January 25, 2015

Bits Bucket for January 25, 2015

Post off-topic ideas, links, and Craigslist finds here.

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Comment by Housing Analyst
2015-01-25 06:24:32

San Jose, CA Sale Prices Plunge 9% YoY; Price Declines Spread


Comment by real journalists
2015-01-25 06:32:31


Comment by Shillow
2015-01-25 07:23:03

Mo Credik

Comment by Mr. Banker
2015-01-25 07:33:52

Right on!

The banks will be open tomorrow morning. Be there and be ready to sign, or (gasp) do without.

Comment by Shillow
2015-01-25 07:40:53

Many banks in Canada will soon close their doors. Bubble oil and bubble housing tide going out quickly.

After that it’s all Rush and frozen tundra.

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Comment by Mr. Banker
2015-01-25 07:44:56

“Many banks in Canada will soon close their doors.”

(A sense of urgency! Such a gift!)

Do not hesitate, do not delay! Get your money while the gettin’s good.

Comment by Albuquerquedan
2015-01-25 06:39:38

Paul Hodges is not a bad forecaster but he does not know Shih Tzu about property in China. He states that Chinese property taxes are off 30%. One problem China has not implemented property taxes yet. It is one of the reforms that soon will be implemented. Right now the local governments use land sales to finance governmental activities in lieu of property taxes which of course encourages the governments to promote new building.

Comment by Albuquerquedan
2015-01-25 07:27:58

The only exception is a tax on foreign holdings.

Comment by Blue Skye
2015-01-25 07:29:11

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

I have read that elsewhere.

They are really screwed.

Comment by Albuquerquedan
2015-01-25 07:44:00

Sales off 30% which had dropped to 11% by December is not the big a deal in a correction.

Comment by Albuquerquedan
2015-01-25 08:07:13

Does not appear to be a bad year for workers from China Daily, disposable would be after taxes:

BEIJING - The per capita disposable income of urban residents in Beijing was 43,910 yuan($7,070) in 2014, an increase of 8.9 percent from the previous year, local authorities said on Thursday.

According to a report jointly published by Beijing Statistics Bureau and the National Bureau of Statistics Beijing survey office, the per capita net income of the city’s rural residents was 20,226 yuan, up by 10.3 percent year on year.

Population of the permanent residents in Beijing was 21.516 million by the end of 2014, a growth of 1.7 percent from the end of 2013. The population of the urban residents was 18.59 million, which is 86.4 percent of the total permanent residents.

The city’s consumer price index, a main gauge of inflation, rose 1.6 percent in 2014 from 2013.

The total retail sales of consumer goods of Beijing in 2014 was 909.81 billion yuan, up by 8.6 percent year on year.

A raft of China’s 2014 economic figures unveiled on Tuesday by the National Bureau of Statistics shows per capita disposable income of all residents was 20,167 yuan.

The CPI for the whole country rose 2 percent, below the government’s target of 3.5 percent

Comment by Raymond K Hessel
2015-01-25 08:39:01

AB Dan, is your endless shilling for China based entirely on demonstrably fake Chinese official statistics?

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Comment by Professor Bear
2015-01-25 08:41:28


Comment by Albuquerquedan
2015-01-25 08:43:35

They are not significantly more inaccurate than the data used by the U.S. The IMF and numerous independent sources find them as reliable as data put out by other countries. Look at the shadow statistics compared to the U.S. I do not see why we should use official statistics from the U.S. but adjusted numbers from China.

Comment by Albuquerquedan
2015-01-25 08:49:54

I do not determine when my posts appear.

Comment by Albuquerquedan
2015-01-25 09:04:38

To put it simply when the U.S. is claiming 5% growth it is probably more like 2.5% if we measured it like it was measured during the Reagan era and adjusted for inflation the same. China is probably inflating similarly. However, it makes no sense to measure one country one way and the second country another way, if you are trying to compare them.

Comment by Housing Analyst
2015-01-25 09:15:10

It doesn’t much matter when both are experiencing cratering GDP.

Comment by Albuquerquedan
2015-01-25 09:18:50

The IMF will call a country out when it considers its data as not credible, that has not happened with China but it has happened with Argentina:


Comment by Housing Analyst
2015-01-25 10:23:35

Cratering GDP.

Comment by Blue Skye
2015-01-25 11:15:16

“IMF will call a country out…”

Why piss off the patsy? An IMF bailout isn’t going to happen there.

Comment by Combotechie
2015-01-25 07:37:45

“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.

Comment by Albuquerquedan
2015-01-25 08:01:27

Yes and encourage them to rent out their second homes.

Comment by Combotechie
2015-01-25 08:19:36

“Yes and encourage them to rent out their second homes.”

“Encourage”, an interesting word the way it is used here; It sounds a lot like “force”.

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Comment by Dman
2015-01-25 09:04:59

Why do they need to be “encouraged” to rent out their second homes? Isn’t that just a common sense way to generate cash flow? Of course, you can’t rent out a second home if nobody can afford to pay the rent, or if you think that actually living in the “home” will reduce its value (a common belief in China), or if the “home” is in a ghost city in the middle of the Gobi desert.

The fact is that these empty apartments are seen as investments that can never lose value, and can eventually be flipped. They aren’t seen as homes as much as concrete and steel versions of paper stocks. Now that taxes will have to be paid on them, their perceived value as a profit generating or cash preserving commodity is over. There will be no resale market, and the folks left holding them will lose everything they paid for them. The government will be forced to repeal the tax on real estate, but it will be too late to preserve the illusion of real estate being anything but a game for suckers.

Comment by Bill, just south of Irvine
2015-01-25 07:45:46

“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.

Comment by Ben Jones
2015-01-25 07:49:45

‘China’s existing property tax levels are in fact relatively high by international standards. In 2013, Chinese property tax revenue as a share of GDP was higher than the average high income economy including Japan and Korea.’

‘At current levels property taxes are already a dominant source of revenue for local governments. In 2013, property tax revenue was the second largest source of tax revenue after business taxes on the service sector. If business tax revenue received from real estate developers was included as a part of property taxes this would make property taxes the leading source of tax revenue and nearly one-fourth of total tax revenue.’

‘China’s local governments derive most of their property tax revenue from transactions rather than recurring property taxes. The largest source of property tax revenue is a 3 percent tax paid on the value of property by the buyer for transferring property rights (契税). Meanwhile, China’s current recurring property taxes are levied only against commercial property owners not households.’

‘Property tax reform is now one of the top three fiscal reform priorities outlined by the Ministry of Finance following the third plenum. At that time, Finance Minister Lou Jiwei promised a gradual transition away from transaction tax on property toward recurring taxes on property owners.’


Comment by Albuquerquedan
2015-01-25 07:54:43

Ben, your story backs up what I was saying. Property taxes as understood by Americans does not mean transfer taxes.

‘China’s local governments derive most of their property tax revenue from transactions rather than recurring property taxes

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Comment by Ben Jones
2015-01-25 08:01:25

‘Paul Hodges is not a bad forecaster but he does not know Shih Tzu about property in China. He states that Chinese property taxes are off 30%. One problem China has not implemented property taxes yet.’

Get the egg off your face.

Comment by Albuquerquedan
2015-01-25 08:03:30

I do not see any egg. He sure was not clear if he was including land sales and transaction taxes in what he was calling property taxes.

Comment by Ben Jones
2015-01-25 08:17:28

It doesn’t even make sense that an annual tax on land would be down unless the government lowered taxes. Clearly, what he’s saying is that transactions are down.

It’s not hard to admit you are wrong. It’s a sign of maturity, really.

Comment by Albuquerquedan
2015-01-25 08:21:48

Clearly, what he’s saying is that transactions are down.

Yes, but that was not what I found wrong about the story. As used by Americans property taxes do not include when the government sells its own property. So I do not see how I am wrong.

