Bits Bucket for May 15, 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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Is the mania over yet?
The Wall Street Journal
Amid boom, fears of too many $20 million Manhattan apartments
By Eliot Brown and Josh Barbanel
Published: May 14, 2015 12:21 p.m. ET
Construction of luxury high-rise buildings is reshaping Manhattan’s skyline.
It’s getting crowded at the top of Manhattan’s apartment market.
As condo developers chase billion-dollar paydays through the construction of luxury dwellings, the cranes dotting the city are sparking fears of a supply glut.
Builders are plowing ahead with scores of condominiums priced above $20 million in skinny glass towers throughout Manhattan.
One building, the 66-story tower at 220 Central Park South, is listing more than 60 apartments above $20 million, according to filings made with the New York attorney general’s office. By comparison, in 2008, just 29 new condos sold for $20 million or more across all of Manhattan, according to appraisal firm Miller Samuel.
“There are a finite number of people that will buy these,” said Jonathan Miller, president of Miller Samuel. As for the developers kicking off projects now, “You are going to have haves and have-nots.”
The boom in the upper echelons of residential real estate is touching a handful of cities around the world, including London, Singapore and Dubai, where the global elite are pouring money into top-quality homes. But the demand is particularly acute in New York, reshaping its skyline to an extent few would have predicted during the real-estate bust.
There are signs demand for this rarefied product might be nearing its limits. The 1,004-foot green glass tower One57 remained about 25% unsold for much of last year. Its builder, Extell Development Co., lowered its expected total revenue from the building by about 4%, or $100 million, in part because of the slowdown, according to filings made with the Tel Aviv Stock Exchange in Israel, where Extell has issued $300 million in debt.
…
When “no justice, no peace!” comes to NYC, that “investment” may not look so attractive.
Will finance seem boring as dentistry once this ends?
Dentistry is much more exciting than your bond posts ever were. And why are you following bond yields again? Still looking for a sign that interest rates will skyrocket and crash house prices? Good luck with that. HeliYellen can’t say “25 basis points maybe in 6 months” without the stock market wibbling in disbelief that Grandma could be SO UNFAIR.
With collapsing demand it doesn’t much matter what the prices are Donk.
“And why are you following bond yields again?”
1. Sovereign bonds are a very important substitute asset for other categories (equities, real estate, commodities, etc), since they are considered risk-free. It normally takes over six months for a bond market correction to play out, after which a flight to quality into bonds from other assets is a natural development.
2. The last time I checked, mortgage rates and long-term bond yields were about 99% correlated, so this discussion is directly relevant to housing demand.
“The last time you checked” was, what, a year ago? Show me the high rates and crashing prices.
The correlation I mentioned is between mortgage rates and long-term Treasury yields. It’s been since before the Great Recession since I last checked, and the correlation structure may have broken down due to the market distortion of quantitative easing. Fundamentals suggest that Treasurys and federally insured mortgage-backed securities are close substitutes; hence their yields should be cointegrated.
I don’t think ANY of the correlations are going to hold up. Even if mortgage rates rise — for whatever cause — that doesn’t mean prices will crash. And once AGAIN, HBB think that prices are dictated by what J6P can afford. NO, house prices are dictated by what the rich can afford to borrow. For heaven’s sake, they are borrowing money to buy ART. Do you really think they’re going to pass up another chance to snap up even MORE property? Cash, where they don’t care what interest rates are?
And how much money in rent would have wasted while waiting for you and your 99% correlations?
Well… Use your own losses as an example.
You paid a what…. 250-350% premium for a depreciating asset, doubled down on that loss by financing for 30 years when you could have rented for less than half the monthly cost.
Your other problem is the fact that those evil rich people living in your mind have no use for a bunch of excess empty houses. Rich people don’t buy them to live in or for your flawed concept that they go up in price. I know a large number of truly wealthly people and not a single one of them own a residence. They lease. Why? Because they know a SFR depreciates and don’t have the time to waste to keep up with that depreciation. Look at your losses to depreciation just since you signed up for your charade. $2.50/sqft/year by what… 2000sq ft for 3 years now? That’s $15000 in losses to depreciation. Now stack on your interest, taxes and insurance. And we haven’t even gotten to your overpayment.
