The Housing Bubble

real journalists

http://www.tampabay.com/news/business/personalfinance/reports-show-growing-financial-squeeze-for-most-florida-workers/2215222

Income disparity is growing faster and there is a higher percentage of low-wage jobs being created in Florida compared with most places in the United States, according to a pair of reports coming out this week…A whopping 61 percent of job openings in Florida pay less than the estimated living wage for a single adult…

Opinion: He called $50 oil, now he says it’s going lower
By Howard Gold
Published: Jan 27, 2015 7:00 a.m. ET
Oil industry is in early phase of correction, fund manager says

Last November, when I was trying to figure out where oil prices were going, I spoke with Shawn Driscoll, manager of the T. Rowe Price New Era Fund, a mutual fund that focuses on natural resource stocks.

Brent crude was trading at $80 a barrel, and there was speculation that the Organization of Petroleum Exporting Countries would halt its slide by cutting production at its upcoming meeting, scheduled for Thanksgiving Day.

Driscoll was having none of it. Oil, gold, and other commodities, he told me, were in a secular bear market that could last another decade. He said oil would bottom out around $50 over the next 10 years.

Actually it took less than 10 weeks, as Brent traded under $48 a barrel on Monday. I usually don’t revisit columns or sources that quickly, but events have moved so fast I decided to catch up with Driscoll again.

Right off the bat, he acknowledged being surprised by the suddenness of oil’s price drop.

“We expected Saudi Arabia to cut, frankly,” he told me in a phone interview. “Once Saudi Arabia didn’t cut production, it became clear to us there was a problem.”

Both supply and demand were heading in opposite directions more drastically than he expected.

“Underlying demand got a lot weaker, Libya came back, Iraqi volumes have been pretty good,” he explained.

We spoke last Friday, the day after the pro-U.S. Yemeni government had fallen and King Abdullah of Saudi Arabia died and was succeeded by his 79-year-old half-brother Salman bin Abdulaziz al-Saud.

Yet despite these new uncertainties in the world’s most volatile, energy-rich region, Driscoll’s view remains unchanged: look out below.

He explained that $40 a barrel is the top of the industry’s operating cost curve — the price at which individual wells break even after they’ve been drilled and are producing and below which operators shut in existing wells.

So, does he think Brent will fall below that $40 magic number? “I do,” he told me.
…

Junk bond bubble imploding - look out below!

http://wolfstreet.com/2015/01/27/junk-bond-bubble-implodes-beyond-energy-deals-scuttled-yields-soar/

Regions 1 & 2, come in…Regions 1 & 2, please check in.

The Blizzard That Wasn’t.

The comrads in China don’t like the less-equal animals exchanging information about the true state of the country on the Internet.

https://www.yahoo.com/tech/s/china-says-harmful-must-managed-vpns-blocked-113202809.html

Suck ‘em in, shake ‘em out.

As of now the DOW futures are down 300 points.

this is a drudge report link

‘nearly a dozen democrats, said they were worried clinton’s hires for the top echelons of her pre-campaign haven’t taken gender and diversity into account.

one operative quipped that the top levels of the campaign are in danger of looking like ‘white dudefest 2016.’

http://www.thedailybeast.com/articles/2015/01/26/will-hillary-s-campaign-be-white-dude-fest-2016.html

and on the topic of diversity, the 2014 super bowl coke commercial

http://www.youtube.com/watch?v=443Vy3I0gJs

forward

Precious metals: the anti-Fed.

http://www.kitco.com/market/

Looks like Obama’s “all is well, crisis contained” happy talk at his SOTU speech was a tad premature.

http://www.zerohedge.com/news/2015-01-27/shadow-crisis-has-not-passed-durables-goods-orders-collapse

The financial reckoning day approaches. Be afraid, FBs and realtors. Be very afraid. The Fed has already blown its wad so don’t count on much help from them this time around.

http://www.businessinsider.com/durable-goods-orders-january-27-2015-1

Jonesy… Where or who was DipstickDan’s rage directed at?

another drudge link for the badge lickers and uniform fetishists

little piggies oinking about smartphone apps that track their ‘revenue enhancement’ locations, can’t be having that because it’s all about the public safety, and it’s ‘for the children’

http://finance.yahoo.com/news/sheriffs-want-popular-police-tracking-080441241.html

As the Middle Class Evaporates, Global Oligarchs Plan Their Escape from the Impoverished Pleb Masses

Michael Krieger | Posted Monday Jan 26, 2015 at 11:38 am

The middle class has shrunk consistently over the past half-century. Until 2000, the reason was primarily because more Americans moved up the income ladder. But since then, the reason has shifted: There is a greater share of households on the lower rungs of the economic ladder.