Comment by Blue Skye
2015-01-25 08:28:39

However, admission of wrong-headedness takes a debt donkey pounding.

Comment by Housing Analyst
2015-01-25 08:38:16

^ There it is.

Comment by Professor Bear
2015-01-25 08:44:38


Comment by Albuquerquedan
2015-01-25 08:48:01

are you looking in the mirror Bear when you are saying that.

Comment by Professor Bear
2015-01-25 09:05:31

No, I’m looking at your post above, which is par for the course, followed by Ben’s:

‘Paul Hodges is not a bad forecaster but he does not know Shih Tzu about property in China. He states that Chinese property taxes are off 30%. One problem China has not implemented property taxes yet.’

Get the egg off your face.

I realize it is hard for you to add 2+2.

Comment by Housing Analyst
2015-01-25 09:13:07

He doesn’t do much for the legal professions reputation.

Comment by Oddfellow
2015-01-25 09:13:21

Maybe it depends on what our definition of “is” is.

Comment by Professor Bear
2015-01-25 09:18:52

“He doesn’t do much for the legal professions reputation.”

Actually he confirms it perfectly!

Comment by Albuquerquedan
2015-01-25 09:26:38

When you have nothing you engage in ad hominem attacks. China is doing much better than anyone that posted against me predicted, you were all wrong and you all know it. The IQ of this board has dropped 30 points since five years ago. You have to believe that a government selling land is a property tax for me to be wrong today, I do not think virtually anyone in America would believe that but I guess you will just to try to find me wrong about something.

Since this blog is a waste of time, today, this will be my last post of the day, so calling me out will not work.

Comment by scdave
2015-01-25 10:01:51

It’s not hard to admit you are wrong. It’s a sign of maturity, really ??

+1 Ben….And there are a few here that need to learn this lesson but don’t hold your breath…

Comment by Professor Bear
2015-01-25 10:06:07

Repeatedly posting implausibly precise predictions, then defending them incessantly, is outright lame.

Comment by Ben Jones
2015-01-25 10:25:02

Comment by Albuquerquedan 2015-01-25 09:26:38

‘Since this blog is a waste of time, today, this will be my last post of the day’

‘Albuquerquedan January 25, 2015, 2015/01/25 at 9:43 AM’

‘Albuquerquedan January 25, 2015, 2015/01/25 at 10:00 AM’

Comment by Professor Bear
2015-01-25 10:29:24

“When you have nothing you engage in ad hominem attacks.”

Pointing out the blatant lies in your posts is not an ad hominem attack, although it does seem like a huge waste of time.

Comment by Housing Analyst
2015-01-25 10:37:22

Dan’s backpedalling is as laughable as Jingle_Frauds $90k building permits.

Comment by Dman
2015-01-25 11:18:09

So if I understand ADan’ s posts correctly, Obama can in no way affect the price of oil, and China is an economic basket case. I’m glad he finally changed his tune.

Comment by Professor Bear
2015-01-25 11:22:22

Even the densest people some times see a ray of light.

Comment by Combotechie
2015-01-25 07:56:02

“Democracy is the recognition that government needs some type of smoke an mirrors to make the sheople believe that they consented.”

Step 1: Each of the two major political parties selects a candidate, each candidate deemed to be suitable to serve the interests of the PTB.

Step 2: Allow the sheople to choose one of the two candidates.

Result: The sheople get to feel that they experienced a win while the PTB get to know that they experienced a win.

Comment by Bring Back the WPA
2015-01-25 09:18:10

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.

Comment by Oddfellow
2015-01-25 09:25:46

” Land ownership is actually an exclusive use agreement to borrow The People’s land for a fixed period of time.”

Gotta love that free market capitalism! Just a bunch of commies running a shell game. I hope it overwhelms them soon.

Comment by In Colorado
2015-01-25 09:42:44

Gotta love that free market capitalism! Just a bunch of commies running a shell game. I hope it overwhelms them soon.

Why do you think everyone is trying to expatriate their money out of China? Don’t let the fancy cars and office buildings fool you, they’re all working on exit plans, and for good reason.

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Comment by Bring Back the WPA
2015-01-25 11:21:02

Yeah, and that’s why I’m puzzled about the talk about China’s impending real estate bubble or foreclosure crisis. If you default on your mortgage (from the state-owned bank) the government just repossesses their own property. In a severe housing crash they could just take over homes and condos, repurpose them as public housing, and just (forcibly) move people in.

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Comment by Housing Analyst
2015-01-25 15:04:10

“I’m puzzled”

That’s typical for someone who believes paying someone to dig a hole and fill it in a’la WPA is an efficient means to run an economy.

Comment by Dman
2015-01-25 09:38:09

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?

Comment by Albuquerquedan
2015-01-25 06:51:59

The total Chinese debt national and local is equal to 60% of the GDP, now it appears that money was pouring into governmental coffers so fast during the boom years they could not spend it. So they now have money in the banks equal to 30% of their gdp. They have a net debt of 30%. Our national debt alone even if you ignore what is held by the fed and private is about 80% of gdp. So which country is the FB?


Comment by Combotechie
2015-01-25 07:38:55

“So which country is the FB?”


Comment by Albuquerquedan
2015-01-25 07:51:02

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

Comment by Oddfellow
2015-01-25 09:20:22

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

Comment by Dman
2015-01-25 09:48:13

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.

Comment by Oddfellow
2015-01-25 10:30:58

The problem is their problem is themselves. The Party survives through patronage and corruption, to root it out is requires destroying their tools of governance, which would end their control.

Comment by Albuquerquedan
2015-01-25 06:54:53

Excerpt from link:

The State Council last week vowed to awaken “dormant” government savings, a longstanding problem that has been characterized by one renowned economist as “an abnormality” in the national balance sheet.

Experts said that the budgeting process must be changed to resolve the problem.

The cabinet’s executive meeting said the government will take appropriations that have been sitting in the nation’s coffers since 2012 (or even earlier) and spend them. Special deposit accounts, which hold much of this money, will be a key target for inspection, and the cabinet has banned any new accounts of this type.

A State Council executive meeting actually discussed the same issue last July, so the fact that the issue keeps coming up highlights both its importance and the lack of progress.

Total bank deposits held by government agencies and public institutions stood at 18.3 trillion yuan ($2.99 trillion) as of Sept 30, equivalent to 30 percent of GDP, Liang Hong, chief economist at China International Capital Corp Ltd, wrote in a November report.

She said that she could not understand why local governments and public institutions have kept borrowing from banks at rates exceeding 6 percent while hoarding fiscal revenue, also in banks, at rates of less than 3 percent.

Comment by Blue Skye
2015-01-25 08:16:40

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

Comment by Albuquerquedan
2015-01-25 08:27:07

Sorry three trillion is not insignificant. China’s national debt drops as percentage of GDP every day. I do not know about corporate debt but due to the stock market rising over 50% last year I have to believe a lot of debt was replaced by selling more shares. We have not seen an update on the corporate debt in almost a year. China has a savings rate of about 30%, there is a lot of money to finance all debt internally.

Comment by Raymond K Hessel
2015-01-25 08:34:31
Comment by oxide
2015-01-25 12:11:41

This big screen simulations of the clear skies and sunset was an eye-opener.

Comment by Dman
2015-01-25 09:55:50

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.

Comment by azdude
2015-01-25 07:11:56

how are your overpriced assets performing?

When will retail be left holding the bag again?

