Bits Bucket for April 11, 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.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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People with mortgages can never do this:
https://en.wikipedia.org/wiki/Manitou_Incline
People with mortgages are physically incapable of doing this, because their bodies are as beaten up and broken down as their bank accounts
http://www.picpaste.com/IMG_20150411_062004-3KtbOxfd.jpg
P.S. I did it in an hour and five minutes today, but I wasn’t in a hurry
Busted broke backpedallers.
I rather enjoyed the Degenerate Gamblers moniker.
I think of an Asian fellow I saw in a casino in Temecula playing poker. He was wearing a flamboyant Hawaian shirt and holding a Mai Tai. It was 8:30 AM.
The asians love to gamble - and that is a huge understatement. I worked with lots of them and they make a big deal out of going to Vegas. I did a little gambling in the past but lost interest quick. I think I lost a total of $300 gambling. And won less than $50
Lacists!
Busted Broke Backpedalling Degenerate Gambers.
Where’s our Frisco Fraudies?
Broke back peddlers
People with mortgages also never get to stand on the top of Pikes Peak, because their albatross of mortgage debt slavery is too heavy for them to carry to the top
http://www.picpaste.com/IMG_20150411_072309-YyzDUNYi.jpg
Broke @ss Loosers!
This is my favorite place to go running (Green Lakes state park) most week days. People with mortgages can’t do that as they have to be an obedient slave to their employers
http://picpaste.com/20131017_140640-e2eWBHHY.jpg
This is the early morning view from my apartment window. 2 bd 2 baths with an extended living room on the top floor with 5 covered parking spots. My rent is about $1200.
People with a mortgage will pay that amount in just taxes, utilities and maintenance on their depreciating shack.
http://picpaste.com/20150129_065601-8EXcD2Pz.jpg
Life is beautiful.
Exactly!
People with mortgage get a home equity loan and travel to exotic places all over the world. Colorado was and is a hick town. Meh…
WRONG
People with mortgages never travel more than 50 miles from where they live, because after paying the mortgage and utilities and insurance and property taxes and maintenance and repairs they are dead f*ing broke
HELOC, man. They are wonderful thing.
I used to sell HELOCSs when I worked for TARP bank in 2004-2005, wonder how many bankruptcies, divorces, and suicides I may have contributed to, LOLZ
My mortgaged coworkers all take fancy vacations, especially the childless. It’s easy when you have a combined 200K+ income. My boss, whose wife doesn’t work and who has a mortgage, goes to Europe for a month every year.
Rockstar since you’re such a rich 1%er why don’t you buy me lunch at Southern Sun in Boulder tomorrow?
Debtors buy things they can’t yet afford and then work as slaaves to pay for things they no longer have.
Savers work for things they don’t yet need and then only do what they enjoy.
I’m sure this is accurate anymore ^^
Is the affordable housing crisis back?
Residential Real Estate
Housing shortage puts the pinch on Dallas-area homebuyers
By STEVE BROWN
Real Estate Editor
Published: 09 April 2015 11:04 PM
Updated: 10 April 2015 05:00 PM
* New report: D-FW housing market gets bad marks for soaring prices
* Sharp drop in Dallas-Fort Worth home starts means less choice for buyers
* First-quarter home sales in North Texas rise thanks to strong March showing
* New North Texas communities woo residents with neighborhood farms, open space
* Case-Shiller: Dallas one of top U.S. markets for home price gains
In some Dallas neighborhoods, buying a house is as frenzied as shopping the day after Thanksgiving.
To get a deal, you often have to be in line when the doors open.
That’s what Jake and Jessica Simpson found this spring when they were house-hunting.
“A house we were interested in would go on the market at 7:30 in the morning and by noon it’s under contract,” Jessica Simpson said. “We had trouble getting in to view a house before we could even put an offer.
“At one house, we made an appointment for 1:30 in the afternoon and they already had 40 offers on the table when we got there.”
The number of preowned homes for sale in the Dallas area this spring is at a more-than-20-year low.
And supplies of new houses on the market are a fourth of what they were before the recession.
In many Dallas-area neighborhoods, there is less than a two-month supply of houses available to purchase. A normal “balanced” market is considered to be about six months of inventory.
With thousands of people coming to North Texas to take jobs for major companies including Toyota, State Farm and Liberty Mutual Insurance, getting here won’t be as difficult as finding someplace to live when they arrive.
…
Reinventing America 4/10/2015 @ 9:03PM
Los Angeles Is The Latest City With A Housing Crisis
When commentators discuss the U.S. cities with the least-affordable housing, they rarely mention Los Angeles. While dense coastal ones like New York, San Francisco, and Boston are considered exclusive, L.A. is sooner associated with the cheap and sprawling cities of the Sunbelt. This description would have been accurate in the mid-20th century, when the city’s unregulated growth made it a bane to architecture aesthetes, but great for middle-class prosperity. For decades, though, L.A. has copied the policies in these coastal hubs—and seen its affordability diminish.
The trend was documented this week over at Salon.com by urbanist Henry Grabar. He noted that when accounting for average income, Los Angeles is the hardest major metro to buy a home, requiring nine years of earnings. This was due to the region’s limited housing supply.
This has made L.A. “expensive for homeowners and tenants alike. The former spend 40 percent of their income on mortgage payments; the latter spend 48 percent of their income on rent. Both figures are the highest in the country.”
