Bits Bucket for February 9, 2015
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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Report from the foothills above Sacramento:
The post Superbowl traffic was heavy at the grand opening for a 50 lot subdivision Saturday. You would have thought it was an Easter parade.
roseville or folsom?
Roseville.
Doesn’t align to well with the fact that CA housing demand is down at 1998 levels eh Jingle_Fraud?
There will always be a trickle of latecomer fool flippers in Ca. Get rich quick mentality is strong there. But it is too little, too late.
This months data should be interesting:
Homebuilder confidence index comes out next week (the 17th)
New home sales (registered on contract) comes out the 25th).
If both aren’t high, then the lines are an illusion (either not long lines everywhere), or the “buyers” aren’t buying.
Considering housing demand is at 20 year lows and inventory at record highs, it’s clear what the answer is.
2015 CA population = 37,254,000.
2014 CA population = 36,434,000.
We need houseing for the 820,000 people new to CA. Using a ratio of 3/household, we need 273,000 new housing units.
RW, how many new units were built in CA in 2014?
Hurry up and buy some more. Get to crackin’, boy!!
The relevant population for California housing demand should take out those who are on public assistance, as this category will clearly rent.
How does CA state population growth look in recent years if you adjust for people on public assistance?
Opinion
California Dreamin’ of a Legacy
Jerry Brown’s popularity isn’t in doubt, but his fiscal record is. He still has time to put the state on solid footing.
By Michael J. Boskin
Feb. 8, 2015 6:30 p.m. ET
…
California is a leader in technology, home to the most innovative companies and a remarkable array of talent and great universities, and the harbinger of demographic and cultural trends. But it is also home to some of the nation’s most difficult problems: Between 2004-13, the population grew 2.25 million, while the number on assistance programs grew by 2.9 million. Even before ObamaCare, the state had more Medicaid recipients than taxpayers.
…
“Mr. Brown’s biggest achievement is presiding over a budget that has moved from an $18 billion deficit in 2011 to a projected $2 billion cash surplus in fiscal 2015-16. The main engine was a 28% surge in revenue from the economic recovery and stock-market boom—and a seven-year “temporary” (and retroactive) tax hike in 2012 that raised the state’s top personal income-tax rate to the nation’s highest, 13.3%.”
No real productivity growth just smoke-n-mirrors. Corporations with family supporting jobs are still moving out, the desperately poor continue to arrive looking for handouts, and the drought is still at stage 4 levels. And the roads? Potholes everywhere on federal, state, county and city streets!
Some friends of mine from the NE US were here for a week, marveling at how good our roads look compared to the NE!
No streets paved with gold either Jingle_Fraud.
“California Most Impoverish State In The US”
http://en.wikipedia.org/wiki/List_of_U.S._states_by_poverty_rate
Bit Coins go missing.
“More than 30 bitcoin investors, who claim they lost up to HK$3 billion, will report to the police on Wednesday following the sudden disappearance of their investment platform’s office and manager in December.”
http://www.thestandard.com.hk/news_detail.asp?pp_cat=30&art_id=154088&sid=43856110&con_type=1
“An investor surnamed Chan, 81, said she tried contacting the four sales staff who approached her in the first place but to no avail. Many investors were introduced to the investment platform through professionals such as legal executives and property and insurance agents. ”
81 years old and investing in Bit Coin? Oh, I see…
“Chan said she pooled her savings of about HK$3 million last June to buy bitcoins after her property agents told her she could earn enough money to buy two flats in Quarry Bay.”
Realtors. lol.
And 3 billion HKD is around 390 million USD.
How can something that was merely a figment of tech geeks’ collective imaginations “go missing”? It makes about as much sense as to suggest that the Emperor’s new clothes have gone missing.
That’s the trick to any good magic act, what’s really gone missing is not what you are directed to look at. The bitcoin is the virtual equivalent of a bookmark, still visible after the “book” has been vanished. The money was gone long ago.
“still visible after the “book” has been vanished. The money was gone long ago.”
Exactly what buying a house is like. In the last 15 years anyways.
More than 30 bitcoin investors, who claim they lost up to HK$3 billion, will report to the police
That’s a fraud angle I never thought of. Get a few buddies to “claim” you all lost millions in bitcoin, report it to the cyberpolice, and then commit real cyberfraud while the cyberpolice are chasing down your wild goose. Clever variation on the old strategy of raising a ruckus on one side of town to attract all the officers, and then robbing a bank on the other side of town. Bonus points if one of your buddies/brothers is employed in the cyber police force. You make-work for him while stealing somewhere else.
Don’t banks and creditors have to pay for cybersecurity, either internally or though fees/taxes? I don’t believe bitcoin is doing that. In which case, let the bitcoin buyer beware. If you want set up to deliberately evade the statists, then don’t expect the statists to rescue you when you are outsmarted.
How about the fraud of claiming bitcoin ever literally existed to begin with?
Of course they existed. They were mined.
(whatever that means)
Mined over matter?
Heh, no work is required of the Fed to create their “bit dollars” out of thin air. All that’s required is a luncheon or two, catered in the board room (or maybe they have a private chef), a little discussion, a ledger entry and PRESTO! They’re owed some more billions!
Think of this:
If a dollar springs forth out of thin air without limitation and is still considered to have value even though the is no limit to how many of them can be produced just think how valuable a bitcoin should be.
A bitcoin also springs forth out of thin air but at the same time they are considered as being “mined” (as is such things as gold ore is mined) and hence their numbers are LIMITED - limited by the limited amount of mining that is done - and because they are limited in number their value should rise just as the value of other things that are limited in number rises.
(or sumtin’ like that)
If the marketing people could somehow connect the term “caret” to bitcoins just as this term is connected to diamonds then bitcoins should REALLY gain in value.
(Maybe next time around.)
Similarly notice how creating a euro-like fake coin as a physical symbol of bitcoin increased the appeal of the imaginary money.
If you are going to bet on Keynesian beauty contest entrants, I strongly advise going with the one that billions around the entire planet judge most attractive and avoid the one that a few goggle-eyed tech geeks find most beautiful.
They were mined.
(whatever that means)
I could explain it briefly, if you are actually curious rather than just scoffing.
Bitcoin are clearly ephemeral, but that does not make them make-believe as PB is suggesting.
The cryptographic concept of a “proof of work” is clear…
“I could explain it…”
Some things will not be understood by those living outside a thing, no matter the language used.
Two things are clear: Unimaginable fortunes are made by the people who invented this scheme. A constant bleeding (or fleecing) is being experienced by the speculators who came later in the game.
Prime_is_contained: Bitcoin are clearly ephemeral, but that does not make them make-believe as PB is suggesting.