Comment by phony scandals
2015-01-25 07:26:50

Uncle Sam Is Coming After Your Savings

By Megan McArdle
Jan 23, 2015 3:53 PM EST

Earlier in the week, I discussed the Obama administration’s proposal to tax earnings on so-called 529 college savings plans, part of a package of tax hikes that will pay for new programs such as his proposal to make the first two years of community college free. This has been touted as a plan to hike taxes on the rich to help the middle class, but in fact it’s more of a plan to redistribute money from the upper middle class to the lower middle class.


http://www.bloombergview.com/…/obama-s-tax-on-529-college-savings-targets-middle-class - 254k -

Comment by Raymond K Hessel
2015-01-25 08:01:40

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

Comment by Mr. Banker
2015-01-25 08:06:28

“Savers must be ruthlessly punished …”

YES! Yes yes yes yes yes …

“… until they are herded into Wall Street’s rigged casino where the House always wins.”

Yes yes yes yes yes yes yes yes … and yes.

Comment by phony scandals
2015-01-25 10:13:26

“This has been touted as a plan to hike taxes on the rich to help the middle class”
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.”

Comment by MightyMike
2015-01-25 13:49:17

Ms. McArdle’s full sentence was this:

This has been touted as a plan to hike taxes on the rich to help the middle class, but in fact it’s more of a plan to redistribute money from the upper middle class to the lower middle class.

Unfortunately, she only hints at a definition of what constitutes rich, upper middle class and lower middle class. In my experience a lot of rich people prefer to call themselves “upper middle class”. That term really should be phased out. It’s not particularly useful.

Comment by oxide
2015-01-25 18:25:04

Actually I think that “upper middle class” was a very useful term. We used it all the time when I was young.

“Rich” = you could quit your job. Born rich, won the lotto, or was CEO somewhere.

“Upper middle class” = you still worked, but you could live in a big well-kept house in rich neighborhood, drive a really nice car, and send the kids to private school and not worry about college. Doctors, lawyers, judges, high managers.

It didn’t occur to me at the time, but upper middle class are they type I would expect to amass a pile and then go Oil City when they were 55 or so.

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Comment by jane
2015-01-25 21:03:22

Oxy, the Oil City route is for us reg’lar middle class. The upper middle class don’t need to go Oil City.

No way could I claim to be in the same SES as the band of thieves who pay to play - such as docs and successful lawyers. I’ve never been able to bill $350/hr as a steady state.

Have you?

Comment by Larry Littlefield
2015-01-25 07:28:18

You asked what was so special about Austin. What has happened is the younger generation has shifted its preferences, relative to the older generations, as to where they want to live. To places with more social interaction, more places to walk to, more transit.

Unfortunately most of the places like the ones younger generations want essentially collapsed in the 1970s as a result of the older generation’s suburban, auto-oriented preferences. The ones that remain — New York, SF, etc. are in short supply relative to demand, adding to the bubble there and making them unaffordable.


Of course the government is disguising this price signal by trying to prop up the price of ubiquitous and over-supplied suburban and exurban housing, office parks, shopping malls, etc.

On the shortage side, can new “cities” be recreated by re-booting half dead ones, re-structructuring suburbs, or creating new ones? Basically anyplace young people come to see as a reasonable substitute for the places in short supply will see a price increase. And that is what is happening in Austin.

Comment by Housing Analyst
2015-01-25 07:45:16

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


Happens every time.

Comment by Blue Skye
2015-01-25 08:22:34

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

Comment by aNYCdj
2015-01-25 08:37:18

Blue the problem is capital costs the same no matter where you live.

So if you live where i did for a few years in Charleston SC, you could live without a car in downtown or the battery but rents are double what it would be in north Charleston where you could have a nice yard and parking. There is a good local bus route for College and medical students hat run almost 18 hours a day

But the problem is if you get half or less the money for your services and have to buy a lot of stuff, it really is very hard to start up, but if you own everything here and go there with cash in your pockets you can live very well.

Comment by Housing Analyst
2015-01-25 08:50:15

It’s good to know Charleston, SC is as big a mess as everywhere else.

Look out below.

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Comment by aNYCdj
2015-01-25 08:24:59

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?

Comment by Housing Analyst
2015-01-25 09:04:42

Presume much?

Comment by Dman
2015-01-25 09:23:00

The Detroit area is the fourth wealthiest in the nation, excluding the city of Detroit itself. And even the city is changing fast. We have plenty of manufacturing and tech companies locating here. You dont know what you’re talking about.

Comment by aNYCdj
2015-01-25 09:37:29

Well i predicted 15 years ago Harlem will be the new renaissance by moving those people out because of the higher rents and more police presence, and guess what it worked….now its Detroit time…

time to find places for the functionally illiterate to move to.

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Comment by Dman
2015-01-25 11:09:57

No disagreement from me. The first thing many Detroiters do when they get a decent job is move out of the city. There are more middle class neighborhoods within the city limits than people think, but they are all threatened by the encroaching ghetto. The new mayor sounds like he actually has a plan to save those neighborhoods first by demolishing the blight before it infects the entire street, but there are large sparsely populated areas of the city that just need to be bulldozed. Eventually the bad areas will be smaller and more densely populated, but maybe a little safer to live in.

Comment by Larry Littlefield
2015-01-25 13:48:20

First of all, they are trying to reboot urban Detroit and the central city is the strongest real estate market and the biggest focus of development in the metro area.

But it is a relatively small area, and most of the city continues to die.

I’m pretty sure I identify legacy costs as an issue for older cities. The cost of the poor is focused on those who live within their taxing jurisdiction. The pension and retiree health care costs of the employees of an affluent city of 2 million is foisted on a poor city of 600,000. Etc.

Just move onto the second post in the series for these issues.


Comment by MightyMike
2015-01-25 13:55:38

Austin can rely on big government. It’s the capital of a big state, so there are lots of government jobs. It also has the whole semiconductor/computer/software industry, which was built on federal corporate welfare.

Comment by real journalists
2015-01-25 08:27:26

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

Comment by phony scandals
2015-01-25 07:34:09

I am going to sign up for this class if they offer it tuition free at a community college near me.

‘Hating Whitey’: Arizona State stirs pot teaching ‘the problem of whiteness’ class

College students in Arizona can now take a class on “Hating Whitey.”

by Tom Tillison | BizPac Review | January 25, 2015

In a sign that America’s institutions of higher learning may be lost forever to the radical left, college students in Arizona can now take a class on “Hating Whitey.”

In line with the extreme academic discipline called critical race theory, which is prevalent on campuses across America, Arizona State University is now offering a course on “the problem of whiteness,” according to Campus Reform.

Critical race theory is a belief that relies heavily on the myth of institutional racism, the opinion that racism is inherent in America, brought on by white privilege and white supremacy.

And if that’s not bad enough, the class — ENG 401: “Studies in American Literature/Culture: U.S. Race Theory & the Problem of Whiteness” — is being taught by a white man.

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.

Campus Reform correspondent Lauren Clark, a student at Arizona State, joined Elisabeth Hasselbeck this week on “Fox and Friends,” and talked about the books associated with the course.

“All of the books have a disturbing trend, and that’s pointing to all white people as the root cause of social injustices for this country,” Clark said.

Comment by Albuquerquedan
2015-01-25 07:42:05

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

Comment by aNYCdj
2015-01-25 09:03:20

Dan there is no such thing as white flight…never was

Instead parents saw the next generation of kids on a Jail track instead of a college track and moved…and so did black people.

Comment by Mr. Banker
2015-01-25 07:48:23

Bahahahahahaha … keeping the victim mentality alive = WIN!

Comment by palmetto
2015-01-25 08:07:37

“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.

Comment by real journalists
2015-01-25 08:29:22

Blacks are “sun people” and whites are “ice people”


Comment by phony scandals
2015-01-25 08:35:41

[In front of the house]

Mother And remember, the Lord loves a working man.

Navin Lord loves a working man.

Father And son, don’t never, ever trust whitey.

Navin Don’t trust whitey. The Lord loves a working man, don’t
trust whitey. (he hugs his mom)

Mother Ah baby!

Navin Daddy! (he hugs his dad)

Navin Pierre come here. Don’t you forget to grow up now.

Father O.k. Now let the boy go. We got work to do.