You’re looking for vindication for your tragic error but you won’t find it here.
“Even if mortgage rates rise — for whatever cause — that doesn’t mean prices will crash.”
Don’t confuse correlation with the law of demand.
Unless the government successfully intervenes with market distorting price fixing measures to prop up home valuations, higher mortgage interest rates imply lower equilibrium home prices, ceteris paribus.
“NO, house prices are dictated by what the rich can afford to borrow.”
You are grasping at non economic theories that make no sense.
That one is a real zinger from the Donk.
“HeliYellen can’t say “25 basis points maybe in 6 months” without the stock market wibbling in disbelief that Grandma could be SO UNFAIR.”
You are completely missing the significance of the bond market crash, which is that the bond vigilantes are back in the driver’s seat, sending long-term rates skyward despite the Fed’s apparent decision to put interest rate liftoff indefinitely on hold.
What does it portend if the Fed loses it’s ability to steer long-term rates?
I personally find this conundrum much more interesting than dentistry, but then I am admittedly a bit odd.
ft dot com
May 14, 2015 7:55 pm
Draghi warns central banks against ‘blind’ risk-taking
By Claire Jones in Frankfurt
Mario Draghi, President of the European Central Bank, ECB addresses the media during a press conference following the meeting of the Governing Council in Frankfurt/Main, central Germany, on November 6, 2014. European Central Bank chief Mario Draghi dismissed media speculation of deep differences on the ECB’s policy-setting governing council.
Mario Draghi has warned central banks to beware of the risk that aggressive monetary easing, including mass bond buying, could lead to financial instability and worsen income inequality.
The European Central Bank president said the apparent success of policies such as the ECB’s landmark €1.1trn quantitative easing package should not “blind” policy makers to the potential consequences of their actions on risk-taking in financial markets and in exacerbating wealth disparities.
…
PBear, Double Flip et. al.
You guys are awesome - and I don’t use that word lightly -
I put out my concerns yesterday with a fairly hefty response - thank you for that.
PBear - Does that 1996 date you put out coincide with the start of deliberations during the Clinton Crime campaign to do away with Glass Steagle? I recall it was repealed in 1998 so the 1996 date would be about right, right?
We are indeed in interesting and for me just scary times. Very difficult to make informed decisions when the information we are getting is just corrupt.
Good to know that I am not alone in my sentiments and to respond accordingly - respond - because by the time anyone REACTS it is too late.
Enjoy your weekend and remember to BREATH!!!!
THE DEMOCRATS: THE THE ISSUES
Clinton Proposes Tax Cuts on Profits in Home Sales
By JERRY GRAY
Published: August 30, 1996
CHICAGO, Aug. 29— Trying to counter his Republican opponent’s tax plan and to placate some of his own Democrats over welfare, President Clinton this evening proposed eliminating taxes on profits from home sales and offering incentives to businesses that hire welfare recipients.
Aides to Mr. Clinton briefed reporters on the ideas this afternoon, hours before he was to announce them himself in his acceptance speech before the Democratic National Convention.
Together with a proposed national reading program for children and some new environmental initiatives that were announced on Wednesday, the tax and welfare plans are the pillars of the policy platform that the President has built his re-election hopes on.
Under the tax cut plan, homeowners filing joint returns would be exempt from paying capital gains taxes on profits of up to $500,000 from the sale of their principal home, and single taxpayers would have a $250,000 exclusion. Sellers would not have to reinvest their profits in a more expensive home within two years, as they must do now to avoid the tax.
Under current law, an exemption from the gains tax is also available to taxpayers over 55 years of age, who can take a one-time exclusion of up to $125,000 of gain from the sale of their home.
Mr. Clinton’s proposal would apply to all homeowners, regardless of their age or income, and as often as they sell a primary residence. The only prohibition is a two-year waiting period between home sales.
…
I have long believed it was Bill Clinton’s $500K capital gains tax exclusion that kicked the bubble into overdrive. Suddenly it was very lucrative to own a home that was appreciating in value, and the resultant demand spike created an endogenous feedback into the rate of appreciation in response to the demand spike, creating a self-reinforcing wave of bubble valuation increase.
