another massive “stimulus” it will be the tipping point for precious metals, as nobody in their right mind will continue to trust in the “faith and credit” of central banks that are creating trillions out of thin air.
The POG is exploding in many other currencies worldwide.
That merely because those currencies are weakening.
That merely because those currencies are weakening.
That’s how it’s always been. In reality, it’s not gold that changes, it’s the value of the currency it’s based in that changes.
That sounds right. And when a currency war is being fought on all continents with developed economies, one would expect higher gold prices as a natural consequence.
And one would also expect larger-than-normal swings in price to result.
So, ladies, how’s that corrupt, centrally-planned socialist Argentine kleptocracy working out for you?
http://www.reuters.com/article/2015/01/16/us-argentina-economy-imports-idUSKBN0KP2A920150116
“The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents – #43 added $4 trillion by his lonesome, so that we now have over $9 trillion of debt that we are going to have to pay back — $30,000 for every man, woman and child. That’s irresponsible. It’s unpatriotic.” -
Barack Obama, July 3, 2008
U.S. National Debt Clock : Real Time
http://www.usdebtclock.org/ - 117k -
Candidate Obama said what the sheeple wanted to hear. Once in office, he continued exactly the same policies as his predecessor. So will Hillary. So will Jeb. So will Mitt. So will every other establishment Republicrat candidate.
BULLSEYE
And yet retards will vote for them, then wonder why nothing changes.
“And yet retards will vote for them, then wonder why nothing changes.”
Agreed.
Now do you have any suggestions how to change this?
Now do you have any suggestions how to change this?
mass extinction event?
DA: Landscaper Says ‘Illegal Immigration’ Made Him Smash Dump Truck Into Macy’s, Steal ATM
“I can’t compete with all the illegal immigration; they’re taking over and they work for nothing”
by Ryan Bonner | Smithtown Patch | January 19, 2015
A landscape contractor from Glen Cove told police that he and an accomplice stole a dump truck from a cemetery, smashed it through the Smith Haven Mall Macy’s and then fled with an ATM last month because of the “hard times” caused by the influx of immigrant labor, according to Suffolk County District Attorney Thomas Spota.
Garrett Landry, 26, will be arraigned on a grand jury indictment in Riverhead Friday morning stemming from the incident last month, Spota said.
According to Spota, Landry, the owner-operator of Garland Contracting, a Glen Cove firm specializing in landscape and masonry construction, told Suffolk detectives that “times are hard right now” and “I can’t compete with all the illegal immigration; they’re taking over and they work for nothing.”
Landry, along with an accomplice who has yet to be caught, allegedly hot-wired and stole a dump truck from a Coram cemetery and then drove it to the Lake Grove mall, where the pair backed the truck through the glass doors of Macy’s in order to steal the ATM in the vestibule early on the morning of Dec. 30, Spota said.
Senor Landry es muy stupido
when are the chinese going to stop buying treasuries?
Who is gonna step up to the plate and absorb the treasuries once they quit buying?
You know its coming. Of course you will pretend no one saw it coming.
ECB May Deliver $635 Billion to Steer Euro Away From Deflation
http://finance.yahoo.com/news/draghi-push-seen-delivering-635-075550674.html
End result: Cratering demand
This is what happens when society turns a blind eye to official corruption. This will be California law enforcement in another 20 years.
http://www.borderlandbeat.com/2015/01/police-intent-on-extortion-and.html
phony scandals