Mother And I hope you find whatever it is you’re looking for.

Navin I will Ma. I know it’s out there.

Taj It’s out there alright, and if you catch it, see a doctor and
get rid of it.

Navin See a doctor and get rid of it.

Taj Good luck.

Navin Good luck. The Lord loves a working man, don’t trust
whitey, see a doctor and get rid of it.

Bye Grandma!

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Comment by Combotechie
2015-01-25 08:41:27

“Blacks are ’sun people’ and whites are ‘ice people’”

He’s right!

Go here for some pictures of ice people and where these ice people happen to live:


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Comment by Combotechie
2015-01-25 08:44:10
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Comment by palmetto
2015-01-25 08:57:46


Comment by Oddfellow
2015-01-25 11:25:25

Fatty fish kept them tan. They didn’t need to get vitamin D from the sun.

Comment by Raymond K Hessel
2015-01-25 08:00:35

Here’s a prediction: China’s next revolutionary movement will arise out of the frustrated aspirations and disillusionment of its “rat tribes.”


Comment by Raymond K Hessel
2015-01-25 08:06:20

While 95% of the American electorate remains solidly in the “sheep” category, voting for Wall Street’s Republicrat errand boys, the people of southern Europe are waking up and rejecting the corrupt status quo imposed by and for the .1%. Which has the oligarchs terrified.


Comment by phony scandals
2015-01-25 08:51:45

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.”

Comment by In Colorado
2015-01-25 09:51:49

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.

Comment by rms
2015-01-25 13:57:42

“All they see is the looting of their countries.”

They frittered-away their children’s future, and then blame the financiers. They did it to themselves just like the California home buyers who ruined housing prices for everyone else. Frankly I am amazed that country after country around the globe succumbs to this financial nonsense.

Comment by Professor Bear
2015-01-25 15:32:47

“…just like the California home buyers who ruined housing prices for everyone else.”

And everyone else gets to pay the implicit price of helping California home owners stay in their homes through low returns on savings, high housing prices, high rents, etc etc etc.

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Comment by Raymond K Hessel
2015-01-25 08:08:41


When you read about female doctors feeling forced to prostitute themselves to feed their children, about the number of miscarriages doubling, and about the overall sense of helplessness and destitution among the Greek population, especially the young, who see no way of even starting to build a family, then I can only say: Brussels is a bunch of criminals. And Draghi’s QE announcement is a criminal act. It’s a good thing the bond-buying doesn’t start until March, and that it’s on a monthly basis: that means it can still be stopped.

Comment by Albuquerquedan
2015-01-25 08:18:43

the oil “glut” was about one million barrels a day according to the IEA and U.S. demand at least by one measure increased by one million barrels of a day due to the decreased prices. I am seeing a lot more vehicles on the road. Now, how are we going to meet demand when oil shale production begins to plummet? As I said gas lines or $80 oil by December excerpt from story:

HOUSTON, Jan. 23


By OGJ editors

Total US petroleum deliveries, a measure of demand, increased 5.1% last month from December 2013 to average nearly 20 million b/d, according to the American Petroleum Institute’s monthly statistics for December 2014. For the fourth quarter, total US petroleum deliveries gained 2.9% compared with the same period in 2013.

Gasoline demand last month rose by 5.4% from the prior year to average more than 9.1 million b/d, the highest December level since 2007. Deliveries of residual fuel jumped 71.8% from the prior year to their highest December level in 3 years. Demand also increased for distillate, jet fuel, and other oils.

Comment by Blue Skye
2015-01-25 08:26:14

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

Comment by Professor Bear
2015-01-25 09:09:07

“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?

Comment by Professor Bear
2015-01-25 09:17:36

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.

Comment by Albuquerquedan
2015-01-25 09:43:20

Bogus number, we did not have 1/10 of the oil in storage or demand in 1930s. Since world demand increases almost every year and it did this year, you will have record amounts in storage almost every year to meet demand. I am only posting this because I am waiting to see if an earlier comment will post. I guess I will close out with this one since that one appears to have disappeared.

Comment by Albuquerquedan
2015-01-25 10:00:42

If you look at the total amount in storage it is 6.6 higher this year than last big deal. The MSM is just doing its job and supporting the economic war. Actually, we have five million barrels less in SPR, apparently the government wanted to expand the surplus in commercial stocks just opposite what we should be doing but completely consistent with manipulation:


Comment by phony scandals
2015-01-25 08:23:17

strange 12/25/2009 sale date and $0 sale price of homes

Comment by Raymond K Hessel
2015-01-25 08:41:01

Sunday funnies courtesy of TBP. The best political cartoons out there. Enjoy!


Comment by Albuquerquedan
2015-01-25 08:54:47

Weapons on a layaway plan:

London, UK (IraqiNews.com) Prime Minister Haider al-Abadi announced that Iraq had received a U.S. shipment of weapon during the past week, pointing out that Iraq will pay for the weapons when oil prices increase, and calling the international coalition to continue targeting ISIS sites.

Abadi stated during a joint press conference with U.S. Secretary of State John Kerry and the British Secretary of State Minister Philip Hammond, held today in London and followed by IraqiNews.com, that, “An American arms shipment arrived in Iraq during the past week,” noting that, “There is an increase in aids.”

Abadi added, “The significant decline in oil prices led to a significant breakdown in the Iraqi economy and this may affect the ability of Iraq to fight ISIS,” pointing out that, “Iraq is not a poor country and will pay for the weapons when oil prices increase.”

Abadi said, “I came to London to get more support from allies,” urging the international coalition to “continue to targeting ISIS sites in Iraq.”

Comment by Mr. Banker
2015-01-25 09:15:00

Bahahahaha … I’m glad there exists an ISIS … otherwise one would have to be invented.

Comment by Mr. Banker
Comment by Ben Jones
2015-01-25 09:17:15

‘How the Pentagon Really Gets Funded’

‘The most interesting parts of former Secretary of Defense Robert Gates’s memoir, Duty, are about how he navigated the Department of Defense (DoD) bureaucracy and the special interests who live off it.’

“Despite multiple Air Force studies showing that we had plenty of [C-17] cargo aircraft, Congress just kept stuffing more C-17s into the budget in order to preserve the jobs on the production line. The Air Force didn’t need more, didn’t want more, and couldn’t afford more.”

“At one hearing, one of my staff was walking behind Senator Patty Murray of Washington and noticed that no one had bothered to remove the Boeing letterhead from her talking points.”


Comment by phony scandals
2015-01-25 13:31:59

“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.

Comment by Housing Analyst
2015-01-25 09:20:14

I detect rage and desperation by a few of the posters here.

Comment by Professor Bear
2015-01-25 09:23:38

Are you missing out on the long-term Treasury bond rally?

Comment by Professor Bear
2015-01-25 09:29:11

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.

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.

Comment by Professor Bear
2015-01-25 09:33:45

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.”

Comment by Mr. Banker
2015-01-25 12:58:01

“The debt is yielding 21 percent …”

Bahahaha … or maybe it will end up yielding nothing. Nothing at all.

And then there’s your principle …

Bahahahahahahaha … what part of “poof” do you have a hard time understanding?

Comment by Professor Bear
2015-01-25 15:36:26

Or maybe it will end up yielding this, in your nether regions.

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Comment by Mr. Banker
2015-01-25 13:02:25

In order to prepare yourself, go here:


Comment by Professor Bear
2015-01-25 09:43:31

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?

Comment by Professor Bear
2015-01-25 23:12:47

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.

Comment by Professor Bear
2015-01-25 09:36:21

It’s Greek election day. What implications will the outcome for the future of the euro?

Comment by Professor Bear
2015-01-25 09:37:58

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.

Comment by Raymond K Hessel
2015-01-25 09:38:16

We’ll find out by the time the futures markets open tonight.

Comment by Professor Bear
2015-01-25 09:38:58

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.