Are you planning to exit stocks before the tornado after the bond market rout obliterates your portfolio?
Marketwatch dot com
Need to Know
Here’s what happens to stocks once the bond rout ends
By Barbara Kollmeyer
Published: May 14, 2015 9:23 a.m. ET
Critical information ahead of the U.S. market’s open
20thCentFox/Courtesy Everett Collection
Dana Lyons, on his Tumblr blog, has taken a fresh look at what happens when 10-year Treasury yields ratchet up from a 52-week low to a five-month high within four months. Including the current move, he says this has happened 15 times since 1962.
“Collectively, the impact of the reversal spikes in yields has not been kind to equities,” he says. Lyons backs it up using this table, which shows that from the short to the long term, the yield spike has a been a “poor omen” for stocks (He’s also got a chart on his blog that maps out individual moves).
…
Business Insider
Finance
The bond market is sending shock waves, and Wall Street insiders are worried
Jonathan Marino
May 13, 2015, 10:41 AM
bond traders shock
REUTERS/Neil Hall A trader reacts on the IG Group trading floor in London, March 18, 2013.
Bond yields have been shooting up for the past two weeks, and it’s brought volatility to the stock markets.
Rising yields isn’t good news: When yields go up, prices go down. That means the bonds that people already own are suddenly worth less money.
Some market watchers are blaming fund managers trying to out-trade the Federal Reserve; others think it could be a sign of deeper problems.
With the bond market once again posing challenges to investments, Business Insider spoke with traders and hedge-fund pros about what they see happening with bonds and Treasuries, and what investors can expect next.
…
‘Tis a mere flesh wound.
The Current Bond Market Drubbing Is Nothing Compared to the Last Six
by Ari Altstedter
10:01 AM PDT May 14, 2015
German Flags Fly next to a European Flag in Germany
Photographer: Krisztian Bocsi/Bloomberg
The bond-market freak-out that’s wiped out about $280 billion in value during the last three weeks pales in comparison with other recent market meltdowns.
Bloomberg Intelligence Credit Strategist Richard Salditt tallied them up — from the one in February sparked by stronger-than-expected U.S. job creation, to the 2010 rout triggered by angst that Greece could leave the euro — and found that the average loss is $479 billion, or about 70 percent higher than the current total.
The biggest collapse was the $741 billion wipeout in 26 days after the bond market experienced its own “flash crash” late last year.
…
Marketwatch dot com
The best Yogi Berra quotes for today’s market
By Steve Goldstein
Published: May 12, 2015 12:22 p.m. ET
Getty Images Baseball Hall of Fame legend, Yogi Berra
It’s the 90th birthday for Yogi Berra, the Hall of Fame catcher and manager who is even better known for his wonderful, oft-contradictory quotes.
Those Yogi-isms, as they are called, fit the market as well as they do baseball. Here are a few that can be adapted to today’s market.
Market valuations only make sense at ultra-low interest rates. Federal Reserve Chairwoman Janet Yellen pointed this out last week in a kind of Berra-ish way.
“I would highlight that equity market valuations at this point generally are quite high,” Yellen said. “They are not so high when you compare the returns on equities to the returns on safe assets like bonds, which are also very low, but there are potential dangers there.”
Of course, how else can stocks be valued if not against the most risk-free asset — the 10-year Treasury. And further, who but the Fed are mostly (though not entirely) responsible for the current low interest rates? What institution has over $4 trillion of bonds and mortgage-backed securities on its balance sheet? But what Yellen seems to be saying is that once rates start rising, valuations that today are at least justifiable might not make such sense. Beware.
…
Yellen’s dissembling is getting so detached from reality that cortorted logic is her last and only defense.
Marketwatch dot com
Is this a repeat of the 2013 taper tantrum?
By Ellie Ismailidou
Published: May 14, 2015 2:35 p.m. ET
A recent global bond market selloff has made investors dread a repeat of the 2013 “taper tantrum,” during which yields skyrocketed in a mere four months as government bonds got hammered.
In May 2013, after a mere suggestion of an imminent reduction in bond purchases by then Federal Reserve Chairman Ben Bernanke, panic spread in bond markets all over the world.
