The Housing Bubble

Mo Credik

The only exception is a tax on foreign holdings.

2 + 2 = land sales revenue is off by 30%.

I have read that elsewhere.

They are really screwed.

“One problem China has not implemented property taxes yet. It is one of the reforms that soon will be implemented.”

And these taxes will add to the expense of owning property.

“China has not implemented property taxes yet. ”

One has to wonder how that will be done. Like all States, they will start very low when they implement property taxes to make it seem insignificant and people will be the frogs in the sauce pan as the water is tepid. All states turn up the temperature until it’s unbearable and it’s too late for the frogs in the pan. But China is new to that type of thing. They might make the temperature unbearable immediately.

At least those governments are blatantly less pretentious about having “consent of the governed” than the American government. Democracy is the recognition that government needs some type of smoke an mirrors to make the sheople believe that they consented. So that the people provide their own jar of vasoline.

Of course, in China “property tax” is really just a form of rent paid to the government because the property owner doesn’t really own the land. Land ownership is actually an exclusive use agreement to borrow The People’s land for a fixed period of time.

Second and third tier city budgets are already crashing because the land sale scam isn’t generating revenue anymore. Beijing is worried that first tier cities will soon have the same problem. Municipal debts alone will take up a significant chunk of reserves the national government will have to pay for, and the bill for the bad loans the banks own will be just as big. China can’t sell its U.S. bonds without spiking the Yuan, so where is it going to get the money?

“So which country is the FB?”

Both?

that should be ignore fed and non-private (like social security)

The total Chinese debt national and local is equal to 60% of the GDP

But what about China’s private-sector debt, the highest in the world? It’s only the best predictor of economic crashes.

“You can see how China’s private-sector debt has surged past everyone, nearing 200% of GDP.”

Read more: http://www.businessinsider.com/chinese-private-sector-debt-2014-3#ixzz3PqnWyyjJ

The money in the banks was loaned out to zombie companies that will never be able to pay it back. The government has been frantically trying to get a handle on the debt situation for years. The fact that they are not done yet is not a good sign.

Pretty insignificant when you consider the $24 Tr debt pyramid piled on top of it.

Pictoral essay of China’s horrendous ecological mess.

http://www.theburningplatform.com/2015/01/25/pictorial-essay-china-stinks-no-really-china-stinks/

The banks used the shadow banking system to loan that money to bankrupt developers and companies, and state owned firms that have never earned a profit. That money is gone forever.

Savers must be ruthlessly punished until they are herded into Wall Street’s rigged casino where the House always wins.

“This has been touted as a plan to hike taxes on the rich to help the middle class”
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From a speech at the University of Rhode Island in November 2012, and at this point in the speech Jonathan Gruber is talking about the Cadillac tax again.

“Until a second Massachusetts hero arose, John Kerry. John Kerry said no, no we’re not going to tax your health insurance, we’re going to tax those evil insurance companies. We’re going to impose a tax that if they sell health insurance that’s too expensive, we’re going to tax them. And conveniently the tax rate will happen to be the marginal tax rate on the income tax code. So basically it’s the same thing: we just tax insurance companies, they pass on higher prices that offsets the tax break we get into being the same thing. It’s a very clever basic exploitation of the lack of economic understanding of the American voter.”

And when the herd of empty pocketed fools move in the other direction?

KEEEEEEEEEEEEEEEEEYRAAAAAAAAAAAASH!

Happens every time.

There are countless walkable communities in the US with much lower cost of living.

Larry, its why Austin is growing and Detroit never will?

To me its all about functional illiteracy, if 60% of peeps in Detroit have very poor skills why would companies move there? Sure it maybe a lot cheaper then Austin but where do you get top quality workers when Austin has them by the boat load?

If you like your sh*tty walkscore, you can keep your sh*tty walkscore

Yes, Detroit did so well after they drove whitey out.

Bahahahahahaha … keeping the victim mentality alive = WIN!

“Leave it to a white academic elitist, beset with “white guilt” no doubt, to corrupt the minds of young Americans with a theory driven by identity politics that has little basis in reality.”

Wrong. I doubt if this “academic” has one lick of “white guilt”.

This is basically about a war between two groups of whites who hate each other with a passion, and one group uses people of color as foot soldiers against the other group, which basically just wants to be left alone.

Also this is the Washington version of Gladiator Games in the Coliseum.

As for those shrieking about Greece’s sacred duty to pay off all its debts, I present Michael Hudson’s mantra of perfect logic:

“Debts that can’t be repaid, won’t be repaid.”

The narrative was that after “taking their medicine” that countries like Spain and Greece would come roaring back. Apparently that hasn’t happened and the locals don’t believe it ever will happen. All they see is the looting of their countries.