Comment by butters
2015-01-25 10:24:45

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.

Comment by Raymond K Hessel
2015-01-25 10:52:45

Syriza looks headed for a blowout, while New Dawn - neo-nazis for all intents and purposes - are set to get up to 8% of the vote, surpassing the former establishment PASOK whose corrupt and self-serving crony capitalist maladministration helped paved the way for Greece’s current apocalypse. It is a stunning repudiation of the sleazy Greek political establishment and their Troika-Goldman Sachs masters.


Comment by Oddfellow
2015-01-25 12:45:18

If Syriza wins, I bet they use their victory to try to get more debt forgiveness through the threat of leaving the euro. If they can’t get what they see as adequate debt forgiveness, then it could get interesting.

Comment by shendi
2015-01-25 17:19:54

I think that in the short term a lot of rich people will move their money out of Greece if they have not already done so, like the Chinese looters that fled their country. It would be interesting to see what Syriza will do to clean the corrupt government / kickbacks way of doing business.

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Comment by Raymond K Hessel
2015-01-25 18:37:22

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.

Comment by Professor Bear
2015-01-25 09:44:47

Have the Fed’s anti-renter policies remained in place since the end of Ben Bernanke’s tenure?

Comment by Professor Bear
2015-01-25 09:48:28

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.

Comment by Professor Bear
2015-01-25 09:51:06

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.

Comment by Professor Bear
2015-01-25 09:58:06

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.

Comment by rms
2015-01-25 15:14:02

“…and houses kept getting bigger as families got smaller.”

+1 This issue seems to have quietly gone by the boards.

Comment by Professor Bear
2015-01-25 15:40:50

…also as incomes got smaller.

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Comment by Professor Bear
2015-01-25 10:00:47

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.

Comment by Professor Bear
2015-01-25 10:07:54

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.

Comment by shendi
2015-01-25 17:23:57

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.

About 80% of these are the corrupt Chinese fleeing their country with money. I don’t know what their kids will do after learning English.

Comment by Raymond K Hessel
2015-01-25 10:55:42

The Fed’s policies are anti-99%, not just anti-renter or anti-saver.

Comment by Professor Bear
2015-01-25 10:02:33

Home-Sales Winning Streak Ends, First-Time Buyers Go Missing 
By Shobhana Chandra Jan 23, 2015 2:04 PM PT
Photographer: Scott Eisen/Bloomberg
Brownstone buildings are seen from a rooftop near Kenmore Square in Boston, Massachusetts, U.S.

A three-year winning streak for sales of previously owned homes in the U.S. ended in 2014 as some investors stepped out of the market and first-time buyers failed to fill the void.

Purchases totaled 4.93 million last year, down 3.1 percent from the 5.09 million houses sold in 2013, figures from the National Association of Realtors showed Friday in Washington.

The share of American homebuyers making their first purchase dropped in 2014 to its lowest level in almost three decades, according to the Realtors group. At the same time, employment gains, growing consumer confidence, mortgage rates at historically low levels and government efforts to lower purchasing costs probably will help bolster demand in 2015.

“Demand has been pretty sideways,” said Jay Feldman, an economist at Credit Suisse in New York. “There are various positives and I don’t see any big negatives for housing. The improving labor market and low mortgage rates will support the housing recovery.”

Comment by phony scandals
2015-01-25 10:04:17

More homeless camps are appearing beyond downtown L.A.’s skid row


JANUARY 24, 2015, 10:00 AM

Soaring rents, closed shelters and funding cutbacks are pushing residents from neighborhoods such as Highland Park and Boyle Heights into the streets, where they cling to familiar turf.

When jobs dried up, he used to grab a cheap hotel room downtown. Now those rooms are gone, converted to homeless housing, tourist hotels, lofts or market-rate rentals.

http://www.latimes.com/local/california/la-me-homeless-encampments-20150125-story.html - 166k -

Comment by Mr. Banker
2015-01-25 10:22:27

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!


Comment by Raymond K Hessel
2015-01-25 10:48:14

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.

Comment by Dman
2015-01-25 10:05:05

I just watched the episode of Family Guy where Brian gets smiley new teeth and so becomes a realtor, and then sells Quagmire a dilapidated condo. I wonder if Seth McFarlane reads this site?

Comment by Professor Bear
2015-01-25 10:14:34

Have the widely-touted benefits of home ownership generally led to improved household financial security for African Americans?

Comment by Professor Bear
2015-01-25 10:19:18

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.”

Comment by rms
2015-01-25 21:27:30

“Denise Watson bought a two-bedroom townhome in the Villages of Marlborough in 2005.”

I’m guessing that Denise has never heard, “buy the dip.”

Comment by Bring Back the WPA
2015-01-25 10:20:20

Solar industry creates 8x more jobs than the fracking industry: http://goo.gl/fhkZg2

“The future’s so bright, I gotta wear shades … Fifty thou a year — buys a lot of beer” — Timbuk 3

Comment by Housing Analyst
2015-01-25 10:30:05


Comment by Bring Back the WPA
2015-01-25 11:31:00

No, not at all. At the current rate of technological improvements and falling prices, it is forecast for solar to reach grid parity by 2020. Grid parity means solar will be the same price or cheaper than hydrocarbons — without subsidy. Building permits and installations of rooftop solar are soaring.


Comment by Housing Analyst
2015-01-25 12:25:14

It’s reality my friend.

BTU’s/$ spent on fossil fuels far exceed solar. Always has. If oil were a few hundred a barrel then solar *might* be less costly.

Besides… solar is unreliable.

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Comment by Shillow
2015-01-25 13:29:27

By the year 2020, always 5 years away.

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Comment by measton
2015-01-25 21:20:33

You can lock in your energy costs for the next 20 years by purchasing solar. You can increase your families security with solar. You can free yourself from market manipulators with solar.

Comment by Housing Analyst
2015-01-26 06:07:38

How does that work with my fleet of equipment and vehicles which happens to be everyones highest cost of energy?

Comment by Professor Bear
2015-01-25 10:20:43

I can’t believe I’ve wasted a portion of another perfectly lovely morning trying to refute Dipstick’s endless deluge of insipid posts.

Shame on me.

Comment by Mr. Banker
2015-01-25 10:33:46

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!

Comment by Professor Bear
2015-01-25 10:55:23

Nice thought: Drown out your laments with the proceeds of a brand new $500K mortgage loan.

Comment by Neuromance
2015-01-25 14:15:48

Think of all the shinies you can get for that amount! :)

Just don’t think about your net worth. That’s boring, unimportant stuff, let the professionals handle that. They wouldn’t steer you wrong.

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Comment by rms
2015-01-25 21:57:29

“Think of all the shinies you can get for that amount!”

Especially in Ho Chi Minh City, but likely not a ranking on Sperling’s Best Places To Live.

Comment by Professor Bear
2015-01-25 11:04:31

Too bad, so sad, for Mr. Banker, and anyone else who bought fracking junk bonds!

Oil collapse could trigger billions in bank losses
Huge expansion in leveraged loans to oil and gas sector in recent years suggests heavy losses from defaults
55-gallon oil barrels stacked up outside a Chevron Gas station in Santa Barbara, California
By James Titcomb
7:30PM GMT 24 Jan 2015

British banks including Royal Bank of Scotland and Barclays may be sitting on billions in losses from the collapse in oil prices after a surge in junk loans to the industry.

UK banks have been behind more than $50bn of leveraged loans — high-yield, non-investment grade debt — to the oil and gas industry in the past four years, according to data from Dealogic.

Although British lenders are not the most exposed to the oil collapse, with most debt issuance arranged by US and Canadian institutions, leveraged loans arranged by UK lenders have more than doubled since 2011 amid the North American shale boom.

The price of Brent crude has slumped from $110 a barrel last summer to $48.91 on Friday, amid a glut in supply and falling global demand.