Dollars and bitcoins are both logical constructs. Except that bitcoin has no physical manifestation. It’s closer to a Farmville tractor than gold. It’s a savings account that you can’t turn into paper or coins.
Interesting thing about gold, its value is a logical construct too. It’s shiny and can be worn as adornment (jewelry) which gives it a basic level of demand. It’s durable in that it doesn’t change its shape, and it won’t burn, like diamonds. It’s durable, desirable, has limited availability. It could make a useful currency and has historically. However - its value in terms of directly helping people live is extremely limited. You can’t eat it, drink it, shelter under it, wear it as clothing, bind wounds with it or treat illness with it. But it’s more durable and malleable than wampum or beanie babies or baseball cards or any other representations of value. Hence its historical appeal.
I’ve never known gold in a safe deposit box to just disappear like that.
There’s a bit more re missing Bit Coins in HKG.
Bitcoin should be banned in HK, expert says
(02-09 15:12)
A finance expert said the government should ban Bitcoin in Hong Kong, after a trading platform of the virtual currency that took in an estimated HK$3 billion from thousands of investors has reportedly gone bust.
It’s believed around three thousand people here have invested a total of about HK$3 billion in Bitcoins issued by the trading platform, mycoin.hk.
Simon Lee, a senior lecturer in accounting and finance at the Chinese University, said some investors were too greedy and took big risk.
He told RTHK the investors were not knowledgeable about the market and were lured just by offers of high returns. –RTHK
Bitcoin Poof!
In other news, global warming fraud exposed.
“In each instance, the actual trend of 60 years of data had been dramatically reversed, so that a cooling trend was changed to one that showed a marked warming…”
The Telegraph
Link please? Sorry to seem dense, but I’m missing the bitcoin warmist connection.
The connection for me is the Cosby Syndrome; cascading revelations of fraud.
“… cascading revelations of fraud.”
I resemble that!
“… cascading revelations of fraud.”
You rang?
cascading revelations of fraud
So, Blue, by analogy: if there were stories breaking regarding fraudulent boat sales going on around the globe, then it would be foolish for anyone (including you) to own a boat?
The fact that there are fools out there, and they are separated from their money, in whatever area is the hot-thing in the news—none of these things should be a surprise to us here.
No doubt Prime, I am a fool for owning a boat. I can diminish the nasty consequences of my foolishness in several ways though; paying way below reproduction cost, physical verification of the soundness of it, taking possession, not leveraging the cost or risking more than a tiny % of my wealth, not acquiring more than I will consume and last but not least, by always having a topless deck fox aboard. These are the rules I live by.
“When future generations look back on the global-warming scare of the past 30 years, nothing will shock them more than the extent to which the official temperature records – on which the entire panic ultimately rested – were systematically “adjusted” to show the Earth as having warmed much more than the actual data justified.”
http://www.telegraph.co.uk/news/earth/environment/globalwarming/11395516/The-fiddling-with-temperature-data-is-the-biggest-science-scandal-ever.html
Oh my…
Global warming is bigger fraud than Iraq war and O’care combined together.
Prediction - they will come up with more outrageous claims.
I haven’t read the article just yet (will after I read this), but I can say definitively that the research I helped conduct on an oceanographic research ship wasn’t doctored in any way. Most of the scientists were pretty conservative people - Ayn Rand (ish) types - all about the free market, etc.
If there was ANY way they could have shown that climate change and other man-made environmental issues were some kind of Hoax, or even that there was no evidence for it, they would have GLADLY taken the Nobel prize that went with such a revelation. Really.
They simply agreed that yes, we’re pretty much fucking this planet up, starting with the oceans.
Are you planning to keep riding your losses in Treasurys after last week’s multiday selloff?
Are you planning to keep riding your losses in Treasurys after last week’s multiday selloff?
Yes all the way down
. I did sell a US stock-bond fund VWELX and buy a foreign index fund VTIAX .
“(Reuters) - China’s trade performance slumped in January, with exports falling 3.3 percent from year-ago levels while imports tumbled 19.9 percent, far worse than analysts had expected and highlighting deepening weakness in the Chinese economy.
Largely as a result of the sharply lower imports - particularly of coal, oil and commodities - China posted a record monthly trade surplus of $60 billion.”
Falling off a cliff.
It’s hard to tease out how much is lower prices and how much is lower quantity, but the Baltic dry index is also in the toilet.
Fed getting nervous about “Audit the Fed” bill. Wonder what they have to hide?
http://www.marketwatch.com/story/the-feds-republican-tries-talking-republicans-put-of-audit-the-fed-2015-02-09?link=MW_latest_news
creating money to solve problems is tough work.
The audit will never happen.
+1
Clothesless leaders will not allow anybody to reveal it.
stick with volkswagens
No, the Republicrat duopoly is too beholden to the Wall Street-Federal Reserve looting syndicate to go along with an audit, and since 95% of the electorate sanctioned crony capitalism with their votes for Obama, McCain, and Romney in the past two elections, it’s not like they need to worry about popular pressure.
Is Greece too big to fail?
seems like they are debt slaves from a casual observation.
“Is Greece too big to fail?”
Yes, yes I think it is. It should be let go from the EU, but that would probably cause the whole edifice to crumble. Can’t have that.
Is Greece too big to fail ??
I bet this went over well in Germany…Pay us or we will just default on your loans…
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCEQqQIwAA&url=http%3A%2F%2Frt.com%2Fnews%2F230479-greece-tsipras-germany-nazi%2F&ei=7sjYVO3bMYu6ggS-p4D4Bw&usg=AFQjCNFv50MOV1eD-_Q5lUNj4vHy4-uggQ&sig2=eLkW_f1I8X_1mMYpjumk7Q&bvm=bv.85464276,d.eXY
No point throwing more good money after bad. The just need to accept that Greece is going to default.
“Pay us or we will just default on your loans…”
Isn’t that Donald Trump’s tactic?
9 February 2015 Last updated at 05:48 ET
Robert Peston, economics editor Economics editor
UK planning for possible Greece exit from the eurozone
The prime minister this morning chaired a meeting of senior officials to discuss the impact on the UK of possible Greek exit from the eurozone - and to take steps to ensure British banks and companies would not be excessively damaged.
Attended by the head of the Treasury, Nick Macpherson, the Treasury’s director of financial stability, Lowrie Kahn, and the Bank of England’s international director Phil Evans, David Cameron asked for information on the impact on Greece and the rest of the eurozone of Greece leaving the eurozone.
The chancellor did not attend, because he is on his way to the G20 meeting in Istanbul - though he has been kept in the loop on discussions.
There was agreement that the probability of Greece adopting a new currency had increased, as per my column of this morning. However those attending still believe that some kind of compromise between Athens and other eurozone governments can be reached to keep Greece in the euro.