– From yesterday’s New York Times article: Middle Class Shrinks Further as More Fall Out Instead of Climbing Up

At a packed session in Davos, former hedge fund director Robert Johnson revealed that worried hedge fund managers were already planning their escapes. “I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway,” he said.

– From the Guardian’s article: As Inequality Soars, the Nervous Super Rich are Already Planning Their Escapes

So the other day, President Barack Obama once again demonstrated his contempt for the American public by using his State of the Union address to pejoratively blurt out meaningless phrases such as “but tonight, we turn the page” and: “The verdict is clear. Middle-class economics works. Expanding opportunity works. And these policies will continue to work, as long as politics don’t get in the way.”

Sorry, but why are “we turning the page” tonight? Weren’t you elected over six years ago? Why didn’t you turn the page in 2009?

Welcome to the recovery suckers.

libertyblitzkrieg.com/…/ - 74k -

The EIA publishes what they call a Drilling Productivity Report in which they claim that each rig is getting more productive, that is each rig produces just a little more oil each month than it did the previous month. But over the long haul, I find that the exact opposite is true. In every place in the world, each rig produces a little less oil every year.

http://peakoilbarrel.com/

He who panics first, panics best.

http://www.zerohedge.com/news/2015-01-27/nyse-invokes-rule-48-pre-empt-selling-panic

Why is Mr Market so glum today? Are Grexit fears spilling across the Atlantic Ocean to Wall Street?

“ the 2014 median rent herewas a depressing $1,423.”

http://blogs.dallasobserver.com/unfairpark/2015/01/the_dallas_housing_market_is_still_nuts.php

Falling Gas Tax Revenue Has California Lawmakers Considering Mileage Tax Plan

January 25, 2015 12:24 AM

SAN FRANCISCO (CBS SF) — With an increase in electric and hybrid vehicles along with better fuel-efficient vehicles, changing Bay Area drivers habit are posing a serious problem for state coffers.

As motorists use less and less gas, gas tax revenues to pay for state highways, roads and bridges shrink. Meanwhile, as gas prices fall, so does the sales tax generated by fuel sales. In California, among the taxes collected on fuel is a 2.25% sales tax on gasoline and a 9.67 percent tax on diesel.

Some state lawmakers feel a mileage tax is the best solution.

sanfrancisco.cbslocal.com/…/ - 266k -

Welcome to http://goo.gl/Js2S73

More potential layoffs at US Steel - in Alabama for all places

http://www.wsfa.com/story/27946303/us-steel-workers-in-fairfield-face-potential-for-major-layoffs

Ha! Yesterday in my bitbucket post at 09:31:52 I said the Dow was forming a diamond formation and there was a 69% chance of a hard selloff… dang, too bad I didn’t follow my own advice, coulda made a few bucks today on the short side.

Sales of new homes barely managed to rise last year
Published: Jan 27, 2015 10:57 a.m. ET
December sales jump to 481,000, well above expectations
By Greg Robb
Senior economics reporter
AFP/Getty Images
A townhome for sale on Dec. 30 in Centreville, Virginia.

WASHINGTON (MarketWatch) — After a year of fits and starts, sales of new single-family homes rose slightly over all of 2014 compared to 2013, the government reported Tuesday.

An estimated 435,000 new homes were sold in 2014, up from 429,000 a year earlier and the highest level in six years. In December, sales of new single-family homes rebounded 11.6% to a seasonally adjusted annual rate of 481,000.

Economists polled by MarketWatch had expected a December home-sales rate of 455,000, compared with an originally estimated November rate of 438,000. On Tuesday, the government revised November’s rate to 431,000. Sales of new homes in December were up 8.8% from a year earlier.

More broadly, sales remain far below a peak rate of almost 1.4 million in 2005.