As a result, the 10-year U.S. Treasury yield gained 140 basis points between May and early September 2013. And the rest of the world followed, with the yield on the 10-year German bond, known as the bund, rising by 80 basis points and the yield on the 10-year Japanese benchmark note gaining 20 basis points.
Fast forward to today, when since mid-April, 10-year government yields have soared all over the world — by 40 basis points in the U.S., 60 basis points in Germany and 15 basis points in Japan.
Is this move a precursor of a “Taper Tantrum: Part 2”?
Analysts have pointed out that the recent selloff is in some ways even worse than the 2013 tantrum. The current rout is “more severe than the taper tantrum in terms of speed but has a way to go to match the magnitude,” a report by LPL Financial noted.
The report looked back at the major bond pullbacks of the past 15 years, showing that the current correction is among the swiftest. It is in fact on pace, and of similar magnitude, to the 2003 mortgage-backed securities related sell-off. But it has not yet reached the magnitude of the 2013 taper tantrum.
…
“Are you planning to exit stocks before the tornado after the bond market rout obliterates your portfolio?”
What’s your current asset allocation?
Have you made any changes in the past 6-12 months?
Do you plan on making any changes?
What’s your current asset allocation?
Have you made any changes in the past 6-12 months?
Do you plan on making any changes?
~60-25-15 stocks-bonds-cash
I used the free Morningstar Xray online tool to get a handle on that just a few days ago.
Have you made any changes in the past 6-12 months? yes
Do you plan on making any changes? Never do but that doesn’t stop me.
Drudge Report, Breitbart, Weekly Standard, CNS News, Daily Caller, Washington Times, World Net Daily, Washington Examiner, CBS Local, Fox News, et cetera.
You hate Obama, got it. But instead of doing some critical thinking and analysis on your own, you lazily click on all of those links, get all emotionally manipulated, and go vote for the candidate that Sheldon Adelson purchased.
You could have voted for Ron Paul in 2008 and 2012, but you didn’t.
You could vote for Rand Paul (or Bernie Sanders) in 2016, but you won’t.
that Sheldon Adelson purchased
that Sheldon Adelson purchased
that Sheldon Adelson purchased
You should have more self-respect. But instead, you sell your vote like a slave getting sold down the river. Sheldon Adelson is sitting up on the porch of the Big House sipping mint juleps, and you’re out there in the fields picking his cotton and making him RICH.
If you disagree with me that must mean you are a brain dead lazy zombie.
Please - oh great leader - give us the news outlets you deem acceptable so we can come into the light of goodness.
Start here:
http://www.lp.org
Will never work. His obsolete kind get the only meaning in their lives by feeding on the rage and fear of The Angry Channel.
HGTV???
Get your news on Comedy Central. Get your Comedy on Fox.
Fox is more tragi-comic. Although they do have the hottest “contributors,” albeit the most vapid.
http://en.wikipedia.org/wiki/Tom_Steyer
http://en.wikipedia.org/wiki/George_Soros
Milwaukee, WI Sale Prices Plummet 15% YoY As Housing Bust Gains Speed
http://www.zillow.com/milwaukee-wi/home-values/
The stupid - it burns…
The is no problem that cannot be solved without bigger and bigger government, more and more regulations and higher and higher taxes.
————–
Fining Low-Wage Employers Can Help Connecticut’s Economy
Courant.com | 5/14/2015 | Dan Haar
There’s no doubt that levying fines against large employers that pay low wages would raise hundreds of millions of dollars for the state government, but opponents have so far held the upper hand by arguing that it would hurt the economy.
Now supporters of the plan — a bill under consideration at the state legislature — are fighting back on economic grounds, with a report due to be released Wednesday showing that the fines would create at least 532 jobs, and perhaps more than 1,000 new positions.
The bill would fine employers with 500 or more Connecticut workers $1 for each hour of work by an employee who earns less than $15. It would raise $189 million a year, according to the report, from a professor at the UConn School of Social Work and two economists who are retired from state agencies.
The fees would increase the number of jobs in the state economy by between 532 and 1,388, depending on how the companies that paid the penalties allocated the costs, according to the report. This would happen because government spending creates jobs more efficiently than spending on retail and fast food, the sectors most affected.
Ia it not obvious that corporations will substitute more capital intensive production methods or outsource low-wage production offshore rather than risk a fine for low-wage labor?