David Cameron heard that Greek people would see their savings wiped out, inflation would take off, and there would be a massive devaluation,
He was also told that Greek companies and banks would face acute financial difficulties because of the mismatch between the “hard” euros they would owe to those outside Greece which would have to be serviced out of “soft” or “devaluing” new drachmas.
…
The Greeks have declared that they are bankrupt. That means the Euro debts cannot be paid back, so they won’t, in Drachmas or anything else.
It is the banks that gave the loans that face acute financial difficulties. They were playing interest rate spreads and they deserve to collapse.
When Destroit went BK, they were nearly forced to sell their art collection to pay creditors. Why aren’t the central bankers repo-ing the Parthenon and olive groves?
As lazy as the greeks are, they actually fight back unlike the sheeple here.
Why aren’t the central bankers repo-ing the Parthenon and olive groves?
Because Greece is a sovereign nation and isn’t an American municipality?
While credit default swaps have been sold as “insurance” against sovereign defaults, no one has ever been able to actually cash in their “policies” since whoever issued the swaps keeps finding excuses for why no actual default event exists. But if Greece formally defaults, some financial institution will either be forced to pay out big or the whole credit swap derivative market will be revealed as yet another bankster scam.
“They were playing interest rate spreads and they deserve to collapse.”
+1 Exactly right. Crash-n-Burn for these parasitic gamblers!
Whew, thank God I’m not on that HSBC list, lol. A lot of the usual suspects are, but then, Christian Slater? Phil Collins? Elle McPherson?
http://www.zerohedge.com/news/2015-02-09/if-your-name-list-prepare-be-audited-or-worse
Ah, I love the smell of globalization in the morning!
They can breathe easy, since none of them are conservative activists or have politically incorrect affiliations.
The IRS likes to go after high profile tax evaders, they get more bang for their buck than going after some anonymous individual that no one has ever heard of.
The prosecutions stemming from this and other disclosures are very real and costly. The IRS/DOJ has cast a very broad net in this regard and are taking in all size of fishes.
Exactly. There won’t be any brownie points given in this one, if you’ve got a “name”. Kinda like Martha Stewart.
More meat for the baying hounds of the presstitutes.
I like Phil Collins, so I hope nothing happens to him, but some of the other high profile folks, meh. They think they’re above it all, let’s see if it’s true.
The IRS likes to go after high profile tax evaders, they get more bang for their buck than going after some anonymous individual that no one has ever heard of.
Plus they have money. No point spending tens of thousands of dollars to shake down some middle class nobody who might end up owing a few thousand dollars.
In America justice system, the rich can actually hire good lawyers and get away with it. Or make it painful for the government. Plebs don’t have that kind of money to hire a lawyer. That’s why they end up paying more than their fair share.
Bring back duel, I would say.
In America justice system, the rich can actually hire good lawyers and get away with it.
More like they lessen the blow. Say the IRS wants 10M in back taxes. The lawyer negotiates it down to 3M. You aren’t gonna get 10M from some guy who works in a cubicle farm.
You aren’t gonna get 10M from some guy who works in a cubicle farm.
If you harass 10,000 cube dwellers, we will recoup 3 millions at a fraction of the cost.
Maybe the Justice Department needs to issue criminal indictments for once against the bank that aided and abetted such systemic fraud.
Banks going after margin-call losers who bet using leverage they didn’t have and couldn’t afford to gamble with.
http://www.marketwatch.com/story/danish-bank-takes-hard-line-on-currency-losses-2015-02-09
“Lucas Energy Defaults On Debt”
http://fuelfix.com/blog/2015/02/02/lucas-energy-defaults-on-debt-weighs-sale-or-outside-investment/
“The company, which had 11 full-time employees at the end of September, had $9.8 million in liabilities…”
They owe a million $ per employee. I think it is unfair to call them an energy company. They seem to have been a borrowing enterprise.
Much like the $110 million grilled cheese chuckwagons we read about over the weekend.
It’s fraud through and through.
The company, which had 11 full-time employees at the end of September, had $9.8 million in liabilities
I’m sure that most of the roughnecks in the field were temps and contractors.
Still though, why would they have so much debt? Weren’t they making money hand over fist when oil was $100+ per barrel? They should have cash stashed away.
They couldn’t even operate without a steady stream of borrowed money.
Still though, why would they have so much debt?
Salaries and bonuses come first. Corporations have been hollowed out by the management class for their own benefits.
If they have only 11 employees I would guess that they are privately held. Of course, that could mean that the owner(s) ransacked the balance sheet via bonuses and left the creditors holding the bag. It wouldn’t be the first time that happened. Of course, they would have had to do the ransacking before things went south, otherwise I’m sure the creditors could sue them.
There were hundreds of stories about this debt ponzi going on before the price of oil staggered.
I am kinda in this camp…Not because of inflation…More because of low to negative world wide rates…I think the FED may raise a symbolic 25 basis points just to show that they are willing to….but I think that will be it for 2016….
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CB4QqQIwAA&url=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F2%2F90acc55e-adf6-11e4-8188-00144feab7de.html&ei=PszYVN9Jib6CBNi6gsAP&usg=AFQjCNGBfGnItAR4YM25XqZal_AWPjq_NQ&sig2=7NNZg1tPQE1JCEDzNJA9sA
They’re screwed and anyone else holding debt is screwed. You know it. I know it. We all know it.
what “rate” do you refer to? How does that effect treasury yields?
what “rate” do you refer to? How does that effect treasury yields?
World wide rates…Take Germany…They are negative 20 basis points…We are the safest bet with higher rates…Flight to quality thereby drives down the yield…
It’s an urban myth that the Fed always “leads” on setting rates. Not always true, there have been occasions where the Fed follows the bond market higher. I suspect the Fed will do that here — it’s politically safer to let the bond market go first and react to it versus sticking its neck out and taking the heat if a rate rise kills the recovery.
I doubt the Fed will raise rates this year. This is all talk to get folks buying debt “before” it gets more expensive. And talking down the markets.
http://conservativetribune.com/holders-replacement-cover-up/
BREAKING: Eric Holder’s Replacement Busted for Helping Obama in Massive Cover-Up
Sunday, February 8th, 2015
I must confess — and I know it’s rare — to being wrong. I truly believed there was no candidate less qualified and more criminal than Eric Holder to be the attorney general of these United States.
However, it just so happens that Attorney General-designate Loretta Lynch could be just that candidate. And what’s worse is that, as a going-away present, Attorney General Holder is covering up the evidence that could prove her guilt.
The allegations stem from Lynch’s stint as the U.S. attorney for the Eastern District of New York, where she was responsible for the investigation of international money laundering by the bank HSBC.