“The improvement in the December data is in line with other housing activity indicators, which suggest the housing market stabilized at the end of last year after some weakness in the first half of 2014,” said Jesse Hurwitz, an economist with Barclays.

Other economists were more skeptical.

“This looks good but it says more about the weather than the underlying state of the housing market,” said Ian Shepherdson, chief economist of Pantheon Macroeconomics.
…

great investment opportunity National Bank of Greece S.A. (NBG) the 10 year is really nice

http://finance.yahoo.com/echarts?s=NBG+Interactive#

Las Vegas Real Estate News blurb today:
Builders need to Sell 2014 Inventory!
Cancellation rates jumped to 34 percent… Builders Loss is your Gain!
Buy a New Home get up to $20,000 cash back

“U.S. Spies on Millions of Drivers”

DEA Uses License-Plate Readers to Build Database for Federal, Local Authorities

WASHINGTON—The Justice Department has been building a national database to track in real time the movement of vehicles around the U.S., a secret domestic intelligence-gathering program that scans and stores hundreds of millions of records about motorists, according to current and former officials and government documents.

The primary goal of the license-plate tracking program, run by the Drug Enforcement Administration, is to seize cars, cash and other assets to combat drug trafficking, according to one government document. But the database’s use has expanded to hunt for vehicles associated with numerous other potential crimes, from kidnappings to killings to rape suspects, say people familiar with the matter.

Officials have publicly said that they track vehicles near the border with Mexico to help fight drug cartels. What hasn’t been previously disclosed is that the DEA has spent years working to expand the database “throughout the United States,’’ according to one email reviewed by The Wall Street Journal.

Many state and local law-enforcement agencies are accessing the database for a variety of investigations, according to people familiar with the program, putting a wealth of information in the hands of local officials who can track vehicles in real time on major roadways.

The database raises new questions about privacy and the scope of government surveillance. The existence of the program and its expansion were described in interviews with current and former government officials, and in documents obtained by the American Civil Liberties Union through a Freedom of Information Act request and reviewed by The Wall Street Journal. It is unclear if any court oversees or approves the intelligence-gathering.

A spokesman for Justice Department, which includes the DEA, said the program complies with federal law. “It is not new that the DEA uses the license-plate reader program to arrest criminals and stop the flow of drugs in areas of high trafficking intensity,’’ the spokesman said.

Sen. Patrick Leahy, senior Democrat on the Senate Judiciary Committee, said the government’s use of license-plate readers “raises significant privacy concerns. The fact that this intrusive technology is potentially being used to expand the reach of the government’s asset-forfeiture efforts is of even greater concern.’’

The senator called for “additional accountability’’ and said Americans shouldn’t have to fear ”their locations and movements are constantly being tracked and stored in a massive government database.’’

The DEA program collects data about vehicle movements, including time, direction and location, from high-tech cameras placed strategically on major highways. Many devices also record visual images of drivers and passengers, which are sometimes clear enough for investigators to confirm identities, according to DEA documents and people familiar with the program.

The documents show that the DEA also uses license-plate readers operated by state, local and federal law-enforcement agencies to feed into its own network and create a far-reaching, constantly updating database of electronic eyes scanning traffic on the roads to steer police toward suspects.

The law-enforcement scanners are different from those used to collect tolls.

By 2011, the DEA had about 100 cameras feeding into the database, the documents show. On Interstate 95 in New Jersey, license-plate readers feed data to the DEA—giving law-enforcement personnel around the country the ability to search for a suspect vehicle on one of the country’s busiest highways. One undated internal document shows the program also gathers data from license-plate readers in Florida and Georgia.

“Any database that collects detailed location information about Americans not suspected of crimes raises very serious privacy questions,’’ said Jay Stanley, a senior policy analyst at the ACLU. “It’s unconscionable that technology with such far-reaching potential would be deployed in such secrecy. People might disagree about exactly how we should use such powerful surveillance technologies, but it should be democratically decided, it shouldn’t be done in secret.’’

License-plate readers are already used in the U.S. by companies to collect debts and repossess vehicles, and by local police departments to solve crimes.