While low prices are likely to give a shot in the arm to consumers and manufacturers, many oil producers, particularly in America’s shale gas fields, are likely to be driven out of business.

A lengthy period of cheap crude is likely to trigger widespread defaults and many oil and gas loans are now changing hands for well below their face value as investors fear they will not get their money back.

Banks will offload many of the loans and hedge their losses, and some will have stricter lending standards for high-yield loans than others.

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.

Some lenders have privately indicated that they consider the oil price fall to have a positive impact, with the wider economic benefits offsetting the loans they are writing off. However, significant losses are seen as inevitable if prices fail to rebound.

Chirantan Barua, an analyst at Bernstein Research, has estimated that the combined losses of Barclays, RBS, HSBC and Standard Chartered from falling oil prices could amount to $3.4bn.

Someone is feeling the pain,” said Mr Barua. “When you see [this much] high-yield issuance in a sector that has been levering up across the supply chain, any shocks in the underlying business will have risk ripples across the financial system.”

Comment by Professor Bear
2015-01-25 11:21:22

“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.

Comment by azdude
2015-01-25 12:17:22

I really think its time for some more bond sales to uncle fed so we can bailout the oil industry. The pain is too much.

Comment by Professor Bear
2015-01-25 15:43:07

That’s what I was thinking. For instance, what is stopping the Fed from printing up some more balance sheet assets to buy up all the fracking junk bonds?

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Comment by Professor Bear
2015-01-25 17:07:34

The Oil Price Crash Is Forcing Central Banks Into Action All Around The World
Business Insider
By Tomas Hirst January 24, 2015 4:26 PM
REUTERS/Darrin Zammit Lupi
A man falls off the “gostra”, a pole covered in grease, during the celebrations for the religious feast of St Julian, patron of the town of St Julian’s, outside Valletta, August 31, 2014.

Markets have been taken by surprise recently by central banks loosening monetary policy. But with inflation falling across the developed world, they really shouldn’t be.

Recent weeks have seen the Bank of Canada joining the Swiss National Bank in cutting rates, while the Bank of Japan stepped up its lending programme and the Bank of England returning its first unanimous decision not to raise rates in six months. And today the European Central Bank (ECB) is widely expected to launch a large asset purchase programme, with rumours that it could amount to as much as €50 billion a month for at least a year.

So what’s going on?

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Comment by Professor Bear
2015-01-25 17:42:57

“So what’s going on?”

1. Interest rates on Westernized nations’ government bonds are either kissing up against the zero bound or dropping to unprecedented negative levels.

2. Oil prices are still dropping, and no amount of jawboning by AlbqDanEsq or anyone else can stop them.

Comment by Mr. Banker
2015-01-25 11:32:32

“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.)

Comment by Professor Bear
2015-01-25 11:52:50

There has never been a better time for dips to buy!

Comment by phony scandals
2015-01-25 11:25:19

U.S. Army sends tanks, equipment to Eastern Europe
All wars are bankers wars

Part of broader effort to bolster U.S. military presence in region

by John Vandiver and Michael Darnell | Stars and Stripes | January 25, 2015

U.S. Army Europe will soon dispatch a survey team to eastern Europe to scout locations for tanks and other military hardware as part of a broader effort to bolster the U.S. military presence in a region rattled by Russia’s intervention in Ukraine, the Army’s top commander in Europe said Friday.

“We are doing surveys here in the next few weeks up in Estonia, Latvia, Lithuania, Poland, Romania and Bulgaria to see if there is a place where perhaps some of that equipment could be stored there,” USAREUR chief Lt. Gen. Ben Hodges said during an interview with Stars and Stripes. “Maybe it’s a company, maybe it’s a whole battalion, we don’t know yet until we do the survey.”

In 2015, the Army expects to rotate a full-sized, U.S.-based heavy brigade of some 3,000 troops and additional tanks and other armored vehicles through Europe in connection with the service’s Regionally Aligned Force initiative. Last year, the program kicked off on a smaller scale, bringing combat tanks back into Europe after a brief absence following the elimination of two Germany-based heavy brigades in 2013. Now, the regional concept is picking up steam, with plans for 220 armored vehicles in Europe.

Comment by phony scandals
2015-01-25 14:07:32

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.


Comment by Professor Bear
2015-01-25 15:45:36

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

Sucks to divest from an asset as it experiences one of the biggest rallies in modern financial history, while finding yourself on the long end of a natural resource stock undergoing a 50%+ crash.

Comment by Professor Bear
2015-01-25 11:26:29

NYMEX oil futures are still dropping…look set to retest 52-week lows under $45/bbl.

Crude Oil - Electronic (NYMEX) Mar 2015

Change -$1.02 -2.20%
Volume 351,583
Jan 23, 2015, 5:14 p.m.
52 week low $44.78

Comment by Blue Skye
2015-01-25 12:23:03

Wake me up at $30.

Comment by Professor Bear
2015-01-25 15:46:36

Gradually getting there…

Comment by Professor Bear
2015-01-25 15:49:25

Given that oil dropped by 7% last week, it might be interesting to ask how many more 7% weeks of decline would it take to get the price down from $45/bbl to $30/bbl.

A little simple math offers the answer:

$45*(1-0.07)^n = $30.

The solution is n = log(30/45)/log(0.93) = 5.6 — a little under 1 1/2 months.

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Comment by Professor Bear
2015-01-25 16:21:37

Still falling…under $45/bbl as I type. I can’t wait to make my weekly visit to the Costco gas station!

Crude Oil - Electronic (NYMEX) Mar 2015
Change -$0.75 -1.65%
Volume 2,903
Jan 25, 2015 6:07 p.m.
Previous close $ 45.59
Day low $44.54
Day high $45.35
Open: $45.20
52 week low $44.54
52 week high $100.52

Comment by Housing Analyst
2015-01-25 16:25:03

… down down dowwwwwwwwwwwwwwwwwwn we go!

Comment by Professor Bear
2015-01-25 16:42:31

Too bad that AlbqDanEsq got his feelings hurt and is not around to explain why the markets are wrong and oil prices are going straight back up to $80/bbl any day now.

Comment by Housing Analyst
2015-01-25 12:04:54

“Mortgages are for poor people pretending to be middle class”


Comment by azdude
2015-01-25 12:13:22

volitility is the enemy of inflated asset prices!

Comment by phony scandals
2015-01-25 13:43:15

‘We Are Going to Destroy the Greek Oligarchy System’

Promises to destroy what sucks the energy and economic power from everybody else in society

by Truthdig | January 25, 2015

Yanis Varoufakis is tipped to become finance minister of what may become Greece’s leading party after legislative elections on Sunday. He tells Britain’s Channel 4 what Syriza will do if it takes power.

Channel 4 economics editor Paul Mason asks Varoufakis, who teaches economics at the University of Athens, “what will you do to [Greece’s] oligarchy, concretely?”

Varoufakis responds, “We are going to destroy the basis upon which they have built, for decade after decade, a system, a network that viciously sucks of the energy and economic power from everybody else in society.”

When Mason responds that Varoufakis knows what happened “last time somebody tried to take power from the Greek oligarchy,” Varoufakis replies, “the good fight has to be fought independently of costs.

Comment by Professor Bear
2015-01-25 16:27:52

What will happen if Greece reneges on their bailout debt?

Comment by Professor Bear
2015-01-25 16:29:02

The Wall Street Journal
Greeks head to polls to elect next national government
Published: Jan 25, 2015 10:14 a.m. ET
A Greek orthodox priest prepares to vote in Athens Sunday in Greece’s parliamentary elections.
By Nektaria Stamouli

ATHENS—Greeks headed to the polling booths Sunday for the third time in less than three years to elect a new government, a vote that could determine the country’s future in the eurozone and reverberate across Europe.