The worst thing about a commodities bubble bursting is that it ever grew in the first place.

“Now, how are we going to meet demand when oil shale production begins to plummet?”

The usual way: If production goes down, and the gasoline glut wanes, then prices will rise to the point where supply and demand are in balance. But the futures markets suggest that price will be around $55/bbl by year end, not $80.

How do you make up the numbers and facts you throw out here?

My read of this article is that the 5.1% increase in deliveries was met by a 16 percent increase in output, resulting in the largest oil glut since the Great Depression.

Small wonder the world is swimming in oil and traders are shipping it off to sea!

U.S. December Oil Glut Highest Since Depression, API Says
By Mark Shenk Jan 23, 2015 12:00 PM PT

U.S. crude inventories in December surged to the highest level for the month since 1930 as production climbed, the American Petroleum Institute said.

Stockpiles rose 7.4 percent from last year to end December at 383.5 million barrels, the industry-funded group said Friday in a monthly report. The U.S. shale boom sent crude production to the highest level for the month since 1972, moving the country closer to energy independence. The combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies from shale formations in the central U.S.

“This report spotlights what’s been a wonderful story over the last four years,” John Felmy, chief economist at the API in Washington, said by phone. “Horizontal drilling and hydraulic fracturing increased production from shale fields. There have also been gains in deep-water drilling and Canadian oil sands that have left us with a lot of crude.”

Crude output rose 16 percent from last year to end December at 9.12 million barrels a day, the highest level for any month since February 1986, according to the API. Production of natural gas liquids, a byproduct of gas drilling, climbed 19 percent to a record 3.18 million barrels a day.

Refinery inputs gained 1.9 percent from December 2013 to 16.7 million barrels a day, a record for the month. Production of gasoline advanced 1.8 percent to 9.66 million barrels a day, a record for December. Output of distillate fuel, a category that includes heating oil and diesel, increased 2.8 percent to 5.23 million.

Total imports of crude and fuels rose 1.3 percent from a year earlier to 9.66 million barrels a day in December, the highest level for 2014. Exports of refined products slipped 8.1 percent to 4.23 million barrels a day last month.

Total deliveries of petroleum products, a measure of demand, increased 5.1 percent from a year earlier to 20 million barrels a day in December. Demand rose for every major category.
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Bahahahaha … I’m glad there exists an ISIS … otherwise one would have to be invented.

“the “defense” industry secures congressional votes by spreading its facilities throughout the country. That helps ensure their survival in the face of a call for budget cuts.”

Pretty slick.

Credit Markets
U.S. Government Bond Yields Drop, Europe’s Are at Record Lows
ECB’s Stimulus Likely to Boost Prices at a Time When Demand Is Already Strong
By Min Zeng
Updated Jan. 23, 2015 3:40 p.m. ET

Government bond yields on both sides of the Atlantic tumbled to historic lows on Friday, the latest ripple from Thursday’s decision by the European Central Bank to support economic growth with a monetary stimulus plan.

The 10-year yields in Germany, France, Belgium, Finland, Austria, the Netherlands, Spain, Italy, Ireland and Portugal all fell to record lows, extending the declines of the past months.

In the U.S., the yield on the benchmark 10-year note fell toward a 20-month low. The yield on the 30-year Treasury bond settled at a record low. Bond yields fall when their prices rise.

Investors have been piling into both stocks and government bonds following ECB President Mario Draghi ’s announcement on Thursday that the central bank will buy a total of EUR60 billion ($67 billion) a month in assets, including government bonds. The ECB said the buying will start in March and run through September 2016.

Bond buyers believe the buying binge by the ECB will boost asset prices at a time when demand for bonds, especially high-grade government bonds, remains strong due to the uncertain global growth outlook.

“In today’s $100 trillion global supermarket of bonds, the shelves will be further emptied by the ECB’s bond-buying program, supporting bond prices,” said Tony Crescenzi, senior market strategist at Pacific Investment Management Co. in Newport Beach, Calif., which had $1.68 trillion in assets under management at the end of 2014.

Lower yields on government bonds could be a boon for the housing market as they push down mortgage rates. Companies also benefit by locking in favorable borrowing costs when selling new debt.

But lower yields mean investors have to make do with lower income, pushing many to dial in to riskier bonds for higher yields. Investors also caution that bond buyers may be vulnerable if sentiment sours on bonds, as slim yields offer a thin layer of protection against the risk of capital losses.
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In late afternoon trading, the yield on the benchmark 10-year Treasury note was 1.814%, compared with 1.898% on Thursday. The yield had closed at 1.777% on Jan. 15, the lowest level since May 2013. The yield was 2.173% at the end of 2014.