HSBC ended up paying a $1.2 billion fine to the U.S. government for its role in the money laundering scandal, which kicked money back to Mexican drug cartels.
According to the whistleblower in the HSBC scandal, John Cruz, the Obama administration “is continuing to cover up its role in the HSBC money laundering scandal.”
He also stated that the money passed through federal wire transfer channels. Because of that, Cruz said, it’s impossible that the federal government — including Loretta Lynch, who ran the investigation — did not have access to the records proving HSBC’s guilt
The case is a rather complicated one, involving HSBC’s knowledge of loans obtained through identity theft, which the bank profited from and used for money laundering.
“When an individual finds out they got a loan they never knew about, 5 percent of that loan went to the accounting firm that made up the phony tax returns and the other 95 percent of that loan went to the manager,” Cruz told WND.
“One manager was involved in the transaction, another manager was involved in notarizing the transaction, and senior management was involved where they signed off permission to give the loans even when the loans get rejected by underwriting,” he explained.
Cruz was a former HSBC vice president who blew the whistle and was subsequently fired. He’s currently suing the bank for wrongful termination and says that the Justice Department, under Eric Holder, has stonewalled him at every turn from getting documents relating to his case.
In addition, he said that the government’s deferred prosecution of HSBC under Lynch, which consisted merely of a fine, was “a joke.”
WND also reported there was evidence the Justice Department didn’t investigate the money laundering charges because Holder was doing a favor for banking clients of his law firm.
In other words — meet the new boss, same as the old boss.
It’s somewhat unsurprising to find both the current attorney general and the possible future attorney general involved in the same scandal.
One would have hoped Obama could find someone better than Eric Holder as attorney general this time around. No such luck, it seems.
Please like and share on Facebook and Twitter if you agree Loretta Lynch should not be our attorney general.
Like any other Obama nominee you knew the character assassination from the GOP was coming. It’s what they do.
I would really like just one nominee to say racial hate crimes apply to black people too.
I’ve had some strange Craigslist dealings lately. In previous transactions I mostly paid for my deals with PayPal particularly with large balance transactions. These days it feels like the sellers are avoiding sending their addresses through e-mail preferring verbal contact only like they’re hiding, and they want cash, no PayPal. I can almost feel the desperation.
Maybe they’re selling stolen goods?
Maybe they don’t want possibly sketchy characters showing up at their home address.
I thought about these two conditions, but I get the feeling that they’re hiding from collection agencies.
@ tj - if you are there - this might fit in what you were describing last week regarding the Euro - no?
Pulled this bit from Anthony Sanders at Confounded Interest…..
I have to say that it seems the narrative that Luigi Barzini had posited a some 35 years ago in his book “The Europeans” is coming to light - again how can people in Italy who eat pasta agree with the Germans who dine on roasted potatoes?
I also wonder given Greenspan’s comments here if the US Fed and others have not piled up debt in order to blow the Eurozone apart to begin with.
Now I sound like a conspiracy drone…..(snark).
Greenspan: Greek Exit From Euro Just a Matter of Time (Athenian Chicken Dance)
The Greek Treasury is running out of money. In fact, they may have only a few weeks of cash left.
So, we know have what is know as the Athenian Chicken Dance. Who will flinch first? Greece or Germany (and the ECB)?
(Bloomberg) — Greece’s exit from the euro is just a matter of time because no one wants to risk lending money to the country any more, according to Alan Greenspan.
Hours before Prime Minister Alexis Tsipras was due to set out plans on how to keep his government paying its bills, the former Federal Reserve chairman said the nation’s crisis can’t be resolved as long as it remains in the single currency.
“I don’t see that it helps them to be in the euro and I certainly don’t see that it helps the rest of the euro zone,” Greenspan said in a radio interview with the BBC on Sunday. “I think it’s just a matter of time before everyone recognizes that parting is the best strategy.”
German banks have rather a large exposure to Greek debt .. and default.
thanks rj,
yes, greenspan is finally seeing a glimmer of light.
people don’t want to believe me, but i was the ONLY one saying the euro would fail back as far as 2010.
now of course many are starting to come out of the woodwork to make claims against the euro.
amazingly, peter schiff STILL thinks the euro will outlast the dollar.
further, i told everyone that the euro would be in continual trouble and need bailouts. and i said when the bailouts stopped, it would be the end of the euro.
i tried looking for someone that agreed with me back in 2010 or earlier that the euro would fail. i found jimmy rogers saying that he ‘didn’t know, but didn’t think the euro would work’. well he had good instincts. but even he didn’t know the euro would fail.
the euro is the only fiat currency of its kind. there’s nothing else like it. that’s why i called it a ‘fractured fiat’ back then. it’s based on a flawed concept, and the pain will continue until they decide to pull the plug.
The Brits were wise to keep their own currency.
yes, they were.
“people don’t want to believe me, but i was the ONLY one saying the euro would fail back as far as 2010.”
Complete BS.
prove it. find someone else who said it.
Too easy.
Comment by Inspired
2007-04-14 19:45:58
“The foundation set forth by this EURO fabrication, a “true fiat currency” is not bear market tested…& IMO - doomed to fail.
It’s creation was formed in the midst of a powerfull bull market of “lets all get to gether”. Bears breakup these marriages and over throw governments, not the least of which is a unified Europe whose individual partners are no longer abiding by much of their treaty.”
Apparently you mentioned the Euro in one of your rants in 2010 but said nothing about it failing.
too bad
it’s not clear to me that Inspired was calling for the failure of the euro. rather he/she seemed to be talking about the failure of a process.
here’s the link to the whole post..
http://www.thehousingbubbleblog.com/?p=2644#comment-580089
on the other hand there’s is no ambiguity to my calling for the failure of the euro on june 20th 2010. to quickly find it search for ‘fractured’.
http://www.thehousingbubbleblog.com/?p=7318#comment-2075169
Apparently you mentioned the Euro in one of your rants in 2010 but said nothing about it failing.
sure looks like i said something about it failing now, doesn’t it?
for those that don’t care to search, here’s the salient part..
“i’ve been saying for years on other blogs that the euro can’t survive. you know how to tell if i’m right? if i’m right, the euro will never be out of trouble. it will only last as long as they’re willing to bail it out. the idea of, as i call it, a ‘fractured fiat’ currency, is a flawed concept and proves that the people who put the euro together don’t understand how a fiat currency works, or they wouldn’t have even tried it.”
“doesn’t it?”
Well not especially. Your link is to a 2012 post.
I’m not saying you were wrong about this, and I have had the same opinion since before they even launched it. You were not the lone voice in the wilderness you claim though.
and in those 4 and a half years, i haven’t changed what i said about the euro one iota, have i?