…
Julián Castro: Our national affordable housing crisis
By Julián Castro
Updated 7:51 AM ET, Tue April 7, 2015
Opinion: Mom pays $1,000 a month for a garage
Julián Castro is secretary of the U.S. Department of Housing and Urban Development. The opinions expressed in this commentary are his.
(CNN)Can you imagine paying $1,000 a month in rent to live in a one-car garage? Nicole, a 30-year-old woman, doesn’t have to imagine this scenario because it’s her everyday reality. The small and unusual living space is all that this employed, single mother can afford in her high-cost community in San Mateo, California.
Nicole isn’t alone in her struggles.
CNN recently published a powerful piece called “Poor kids of Silicon Valley” that documents the affordable housing challenges facing families in the Bay Area. One aspect featured a house that is home to 16 people, including 11 children. Another chronicles a husband and wife named Rich and Stacey, both of whom have jobs, who are living in a San Jose homeless shelter with their two kids because they don’t have the money to go anywhere else.
Although Silicon Valley has unique characteristics, it isn’t the only community confronting these challenges. Our entire nation is in the midst of an affordable housing crisis. The agency I lead, the U.S. Department of Housing and Urban Development, recently released a report estimating that 7.7 million low-income households live in substandard housing, spend more than half their incomes on rent or both.
These are families who are dedicating $1 out of every $2 they earn just to keep a roof over their head. And the more they spend on housing, the less they have to invest in their children’s education, build up savings and shop at local businesses. These are outcomes that hurt our nation’s economy and require us to respond with swift and bold action.
…
Maybe they should invest in birth control.
But then Jeb Bush would have to import more “fertile” immigrants.
Maybe they should invest in birth control.
Comrad Pelosi’s Democrat votes-for-entitlements permanent Supermajority isn’t going to build itself, you know.
These are families who are dedicating $1 out of every $2 they earn just to keep a roof over their head. And the more they spend on housing, the less they have to invest in their children’s education, build up savings and shop at local businesses. These are outcomes that hurt our nation’s economy
This is the FEDS problem
Once people have depleted savings, maxed out earnings by sending wife to work and working overtime, maxed out borrowing, inflation from printed dollars only shifts spending from wants to needs.
This is the FEDS problem
And remind me again: who are the stupid voters that keep installing corporate statists and Wall Street fluffers who actively assist the Fed’s malfeasance? Oh, that’s right, the sheeple who keep voting for Wall Street-annointed Republicrat candidates, i.e. Obama, McCain, Romney, and HillaryJeb. That’s 95% of the electorate. You can’t fix that kind of stupid. You can only do what you can to mitigate the inevitable consequences.
You are, on the other hand, smarter than that for voting for …who?
I found this article to be interesting:
http://www.citylab.com/housing/2015/04/the-real-role-of-land-values-in-the-united-states/389862/
It looks at land values in the U.S. from a macro perspective.
From the article: “Just 6 percent of America’s nearly 2 billion acres of land is developed, Larson finds. But that little bit of land packs a substantial financial punch. It’s worth roughly $11.7 trillion, according to his calculations, comprising slightly more than half of the total value of U.S. land.”
….. and not a sane soul willing to buy it at that price.
Los Angeles, CA Prices Dive 5% YoY; Excess Housing Inventory Explodes 71% As Foreclosure Action Ramps Up
http://www.movoto.com/los-angeles-ca/market-trends/
Inventory Up 71 percent? Isn’t that very remarkable? Some of you experts chime in. If it is as remarkable as it sounds shouldn’t it be a headline in the LA times?
Yeah, inventory is up to 3,878 in a city of over 3.8 million people. A tiny number that’s up by 71% is still a tiny number.
Well in tha case please mention demand at historic lows I guess if that’s all the activity that can be sustained.
That’s right. Demand at 20 year lows. 30 year low in CA.
Inventory is up 120% where I live in northern Calif. and is at a 3 year high…but that will never get much notice in the local paper, when they do print anything on RE it is authored by a realtor and/or an RE industry fluffer, they do NOT want to annoy advertisers and business interests.
http://www.movoto.com/santa-rosa-ca/market-trends/#city=&time=5Y&metric=Inventory&type=0
Has the Fed painted themselves into a corner with QE and ZIRP?
And is it a corner where they want to stay indefinitely?
Mutual Funds
A Market Rally Without Steam
By CONRAD DE AENLLE
APRIL 11, 2015
Photo Credit
Koren Shadmi
…
As expected, the Fed last month dropped its pledge to be patient about raising the rate, wording it had used consistently in its policy statements. But the rest of the March statement made clear that the central bank was in no hurry to raise the near-zero percent rate until the economy perks up.
The apparent belief among investors that the Fed was still on their side and that economic indicators were not working against them was enough to send the Standard & Poor’s 500-stock index up, but barely: It rose less than 0.5 percent in the first quarter, to 2,067.89. Bond prices rose too, reducing the yield on the 10-year Treasury to 1.93 percent from 2.17 percent. Yields on high- and low-quality corporate instruments also fell, although less so.
Tacit assurances that no rate increase was imminent have long supported stocks and bonds, but concern is growing that the Fed may have painted itself into a corner. A rate increase could provoke turbulence in the markets, investment advisers warn, but continuing to delay could raise concern about the fragility of the markets, the economic recovery or both. Investors who have cheered the Fed’s dovishness could be the ones whose patience is tested.
Ben Bernanke has a thoughtful and well-reasoned blog posting on this.
http://www.brookings.edu/blogs/ben-bernanke/posts/2015/04/07-monetary-policy-risks-to-financial-stability
Has the Fed painted themselves into a corner with QE and ZIRP?