The yield on the 30-year Treasury bond closed at 2.391%, breaking below the previous record of 2.399% on Tuesday.

The ECB joins the ranks of the Federal Reserve and other major central banks in tapping the unconventional monetary-policy tool, known as quantitative easing, following the 2008 financial crisis.

The yield on the 10-year German government bond fell Friday to 0.316%, according to Tradeweb. The yield on France’s 10-year bond fell to 0.533%. The yield on Spain’s 10-year bond declined to 1.378% and the yield on Italy’s 10-year bond dropped to 1.538%.

Jim Caron, global fixed-income portfolio manager at Morgan Stanley Investment Management, with $398 billion in assets under management, said he expects the ECB to gobble up all the net issuance of eurozone government bonds over the next 12 months.

“This should prove to be supportive for euro bonds ultimately,” said Mr. Caron. “As for Treasury bonds, they will follow price action in Europe.”

Lower bond yields in Europe and Japan have turned U.S. Treasury bonds into an attractive bargain, dragging down U.S. bond yields even as the U.S. economy has strengthened and the Fed is prepared to raise interest rates in the middle of this year for the first time since 2006. The Fed’s next policy meeting is due on Jan 27-28.

A stronger dollar has enabled foreign investors to pick up extra returns on U.S. bonds and stocks. The dollar rallied Friday to the strongest level against the euro in more than a decade.
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With so many government bonds offering yields near zero or even negative, where can one find a decent fixed-income return?

Here is one option:

Distressed Oil Rig Bonds Soar Over 20% Yield Mark
By Ben Bain Jan 21, 2015 6:51 AM PT

To appreciate the stunning reversal of fortune wrought by the collapse in oil prices, look no further than Mexico’s rig operators.

A year ago, they were poised to be among the biggest winners of the country’s historic move to abandon its seven-decade oil monopoly. Now they’re joining the swelling ranks of distressed borrowers around the world. The change is just another example of how the 53 percent plunge in crude since June is upending bond investors’ assumptions and stoking unprecedented losses in a country that was supposed to be home to an oil-industry boom.

Rig operators including Grupo R’s Offshore Drilling Holding SA and Oro Negro Drilling Pte. Ltd. are facing pressure from Petroleos Mexicanos as the government crude producer moves to cut costs. Offshore Drilling — whose revenue depends on the day rate it charges for ultra-deepwater rigs — has seen its notes due 2020 lose 28 percent in value this month alone, the most for Mexican bonds in the Bloomberg USD Emerging Market Corporate Bond Index. The debt is yielding 21 percent, an unprecedented 18.8 percentage points above Treasuries.

“The financials of these companies are pretty simple to understand: They have rigs, and they charge a day rate, and they have debt,” said Jim Harper, the head of research at Greenwich, Connecticut-based BCP Securities LLC, said by telephone. “If the money from the day rate doesn’t cover it, then they’re in trouble.”
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Buttonwood
Accentuate the negative
Why investors would opt to lose money
Jan 24th 2015 | From the print edition

A GUARANTEED loss. That is what investing in bonds at negative yields implies: those who buy the bonds will get back less than they paid even after interest is taken into account (and some will have to pay tax on the income as well). Yet government bonds of various maturities in as many as ten countries are selling at negative yields. Why on earth would bond investors, the “masters of the universe” once famed for intimidating governments, be willing to accept such a lousy deal?

One obvious reason is fear, or at least caution. In the depths of the financial crisis in 2008, when the safety of the banks seemed in doubt, short-term Treasury bills offered negative yields and investors were happy to take them. (Holding physical cash is impractical, given the sums involved.) Now, with some uncertainty about what might happen to banks were Greece to leave the euro, investors may decide it is worth accepting a negative yield of 0.16% on two-year German bonds. “In effect you’re paying a 16-basis-point custody fee for keeping your money safe,” says David Lloyd of M&G, a fund-management group.

In other words, investors are willing to lose a little to make sure they don’t lose a lot. But it is harder to see this as an explanation for negative yields on longer-term debt, such as Switzerland’s ten-year bonds. You would have to be quite depressed to conclude that no asset on the planet would make any money at all over the next decade.

Why might investors be so gloomy?
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Owners of Negative-Yielding Sovereign Bonds Say They’re No Fools
By Lukanyo Mnyanda and David Goodman
Jan 25, 2015 4:00 PM PT
Photographer: Martin Leissl/Bloomberg
Mario Draghi, president of the European Central Bank.

Mike Amey never thought he’d buy bonds from countries like Germany and Switzerland when losses were all but guaranteed.