Yeah, before the even started the EU I heard a guy on TV say, “it’ll never succeed because Germany will never accept the same rate of inflation that Italy and Spain do” or something like that. It made sense and is kinda how it’s played out.
I’m not saying you were wrong about this
you as much as called me a liar a little ways above.
Ben, can you remember who it was? i’d like to research the guy. he sounds like a kindred spirit to me. i searched high and low to find someone saying the same thing, so i’d appreciate it.
You were not the lone voice in the wilderness you claim though.
it doesn’t count to be thinking it. it only counts if you actually say it. i did. many times.
“it’ll never succeed because Germany will never accept the same rate of inflation that Italy and Spain do”
yes, he was thinking in terms of every country having a different economy. that’s what i said to schiff during my argument with him. he agreed that every country’s economy was different, but he couldn’t see that that was the reason the euro would fail.
i sure hope you can remember who that guy was..
I think it was Pat Buchanan.
Your link is to a 2012 post.
you are correct. 2012. it wasn’t written in 2010. i did write on other blogs as early as 2009 that the euro would fail. but that doesn’t help me make my point here.
thanks, i’ll try to focus on him for some research. but you know, i don’t think he really understands much about economics. at least i have a place to look. thanks.
Why is it important to you that you were the ONLY person to say the Euro would fail?
I said it myself before 1999. I’ve worked for German companies for 25 years and was interested in the subject. I wrote on this blog long before 2010 that I had expected the Euro to fail and was surprised it hadn’t yet. You were late to the party. I’m not famous though.
Here’s another of your kindred spirits, Jim Rogers, claiming the Euro would fail way back in 2003.
link to his book to follow
http://www.amazon.com/Adventure-Capitalist-Ultimate-Road-Trip-ebook/dp/B004SOVB8O
there are some really good sleuths here on the HBB. i’d appreciate it if any of you could find someone who was saying the euro would definitely fail before i did.
please give the guy’s name and how to find the quote. like i said. i’d appreciate it. i’ll let this go now.
Comment by Blue Skye
2009-02-20 06:42:50
Any bets on how long the Euro lasts?
Reply to this comment
Comment by nhz
2009-02-20 07:07:50
judging from the current market, a few months at most …
euro lost over 35% of its value in about three months and the loss is strongly accelerating (using gold as the yardstick).
Comment by max4me
2009-02-20 06:48:42
why do people keep thinking the euro will fail?
Comment by palmetto
2009-02-20 07:05:28
Because the EU itself is going into the crapper. No EU, no euro.
Possibly a repeat post;
Check out Jim Rogers 2003 book Adventure Capitalist
back in 2006 rogers said he didn’t think the euro was going to work. mark faber argued that it would work ‘great’.
i read ‘investment biker’ years ago. it was a pretty good tale.
So will the tale of the Euro failing be an interesting one. So, we continue to watch.
Why is it important to you that you were the ONLY person to say the Euro would fail?
i’ll tell you why. i’ve been trying to find someone that understands currencies the way that i do. i haven’t found anyone yet.
if that sounds arrogant to you, too bad.
I said it myself before 1999. I’ve worked for German companies for 25 years and was interested in the subject. I wrote on this blog long before 2010 that I had expected the Euro to fail and was surprised it hadn’t yet.
your reason that “germany won’t be ruled” by some other country isn’t the reason it’s unsustainable. if anyone gave that as a reason, i can disregard them.
if you want to make that case logically, i’ll be glad to argue against it.
You were late to the party.
you’re at the wrong party. you can’t make your case logically. all you have is guessing.
Here’s another of your kindred spirits, Jim Rogers, claiming the Euro would fail way back in 2003.
if he did, he changed his mind in 2006. he said he didn’t know if the euro would work, but he didn’t think it would work. i saw and heard him say it on a video.
link to his book to follow
just give me the page number and the exact quote. i’m not going to read a whole book looking for a quote.
and yes, rogers is a kindred spirit. we agree on almost everything.
@blue skye
you’re insulting post just came through.
i answered you.
if my answer gets through or doesn’t get through, it ok with me.
I think you are insulting yourself. You asked for a name and I gave you Jim Rogers. Take it or leave it. You made a ridiculous claim, pure and simple. Fess up to it. How many others have to have said this for you not to be the only one?
Me calling you out just wastes space, as do your grandiose claims of solitary genius. You think you know stuff, so explain your ideas and then you can have a Blue Ribbon maybe. You’ll get as good a hammering here to test their temper as just about anywhere.
I think you are insulting yourself.
another example of brilliant thinking.
You asked for a name and I gave you Jim Rogers.
and i’ll give you one. santa clause. so you gave me a name. big deal. you never back anything up.
You made a ridiculous claim, pure and simple.
one that you haven’t proven false yet.
How many others have to have said this for you not to be the only one?
just one. one that doesn’t equivocate. one that says it plainly. and it would be nice if they answered questions about it as i have here. you know.. when someone says something like “the euro is going to fail”, something to support their point usually follows.
Me calling you out just wastes space
coward. make your point logically.
as do your grandiose claims of solitary genius.
i’ve never claimed to be a genius. as usual, it’s another strawman ploy.
You think you know stuff, so explain your ideas and then you can have a Blue Ribbon maybe.
i’ve already explained. it’s your turn. connect the dots for me on how germany not wanting to be ruled, is why the euro must fail..
You’ll get as good a hammering here to test their temper as just about anywhere.
why don’t you begin?
“just one. one that doesn’t equivocate. one that says it plainly”
Sure, as plainly as you did here in 2010, how about more so.
…
No Blue Ribbon I’m afraid. Just the fart extinguisher.
how does germany not wanting to be ruled by some other country in the euro zone, equal the failure of the euro?
you said it. try to support it.
tj, you might be a really nice person, you might be the solitary genius angel of prophecy, but I didn’t engage you to explain my vague thoughts on Europe, the future of the Euro, the mindset of the peoples, the fatal flaw(s) in the Euro. I engaged to call you on your bogus claim.
Bogus.
Fess up.
Jeez, it’s like trying to nail jello to a tree.
On second thought, never mind.
Blue Skye out.
but I didn’t engage you to explain my vague thoughts on Europe, the future of the Euro, the mindset of the peoples, the fatal flaw(s) in the Euro.
you didn’t engage me at all.
a few days ago you claimed the euro had to fail because germany would not be ruled by other eurozone countries. i asked you to explain what you mean but you won’t. you can’t because it’s a dumb assertion.