Net effect: Fewer jobs for low-wage U.S. workers, less U.S.GDP, more votes for Democrats.
“Ia it not obvious that corporations will substitute…”
Only if it’s economical, obviously. And feasible.
The more people like the Koch Brothers are taxed, and the more that Koch Industries are regulated to control the massive amount of toxins they put into the atmosphere, the greater will be the future of America.
“Socialism only works until you run out of other people’s money” — Prime Minister Margaret Thatcher
But if we take the Koch Brothers money and give it to everyone else, it will really help the economy.
When Leona Helmsley said “only the little people pay taxes” was she referring to George Soros?
In fairness to the Queen of Mean, that alleged “quote” came from a disgruntled maid she fired - not exactly an unimpeachable source, as I can’t imagine Helmsley sharing such sentiments with said “little people” in her employ.
“Socialism only works until you run out of other people’s money” — Prime Minister Margaret Thatcher
Another one who needed to pick up a dictionary.
She’s right.
You’re on the hook for a rotting, depreciating shack.
I spray for termites a lot.
Houses depreciate Poet. Rapidly.
Frisco, TX List Prices Plunge 9% As Housing Losses Spread
http://www.movoto.com/frisco-tx/market-trends/
There’s a thing called maintenance. Where is all this depreciation happening?
That’s called depreciation Poet. Just like cars. Jalopies.
San Jose, CA Sale Prices Crater 15% YoY; Housing Losses Mount
http://www.zillow.com/san-jose-ca-95123/home-values/
There are no minus signs in realtor math. Lawnmower, shingles, cement, paint, siding and more are handed out for free at your local Home Depot. And the bank will refund the interest you paid on that 30 year mortgage on your 60th birthday.
Be a renter and a Netflix shareholder!
Apologies if this has been posted before, but can anyone tell me what this is all about? Apparently it only applies to vendors and contractors in the US. On the one hand it sounds like a good thing, but I can’t help thinking there is some sort of ulterior motive here.
http://www.nbcnews.com/business/economy/facebook-tells-vendors-pay-workers-least-15-hour-n358371
Having worked at a place that had a lot of service people (caterers, janitors, security, etc.), it’s pretty damn uncomfortable to look at a group of 6 of them and know you’re making more money than all of them put together, for sitting in a chair and typing.
I would guess it’s guilt driven.
We have lots of those at the Broomfield campus:
Janitorial: Obese Hispanic women.
Security: White trash dreaming of being cops someday
Cafeteria/catering: Tats and piercings crowd.
Landscaping: You know who they are.
Goon, two of your favorite topics in one post:
http://wattsupwiththat.com/2015/05/14/claim-climate-change-will-make-californian-marijuana-more-potent/
Key excerpt:
If you go back to the times plants evolved on land, the average CO2 (carbon dioxide) levels were 1,000 parts per million; today it’s about 400,” said Lewis Ziska, a plant physiologist with the U.S. Department of Agriculture’s Agricultural Research Service.
Ah, Wattsupwiththat. The ’science’ website run by a college-dropout weatherman. Such a good source of info.
Because we know that it’s far more likely that the world’s scientists have all been coerced or bribed into submission to a new climate change orthodoxy, rather than that the fossil fuel industry is employing a few cranks to blow smoke in our eyes.
Wouldn’t Occam agree?
Do you have any source to support that we were not at 1000 ppm, attacking the source because you have no argument is getting old?
So you’re agreeing that man has released massive amounts of co2 into the environment by burning fossil fuels?
You have two tactics attack the source and mischaracterize what people are saying, are you Lola?
Do you admit that burning fossil fuels has released massive amounts of co2 into the environment?
It’s a pretty simple question, why won’t you answer it?
I have no problem with answering that question. We have and it has been very beneficial to plant life. They were starved for co2 when we were closer to 300 ppm.
Is co2 a greenhouse gas?
One of the weakest, yes, Hence the reason that the world was not too hot for life with concentrations twenty times present levels. Thus at the rate we are adding co2 we should be good for the next 7600 years.
“the world was not too hot for life with concentrations twenty times present levels”
Were humans and their crops and farm animals thriving during this period?