Then again, these are hardly normal times in the bond market. Europe faces a prolonged bout of deflation and signs abound that global growth is weakening as oil plummets. Some clients are more willing than ever to lose a little money in return for the security of government debt, said Amey, a London-based fund manager at Pacific Investment Management Co.

Bond prices are now so high that yields on more than $4 trillion of the developed world’s sovereign debt have turned negative. That means investors effectively pay a dozen countries from Germany to France and Japan to borrow.

“It’s not a good feeling,” said Amey, whose firm runs the world’s biggest bond fund and is one of the largest investors in nations with negative yields. Others include BlackRock Inc., Deutsche Asset & Wealth Management and Vanguard Group, data compiled by Bloomberg show.

The seemingly insatiable demand for only the safest assets underscores the challenge the European Central Bank faces in convincing bond investors it has the wherewithal to jump-start the euro region after consumer prices fell for the first time in five years. Last week, ECB President Mario Draghi pledged to pump 1.1 trillion euros ($1.2 trillion) into the region’s economies by buying public and private debt.

Although the ECB’s move may push more investors into riskier assets, JPMorgan Asset Management’s David Tan says it’s possible to profit from holding negative-yielding debt.
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25 January 2015 Last updated at 07:01 ET
Greek election: Anti-austerity Syriza battles New Democracy
The BBC’s Mark Lowen went to a polling station at a primary school in Athens

Greeks are voting in a general election which could result in Greece trying to renegotiate the terms of its bailout with international lenders.

The leader of the left-wing Syriza party, Alexis Tsipras, has pledged to write off much of Greece’s huge debt and revoke austerity measures.

However, the current conservative prime minister, Antonis Samaras, says the austerity measures are working.

He has urged voters not to take Greece to the brink of catastrophe.

Greece has endured tough budget cuts in return for its bailout, negotiated with the European Union, International Monetary Fund (IMF) and European Central Bank (ECB).

The economy has shrunk drastically since the 2008 global financial crisis, and increasing unemployment has thrown many Greeks into poverty.
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We’ll find out by the time the futures markets open tonight.

Greeks vote in election that could lead to showdown over bailout
By Jethro Mullen, CNN

(CNN)Greek voters began voting Sunday in an election that could lead to a dramatic showdown with the debt-laden nation’s lenders.

The left-wing party Syriza, which has vowed to renegotiate the terms of Greece’s multibillion-euro bailout if it wins, has been leading in opinion polls going into the vote.

The party’s pledges to try to get some of Greece’s colossal debt written off and roll back unpopular austerity measures have appealed to exasperated members of the electorate — even if it jeopardizes Greece’s place in the euro zone.

“That is a gamble that people in Greece seem to be prepared to take at this point, simply because the terms of its bailout have been so severe,” Greek journalist Elinda Labropoulou told CNN on Sunday.
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Greek election: Syriza confident of victory – live updates

What are the chances that if Syriza wins and they will continue with the same policies as before. I would say that’s the most likely scenario.

Tsipras declares end to ‘vicious cycle of austerity’ after Syriza wins Greek election – live updates

Today the Greeks kicked the criminals in the teeth. After all the BS that has been shoved down our collective throats since ‘80 by the Wall Street-Federal Reserve looting syndicate and their EU counterparts, it felt pretty good to see the Greeks give the .1% the finger, even if the radical leftist they installed in power is going to make everything worse. Still, if he breaks the back of the TBTF banks who bought Greek debt because they thought their Republicrat creatures would ensure taxpayers took it off their hands for a tidy profit, this could still be a win.

Friday, June 27, 2008
The U.S. Government’s Anti-Renter Policies
Princeton University economist Paul Krugman says America has an anti-renter bias.

Listening to politicians, you’d think that every family should own its home — in fact, that you’re not a real American unless you’re a homeowner. “If you own something,” Mr. Bush once declared, “you have a vital stake in the future of our country.” Presumably, then, citizens who live in rented housing, and therefore lack that “vital stake,” can’t be properly patriotic. Bring back property qualifications for voting!

Even Democrats seem to share the sense that Americans who don’t own houses are second-class citizens. …

And the belief that you’re nothing if you don’t own a home is reflected in U.S. policy. Because the I.R.S. lets you deduct mortgage interest from your taxable income but doesn’t let you deduct rent, the federal tax system provides an enormous subsidy to owner-occupied housing. On top of that, government-sponsored enterprises — Fannie Mae, Freddie Mac and the Federal Home Loan Banks — provide cheap financing for home buyers; investors who want to provide rental housing are on their own.