I engaged to call you on your bogus claim.
give me the page number and exact quote from rogers in his book that he claims the euro WILL fail, and i’ll admit you were right and won the argument.
i don’t believe you can find it because i don’t believe that he said it.
unlike you, i’ll admit i was wrong if i see proof that someone (hopefully some economy pundit type) said CLEARLY that the euro would fail, before i said it.
a proven rogers quote from his book will do it. you said it was there. provide it.
Can auntie Yelling bailout the greeks? I wouldn’t discount that possibility for the “good of the world.”
Yellen the Felon won’t bail out the Greeks. She will bail out the money that foolishly lent money to the Greeks.
I mean, Yellen will bail out the banks that lent money to the Greeks, knowing taxpayers would be forced to make good any losses.
Talking to a friend over the weekend and got a real laugh.
This guy is an accountant who did some work for “investors” back in 2009. These guys were all medical doctors who got the bright idea of buying a bunch of foreclosures from a bank and the plan was to rent them. I was asked if I “wanted in” back then(I laughed) so I had to ask of the outcome. Well the biggest laugh comes 5 years later. Larry said yesterday “they lost their collective shirt and liquidated.” I don’t pry or ask for details from him to keep the info flowing on the rare occasions I talk to him.
It’s rumored that doctors are really stupid investors. I think the rumor is correct.
how could you buy anything in 09 and lose money?
By paying more than the thing is worth!
Sounds like you will be able to explain this to us all shortly.
I read a 1977 book about a farm in California which was expected from the outset to run at a loss. It was pitched to doctors and dentists as a way to book the losses as a tax-writeoff against the performing assets in their portfolios. I still don’t know how that’s profitable… but it must have been. It was a farming tax loophole which was later closed (late 80’s?).
My understanding is that the losses were used to offset taxes on their ordinary income, not portfolio income. It wasn’t limited to farming, there were partnerships that had rental properties, trucking, etc. The distributed losses sheltered the investors other ordinary income from the then income tax rates which were up to 70%.
The distributed losses far exceeded the amount invested.
Congress addressed this strategy by introducing the passive v. active concept on code §469 in the ‘86 code revision .
Where did they buy? I know you like to quote craterrrr, but prices haven’t dropped below 2010 prices, not in the US. Even Ben was trying to invest and fix up back then.
They paid too much Donk.
“was trying to invest and fix …”
Even in the midst of the biggest real estate bubble in history, a distressed property might be found. There are still lots of properties that are not in the bubble, because they can’t be bought with dumb borrowed money.
North Texas’ home market started the new year with another big jump in prices. Median home sales prices rose 12 percent last month from a year ago.
The number of homes listed for sale in North Texas fell to 16358 last month – the lowest total in more than a decade. Only a 2.2-month supply of houses were for sale in the area.
http://bizbeatblog.dallasnews.com/2015/02/north-texas-home-prices-up-12-in-january.html/
oooooof..
Upscale Dallas Suburb Sale Prices Dive 16% In 2014
http://www.zillow.com/southlake-tx/home-values/
when greece,port,spain and Italy stiff the ECB-how much will tax bills for payors like Gern,FRan etc go up? WOW ! it will be big !!!
EU=PU
It depends on how many of the banks and bankers they decide to try to save on the backs of said taxpayers, and how many they throw overboard. They can only get safely back to port with so many aboard, not with all.
Ok - what do we file this under…..because Obama knows everything!!!!
OBAMA SAYS THE PROSPECT FOR A MILITARY SOLUTION TO THE UKRAINE/RUSSIA PROBLEM HAS ALWAYS BEEN LOW BECAUSE RUSSIA HAS A POWERFUL MILITARY
12:19 PM ET
All I can say is Yikes - this is our foreign policy!!???
What’s the problem exactly with that statement?
Mike - look at the history of how this came to be - and hope that history does not repeat itself. Obama appeasement is leading to disastrous results - history repeatedly proves this out.
Are you referring to the fact that Ukraine is in this situation because the US and the EU supported the anti-Russian political movement within Ukraine? That is something that Obama deserves some blame for.
However, if he is now advocating negotiations instead of violence as a way to resolve the present conflict, that seems rather reasonable to me.
The problem Mike is the nature of the Russian people themselves - making nice with thugs is not the way to go about negotiating from the start. A show of force without conflict is one way to tame the beast and I frankly do not see this from and in the otrauma regime. These are worrisome times with strong echoes of Neville Chamberlain.
The problem Mike is the nature of the Russian people themselves - making nice with thugs is not the way to go about negotiating from the start.
Making war with thugs who have nukes might not be the way to go.
What should our foreign policy be?
Look in Putin’s eyes and see a soul? Or threaten the use of force in defense of Ukraine? You know the answer to second question.
Is the high education bubble beginning to pop?
lsu-outlines-dire-budget-scenarios-layoffs-course-cuts
http://www.shreveporttimes.com/story/news/local/2015/02/06/lsu-outlines-dire-budget-scenarios-layoffs-course-cuts/22996193/
So on one end, State U’s are getting less and less taxpayer money. On the other end men are increasingly skipping college altogether and enrollments are declining. Sounds like there is already a surplus of schools and the ones with the weak hands will be the first to fold.
When you are through with your Obama amnesty complaint stay on the line, we would like you to take a quick survey to see how we are doing.
When you crossed the border was it easy to contact a Border Patrol agent?
Was your Border Patrol agent polite and upbeat about your questions?
Was your Border Patrol agent knowledgeable?
Did your Border Patrol agent provided answers quickly?
How likely would you be to recommend our amnesty program to someone you know?
——————————————————————————-
Homeland Security sets up Obama amnesty complaint hotlines for illegals
Border Patrol agents said the complaint lines amount to a slap in the face
by Stephen Dinan | The Washington Times | February 9, 2015
The Homeland Security Department has set up hotlines for illegal immigrants who believe their rights under President Obama’s amnesty policy have been violated.
In a memo announcing the customer complaint line, U.S. Customs and Border Protection asked illegal immigrants to “please tell us about your experience” if they believe they were treated “contrary to the new DHS enforcement priorities.”
The department alerted “stakeholders” last week of three complaint hotlines: one for CBP, which oversees the Border Patrol; one for U.S. Immigration and Customs Enforcement, which handles immigration laws in the nation’s interior; and one for U.S. Citizenship and Immigration Services, which is poised to handle the millions of amnesty applications expected to be filed.
The amnesty policy grants tentative legal status to up to 4 million illegal immigrants and orders Border Patrol agents and Immigration and Customs Enforcement agents not to arrest other illegal immigrants who say they have been hiding in the U.S. for years but don’t meet the criteria for full amnesty.
Border Patrol agents said the complaint lines amount to a slap in the face to those who put their lives on the line to enforce the law.