In 2010, the DEA said in internal documents that the database aided in the seizure of 98 kilograms of cocaine, 8,336 kilograms of marijuana and the collection of $866,380. It also has been connected to the Amber Alert system, to help authorities find abducted children, according to people familiar with the program.

One email written in 2010 said the primary purpose of the program was asset forfeiture—a controversial practice in which law-enforcement agencies seize cars, cash and other valuables from suspected criminals. The practice is increasingly coming under attack because of instances when law-enforcement officers take such assets without evidence of a crime.

The document said, “…DEA has designed this program to assist with locating, identifying, and seizing bulk currency, guns, and other illicit contraband moving along the southwest border and throughout the United States. With that said, we want to insure we can collect and manage all the data and IT responsibilities that will come with the work to insure the program meets its goals, of which asset forfeiture is primary.’

A number of lawmakers have been planning to offer legislation to rein in what they call abuses of asset-forfeiture laws. The Justice Department recently announced it was ending its role in one type of asset seizure, known as “adoptions,’’ a process by which local officials take property, then have the assets adopted and sold by the federal government. Often, that allows the local agency to keep a higher percentage of the money from the seizure. The policy change doesn’t affect the bulk of asset seizures in the U.S.

The national vehicle database program was launched in 2008 and opened to participating state and local authorities a year later. The initial focus was on tracking cars moving on or near the Southwest border, in order to follow the movements of drugs and drug money, according to officials and documents. Requests to search the database are handled by the El Paso Intelligence Center in Texas, which is known as EPIC in law enforcement circles. EPIC is staffed around the clock to both take in and send out information about “hits’’ on requested license plates.

The effort began in border states like Arizona, California, Nevada, New Mexico and Texas, but the goal has always been expansion, according to current and former federal officials and documents. Officials wouldn’t say how many other states are now feeding data into the system, citing concerns that disclosing such information could help criminals avoid detection.

The federal program hasn’t always been embraced by states. At a 2012 hearing, Utah lawmakers balked when DEA officials sought to have license-plate readers in the state feed into the database—one of the few times the agency has provided even limited facts about the program. That same year, a DEA official made a general reference to the program at a congressional field hearing about the Southwest border, saying it was built to monitor and target vehicles used to transport bulk cash and other contraband.

Under questioning from Utah lawmakers, the agency said the program began with an effort to track drug shipments on the Southwest border, and the government wanted to add monitors on major drug-trafficking routes like Utah’s Interstate 15, in order to hunt a wide array of criminals. That alarmed privacy advocates, who noted at the time that the DEA’s map of major drug routes included most of the national highway system.

The agency has reduced the time it holds the data from two years to 3 months, according to a Justice Department spokesman.

The EPIC database allows any police agency that participates to quickly search records of many states for information about a vehicle. One May 2010 redacted email says: “Anyone can request information from our [license-plate reader] program, federal, state, or local, just need to be a vetted EPIC user.…’’

The data are also shared with U.S. border officials, according to an undated memorandum of understanding between the DEA and Customs and Border Protection officials. That document shows the two agencies specifically said that lawmakers might never specifically fund the work, stating: “this in no way implies that Congress will appropriate funds for such expenditures.’’

The disclosure of the DEA’s license-plate reader database comes on the heels of other revelations in recent months about the Justice Department, as well as the agencies it runs, gathering data about innocent Americans as it searches for criminals.

In November, The Wall Street Journal reported that the U.S. Marshals Service flies planes carrying devices that mimic cellphone towers in order to scan the identifying information of Americans’ phones as it searches for criminal suspects and fugitives. Justice Department officials have said the program is legal.

Earlier this month, the DEA filed court documents indicating that for more than a decade it had gathered the phone records of Americans calling foreign countries, without judicial oversight, to sift through that data looking for drug suspects. That program was canceled in 2013.

Write to Devlin Barrett at devlin.barrett AT wsj.com

Looks like Obama is dropping his plan to tax 529 plans. Apparently included in the rage from the right was a call from Pelosi to back off.

When Pelosi thinks an idea is bad, it must be REALLY bad.

Thankfully this president has no power any more. Whew.