According to recent public-opinion polls, Greece’s radical leftist Syriza party was poised to win the general elections, but it wasn’t clear whether its share of the vote would be enough to clinch an outright majority in the legislature.

Syriza has been steadily leading in the opinion polls for the past year, while its lead has widened further in the days immediately before Sunday’s vote. The polls show the party garnering between 29.6% and 33.4% of the vote, edging out the incumbent New Democracy party by five to 10 percentage points.

The outcome could have lasting repercussions for both Greece and the eurozone. Syriza, which emerged as the main opposition party in mid-2012 at the depths of the nation’s debt crisis, has promised to tear up the austerity and overhaul program that Athens pledged in exchange for a EUR240 billion ($269 billion) bailout from international creditors.

Since that deal, Greece has undertaken a broad sweep of revamps and cutbacks that have helped fix its public finances and nudged the economy back to growth following six years of deep recession. Those cutbacks have come at a cost: Some 25% of Greeks remain jobless, while a quarter of households live close to the poverty line.

However, Syriza’s promises to roll back many of those overhauls and its demands for debt relief from Greece’s international creditors have also stoked fears of an open clash with eurozone partners that could lead to the country’s exit from the common currency and once again rattle financial markets world-wide. In the past three months, Greece’s financial markets have shed roughly a fifth of their value, while nervous depositors have withdrawn several billions of euros from the country’s banking system.

A Syriza victory would also be closely watched by other antiausterity parties in Europe—on the left and the right—that have been gaining ground in the past year.

Comment by Professor Bear
2015-01-25 17:50:30

Market Pulse
Euro falling as Syriza projected to win Greek election
Published: Jan 25, 2015 7:12 p.m. ET
By Michael Kitchen
Asia editor
Corrects Friday’s euro-dollar level.

LOS ANGELES (MarketWatch) — The euro dropped to fresh lows of more than a decade late Sunday as official Greek projections showed anti-austerity party Syriza likely to finish first, possibly with enough seats to form a government on its own, raising questions over Greece’s future in the eurozone. By around 7:00 p.m. U.S. Eastern time, the euro (EURUSD, -0.33%) was changing hands for $1.1174, off its level of around $1.1240 Friday. Earlier in the day, the currency pair fell as low as $1.1098, its weakest point since mid 2003, less than a year after retaking parity with the U.S. dollar in 2002. Against the Japanese yen, the euro (EURJPY, -0.36%) dropped as far as ¥130.15, the lowest in more than a year. It soon rebounded to ¥131.25, but was still down from Friday’s ¥132.45.

Comment by Blue Skye
2015-01-25 18:15:28

“What will happen if Greece reneges…”

1%ers in sackcloth and ashes?

Comment by Professor Bear
2015-01-25 18:22:22

That will be not be necessary, given the potential for unlimited quantitative easing to offset whatever negative consequences arise.

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Comment by phony scandals
2015-01-25 14:15:27

Report: IBM Employees Bracing for Colossal Layoff Starting Next Week

The VAR Guy | January 23, 2015

IBM is set to begin laying off what could amount to 26 percent of its global workforce next week, according to one report on the rumored firings. Content Classification: Curated

Read Article at Source »

http://www.techinvestornews.com/…employees-bracing-for-colossal-layoff-starting-next-week - 34k -

Comment by phony scandals
2015-01-25 14:22:22

It’s not a joke it’s a strategy.

The Cloward–Piven strategy.

Immigration Officers Blast Border Bill: ‘A Global Joke;’ ‘Where Is the Outrage?’

“It’s not border security if anyone can recite the magic words and get waved right on in”

by Craig Bannister | MRCtv.org | January 23, 2015

“We admit individuals who have no business being admitted,” the head of the immigration officers’ union said today, blasting both Pres. Obama’s amnesty and the new border bill.

Kenneth Palinkas, President of the National Citizenship and Immigration Services Council representing 12,000 United States Citizenship and Immigration Service (USCIS) adjudicators and personnel, says the immigration legislation scheduled to be considered by the House of Representatives next week puts officers’ mission “in grave peril.”

“Where is the outrage from Congress?,” he asks. “After the House passed its legislation to reverse the amnesty, all I hear is silence in the Senate. It seems Congressional leaders will not rise to defend the laws of the United States, but are giving in to the ‘imperial presidency,’ Palinkas says.

The new “border security” bill is “a global joke,” Palinkas says:

“H.R. 399 – Chairman McCaul’s legislation – does nothing to preclude anyone in the world from turning themselves in at the US border and obtaining automatic entry and federal benefits. Almost anyone at all can call themselves an asylum-seeker and get in; it’s a global joke.”

Comment by Raymond K Hessel
2015-01-25 18:41:33

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.

Comment by phony scandals
2015-01-25 14:51:53

Comment by Raymond K Hessel
2015-01-24 20:09:40

The ranks of the homeless are welling in the Obama-Fed-Wall Street “recovery.”


“Evicted four months ago from their Highland Park apartment, Louis Morales and his 18-year-old stepson, Arthur Valenzuela, live half-hidden by brush along the nearby Arroyo Seco riverbed.”

“Morales, 49, keeps a framed bible verse and a stuffed monkey in his tent. Water hauled by bike from a park heats up on the camp stove.”

Sounds like Louis is gettin’ with the program.

Wed Jan 21, 2015, 03:01 PM

“America’s lifestyle expectations are far too high and need to be adjusted so we have less things and a smaller, better existence,” Greene said in an interview today at the World Economic Forum in Davos, Switzerland. “We need to reinvent our whole system of life.”

Billionaire Jeff Greene, who amassed a multibillion dollar fortune betting against subprime mortgage securities flew his wife, children and two nannies on a private jet plane to Davos for the week.

Comment by Jamie
2015-01-25 15:20:03

I am 26 years old with a very secure $100k year job, pension, maxing out 401k, zero debt, excellent credit, and $110k in savings. I’ve been very fortunate to find a great job and kept a low overhead which has allowed me to save quite a bit over the last 4 years. Unfortunately I missed the boat timing wise for purchasing at discounted prices in San Diego as the bulk of my saving has been done in the last 2 years.

I’ve watched single family home prices climb and climb over the last few years as i’ve been saving and am starting to get worried that they will never come back down to what I consider “affordable” levels. I would love even a 10% correction in SD housing, and would ideally purchase a $425k-ish complete fixer upper with 20% down and fix it up from there. The worst house in the nicest neighborhood I can find!

Currently I rent a small but nice 1 bedroom apartment 2 blocks from the ocean with my significant other with a total cost of $900 to me after rent and all utilities/wifi. I love the area we live in and although the apartment is very small I can see myself doing this for a few more years and continuing to save at a slower rate. My only concern is that prices will continue their upward march and all my efforts will be wasted in the long run. Prices seem crazy to me and flipping activity is rampant in the areas I look at. My initial inclination is to keep saving and keep a low overheard and wait for a potential correction.

Comment by Housing Analyst
2015-01-25 15:52:00

Sit tight because prices are falling again in San Diego.

Comment by Professor Bear
2015-01-25 15:53:27

“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.

Comment by phony scandals
2015-01-25 17:28:43

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.

Comment by Housing Analyst
2015-01-25 17:31:16

^ yup. Jamie… Kristopher… it’s all good.

Comment by Professor Bear
2015-01-25 17:45:18

Kristopher / Jamie could afford to buy a $550K house with a $110K 20% downpayment. Why wouldn’t he do this post haste, given the rare opportunity to buy in San Diego?

Comment by phony scandals
2015-01-25 19:13:44

“Why wouldn’t he do this post haste, given the rare opportunity to buy in San Diego?”