In effect, U.S. policy is based on the premise that everyone should be a homeowner. But here’s the thing: There are some real disadvantages to homeownership.
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Feds Still Promote ‘Cult of Home Ownership,’ as Investors Drive Prices Up
J.D. Tuccille|Dec. 30, 2014 9:28 am

A couple of weeks ago, I noted that Fannie Mae and Freddie Mac are partially returning to their old tricks of promoting home ownership at all costs. By backing loans to “qualified first-time homebuyers” who put down as little as 3 percent of the value of a home, they’re taking a step back toward the Clinton-era and Bush-era policies that led so directly to the mortgage meltdown.

Why would they do this?

Because government officials have long been hung up on the idea that home ownership is a good thing in itself, and that rising housing prices are a sign of increasing prosperity.
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The True Cost of the Homeownership Obsession
January 16, 2015 09:45:39

In 2014, the US homeownership rate fell below 65 percent, which means it’s back to where it was during the 1970s and much of the 1990s. Various federal agencies have long made homeownership a priority, and have introduced a bevy of government and quasi-government programs including the GSEs like Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) , FHA-insured loans, VA-insured loans, the Bush administration’s “American Dream Downpayment Initiative” and, of course central bank meddling to keep interest rates nice and low for the mortgage markets.

And for all their efforts, all the inflation, and all the taxpayer-funded subsidies poured into bailouts, we have a homeownership rate at where it was forty years ago. During the housing boom, though, homeownership rates climbed to unprecedented levels, cracking 70 percent or more in many parts of the country. When the boom in homeownership came to an end, it was not a painless matter of people selling their homes. It was a very costly readjustment process, and it was something that would have been completely unnecessary and would never have happened to the degree it did without the interference of Congress, the central bank, and the easy-money induced boom they engineered.

The American Dream = Homeownership

Homeownership rates have never been an indicator of economic prosperity. Switzerland, for example, has a homeownership rate half of the US rate. Nevertheless, raising the homeownership rate has long been a pet project of politicians in Washington.

Nevertheless, the political obsession with raising homeownership rates dates back to the New Deal when Roosevelt began introducing a variety of homeownership programs designed to drive down the percentage of households that were renting their homes. Based on romantic ideas of frontier homesteading, it was assumed that owning a house was the only truly American way of living. It was during this time that the thirty-year mortgage — an artifact of government intervention — became a fixture of the mortgage landscape. And homeownership rates did indeed increase. And with it, debt loads increased as well.

By the 1990s, central-bank engineered low interest rates propelled mortgage debt loads to awe inspiring new levels, and houses kept getting bigger as families got smaller. Government-sponsored entities like Fannie Maeand Freddie Mac / Federal Home Loan Mortgage Corp kept the liquidity flowing and home equity lines of credit turned houses into sources of income.

From 2002 to 2007, those of us who worked in or around the mortgage industry were amazed at just how easy it was to get a loan even with a very sketchy credit history and unreliable income. Only token down payments were necessary. Many of these less-than-impressive borrowers bought multiple houses. Behind all of it was the Federal government and the Fed forever repeating the mantra of more homeownership, lower interest rates, more mortgages, and rising home prices. The rising homeownership levels were for the populists. The rising home prices were for the bankers and the existing homeowners.

A Housing-Related Employment Bubble

The housing bubble became the gift that seemingly never stopped giving because with all this home buying came millions of new jobs in real estate, construction, and home mortgages. Seemingly everyone looked to real estate as a source of easy money. The bag boy at your local grocery store was selling condos on the side, and everyone seemed to be selling new home loans. Home builders couldn’t keep up with the orders and contractors had six-week waiting lists.

We know how that all ended. The foreclosure rate doubled from 2002 to 2010. Implied government backing of Fannie Mae and Freddie Mac became explicit government backing, and numerous too-big-to-fail banks which had invested in home mortgages were bailed out to the tune of hundreds of billions of taxpayer dollars. Some lenders like Countrywide and Indymac essentially went out of business, and all lenders (including many who were not bailed out) faced costs ranging from 20,000 to 40,000 per foreclosure in lost revenue, legal fees, and other costs. Foreclosures begat foreclosures as foreclosure-dense neighborhoods were most prone to price drops, leading to negative equity, which in turn led to even more foreclosures. Ironically, the most responsible borrowers — the ones who made sizable down payments and reliably made payments, and thus had more skin in the game — were the ones who suffered the most and who had the most to lose by simply walking away from their homes.

Real estate agents, loan industry professionals, construction workers, and others who relied on the home purchase industry lost their jobs and had to spend time and money on retraining in completely new industries. Or they were simply among the millions who collected unemployment checks and food stamps supplied by those who still had jobs.

Was the Bubble Worth It?