Everyone Must Check In

Over 7 Million People Who Suffered Foreclosures Could Return to Housing Market

By Douglas A. McIntyre January 27, 2015 6:33 am EST

About 7.3 million people who owned a home that went through foreclosure in the housing market collapses could potentially be back in the real estate market within eight years. (These people are known as “boomerang buyers.”) The emphasis should be on “potential,” because there is no guarantee they will return at all.

The first wave of 7.3 million homeowners who lost their home to foreclosure or short sale during the foreclosure crisis in 2015 are now past the seven-year window they conservatively need to repair their credit and qualify to buy a home. More waves of these potential boomerang buyers will be moving past that seven-year window over the next eight years corresponding to the eight years of above historically normal foreclosure activity from 2007 to 2014.

While it is hard to imagine any lending institution will give them loans again, some have been forgiven, at least financially. This group is relatively old by home ownership standards:

Read more: 7.3 Million Boomerang Buyers to Return to Housing Market, Says RealtyTrac - 24/7 Wall St. http://247wallst.com/housing/2015/01/27/over-7-million-people-who-suffered-foreclosures-could-return-to-housing-market/#ixzz3Q4zlvE00
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Opinion: Time to invest in Big Oil? Not now, maybe never
Published: Jan 28, 2015 12:03 a.m. ET
Can you cash in if gas goes to $5? Not likely, for these 8 reasons
AFP/Getty Images
Oil tankers anchored at Basra harbor, in Iraq.
By Paul B. Farrell
Columnist

“Is it time to invest in energy?” teases the Wall Street Journal? After all, “as oil prices continue to sink on concerns about weak global economic growth, investors might be tempted to pick up some energy stocks on the cheap.” USA Today nods yes with this teaser: “Former oil exec: $5-a-gallon gas on the way.” Yes, a former Shell president is predicting the “joy ride starts to end later this year.” Oil may hit $100.

Risk your retirement portfolio now? Speculate? But what if gas doesn’t hit five bucks a gallon by Christmas? Can you afford the risk? Gamble? Anxiety?

The Journal’s Dan Strumpf hit the nail on the proverbial head: “Investors thinking about getting into the sector should have a stomach for volatility and an eye for the long run … but how long until a rebound takes place is a matter of fierce debate.” Bank of America predicts a bigger collapse of crude prices “to $32 before climbing to $57 a barrel by year-end.” Unfortunately, a helluva other big players disagree with Big Oil’s rosy year-end predictions:

1. The Saudi Kingdom oil billionaires warn of a permanent collapse

This is just a reminder, because you couldn’t have missed it when NBC News and every other news source reported that Saudi Prince Alwaleed, chairman of Kingdom Holdings and a nephew of former Kind Abdullah said: “Oil Will Never See $100 Again.”

Never? Yes, never, as the prince added: “I can assure you that Saudi Arabia is not using the oil price right now to impact the fracking industry in the United States … there’s an oversupply and demand is not so high.” Yes, the Saudi Kingdom gets it: The world will never see $100 oil again, and America’s high-risk fracking is no sure thing either.

2. Warning, the Rockefeller oil heirs are dumping oil stocks

So is “one of the biggest names in the history of Big Oil, the Rockefellers” selling, writes the Rolling Stone’s Tim Dickinson in “The Logic of Divestment: Why We Have to Kiss Off Big Carbon Now.” Last September Rockefeller’s heirs announced they “would be purging the portfolio of the Rockefeller Brothers Fund of ‘risky’ oil investments.” Get it? Even the heirs of the Rockefeller family billionaires see the handwriting on the wall, are dumping oil stocks.

3. America’s next generation leaders say let’s dump oil stocks

Even more interesting, this revolutionary wave is also driving America’s college students, our next generation of leaders, triggering a revolution across universities, government pension funds and mutual funds in retirement accounts. America’s rapidly moving past the era of fossil fuel: “As climate-change activists pressure public institutions to dump their fossil-fuel investments, it’s becoming increasingly clear that the right thing to do is also the smart thing to do.”

4. Philanthropists and institutions are dumping oil investments

A revolution is emerging: a “growing number of savvy, social-minded investors are waking up to this risk and moving their money out of fossil-fuel stocks. In September, as the price of oil was entering its free fall, 50 foundations announced they would be ending their investments in fossil fuels over the next five years, a deal orchestrated by Divest-Invest Philanthropy.”
…