And is it a corner where they want to stay indefinitely?
Unless we have hyperinflation they will stay there. And since QE and ZIRP don’t put money directly into the hands of the average Joe (unless he HELOCs) I don’t foresee inflation on wants, only on needs.
The Irish Times
Global markets strong due to ECB quantitative easing and GE plans
S&P 500 near record high with European equities at 15-year peaks
A general view of Madrid’s stock market. Investors have been emboldened by the prospect of an economic recovery as the European Central Bank’s €1.1 trillion quantitative easing policy suppresses borrowing costs and cheapens the single currency. Photograph: Juan Carlos Hidalgo/EPA
Fri, Apr 10, 2015, 19:54
First published: Fri, Apr 10, 2015, 19:54
Global stock markets ended the week with the S&P 500 back within striking distance of its record high, European equities at 15-year peaks and the Nikkei 225 in Tokyo briefly climbing back above 20,000 for the first time since 2000.
Investors have poured record amounts of money into euro-zone equities over recent months, emboldened by the prospect of an economic recovery as the European Central Bank’s €1.1 trillion quantitative easing policy suppresses borrowing costs and cheapens the single currency.
With the ECB’s €60 billion of monthly bond purchases starting only last month, investors are mindful that the euro-zone equity rally has further room to run, given the stellar performance of US shares in recent years when the Federal Reserve was the largest buyer of government debt.
Wall Street’s latest push higher came as General Electric unveiled plans to sell the bulk of its finance arm and return up to $90 billion (€85bn) to shareholders through stock buybacks and dividend increases over the next three years.
…
“Investors have poured record amounts of money into euro-zone equities over recent months, emboldened by the prospect of an economic recovery as the European Central Bank’s €1.1 trillion quantitative easing policy suppresses borrowing costs and cheapens the single currency.”
“… and cheapens the single currency.”
And I suppose this is a good thing.
Question: If you are a wage earner and you are paid in a currency that gets cheapened, is this a good thing for you?
How about if you are a saver, one of those prudent people who do not spend every cent they can get hold of, is this a good thing for you?
Who is it that makes economies work? Is it the financial guys who move lots of numbers around or is it the working guys who actually produces stuff?
Which of the two gets rewarded and which gets screwed?
The money that gets electronically printed and circulated through the veins of the world’s payments system is the life blood of the economy. Without central banks serving as the heart that pumps money through the payments system, the economy would go into cardiac arrest and die.
Note: The above is not my own opinion, but rather my guess about how central bankers view their own “essential” role in the global financial system.
Most international trade is handled via “letters of credit” where the bank holds the payment in escrow and pays the seller when the goods are received by the buyer.
Currency is the cornerstone of the modern economy.
The companies and structures that have grown up around it to take their skim are not.
There’s never been a better time to belong to the 0.01% Ownership Society.
IMO we are deeply and totally immersed into the Age of Financialization.
Wiki-up the term “financialization” and you will learn that:
“Financialization is a term sometimes used in discussions of financial capitalism which developed over recent decades, in which financial leverage tended to override capital (equity) and financial markets tended to dominate over the traditional industrial economy and agricultural economics.”
Pay special attention to this part:
“… financial markets tended to dominate over the traditional industrial economy and agricultural economics.”
And home in on this word: “dominate”.
‘General Electric Co will shed most of its finance unit and return as much as $90 billion to shareholders as it becomes a “simpler” industrial business instead of an unwieldy hybrid of banking and manufacturing.’
‘The company on Friday outlined a restructuring plan that includes buying back up to $50 billion of its shares, selling about $30 billion in real estate assets over the next two years and divesting more GE Capital operations.’
‘Blackstone Group LP and Wells Fargo & Co confirmed that they were buying most of the assets of GE Capital Real Estate for about $23 billion. This is the biggest deal in the commercial property market since Blackstone’s acquisition of office landlord Equity Office Properties Trust in 2007 for $39 billion, including debt.’
“We just think the market timing is very good vis-a-vis the value of financial service assets,” GE Chief Executive Officer Jeff Immelt said in an interview. “There have been moments in the past when there weren’t a lot of buyers. Now there are.”
‘GE funded many of its loans and leases by borrowing money from bond markets. During the financial crisis it lost access to that funding, bringing it uncomfortably close to running out of cash. Lenders like GE Capital and CIT Group Inc, which cannot rely on bank deposits to fund their assets, have had to rethink the way they do business since the crisis. Many decided to either shed assets or become banks.’
http://finance.yahoo.com/news/ge-close-selling-nearly-real-094207788.html
‘which cannot rely on bank deposits to fund their assets’
‘Fractional-reserve banking is the practice whereby a bank takes in deposits, creates credit or makes loans, and holds reserves (to satisfy demands for withdrawals) that are less than the amount of its customers’ deposits. Reserves are held at the bank as currency, or as deposits in the bank’s accounts at the central bank. Because bank deposits are usually considered money in their own right, fractional-reserve banking permits the money supply to grow beyond the amount of the underlying reserves of base money originally created by the central bank.’
‘To mitigate the risks of bank runs (when a large proportion of depositors seek withdrawal of their deposits at the same time) or, when problems are extreme and widespread, systemic crises, the governments of most countries regulate and oversee commercial banks, provide deposit insurance and act as lender of last resort to commercial banks. In most countries, the central bank (or other monetary authority) regulates bank credit creation, imposing reserve requirements and capital adequacy ratios. This can limit the amount of money creation that occurs in the commercial banking system, and helps to ensure that banks are solvent and have enough funds to meet demand for withdrawals. Rather than directly limiting the money supply, central banks may pursue an interest rate target to control bank issuance of credit.’