“Instead of supporting our agents, this administration has decided it is more important to find new ways to solicit complaints and invite ridicule against them,” said Shawn Moran, vice president of the National Border Patrol Council, the labor union that represents line agents. “We demand that this administration spend more time defending the men and women defending our nation and less time promoting the extreme agendas of pro-illegal-immigration organizations.”
Have some European relatives visiting us. From what they told us, immigration treated them like dirt, even though they had visas and passports in order and a return ticket home.
So the moral of the story is: obey the law, get treated like a criminal; break the law, get coddled.
The Border Patrol should not be throwing up obstacles to Comrade Pelosi’s new entitlements-for-votes recruits into the DNC’s permanent Democrat supermajority.
Change of Internet regulator must happen before US 2016 polls, CEO says
Opponents of the new oversight system may be deliberately trying to delay the transition
by Phys.org | February 9, 2015
Plans to transfer control of Internet overseer ICANN from US hands to a globally representative body could be jeopardized unless a deal is reached before the 2016 US elections, the group’s chief warned Monday.
Fadi Chehade, chief executive of the Internet Corporation for Assigned Names and Numbers, said opponents of the new oversight system may be deliberately trying to delay the transition set for September 30.
“ICANN has been waiting for this political window to open for 16 years,” Chehade told AFP as the group began a four-day meeting in Singapore.
“We don’t know what factors could affect the political window,” he said, adding however that “we do know that in 2016 there is a heavy political process in the United States”.
“Therefore the oxygen that is available to certain items may be very easily consumed by the electoral process.”
The next US presidential election and related polls for Congress and state governors will be held on November 8, 2016.
ICANN is in charge of assigning Internet domain names and the numbering codes that lie behind online addresses. It has been overseen by the US government since it
CraterRage® Photo Of The Day
http://goo.gl/ITjw9u
Renters Are Majority in Big U.S. Cities
Even Relatively Inexpensive Places Move Away From Homeownership
By
Laura Kusisto and
Kris Hudson
American cities—and not just the priciest ones—are more and more the domain of renters.
http://www.wsj.com/articles/renters-are-majority-in-big-u-s-cities-1423432009?mod=WSJ_hp_EditorsPicks
School quiz: Conservatives believe helping poor ‘is a waste of money’
February 9, 2015
Kyle Olson
WEST ALLIS, Wis. – An 11th grade U.S. Government and Politics student believes only a fascist would make the statement: “We should not help the poor, it’s a waste of money.”
But the Nathan Hale High School student – who answered that on a quiz – found out he was “wrong.”
According to the quiz, it’s a conservative who believes that.
“When I picked my son up from school, he asked me what political party did I think thought ‘We should not help the poor, it’s a waste of money,’” the student’s mother, Heather Bronnson, tells EAGnews.
“I answered none, and a discussion took place,” she says.
“He answered ‘E’ which stood for Facism because he couldn’t imagine conservatives or liberals saying such a thing,” according to the mother.
Bronnson tells EAGnews she was “shocked” and “extremely angry” and it bothered her son “a lot.”
“If a 16-year-old believes that a Republican or conservative doesn’t believe in helping the poor, they may view themselves as liberals at a young age … and incorrectly,” she says.
The student, whom the mother did not want identified, actually got several of the answers marked wrong by the teacher.
Bronnson contacted the assistant director of instructional services for the West Allis, Wisconsin school district but as of Monday morning, she has yet to hear back.
“The reason that I publicly posted this worksheet is that I hope people will take a look at what their children are learning in school, especially in high school,” she tells EAGnews.
“We tend to only see what they are learning as parents when they need our assistance on something. I think that all parents need to realize that there are things taught sometimes to their kids that aren’t true or at best are misleading.”
The bottom portion of the quiz instructs students to visit a website – gotoquiz.com – and input their answers.
eagnews.org/school-quiz-conservatives-believe-helping-poor-is-a-waste-of-money/ - 62k -
they will never ask what about the undeserving poor, the ones who would rather throw money away on cigs booze strippers lotto, refuse to work and then complain they dont get enough.
Overleveraged shale plays are starting to look like the Walking Dead.
http://www.businessinsider.com/r-exclusive-sandridge-cutting-rig-count-by-75-percent–document-2015-2
“Overleveraged shale plays are starting to look like the Walking Dead.”
So are the degenerate housing gamblers.
“US oil and gas producer SandRidge Energy plans to slash its rig count in Oklahoma and Kansas by nearly 75 percent, according to a document obtained by Reuters.”
So, is oil going up?
crater
The good old days????
Ted Wacholz couldn’t believe his eyes: He opened Facebook on Saturday morning and saw film footage of the SS Eastland disaster, which claimed 844 lives on the Chicago River in 1915,
http://www.newser.com/story/202429/mystery-footage-found-of-1915-eastland-disaster.html
Will oil producers run out of storage soon, driving prices to the floor?
ft dot com
February 9, 2015 9:15 am
Oil ‘contango’ puts profit in storage
Gregory Meyer and Ed Crooks in New York
Views of oil pipelines and tanks at the Enbridge tank storage and pipeline facility in Cushing, Okla. on Friday Feb. 24, 2011. The terminals at Cushing have a capacity of 57 million barrels and several companies are expanding. Photos by Shane Bevel©Bloomberg
Anyone seeking to understand oil’s fall should watch what is happening in Cushing, Oklahoma.
The little city of 7,900 people is also home to tanks capacious enough to hold 70.8m barrels of crude, by the government’s latest reckoning. There, oil stocks have doubled since October to 41.3m barrels — a tenth of US commercial inventories. In a “few months it will be full”, Alan Swanson, chief financial officer at tank owner Plains All American Pipeline, told analysts last week.
Cushing’s rising occupancy rate shows how much supply exceeds demand even with US crude at $52 a barrel. With North American production still booming, it is pouring into tanks in places like Cushing, the Gulf coast of Texas and Hardisty, Alberta. Cushing is watched most closely, as it is the delivery point for the benchmark West Texas Intermediate (WTI) futures contract used by oil companies, airlines, banks, hedge funds and asset managers.
Futures markets reflect the state of oversupply. On Friday, WTI crude for March delivery at Cushing settled at $51.69 a barrel. The same grade for delivery in March 2016 was $61.63 a barrel. This type of upward sloping curve is called “contango”, commodity trader jargon for when prices for future delivery are higher than in the spot market.
The contango time spread suggests the market believes there is plenty of oil around and no need to scramble for supplies. But it is more reflective of current conditions than predictive. A case in point: the last time the one-year WTI spread was more than $10 was in February 2011 — right before civil unrest in Libya sent crude soaring above $100 per barrel. Within a few months western countries were worried enough to make a rare release from emergency oil stockpiles.
