The Housing Bubble

Jingle_Fraud,

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

Housing Demand Plummets YoY In 55 Of 58 California Counties

http://files.zillowstatic.com/research/public/County/County_Turnover_AllHomes.csv

Only 3 counties posted a gain in housing demand. The average of the median sale prices in those three counties was 60% less than the statewide median sale price.This explains why inventory is massive and growing and sellers are slashing list prices across the state.

There’s a whole lot more slashing to come.

“The recovery is solid and growing.”

This message sponsored by the National Association of Realtors

How’s the fraud index?

The Burrito Index is layered with hot sauce as the restaurants are increasingly busier with longer wait times increasing. I could not even get into Jack’s Urban Eats the other days and still get back to work on time.

Did CapitalOne increase everyone’s credit limit?

“Always, ALWAYS pay off debt and shore up yer cash in GOOD times.”

Sage advice I’ve heard and adhere to.

Texas added 20,100 jobs in January, the oil industry lost 3,400 jobs.

http://bizbeatblog.dallasnews.com/2015/03/texas-added-20100-jobs-in-january-the-oil-industry-lost-3400-jobs.html/

Collapsing Demand Jingle_Fraud. Your empty wallet has blinded you.

If those $390,000 houses are such a good deal, you should fly here today and buy several of them

Speaking of Detroit:

http://www.iraqinews.com/features/u-s-district-judge-shot-in-detroit-in-robbery-attempt/

I’ve seen it to say that doing bad things can yield good results for the economy. If you google the term “economics is not a morality play” and click on Krugman’s column, you’ll see what he’s talking about - namely that WWII had good economic benefits.

The point is, this is taken as cover to do whatever the PTB considers beneficial, regardless of how eyebrow raising it is. Things like blowing bubbles and rewarding people who’ve engineered financial collapse.

“Beyond the power at stake, macroeconomic policy has undeniable moral dimensions which, as Mr Waldman reminds us, limit what is politically possible. Monetary and fiscal policy have real distributive consequences, not all of them fair. It may be wise, all things considered, to accept that some distributive injustice is the price of policies that are best for the larger economy and for overall well-being. It is wrong, though, to deny that inflation hurts savers relative to debtors, and it is wrong to deny there is a moral dimension to financial prudence and profligacy. It is wrong to deny that TARP added up to a scheme of private profits and socialised losses, and it is wrong to deny that this is morally repellent. It is best to acknowledge that in economic emergencies, some people are going to get shafted in the rescue operation, and some people are going to get an entirely undeserved windfall. As Mr Waldman rightly suggests, prevailing moral sentiments are less likely to rule out efficient policy when policymakers acknowledge and address the legitimate moral concerns of the public. ”

http://www.economist.com/blogs/democracyinamerica/2010/11/limits_technocracy

tl;dr: A society which repeatedly rewards stupid and destructive acts with more and more government largesse is going to get more of those acts.

“…a road that will never, ever end.”

All roads end up in Israel.

It’s all fun and games until someone eats a fruit bat.

At this point, does it even matter?

And Obama has differed how?

Require a mandatory draft of all fighting age Arizonans and South Carolinians the next time John McCain and Lindsey Graham get us into another war, and I guarantee you those two will be gone in the next election.

Wasn’t Colin Powell Secretary of State at that time?

Was it the State Department or the Department of Defense? The Secretary of Defense at the time was Donald Rumsfeld.

earn not own.

BTW, seeing a lot of garbage about fracking in the media. The whole “companies are not fracking their wells” is not the whole story. Well financed companies in the fields are certainly slowing down their completions. However, most companies in the space have to complete wells for the cash flow. In the Bakken oil area, you initially saw a slow down in completions in the Fall which actually slowed oil production. However, it was due to a regulatory change which required less flaring on natural gas not due to an attempt to wait for higher prices, In December 25 more wells were completed than drilled. That was when the number of drilling rigs was in the 180s now we are down to about 114 drilling rigs. After a brief slowdown in completions which only lasted for a few days, the overall completion rate, judging by North Dakota state figures, is the same as when 180+ rigs were drilling. We are working off the large backlog of about 750 wells quite fast now. The oil production figures will fall when completions slow down not when drilling slows down but that will occur as a natural development of having less wells to frac. Only a matter of weeks or at most a few months. The three thousand total well backlog quoted by the media sounds to be a reasonable estimate based on data a few months ago, it is lower now.

BTW, by reporting a large increase in jobs and the numbers are suspect, since it may be a number of people forced to get a second job due to low wages, they cause the dollar to surge which just causes problems for the companies that export and actually pay decent wages.

An example on why the small producers that dominate fracking at least for now cannot delay fracking a well and getting the cash flow:

(Bloomberg) — A Colorado oil producer is giving debt investors a lesson in the risks of lending to companies that staked their future on the U.S. shale boom.

Less than seven months after raising $175 million in a junk-bond offering, American Eagle Energy Corp. said Monday that it wouldn’t make its first interest payment on the debt. Instead, it hired two advisers — Canaccord Genuity Group Inc. and Seaport Global Holdings LLC — to negotiate with bondholders on a plan to restructure its debt, according to three people with knowledge of the situation who asked not to be named because the matter is private. The holders of the notes are left to consider how to maximize recovery of their investment, either by giving the company more time to try to become profitable or by pushing it into default.