‘Fractional-reserve banking is the current form of banking practiced in most countries worldwide. Fractional-reserve banking predates the existence of governmental monetary authorities and originated many centuries ago in bankers’ realization that generally not all depositors demand payment at the same time.’
http://en.wikipedia.org/wiki/Fractional-reserve_banking
These cycles are nothing new, just the magnitude is new.
Loading up on debt to hoard the resources of industry has a limit, because it does not deliver wealth to the consumers of industry. Eventually, there is no one to buy the products.
When all the new borrowing is being used to service the old borrowing, it is the end of the cycle.
What if the new borrowing is used to finance the new buying of shares?
And how does this development evolve when and if interest rates ever increase?
“General Electric Co will shed most of its finance unit and return as much as $90 billion to shareholders as it becomes a “simpler” industrial business instead of an unwieldy hybrid of banking and manufacturing.”
Connect the dots, connect the arrows:
General Electric. -> Jack Welch. -> Six Sigma. -> An unwieldy hybrid of banking and manufacturing.
Connect the dots
Possibly someone perceives a sea change. Is the Gloden Age of Financialization running aground on debt exhaustion?
The Grilled Cheese Truck, Inc (GRLD)
A month ago the price was six dollars. A few days ago the price was one-sixty-one. Yesterday the price ended up at one-twenty-six.
The message is clear: Buy the dip!
Consider: If the price of zero represents the lowest price GRLD can drop to, it’s bottom, then yesterday’s price of one-twenty-six means the current price is much, much closer to the bottom than it is to the top.
The way to get rich in the stock market is to buy low and sell high. GRLD is currently offering up an opportunity for you to buy low.
GRLD is sitting there, sitting there and waiting. Waiting for you to take it.
So, the question boils down to: Are you willing to take it? Are you man enough to take it?
They’re sitting there waiting, waiting for you to take their money. Are you gonna take it? Are you man enough to take it?
Put that coffee down. Coffee is for closers.
Dallas has more than one grilled cheese themed restaurants, as do a handful of other cities.
This is truly the gilded age.
Rice and beans truck will be up next. Then good old-fashioned soup lines.
“soup lines” already exist…except they’re for ramen noodles and they’ll set you back at least $10 a bowl.
http://www.thrillist.com/eat/nation/best-ramen-shops-ramen-noodles
One more reason for the terrorists to hate us.
Dallas has more than one grilled cheese themed restaurants, as do a handful of other cities.
I believe they are called “Denney’s”
Located right next to the La Quinta motel in most places.
For ye’ of little faith…I give ye’
The Dallas Grilled Cheese Company!
http://dallasgrilledcheese.co/
I kid you not…I believe this is some kind of millennial driven mania. It is only a matter of time until there is a PB&J dedicated restaurant. I’m pretty sure there already is one.
Everything is on track for $80 dollar oil even with occasional sharp sell offs oil was up 5% for the week and the drill rig count continues to fall and oil production is now dropping in the shale areas. Saudis know to damage the industry beyond repair they only need to keep the price below $65 for WTI for a few more months. This is the problem with predatory pricing, it only lasts long enough to damage competition and then results in even higher prices:
http://natmonitor.com/2015/04/11/uh-oh-u-s-oil-rigs-are-sliding-once-again-and-its-alarming-investors/
Ban,
Remember…. Falling prices to dramatically lower and more affordable levels is your wallets best friend and exactly what is necessary to accelerate the economy.
Predatory pricing is not good, lower prices due to new discoveries or new technologies is good. Unfortunately, we have seen the former not the latter. 5.4 million barrels of oil per day is produced in shale oil fields in the U.S., virtually none of can be replaced at today’s prices and shale oil has a sharp decline rate so it must be constantly replaced, that is the problem.
The demand side has broken down. Something stopped the parabolic rise to infinity.
We continue to add 100,000 barrels a day to demand on average every month so nothing has broken down.
Do you really believe this does not add to demand:
http://www.chinadaily.com.cn/business/motoring/2015-04/10/content_20402956.htm
Excerpt:
Passenger-vehicle sales in China gained 12 percent last month, led by demand for sport-utility vehicles and minivans in the world’s largest auto market.
Retail deliveries of cars, multipurpose and SUVs climbed to 1.78 million units in March, the China Passenger Car Association said on its website on Thursday.
SUV sales surged 64 percent in March and minivan deliveries jumped 26 percent, while sedan demand fell 0.6 percent, according to the data.
“Auto sales have been driven by replacement demand or families buying a second vehicle, so SUVs are a natural choice as they seek something different,” said Yale Zhang, Shanghai-based managing director of Autoforesight Shanghai Co.
Oil Markets
Oil Prices Tumble as Supplies Hit New Record
U.S. inventory data show largest one-week build in crude supplies since 2001
By Nicole Friedman
Updated April 8, 2015 8:20 p.m. ET
The most volatile oil market in three years was hit with another sharp swing on Wednesday, as a huge buildup in crude supplies sent U.S. prices to their biggest loss in two months.
Crude oil for May delivery slid 6.6%, a day after rising 3.5% to set a high for the year.
Prices have moved more than 2% up or down on 42 trading days this year, more than the total number of such moves in any of the past three years.