I happen to think that a conservative is intelligent enough to survive conditions that a dinosaur could survive. While a dinosaur did not have a brain as large based on body weight as the average modern conservative human being,. it had a brain twice the size of a modern liberal based on body weight.
http://wattsupwiththat.com/2015/05/15/new-claims-murky-global-warming-statistics-are-guessed-at/
Were humans and their crops and farm animals thriving during this period?
I don’t know. But I offer the observation that since 95% of the US electorate are vegetables and sheep, judging by their voting patterns, could it be that humans are morphing into crops and farm animals as we sink deeper into IDIOCRACY?
could it be that humans are morphing into crops and farm animals as we sink deeper into IDIOCRACY?
That theory does have more validity than CAGW. It does have strong evidence, such as 911 calls when McDonalds get an order wrong.
Meet one of the people behind the Grilled Cheese Truck. Ladies and
Gents, I give you General (cough-cough) Wesley Clark.
http://www.zerohedge.com/news/2015-05-14/former-nato-commander-presidential-candidate-makes-millions-pushing-penny-stocks
goon’s right. Stick a fork in it.
Speaking of sticking it in it, my newest FWB just graduated from college this month. She is 23.
Did you attend the graduation? You must be so proud.
All you need to know about AGW in one quick post:
http://wattsupwiththat.com/2015/05/12/22-very-inconvenient-climate-truths/
Excerpt but don’t let science get in the way of green crony capitalism:
5. The changes of the Mean Global Temperature are more or less sinusoidal with a well defined 60 year period. We are at a maximum of the sinusoid(s) and hence the next years should be cooler as has been observed after 1950. (discussion: p. 12)
6. The absorption of the radiation from the surface by the CO2 of the air is nearly saturated. Measuring with a spectrometer what is left from the radiation of a broadband infrared source (say a black body heated at 1000°C) after crossing the equivalent of some tens or hundreds of meters of the air, shows that the main CO2 bands (4.3 µm and 15 µm) have been replaced by the emission spectrum of the CO2 which is radiated at the temperature of the trace-gas. (discussion: p. 14)
7. In some geological periods the CO2 content of the air has been up to 20 times today’s content, and there has been no runaway temperature increase! Why would our CO2 emissions have a cataclysmic impact? The laws of Nature are the same whatever the place and the time. (discussion: p. 17)
any housing news today?
China’s housing crash continues (snore…)
8. Gravity is proven? Tell that to a helium balloon. Or a cloud.
Teach the controversy!
“unpossible”, Kerry said we were winning:
http://news.yahoo.com/jihadists-seizes-government-hq-iraqs-ramadi-officials-000848164.html
And Rummy said we’d be out in 6 months, and this would pay for itself.
“We will be greeted as liberators.”
Dick Cheney
“Deficits don’t matter.”
Dick Cheney
And he also wrote in great detail about “the parade of horribles” that could (and did) occur.
And Wolfowitz said Iraqis would be dancing in the streets to greet their liberators. Odd, the only time I saw said Iraqis dancing in the streets was when they strung up those four charred Blackwater contracters from a bridge in Fallujah.
NONEtheless… there WAS dancing in the streets.
And DWTS to distract the herd creatures from what a debacle Bush “led” us into. And Jeb will lead us back into, on the orders of his AIPAC handlers.
Blood for the blood god!
http://news.yahoo.com/why-us-economic-growth-disappointed-205921253–finance.html
Why US economic growth has disappointed this year?
Simple.
Prices are massively inflated resulting in collapsing demand.
But loans are available to buy?
It is a “good” thing we are giving auto loans to anyone that can fog a mirror:
http://www.bloomberg.com/news/articles/2015-05-15/factory-output-in-u-s-stalled-in-april-on-machinery-cutbacks
The auto bonanza will only last a couple of years. Then the credit risk retention for auto loans will kick in October 2016. Auto finance will have to keep 5% of every loan unless buyers kick in 10% of the total purchase price (including taxes and fees!), cash, and have 2 years of paid-up credit. That means you, contractors! You want a behemoth to tailgate my poor beater? Pony up $8K.
Most contractors aren’t dead broke like you Donk.