With the price of U.S. crude down 52 percent since July, American Eagle and other small energy producers with significant debt loads are struggling to service obligations to creditors who were willing to lend them money just a few months ago. The energy sector represents about 14 percent of the high-yield bond market, and analysts expect defaults to increase this year as more companies are forced to scale back operations and record losses on oil reserves previously valued at much higher prices.

Bonds Fall

The company’s “small scale and relatively high drilling costs made it the one of the first victims of the drop in energy prices,” said Spencer Cutter, a credit analyst at Bloomberg Intelligence. “It was also unfortunate that oil prices dropped so much soon after the bond was issued, causing it to skip its first-ever interest on the debt.”

American Eagle Energy’s first-lien bonds, which are secured by its assets, fell 10.25 cents to 31.75 cents on the dollar at 4:23 p.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. They traded at par in September.

The oil and gas producer, which operates in North Dakota’s Bakken shale, has 30 days to make the $9.8 million interest payment before triggering a default on the 11 percent bonds due September 2019.

American Eagle Energy’s shares have lost 96 percent since the bonds were issued in mid-August, closing at 20 cents in New York.

I used to think that way too, that solar only makes sense with massive subsidies, etc., etc. But the tide has turned. Facts on the ground show there’s been a quantum leap in solar’s competitiveness.

“Facts on the ground”

LOL

“renewable energy sources will reach, or exceed, 14% of the nation’s electrical supply by the end of 2015″

As long as it takes more energy to put the “renewables” in place than they produce, such statements are entirely misleading.

LOL. Of course Fox News didn’t follow up after Solyndra with: “The much-maligned government program that funded the failed solar tech company Solyndra is expected to make taxpayers a $5 to $6 billion return, Bloomberg Businessweek reported on Wednesday.” As radio man Paul Harvey used to say, “now you know the rest of the story.”

Isn’t it right in the story that gold is even, it’s the dollar moving?

Looks like my move to write calls on some of gold and silver positions a few weeks ago was pretty smart right? I posted it when I did it. However, what happens to the dollar when the world figures out what a scam our employment figures are, people have to work two jobs to come close to equaling one good job. When the dollar falls gold will soar. The amazing thing about gold is how well it has performed considering the dollar’s rise.

Interest rate BACK TO NORMAL???

It can never happen again. We are THAT much in debt.

With the obama deficits - we can’t afford interest rates anything other than zero.

—————

A Nightmare Scenario: If The Average Rate Of Interest On U.S. Government Debt Just Gets Back To 6 Percent, The Federal Government Will Be Shelling Out A Trillion Dollars A Year Just In Interest On The National Debt
IWB - July 16th, 2013

But if interest rates rise, the U.S. government could be looking at some very hairy interest payments very rapidly. For example, if the average rate of interest on U.S. government debt just gets back to 6 percent (and it has been far higher than that in the past), the federal government will be shelling out a trillion dollars a year just in interest on the national debt.

State and local governments all over the nation could also very rapidly be facing a nightmare scenario.

Detroit is already on the verge of formally declaring the largest municipal bankruptcy in the history of the United States, and there are many other state and local governments from coast to coast that are rapidly heading toward financial disaster even though borrowing costs are super low right now.

If interest rates start rising dramatically, it would cause a huge wave of municipal financial disasters, and municipal bond investors would lose massive amounts of money…

“Muni bond investors are in for the shock of their lives,” said financial advisor Ric Edelman. “For the past 30 years there hasn’t been interest rate risk

That risk can be extreme. A one-point rise in the interest rate could cut 10 percent of the value of a municipal bond with a longer duration, he said.

Many retail buyers, though, are not ready for the change and “when it starts, it will be too late for them to react,” he said, adding that he was encouraging investors to look at their portfolio allocation and make changes to protect

But of much greater importance to most Americans is what is happening to mortgage rates. As mortgage rates rise, it becomes much more difficult to sell a house

According to CNBC, there is an increasing amount of concern that the rise in mortgage rates that we are witnessing could throw the real estate market into absolute turmoil…

This is what we are talking about when we talk about the “bubbles” that the Federal Reserve has created. The housing market is now completely and totally dependent on these artificially low mortgage rates. If rates go back to “normal”, the results would be absolutely devastating.

But of course the biggest problem with rapidly rising interest rates is the potential for a derivatives crisis.

There are several major U.S. banks that have tens of trillions of dollars of exposure to derivatives. The following is from one of my previous articles entitled “The Coming Derivatives Panic That Will Destroy Global Financial Markets“…

“The polls”

Which polls?

Peeps are using the emergency room a lot more

Way back, early to mid-2000’s or so, we used to go to D*O*C*S in Westchester County, if needed. I just looked; they still exist. Any equivalent in the city? At that time it cost about $60-80 and you usually had to wait quite a while, but it was better than the ER, unless your insurance is very good.

A few months ago I was in the ER at Sunrise Hospital (Vegas) and it was so crowded people were hanging off the walls. It reminded me of the freak show that is Columbia Presbyterian’s ER in Washington Heights (near our old neighborhood.)

I overheard a young guy who was worried about the cost - his girlfriend passed out in a casino and the establishment’s PTB insisted on an ambulance. He was freaking out because he didn’t think she needed hospitalization for being stewed. Probably got a big bill.