Wednesday slide was triggered by a report from the U.S. Energy Information Administration showing the nation’s crude stockpiles soared to a new record last week, posting the biggest increase in 14 years as oil production rose.
The surprisingly large addition to supplies underscores the persistence of a glut that forced oil prices down to six-year lows earlier in the year. Wednesday’s selloff erased much of this week’s big gains, which were driven by forecasts that booming U.S. oil output would start to decline later in 2015.
“There’s simply not a shortage at all,” said Kyle Cooper, analyst at IAF Advisors in Houston. “There’s a big glut, and that glut remains intact.”
…
Notice the blatant error in this article, which suggests negative oil price shocks are limited to 10 years or less. This ignores the one that lasted from the mid-1980s through 2000 or so, for well over a decade.
Business
Oil prices tumble as U.S. supplies hit 80-year record
Crude prices tumble again after report shows U.S. oil inventories surged, standing now at their highest levels in 80 years.
U.S. oil inventories keep piling up, and now stand at their highest levels in eight decades.
TORONTO STAR FILE PHOTO
By: Vanessa Lu Business reporter, Published on Wed Apr 08 2015
Crude prices tumbled again Wednesday after a new report showed U.S. oil inventories keep piling up, and now stand at their highest levels in eight decades.
Stockpiles increased by 10.9 million barrels for the week ending April 3, far exceeding analysts’ expectations of 3.4 million, according to a weekly update by the U.S. Energy Information Administration.
“It was another big increase,” said Colin Cieszynski, chief market strategist for CMC Markets in Toronto, noting the resulting price volatility could be here for some time.
“This is something that literally plays out over years,” he said. “Usually, when we have had these price shocks in crude oil, they don’t go away immediately.
“The shortest ones I have seen have been two years, and they can run to five to 10 years,” Cieszynski said.
…
You can post old news over and over, it will not change how oil changed for the week. I predicted $80 for December not June for a reason. It takes time for drill rigs to shutdown, fracking to decrease and then for production to fall. Just in the last three rigs have we seen the third leg start. The last three weeks have seen flat, large fall, then a partial recovery mainly due to an increase in Alaska, unrelated to shale oil. Soon thirty thousand per week declines will be the norm.
Commodities | Wed Mar 25, 2015 9:19am GMT
UPDATE 2-China’s crude storage nearly full, says Sinopec exec
* Crude imports likely to be flat to slightly higher in 2014 -exec
* Storage being added, but not ready for use -exec (Adds analysts’ comments and Brent prices)
(Reuters) - China’s commercial and strategic oil storage is almost full, a Sinopec trading executive said on Wednesday, leaving little room for Asia’s top oil consumer to keep up its soaring import growth and adding downward pressure to an already oversupplied market.
China’s purchases to fill its strategic petroleum reserves (SPR) was one of the main drivers of Asian demand since August of last year, with the nation’s importers buying cheap crude to fill oil tanks despite slowing economic growth.
But with storage capacities approaching their limits, China’s crude imports will likely stay flat or rise only slightly this year, said the executive, who requested not to be named despite speaking to reporters at an industry event.
China’s crude oil imports grew 4.5 percent in the first two months of the year compared to the same period a year ago, according to official customs data.
But daily crude imports in February of 6.7 million barrels per day (bpd) were down nearly 7 percent from a record 7.15 million bpd in December, the data showed.
“We see a stop in stocking up of Chinese SPR as a drop in needed demand for oil markets,” said Daniel Ang, investment analyst at Singapore’s Phillip Futures. “Now that it has happened the markets are just factoring this in,” he said.
…
Broke, unemployed people don’t do much driving.
China is building over 150 million barrels of new SPR capacity which comes online soon, I guess you will just ignore that.
Broke, unemployed people don’t do much driving.
Just one Company hiring ten thousand engineers per year, the country does not sound too broke:
http://www.chinadaily.com.cn/business/tech/2015-04/11/content_20410029_2.htm
“Just one Company”
Doesn’t answer the question of how a Fang nu factory worker can pay 40 times his salary for a house, six times his salary for a car, save 40% of his income (to buy a house back home) and pay 40% of his income for food can afford a smart phone.
40 must be some kind of lucky number in China.
Your salary numbers are out of date, so your question assumes facts not in evidence, none of the statements are true.
Pay vs. costs, China and the U.S.
http://www.numbeo.com/cost-of-living/compare_countries_result.jsp?country1=China&country2=United+States
Do you think a lot of 12 hour per day factory workers post their wages on that Expat site?
That’s odd, your link shows it would take over 40 years salary to buy a little box in the sky flat.
Comment by Albuquerquedan
+1 But I don’t know what the price will be at any point in the future. As to rig counts -
“The count has fallen in 18 consecutive weeks, during which time it has plunged 932 units (OGJ Online, Dec. 5, 2014). The total of 988 is the lowest since Aug. 21, 2009, and 843 fewer units compared with this week a year ago.”
“The average Canadian rig count for March was 196, down 167 from February and down 253 from March 2014.”
“The worldwide rig count for March, meanwhile, was 2,557, down 429 from February and 1,040 from March 2014.”
We have just had an oil spill from a ship in Vancouver harbour which will probably gum up any increases from that port of oil exit for several years. If on it’s own, that would keep Canadian oil exports to the US at very low prices.
But the Energy East line is looking pretty good and makes a lot of sense. If that comes on line in a big way it would distort the prices of domestic oil from Canada.
Whatever, I think we in North America for at least the next 50 years have more than enough oil for our own consumption needs from domestic reserves - if we had to.