And for what? The opportunity cost of it all was immense and during the bubble years, total workers in housing-related employment ballooned to 7.4 million, many of whom were fooled by the bubble into thinking the home-sales industry was a good long-term career. To get these jobs they spent many hours and thousands of dollars on certification, training, and job experience. After the bubble popped, three million of those jobs disappeared. From 2001 to 2006, employment in the mortgage industry increased by 119 percent, only to have most of those jobs disappear from 2006 to 2009.

Now, there will always be people who make bad career decisions, and there will always be frictional unemployment, but without the housing bubble and the myriad of federal programs and central bank pumping behind it, would millions of workers have flooded into these industries knowing that most of them would be unemployable in that same industry only a few years later? That seems unlikely.

Moreover, might we be better off today if those same people, many of whom were very talented, had invested their time and money into other fields and other endeavors? What businesses were never opened and what products were never made because so many flocked to the housing sector? We’ll never know.

Thanks to the government’s relentless drive for more homeownership and ever-increasing home prices, millions of workers concluded that real-estate jobs were the best bet in the modern economy. They thought this because investors chasing yield in a low-interest-rate environment were pouring their money into owner-occupant housing in response to government guarantees on single-family loans and easy money for mortgage lending.

The people were promised more homeownership, but after just a few years, it has become clear they didn’t get it. At the same time, Wall Street was promised high home prices, and when the prices faltered, it was offered bailouts instead. Wall Street got its bailouts.
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Homeownership rate, home prices no longer linked
Jan 12, 2015, 12:02pm CST
Greg Edwards

It used to be that the rate of home ownership went up as the mortgage interest rate went down. No longer.

A study by the Federal Reserve Bank of St. Louis found that the two rates have been out of sync since the recession. The Fed’s “strategy of aggressively purchasing mortgage-backed securities to put downward pressure on long-term interest rates appears to have paid off, in terms of house prices. However, the homeownership rate has continued to decline, meaning that housing demand and house prices no longer appear to be linked,” St. Louis Fed research officer and economist Carlos Garriga reported.

While long-term interest rates have remained near historic lows, home ownership has fallen to 64.4 percent in the third quarter of 2014 from 69.1 percent in the first quarter of 2005.

U.S. Economy
Nothing Is Going to Save the Housing Market
Jan 23, 2015 8:00 AM EST
By A. Gary Shilling

U.S. housing activity remains weak despite six years of federal government aid, strong interest from overseas buyers, rock-bottom interest rates and massive purchases of mortgage bonds by the Federal Reserve. Does this mean housing may never spring back to its pre-recession levels? Many signs point to yes.

Don’t blame the Chinese, who are showing an abundance of interest. Their share of foreign purchases leaped to 16 percent in the year ending March 2014, from 5 percent in 2007. They paid a median price of $523,148, higher than any other nationality and more than double the $199,575 median price of all houses sold.

The value of home sales to all foreigners rose 35 percent last year to $92 billion, up more than 50 percent since 2007 and accounting for 7 percent of all existing home sales. Foreigners view U.S. homes as safe investments and U.S. schools as good places to teach their children English.
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The Fed’s policies are anti-99%, not just anti-renter or anti-saver.

Cause: “But as long as shelters, food lines and other relief programs remain concentrated in skid row …”

Effect: “… downtown will be continue to be a homeless magnet.”

Bahahahahaha … it would be sort of fun to offer shelters and food lines and other relief programs in, say, Beverly Hills.

Bahahaha … or MALIBU! Yes, Malibu! Right next to where Barbara Streisand lives!

Bahahahahahahahahahahahahahahahahahahahahahahahahahaha

Yes, but our Fed-levitated, rigged stock markets are near their all-time highs, and Obama in his SOTU speech assured us the economic crisis has passed.

DASHED DREAMS: This is the first part in a series looking at the plight of the black middle class, particularly in Maryland’s Prince George’s County, the nation’s highest-income majority-black county.

Part 2: Half of the loans on newly constructed homes in one Prince George’s County subdivision during the housing boom in 2006 and 2007 wound up in foreclosure.

Part 3: The plight of the Boateng family, who face more than $1 million in debt, shows how some of the people swallowed up by the easy credit era have yet to reemerge.

A shattered foundation
African Americans who bought homes in Prince George’s have watched their wealth vanish
Story by Michael A. Fletcher
Photos by Michel du Cille
Graphics by Darla Cameron, Samuel Granados, Ted Mellnik
Published on January 24, 2015

African Americans for decades flocked to Prince George’s County to be part of a phenomenon that has been rare in American history: a community that grew more upscale as it became more black.