It’s great, cuz in a couple of years when we want to purchase a late model used car, there should be lots of late model repo’d inventory for sale.
‘But’ nobody is interested in a depreciating asset at a grossly inflated price.
US Housing Demand Plunges To 20 Year Low
http://2.bp.blogspot.com/-fqSztKilps8/VFlPKlr52JI/AAAAAAAAhKU/v5oS41S-y0s/s1600/MBANov52014.PNG
wages are still too low for most. no extra $$ to spend. Still waiting for those record corporate profits to “trickle down.”
Baby boomers are getting to old to buy new stuff.
Invest in pharmaceutical stocks.
Prices are grossly inflated and falling to wages.
That’s how the world works Jalopy.
starting today - eh WV?
And its always worked that way.
Economic contraction is centered in China. It is affecting all of us.
China has caught a cold and it has caused the rest of the world to get pneumonia. Just slower growth has caused countries like Brazil to enter the ICU.
It’s good that you can find humor in this because we’re only seeing the beginning.
China is in contraction. That is distinctly different from “slower growth”.
“China’s apparent crude steel consumption fell 3.4 percent from a year ago to 738.3 million tonnes in 2014, according to calculations published by the China Iron and Steel Association (CISA) on Thursday.”
http://www.reuters.com/article/2015/01/22/us-china-steel-consumption-idUSKBN0KV1FJ20150122
What about its consumption of carbon fibre and aluminum? We don’t create as many flint arrow heads these days either.
The key point is not flint arrowheads, it is peak credit growth miracle. That is what affects us going forward.
China is in contraction. That is distinctly different from “slower growth”.
No, China is not in contraction it is growing. Some sectors are slightly contracting but the overall economy is still growing rapidly, it is slower, since 7% is slower than 10%. Neither China nor the IMF are measuring China’s GDP differently so it is growth not contraction. The last retail sales report from China just a few days ago showed an increase in sales of 10% yoy, the employment reports show about one million new jobs per month. All consistent with a country growing its service portion of its economy and its high tech sectors while slightly cutting its housing related industries.
It’s one thing to be wrong, it’s another to be wrong intentionally. You’ve admitted yourself that the IMF just uses the GDP numbers that China reports. Now you say they “calculate” it.
Service. Ah, the Pittsburgh model. This is their hope for the future, not their yesterday’s transition. Decades of depression lie in the middle, and you have to export the “service” to richer neighbors. This will only work if there is another gigantic credit based expansion outside China. Which would be already underway just where?
Economic contraction is centered in China. It is affecting all of us.
You, sir, are mistaken. AB Dan has assured us that China’s long-term prognosis is rosey and the PRC is the engine driving the global economy, despite what the nattering nabobs of negativity in here say.
And the numbers back me up. The Chinese are buying up property all over the world because they have a huge trade surplus caused by their production of real goods. The money to buy the properties is real, just like its economy.
The Chinese elite are getting their money out of China because there aren’t productive investments to make there and it is curtain time for the grifter ruling class.
As I said in December, Obama with the help of the Saudis is trying to do like Reagan and hurt the Russians with low oil prices (Soviet Union at that time) but due to the special characteristics of shale oil, he will only hurt the US and help the Saudis and Russia. The verdict is in:
http://fortune.com/2015/05/14/saudi-arabia-russia-oil-prices/?xid=yahoo_fortune
Collapsing demand means lower prices. Lower prices is good for everyone but the parasites. Sorry Dan.
The fact that oil sand leases are trading at their highest levels in 8 years suggests that the price of oil has a lot of room on the upside:
http://www.rigzone.com/news/oil_gas/a/138619/Oil_Sands_Land_Becomes_Albertas_Hot_Real_Estate_as_Oil_Rebounds
Don’t let falling demand and production fool you.
As I said in December, Obama with the help of the Saudis is trying to do like Reagan and hurt the Russians with low oil prices (Soviet Union at that time) but due to the special characteristics of shale oil, he will only hurt the US and help the Saudis and Russia.
As it ever occurred to you that low oil prices might be low primarily due to market forces rather than diabolical schemes? With 93 million people euphemistically “out of the work force” that’s a lot of unemployed people who won’t be driving and are trying to keep their heating bills low.