Lower prices aren’t the problem. They are the solution.
You will learn this someday.
It’s 2009 in the oil world and some are expecting the year to end up like 2010, with oil at $80. Naturally, that would lead to 2011 with oil at $100. That scenario is “on track” only in the vivid imagination of hopeful predictors. The price isn’t moving out of its band around $50 yet.
There was something big supporting the run-up of oil in the early 2000s and again in the last six years. Both times there was a massive debt expansion fueled building mania, and when it broke down the price of oil fell back to earth. First the US, then Asia. The wave has gone all the way around the world. Where is there a gigantic debt virgin like China to be found for the next big wasteful credit expansionl building mania? Without it how can enough energy be consumed to bring on yet another impressive oil price bubble?
‘a gigantic debt virgin like China’
That’s a good way to put it. You have to have a story. Emerging markets. BRIC’s. A way to explain where all this debt will be put to use.
How is it that you are able to outdmart the futures market?
How is it you are not?
I guess I just don’t see how we get from here to $80/bbl by December 2015. Nor do futures traders.
But few people share your special forecasting skills.
P.S. Does Rasmussen have a frontrunner in the 2016 race yet?
EIA sees oil averaging $59/bbl in 2015 and $75 in 2016
in Oil & Companies News 09/04/2015
On April 2, Iran and the five permanent members of the United Nations Security Council plus Germany (P5+1) reached a framework agreement that could result in the lifting of oil-related sanctions against Iran. Lifting sanctions could substantially change the STEO forecast for oil supply, demand, and prices by allowing a significantly increased volume of Iranian barrels to enter the market. If and when sanctions are lifted, the baseline forecast for world crude oil prices in 2016 could be reduced $5-$15/barrel (bbl) from the level presented in this STEO.
Iran is believed to hold at least 30 million barrels in storage, and EIA believes Iran has the technical capability to ramp up crude oil production by at least 700,000 bbl/day (bbl/d) by the end of 2016. The pace and magnitude at which those volumes would reach the market would depend on the terms of a final agreement. For additional analysis of the possible oil market effects of a lifting of sanctions against Iran, please see analysis box for further discussion.
…
But few people share your special forecasting skills.
Best record on this board and you and my other critics know it. I am right on China and oil and you know it and hate it.
“I am right…”
A more quixotic claim could not be made.
A more quixotic claim could not be made.
He is a lawyer, after all.
Best record on this board and you and my other critics know it.
Like your claim that Romney had it in the bag?
You were right om the 2012 election, too, as I recall. Your HBB prediction record is unblemished, and only matched by your self-aggrandizing bravado.
PB and Colorado, you are lying, I never said Romney would win never mind that he had it in a bag, what I said is Obama did not have it in the bag. Colorado show the statement where I said I had it in a bag or admit you are a liar like Obama. For years the left on this bag has tried to find one post by me calling the election and they cannot, to continue to do so, is not being wrong it is being a liar.
bag=blog
I suppose attorneys are qualified to know when everybody else in the world is lying at the same time if anyone is.
Obama trusts Iran so this must be some mistake:
ADEN (Reuters) - Local militiamen in the Yemeni city of Aden said they captured two Iranian military officers advising Houthi rebels during fighting on Friday evening.
Tehran has denied providing military support for Houthi fighters, whose advances have drawn air strikes by a regional coalition led by Saudi Arabia, the Islamic Republic’s main rival for influence in the Gulf.
If confirmed, the presence of two Iranian officers, who the local militiamen said were from an elite unit of Iran’s Revolutionary Guards, would further worsen relations between Tehran and Riyadh who are vying for dominance in the region.
Fairly obvious that Congress hates the Iran deal because oil lobbyists want to keep Iran’s oil off of the market. Conservatives in Congress will take any position if you pay ‘em enough.
In a world which uses 94 million barrels a day, Iran’s added production is insignificant. Now, the ability to shutoff Saudi production which might happen if Iran does have the bomb is significant.
EIA says if Iran oil comes to world market, oil prices will fall $5 to $15 / bbl. That’s a motivator for the US oil industry to keep the Iran sanctions in place.
All the U.S. agencies are staffed by people that follow the party line, when you have NASA actually changing real data to correspond to models to support Obama, you soon realize why the Obama narrative that if we lift sanctions oil will fall is very suspect. Oil will rise until shale oil production is profitable, Iran is really a non-issue. You can’t replace 5.4 million barrels of production with less than a million barrels of additional production Iran, it is as simple as that.
Your scenario on rising oil prices until shale kicks in is reasonable. But when you imply NASA (and I assume you’d include NOAA as well) is fudging climate data, well, maybe you’ve been partaking in Goon’s finest
They have altered the numbers and they admit it, they just claim it makes them more accurate. Google it, you will find I am right.
This is just one example:
http://wattsupwiththat.com/2012/09/26/nasa-giss-caught-changing-past-data-again-violates-data-quality-act/
“Your scenario on rising oil prices until shale kicks in is reasonable.”
Especially if you never studied economics and are completely ignorant of modern finance, especially as concerns Robert Lucas’ theory of rational expectations.
Inconceivable! Last September Obama was hailing Yemen as a model for counterterrorism success. Of course, that’s before $500 million in American-supplied weapons got looted from Yemeni arsenals by God-knows-who.
https://search.yahoo.com/search;_ylt=Aq2Yushi4J0dX4E3WcIQE2mbvZx4?fr=yfp-t-901-s&toggle=1&fp=1&cop=mss&ei=UTF-8&p=obama%20yemen%20success
No problem, we’ll sell them more guns to replace the stolen ones.