The county became a national symbol of the American Dream with a black twist. Families moved into expansive new homes, with rolling lawns, nearby golf courses and, most of all, neighbors who looked like them. In the early 2000s, home prices soared — some well beyond $1 million — allowing many African Americans to build the kind of wealth their elders could only imagine.

But today, the nation’s highest-income majority-black county stands out for a different reason — its residents have lost far more wealth than families in neighboring, majority-white suburbs. And while every one of these surrounding counties is enjoying a strong rebound in housing prices and their economies, Prince George’s is lagging far behind, and local economists say a full recovery appears unlikely anytime soon.

The same reversal of fortune is playing out across the country as black families who worked painstakingly to climb into the middle class are seeing their financial foundation for future generations collapse. Although African Americans have made once-unthinkable political and social gains since the civil rights era, the severe and continuing damage wrought by the downturn — an entire generation of wealth was wiped out — has raised a vexing question: Why don’t black middle-class families enjoy the same level of economic security as their white counterparts?

The impact of the financial devastation of the past several years is hardly visible along the quiet, well-tended streets of many Prince George’s neighborhoods. The county has the highest foreclosure rate in the District region, yet few houses appear to be abandoned.

Instead, the slow-motion crisis operates mostly in private, limiting people’s options, constricting their vision and forcing a seemingly endless series of hard choices. Having your wealth vanish means making pivotal life decisions — about where to send your children to school, saving for college, making home improvements and setting aside something for retirement — knowing you have no financial leeway.

“This big gorilla on your back, it changes you,” said Fred Bryant, 40, who lives with his wife and two daughters in a brick-front Colonial featuring a one-acre lot, high ceilings, an impressive two-story foyer and a mortgage far higher than the house is worth. “Sometimes you find yourself boiling mad when you shouldn’t be.”
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Solar=FAIL

Maybe you need to take a break from this message board for a while, maybe go on vacation.

A visit to your local bank branch just may possibly offer to you some financial aid for this much-needed vacation.

Ask about the Miracle Dotted Line Freedom Plan and you will get for yourself a free cup of coffee!

“Losses will also depend on how long the oil price stays low, so it is unclear precisely how exposed the banks are to the energy industry’s woes.”

Futures Movers
Oil at lowest level in 5 years, sheds 7% on the week
Published: Jan 23, 2015 3:45 p.m. ET
U.S. Secretary of State John Kerry and Saudi Arabia’s King Abdullah bin Abdulaziz, who has died.
By Claudia Assis, Energy reporter, & Eric Yep

SAN FRANCISCO (MarketWatch) — New York-traded oil ended Friday at its lowest level since March 2009, amassing losses of more than 7% on the week.

Crude-oil futures were mixed, with London-traded Brent settling higher. Investors parsed news of the death of Saudi Arabia’s King Abdullah and marginal improvement in China’s manufacturing data.

Light, sweet crude futures for March delivery CLH5, -2.20% retreated 72 cents, or 1.6%, to settle at $45.59 a barrel on the New York Mercantile Exchange. That was the lowest finish since March 11, 2009.

Prices had traded as high as $47.76 a barrel earlier. On the week, New York-traded oil lost 7.2%, down for 15 of the past 17 weeks.

Brent crude for March delivery on London’s ICE Futures exchange rose 27 cents, or 0.6%, to $48.79 a barrel. Brent traded as high as $49.80 a barrel. On the week, the commodity declined 2.8%.

The change of guard in Saudi Arabia, the world’s No. 1 oil exporter, is unlikely to change kingdom’s stance in oil markets. The new king has kept oil minister Ali Al-Naimi in power, and Saudi Arabia will continue to pursue the strategy of defending its own market share rather than help support oil prices, said Matt Smith, an analyst with Schneider Electric.

Saudi Arabia’s King Abdullah bin Abdulaziz al Saud died at the age of around 90, according to a royal court statement early Friday morning. The statement also said that Abdullah’s half-brother, Crown Prince Salman, who is 79 years old, was declared king and Prince Muqrin, 69, became crown prince.

Earlier Friday, Prince Alwaleed bin Talal, a Saudi businessman and a nephew of King Abdullah, said on CNBC the world would never again see oil at $100 a barrel, reiterating remarks he had made earlier this month.

“The price of oil will remain under pressure for the foreseeable future,” he said.
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“Banks will offload many of the loans and hedge their losses…”

Drop on by your local banker’s office and ask him about his “Buy The Dip” investment program (and get yourself a free cup of coffee while you are at it!).

Do it tomorrow - Monday.

Today - Sunday - should be reserved for prayers.

(Lots of prayers.)

(Lots and lots and lots of prayers.)

By: Louis Cammarosano on January 24 2015 ⋅

Russia boosted gold reserves 16% in 2014 while lowering their U.S. Treasury Holdings by nearly 30%.