And for one desperate moment there
Price crept back in his memory
God it’s so painful when something that’s so close
Is still so far out of reach

O yeah, all right
Take it easy, Jamie
Make it last all night
It was
A rare opportunity to buy in San Diego

Tom Petty and the Heartbreakers - American Girl (lyrics) - YouTube
http://www.youtube.com/watch?v=N5ccVWbteps - 225k -

(Comments wont nest below this level)
Comment by Professor Bear
2015-01-25 20:58:05

Well, he was an American boy
Raised on promises
He couldn’t help thinkin’ That there
Was a little more to life
Somewhere else
After all it was a great big world
With lots of places to run to
Yeah, and if he had to buy
Tryin’ He
Had one little mortgage he was gonna pay

Comment by rms
2015-01-25 23:27:58

“Well, he was an American boy…”

+1 “Standing Ovation!”

Comment by phony scandals
2015-01-25 15:50:08

An Investment Manager’s View on the Top 1%

I sit in an interesting chair in the financial services industry. Our clients largely fall into the top 1%, have a net worth of $5,000,000 or above, and — if working — make over $300,000 per year. My observations on the sources of their wealth and concerns come from my professional and social activities within this group.

The Lower Half of the Top 1%

The 99th to 99.5th percentiles largely include physicians, attorneys, upper middle management, and small business people who have done well. Everyone’s tax situation is, of course, a little different, but on earned income in this group, we can figure that somewhere around 25% to 30% of total pre-tax income will go to Federal, State, and Social Security taxes — leaving them with around $250k to $300k post-tax. This group makes extensive use of 401(k)s, SEP-IRAs, Defined Benefit Plans, and other retirement vehicles, which defer taxes until distribution during retirement. Typical would be yearly contributions in the $50k to $100k range, leaving our elite working group with yearly cash flows of $175k to $250k after taxes, or about $15k to $20k per month.

The net worth for those in the lower half of the top 1% is usually achieved after decades of education, hard work, saving and investing as a professional or small business person. While an after-tax income of $175k to $250k and net worth in the $1.2M to $1.8M range may seem like a lot of money to most Americans, it doesn’t really buy freedom from financial worry or access to the true corridors of power and money. That doesn’t become frequent until we reach the top 0.1%.

Unlike those in the lower half of the top 1%, those in the top half and, particularly, top 0.1%, can often borrow for almost nothing, keep profits and production overseas, hold personal assets in tax havens, ride out down markets and economies, and influence legislation in the U.S. They have access to the very best in accounting firms, tax and other attorneys, numerous consultants, private wealth managers, a network of other wealthy and powerful friends, lucrative business opportunities, and many other benefits. Most of those in the bottom half of the top 1% lack power and global flexibility and are essentially well-compensated workhorses for the top 0.5%, just like the bottom 99%. In my view, the American dream of striking it rich is merely a well-marketed fantasy that keeps the bottom 99.5% hoping for better and prevents social and political instability. The odds of getting into that top 0.5% are very slim and the door is kept firmly shut by those within it.

The Upper Half of the Top 1%

I think it’s important to emphasize one of the dangers of wealth concentration: irresponsibility about the wider economic consequences of their actions by those at the top. Wall Street created the investment products that produced gross economic imbalances and the 2008 credit crisis. It wasn’t the hard-working 99.5%. Average people could only destroy themselves financially, not the economic system. There’s plenty of blame to go around, but the collapse was primarily due to the failure of complex mortgage derivatives, CDS credit swaps, cheap Fed money, lax regulation, compromised ratings agencies, government involvement in the mortgage market, the end of the Glass-Steagall Act in 1999, and insufficient bank capital. Only Wall Street could put the economy at risk and it had an excellent reason to do so: profit. It made huge profits in the build-up to the credit crisis and huge profits when it sold itself as “too big to fail” and received massive government and Federal Reserve bailouts. Most of the serious economic damage the U.S. is struggling with today was done by the top 0.1% and they benefited greatly from it.

www2.ucsc.edu/whorulesamerica/power/investment_manager.html - 42k -

Comment by Professor Bear
2015-01-25 15:57:11

We had some old friends of my wife’s over for brunch. They are relocating from the PNW to SoCal. The guy’s relocation package includes $100K up front to pay off their underwater mortgage and student loans in full when they move.

Has anyone else come across similar corporate relocation deals?

Comment by Professor Bear
2015-01-25 16:03:38

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

Comment by Housing Analyst
2015-01-25 16:04:08

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

Comment by rms
2015-01-25 23:35:37

“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?

Comment by Dudgeon Bludgeon
2015-01-26 01:56:27

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”.

Comment by Professor Bear
2015-01-25 16:16:22

I took a look at the December 2015 Light Sweet Crude Oil (WTI) futures contract price to get a feel for where futures traders expect oil prices to land by year-end 2015 compared to AlbqDanEsq’s $80/bbl prediction. It seems like futures traders are expecting a price below $55/bbl, and that their expectations are 44% lower than they were since beginning a period of decline in July 2014.

Perhaps his superior prediction skill reflects that AlbqDanEsq’s IQ is 30 points higher than that of the average poster on this blog?

Crude Oil WTI December 2015 (CLZ15)
Commodity Price Quote as of Fri, Jan 23rd, 2015
High $54.64
Low $53.12
$95.25 52Wk High
(-43.96%) Since 07/02/14
$51.80 52Wk Low
(+3.05%) Since 01/20/15

Comment by azdude
2015-01-25 17:08:56

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

Comment by Professor Bear
2015-01-25 17:10:19

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.

Comment by Housing Analyst
2015-01-25 18:00:46

“Why Oil Prices May Not Recover Anytime Soon”

Remember… A ‘recovery’ is falling prices to dramatically lower and more affordable levels by definition.

Comment by Professor Bear
2015-01-25 16:38:20

True or false: Foreign-born Americans are not eligible for the WH.

I’m asking this because Canadian-born Cuban-American Ted Cruz seems to have WH aspirations. Is he eligible? (Perhaps the fact that he is married to a Goldman Sachs director means the usual rules don’t apply to him?)

Comment by Blue Skye
2015-01-25 18:23:06

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.

Comment by Professor Bear
2015-01-25 18:46:41

I believe his parents were naturalized Cuban immigrants. They actually have a very impressive family life history.

Comment by aNYCdj
2015-01-25 18:12:21

Jackson Guns and Ammo Shop in Henrietta closed its doors last week after the owner decided it was too difficult to continue business under New York state’s gun regulations.


Comment by Raymond K Hessel
2015-01-25 18:43:41

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.

Comment by Professor Bear
2015-01-25 21:00:18

Once global warming kicks in, can we expect fewer devastating blizzards?

Comment by Professor Bear
2015-01-25 21:02:45

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.

Comment by Blue Skye
2015-01-26 00:32:15

Don’t get hysterical, we have these every year, sort of in the winter season. The kids get off school. Mine were pressed to shoveling.

Comment by Professor Bear
2015-01-25 21:50:29

Are “they” gonna prop up the oil price above $45/bbl in order to make sure Megabank, Inc doesn’t lose too much money on its high-risk oil gambles?

Comment by phony scandals
2015-01-26 08:45:38

phony scandals

Comment by Tarara Boomdea
2015-01-26 18:00:41

Mark Hanson just put up a new post.

Bottom line: Housing demand and price dislocations can occur and last for longer than anybody expects.

Bottom line: There was no “end-user” housing demand “recovery”. Rather, a speculator-driven “house price” super-inflation, which is abnormal and unsustainable in the absence of underlying strong demand driven by end-user wage or credit expansion. Existing sales demand – although anemic – bounced much harder than builder demand, which are still in depression, a feature unique to this speculative bubble in which single-family houses were purchased by institutional investors as bond and dividend stock replacements. The last time house prices were so diverged was in 2007.

Looking forward, the housing market will continue to seek out demand and will find it one way or another. It’s what it does. Stimulus and lower rates are not doing the trick any longer. As such, like in 2006, it’s my belief that the simplest path to increased demand is through lower prices, which will be the theme in 2015.

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