Wars are good for business.
I think looting weapons is the new way the CIA gives weapons to groups that are currently unpopular.
I think we wanted to arm ISIS.
I think we wanted to arm the Houthi’s
By Post Staff Report
April 9, 2015 | 11:59am
Dimon also said that another financial crisis was inevitable and floated his ideas for how it would play out.
“The trigger to the next crisis will not be the same as the trigger to the last one — but there will be another crisis,” he wrote.
The next crisis would bring even more “volatile markets,” he said, in part because stricter regulations would make banks less likely to lend and inject liquidity in times of trouble.
He said recent activity in the Treasury markets is a “warning shot across the bow.” The government securities moved an alarming 40 basis points on Oct. 15 — “an event that is supposed to happen only once in every 3 billion years or so,” he said.
nypost.com/2015/04/09/dimon-says-no-doubt-about-it-bear-stearns-was-a-bad-idea/ - 131k -
“The next crisis would bring even more “volatile markets,” he said, in part because stricter regulations would make banks less likely to lend and inject liquidity in times of trouble.”
Yes! And these stricter bank regulations that will slow down bank lending will act to stifle - STIFFLE! - any recovery and once again - ONCE AGAIN! - blame for the chaos will be incorrectly placed on the banks and bankers, the true victims of the entire mess.
There’s no justice in the world, none at all.
I think the triggers will be the same. Unstable O&G, Sub-Prime and Rental Mortgages, low wages/unemployment and over-inflated markets.
People forced to borrow for everything they used to be able to afford.
“The trigger to the next crisis will not be the same as the trigger to the last one — but there will be another crisis,” he wrote.
We know that Goldman Sach’s had their software stolen, so they had to develop/program a new trigger for the next crisis.
Anyone can tell you when huge imbalances develop, the trick is knowing when the avalanche will start. If you have a small explosive device you can trigger the avalanche at a time of your choosing and profit handsomely.
Are negative interest rates the New Normal?
Curious auction: The Swiss offer bonds at a negative interest rate
April 11, 2015 12:00 AM
By the Editorial Board
Switzerland’s government caught the eye of investors Wednesday when it made them pay a premium to buy its 10-year-yield bonds.
Other governments, including Austria, Finland, Germany and Spain, have done the same thing on shorter-yield bonds, but Switzerland was the first to use this procedure in selling its 10-year landmark bonds. Comparable Nigerian bonds, for example, offer a yield of 14.512 percent for the more adventurous. The Swiss bonds were sold at a negative 0.055 percent rate and were comfortably gobbled up on the market. Their eventual yield, in 2025, will be a modest 1.5 percent. The amount sold was $241.3 million.
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Hey Goon, how soon do you think it’s going to be before millions of California dust-bowl refugees infest Colorado?
http://www.zerohedge.com/news/2015-04-10/californias-historic-drought-about-get-even-worse-snowpack-melts-early-across-west
For starters, they’ll need jobs.
They’ll come, not find work, and move on to the next state.
Heh, we’re already seeing some of them in Florida. The humidititty freaks them out. What ninnies.
Actually it surprises me that they aren’t invading the Mid-atlantic and Upper south. Lots of decent arable land here.
The humidititty freaks them out. What ninnies.
Ever wonder why California’s population grew so much? As someone who has lived in the western USA most of my life I find the east and gulf coast summer humidity to be unbearable. How you guys can stand it is beyond me … and don’t get me started on the bugs.
Florida was not so bad. I had my AC on 24/7 9 months of the year. I had it so cold that I had to wear a sweat shirt in my place. Top floor, 2 bedroom with the screened in balcony, near new, separate private laundry room, fully equipped for just a bit over $900 per month. Good ol days in 2011
Not sure how this movie is going to end but higher taxes and more regulations are {sarcasm} always {/sarcasm} the solution.
If you are a California taxpayer who realized lots o’ gains in 2014 or before and kept them in cash or treasuries, congrats. Your interest on treasuries is exempt from California taxes. If you also loaded up on crypto currency and precious metals and other movable stores of value, also congratulations.
I can retire right now and my current bond income would pay for the roof over my head.
All California needs now is a serious earthquake… a cherry on top.
First Florida, now Wisconsin: “Wisconsin Agency Bans Talk of Climate Change”
Funny how conservatives love to talk about their “freedoms” yet are so eager to issue a gag order to throttle speech about an issue they disagree with…
http://www.scientificamerican.com/article/wisconsin-agency-bans-talk-of-climate-change/
I am not sure whether this will post above but it fits here too:
http://wattsupwiththat.com/2012/09/26/nasa-giss-caught-changing-past-data-again-violates-data-quality-act/
This old boy has amassed some wisdom:
https://m.youtube.com/watch?v=qX-P4mx1FLU
Yep, debtors are slaves to their employers. (~6-min)
The dictionary definition of helpless and stupid: an unarmed Sandra Bullock - because guns, you know, are evil - hides in a closet and makes panicked 911 calls while a stalker roams through her house.
http://www.theguardian.com/us-news/2015/apr/10/sandra-bullock-emergency-call-closet-burglary
But her closet was in her bedroom and her bedroom had a safe door. So she didn’t need a gun, only a phone.
Reminds me of a saying: The most powerful weapon a soldier can carry is a radio.
I was wondering if she had a safe room in her mansion. I was under the impression that most richies in LA have them.