In theory, massive stocks should also damp volatility by rendering panic buying unnecessary. So far, the opposite has been the case as nervous traders grope for answers on production and demand. Volatility implied by prices of options on WTI futures is the highest since the start of the Libya crisis. Last week, futures leapt 7 per cent one day, only to sink 9 per cent the next.
Oil storage data
The contango spread gives companies with the means to store oil a healthy incentive to do so. With monthly tank leases at Cushing now less than 50 cents per barrel and the cost of financing low, traders can purchase crude and lock in a sale price $10 higher, pocketing a profit net of costs.
Lawrence Eagles, BP’s head of North American and global crude analytics, told a conference last month: “When you’re looking at both flat price and at spreads, they’re pretty much indicators of the same thing. If you’ve got too much oil, you have to create conditions where you can store some of that oil. So you get a contango structure.”
…
Oil may drop by more than $30 a barrel from current levels, says Citi
Published: Feb 9, 2015 6:00 p.m. ET
Citi sees potential for $20 oil price bottom, slashes 2015 estimates
FactSet
By MyraP. Saefong
Markets/commodities reporter
SAN FRANCISCO (MarketWatch) — Crude-oil futures have been mounting a come back, lately.
But not everyone believes this rally is a legitimate rebound for the beaten-down commodity.
In a note Monday, analysts at Citigroup raised the possibility that West Texas Intermediate oil prices may fall to as low as the $20 range. Prices on the New York Mercantile Exchange already suffered a loss of 46% last year.
Year to date, crude-oil prices (CLH5, -1.29%) have posted a decline of less than 1%, after gaining nearly 9% in the past three sessions.
But the recent rally looks more like a “head-fake than a sustainable turning point,” said Citi analysts, lead by Edward Morse.
The oil market should bottom sometime between the end of the first quarter and beginning of the second quarter, with oversupply being a key factor, Citi analysts said.
“It’s impossible to call a bottom point,” Ciit notes. But that didn’t stop them from trying. Nymex oil hasn’t settled at the $20 level since 2002.
Crude-oil prices on Monday didn’t appear to be rattled by the bearish Citi call, as West Texas Intermediate oil for March delivery rose 2.3% on Monday to close at $52.86. At that level, oil would have to shed about $32 to fulfill Citi’s most dire predictions.
Citi also cut its forecast for 2015 WTI oil prices to $46 a barrel from a previous forecast of $55, and reduced its 2015 estimate for Brent crude to $54 a barrel from $63.
Citi’s analysts aren’t the only bunch harboring a grim outlook for oil, and the Wall Street bank isn’t even the first.
Based on an earlier reading of out-of-the-money put options (puts give you the right but not the obligation to sell underlying oil futures contracts at specific strike price), traders have been betting that oil could plummet to $20 since early January.
Those traders are likely feeling some pain now, given the recent move higher for crude.
…
Is it true that inflation in China has hit a five year low?
ft dot com
Global Market Overview
February 10, 2015 3:51 am
Asia equities mixed as China CPI hits 5-year low
Jennifer Thompson in Hong Kong
Tuesday 03:10GMT. Equities in Asia-Pacific were mixed after Chinese consumer price inflation hit a five-year low and a lacklustre overnight session on Wall Street weighed on Japan’s Nikkei.
Hong Kong’s Hang Seng was flat, the Shanghai Composite was up 1 per cent, while Australia’s S&P ASX 200 fell 0.5 per cent
Consumer price inflation in China contracted to a five-year low in January, undershooting expectations with a reading of 0.8 per cent year-on-year growth. Analysts’ consensus forecasts were for 1 per cent growth.
Meanwhile, Chinese factory gate prices fell for their 35th consecutive month, with the producer price index down 4.3 per cent year-on-year in January, dragged down by falling energy and commodity prices.
Analysts offered different interpretations for the data, with some attributing it to a one-off timing impact. Julian Evans-Pritchard, China economist at Capital Economics, said the CPI reading was effected by the Chinese New Year holiday falling in January last year and February this year.
The holiday drives up demand for food, creating a higher base for comparison with 2015, meaning inflation should rise in February when the holiday falls later this month.
He added that producer price deflation should not be seen as a bad sign: “In fact, with the price of final consumption goods broadly unchanged from a year ago many firms actually stand to benefit from falling PPI.”
Economists at ANZ agreed that the later timing of Chinese New Year contributed to the falling CPI, but argued that deflation has become a “real risk” for China.
“PPI inflation suggested that the out-of-factory prices remained extraordinarily soft due to sluggish demand for manufactured goods,” they said.
…
ft dot com
January 26, 2015 7:03 am
Shanghai first major Chinese region to ditch GDP growth target
Gabriel Wildau in Shanghai
A Chinese national flag flies in front of buildings in the Lujiazui district of Shanghai, China, on Sunday, June 30, 2013. China’s expansion probably slowed for a second straight quarter, based on the median estimate in a Bloomberg News analyst survey, after export growth collapsed and Premier Li Keqiang reined in record credit expansion to contain shadow-banking risks. Photographer: Tomohiro Ohsumi/Bloomberg©Bloomberg
Shanghai has ditched its official economic growth target for 2015, becoming the first major city or province in China to abandon such metrics as government policy shifts towards a focus on growth quality over quantity.
The move signifies both a nationwide move to switch focus from hitting annual targets with some of the fastest growth rates in the world — now that those rates are waning — as well as an effort to de-link growth from promotions at the local level.
Growth in gross domestic product has long been a key metric to evaluate the performance of local officials, helping to determine whether they were promoted. But President Xi Jinping last year said that “we can no longer simply use GDP growth rates to decide who the [party] heroes are”.
At least 70 smaller cities and counties abandoned GDP targets last year, mostly in areas with high poverty rates and those with special agricultural or ecological value.
But the move by Shanghai — one of four Chinese megacities with province-level administrative status — marks the first such move by a highly developed urban area. At least two municipal districts in Shanghai had previously cancelled gross domestic product targets for 2015, the official Xinhua news agency reported.
Shanghai will “grow steadily, continue structural optimisation, and further increase quality and efficiency” in 2015, Shanghai mayor Yang Xiong said in his government work report to the city’s legislature on Sunday.
Analysts say excessive focus on gross domestic product has contributed to environmental degradation and urban sprawl as officials encouraged heavy industry and bulldozed agricultural land to build housing developments.
“It’s quite significant. The government is moving away from GDP targets and focusing on other metrics that are more important, like inflation and employment,” said Hong Hao, managing director for research at Bocom International, the international investment banking arm of Bank of Communications in Hong Kong.
Mr Yang said Shanghai’s growth had fallen to 7 per cent in 2014. The city’s 7.5 per cent target for 2014 matched the central government’s nationwide goal.
…