Russia added 18.7 tons of gold to its reserves in December 2014 bringing its gold reserve total to 1,207 tons (worth approximately $50 billion) and lowered its U.S. Treasury holdings to $108 billion from $140 billion a year ago.

Russia’s de-dollarization that began before western sanctions were imposed, has accelerated. In December, Russia announced the addition of 18.7 tons of gold to its reserves bringing its total as of year end 2014 to 1,207 tons up from 1,035 tons as of year end 2013.

Russia has lowered their U.S. Treasury bond holdings from $139.9 billion as of November 2013 to $108.1 billion.

https://smaulgld.com/russias-year-de-dollarization-rebalancing-reserves/

Wake me up at $30.

What will happen if Greece reneges on their bailout debt?

Comrad Pelosi’s permanent Democrat supermajority isn’t going to build itself, you know. Millions of new lifetime entitlement voters from Central America and Mexico will speed the process along.

Sit tight because prices are falling again in San Diego.

“My only concern is that prices will continue their upward march and all my efforts will be wasted in the long run.”

What is stopping you from buying? It sounds like you are exactly the kind of buyer a lender would gladly count among his customers.

You’re all over the place.

Buy a house now or wait? (San Diego)

By Kristopher Follow Sun, 25 Jan 2015, 10:25pm 54 views 1 comment
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I am 26 years old with a very secure $100k year job, pension, maxing out 401k, zero debt, excellent credit, and $110k in savings.

P.S. They plan to rent, not buy, upon relocation.

I’d wager that Apple, google, facebook have a fairly large lump sum available to the suckers stuck in SillyValley shacks.

“The guy’s relocation package includes $100K up front to pay off their underwater mortgage and student loans in full when they move.”

Wow! Definitely not a Civil Engineer, right?

That’s actually pretty common. What’s offered is whatever is needed to get the employee into the new gig asap and with as little grief as possible - all within reason. I would bet that wasn’t offered initially but was the result of a “conversation”.

A one time 100k isn’t that much for many, many corps to get the guy behind a desk and producing.

It can be hard to imagine how much money some pple get paid - not in wages alone but in “other”.

Did the plan to bankrupt putin fail ? what inning are we in?

Why Oil Prices May Not Recover Anytime Soon
By Adam Levine-Weinberg
January 25, 2015

Oil prices have collapsed in stunning fashion in the past few months. The spot price of Brent crude reached $115 a barrel in June, and was above $100 a barrel as recently as September. Since then, it has plummeted to less than $50 a barrel.

There is a sharp split among energy experts about the future direction of oil prices. Saudi Prince Alwaleed bin Talal recently stated that oil prices could keep falling for quite a while and opined that $100 a barrel oil will never come back. Earlier this month, investment bank Goldman Sachs weighed in by slashing its short-term oil price target from $80 a barrel all the way to $42 a barrel.

But there are still plenty of optimists like billionaire T. Boone Pickens, who has vocally argued that oil will bounce back to $100 a barrel within 12 months-18 months. Pickens thinks that Saudi Arabia will eventually give in and cut production. However, this may be wishful thinking. Supply and demand fundamentals point to more lean times ahead for oil producers.
…

He could have been born on the high seas, and if his parents were US citizens, he is natural born. Like begets like, so the preacher told me.

When the first major civil unrest hits NYC, some of the anti-gun crowd there are going to be seeing the light, way too late.

The Wall Street Journal
Blizzard bears down on New York region
Published: Jan 25, 2015 10:49 p.m. ET
Possibility of 30 inches of snow, wind gusts of 65 MPH
By Melanie Grayce West

The tri-state region is bracing for a blizzard that is expected to hit Monday afternoon and could measure up as one of the worst snowstorms in New York City history.

With a possibility of 30 inches of snow and wind gusts of 65 miles an hour, New York City Mayor Bill de Blasio came out Sunday with members of his emergency response team to urge residents to use extreme caution over the next two days.

“My message to all New Yorkers is, prepare for something worse than we have seen before,” said Mr. de Blasio. “Don’t underestimate this storm.”

Forecasters have issued a blizzard warning for New York City, northern New Jersey, Long Island and most of southern Connecticut.

The storm moved through the mid-Atlantic Sunday, was expected to get progressively worse as it comes east and would “max out” as it hits the New York area, said John Cristantello, a meteorologist with the National Weather Service.

Lighter snow is expected to begin midmorning Monday and turn heavy around the evening commute into Tuesday morning, with sustained winds from 30 to 40 miles an hour, according to the weather service. Accumulation will be at least 20 inches across the region and temperatures will be in the 20s.
…