But she didn’t exercise her right to shoot him!
At last, spring finally is here in all its glory and wonder. There is, perhaps, nothing more life-affirming than witnessing the eternal unfolding of the seasons, the endless panorama reflecting the celestial pull of the universe. Indeed: What on our Earth can be more powerful than the very life forces of nature herself?
Only one thing I can think of: The ever-grasping greed of the financial “services” industry and its startling inventiveness in creating new ways to separate you from your hard-earned money while giving you nothing in return.
“The ever-grasping greed of the financial “services” industry and its startling inventiveness in creating new ways to separate you from your hard-earned money while giving you nothing in return.”
Or less than nothing in return. Negative equity, that’s less than nothing.
Suck ‘em in with rising prices and then get ‘em to sign the dotted lines and then you will have created for your endless fun and pleasure …
… debt slaves.
Debt slaves now, debt slaves tomorrow, debt slaves forever.
Dumb ‘em down, and profit.
If you care to closely examine the situation you will realize that it is not the banker that is separating schmucks from their hard-earned money, nor is it Amy that is doing the separating. No, there it is the third party that is sitting at the table, a third party that is involved in this crucial decision making event, a third party that comes to the dotted line ceremony with stars and dollar signs in his eyes and this third party often sees himself as another real estate mogul-in-the-making - sees himself as a future Donald Trump!
And who am I, and who is Amy to jointly join up with me to become so cruel and heartless enough to want to dissuade such a person of all his dreams and aspirations?
Pogo was right, you know.
And often along with Mr. Schmuck comes Mrs. Schmuck and together they reinforce the idea the this house they are going to commit themselves to buying IS ALREADY THEIRS!
Bahahahahahaha … already theirs in the sense that they have MENTALLY TAKEN POSSESSION OF IT! They already can picture themselves living there, can picture in their minds just where they are going to put the couch, just where the overstuffed chair will go, just what color they will paint the master bedroom.
Bahahahahahaha … and this is the point that both Amy and I know - we KNOW! - that they will sign the dotted line, and we know - we KNOW! - that is makes little difference - or no difference at all - to Mr. and Mrs. Schmuck just what they are committing their selves to when they sign because at this critical point of their lives they have …
… they have LOST THEIR MINDS!
(And as for Amy and myself? Their loss … is our gain.)
Bahahahahahahahahahahahahahahaahahahahahahaahahaha
Real estate is a nasty business.
But Jamie Dimon says that stricter regulations will only make the crisis worse, and what reason would an honest banker like Jamie Dimon have to lie?
CR8R
WAs there in AZ with my wife a couple years back - her response when I explained we were gonna go see the crater - ‘you are gonna take me to see a hole?” Never lived that one down.
Yet CR8R is a very cool place.
My family has given me hell all day today for dragging them out there, except for one science-oriented kid. But it was worth listening to the complaints for the sake of getting that great crater shot.
isnt that in northeast az? pretty desolate out that way. Did you stand on a corner in winslow az?
Having driven from north to south across the state today, my impression is that nearly the entire state is quite desolate, with some notable exceptions (e.g. the areas around Sedona, Phoenix and Yuma).
Really, I just want to buy a little place to live in Florida. I even have some money. But I have yet to be able to figure out how to buy a house without getting fleeced. The best advice I have had so far is to wait for the bottom - one is coming soon.
So here I am in Florida in my cheap rental, waiting for the bottom.
I would rather have a cheap rental and spending money than a house and living paycheck to paycheck.
I guess what I meant to say is that I wish I had a house I could buy, that would not drop in value, so that I would not have to keep paying rent. The problem is that I could easily lose $30,000 - $50,000 in equity for the houses in my price range while my savings of rent less expenses is around $500/mo. That is $6,000 per year. I missed the bottom here in 2011 and Harry Dent is predicting the next is in 2017. I have been looking for about a year now, so I will have 3 years of “losses”, or $18,000 of rent paid because my life circumstances do not correspond with the bubble.
Bubbles are fleecing mechanisms. I am grateful for my cheap rental.
“But I have yet to be able to figure out how to buy a house without getting fleeced.”
It’s one thing to get fleeced on a bag of apples or a couple laying hens. It’s a death sentence to get fleeced by paying a 250% premium on a depreciating asset. Sadly, there hasn’t been a time in the last 15 years that you wouldn’t have been fleeced.
Bottom is a long way down.
by increasing asset prices uncle fed figures there will be some discretionary income to buy some consumer goods.
How was walmart looking today?
A very long way down Poet.
Plano, TX List Prices Crater 12% YoY; Crude Oil Plunges
http://www.movoto.com/plano-tx/market-trends/
Driving on I-10 west of Phoenix. No shortage of McMansions out here! It is frankly quite astonishing how many recently constructed tract homes are out here.
dont pick up any hitch hikers near tonapah. Buckeye was bubble central.
I always stop in quartzite for fuel and munchies.
Stucco boxes. And notice how so close together the westernmost group before Tonopah is, on the south side of I-10. And there is very little around them. I always wondered about how people needlessly crowd so close so that they can hear families fighting or people getting it on.
I understand in a major city. Or the center, say downtown Tempe or downtown Phoenix.
My Phoenix getaway is generally good. Very quiet, yet a 7 mile drive to the airport. With some nice places to eat. And I fund it all through my municipal bond income and savings bond gains. 2 bedrooms, 2 full bathrooms, full kitchen. My hideaway.
r u over in guadalupe n one of those shanties?
phony scandals