World wide oil consumption is growing by about hundred thousand barrels a day per month. The dollar did not spike and the Saudis did not empty out their storage tanks and increase production just when Russia was taking over Crimea by accident. If this was about economics Saudi Arabia would have just performed its role as swing producer and cut production by a million barrels a day, they would have sold less but made more money than they are now. No, what happen was an attempt to replay the Reagan playbook but not understanding how things had changed.
It isn’t possible to tell what world oil consumption is in real time. Buying for storage is not consumption. Futures speculation is not consumption.
That stuff about the Saudis falling on their swords for Regan is priceless. The Saudis have done something which totally changes their role in the global oil market going forward, and I think you have no clue.
The U.S. economy ended its recession in the Summer of 2009, prior to virtually any of the Obama stimulus hitting the economy. The best year of the Obama presidency for economic growth was 2010. Despite this, the MSM likes to spin the narrative that Obama is making things better and the economy is still weak due to W. Then, why did we recover in 2009 and the economy had its best year in 2010? Why isn’t the economy getting better the longer Obama is president?
“The best year of the Obama presidency for economic growth was 2010.”
Makes sense considering that’s when prices of all items were falling to dramatically lower and more affordable levels.
Outcome: Collapsing demand post 2010.
http://www.treasury.gov/resource-center/data-chart-center/Documents/20120502_EconomicGrowth.pdf
CraterRage Photo Of The Day
https://goo.gl/sGYlXL
http://www.thedenverchannel.com/news/local-news/first-time-home-buyers-courting-denver-metro-homeowners-with-flowers-letters-and-gifts05142015
I was just on the phone with my realtor friend there in the Big D and I could not believe what he said when representing a first time home buying couple and advising them to keep their head on their shoulders - they offered near 280k on a 220k marketed home - and wait for it……They didn’t get the house!!! What the hell is going on out there? Man o man - I guess there are more pot heads moving there than I thought.
I know people who want to unload their current shack and downsize, but who gave up because they couldn’t find a suitable (location, price) place to buy or rent.
De java’u 2005. A rerun with coffee aroma. Coffee brewing in the house fetches another 20K
Thousands of criminals hold Texas real estate licenses
The Texas Real Estate Commission has allowed thousands of people to practice real estate despite having a criminal record. Some crimes are as serious as felony theft and aggravated assault.
“Oh my goodness,” said longtime realtor Charlene Cain. “I always thought our system was very careful, obviously it isn’t. You don’t want to put your client at risk.”
Cathy Nelson is one of Cain’s clients.
“It’s very disturbing,” Nelson said.
http://www.wfaa.com/story/news/investigations/2015/05/15/thousands-of-criminals-hold-texas-real-estate-licenses/27337779/
Best to not let them have any sort of job when they get out. This forces them back to crime, where they belong.
Best to not let them have any sort of job when they get out.
Big difference between denying them all employment and denying them access to sensitive financial data and access to your house when you are not home or an opportunity to perpetrate a sex offense with an unsuspecting family or client.
It’s a good thing for the NAR that breaching your fudiciary duty to your mark, er, “client,” isn’t treated as a crime.
This article doesn’t contain anything that hasn’t been covered here before, but the comments are pretty entertaining!
http://money.cnn.com/2015/05/13/real_estate/buy-rent-real-estate/index.html
The FSA on the move!!!
—————–
Squatters hold California bedroom hostage
KPRC-TV | 5/15/15
Poonam Sandhu rented out the master bedroom of her Watsonville, California home to a couple through Airbnb. Now they refuse to leave or pay rent. Sandhu says she’s been forced from her own home by some terrible tenants.
It is Goon with his 23 year old. Goon, you need to leave the bedroom.
Sandhu says she’s been forced from her own home by some terrible tenants.
Gosh, never saw that coming.
RIP B.B. King. 1925-2015. Saw him perform on more than one occasion. Phenomenal.
Not only a fantastic musician, but had a real connection with his audience.
Same here. And he toured hard and long, right up until the end. Truly a selfless, humble human being. And making it to 89 with diabetes is no small feat (unintentional pun in there somewhere) in itself, especially being on the road as much as he was.
Democrats Get a Taste of Obama’s Arrogance
National Review | 5/15/2015 | Jonah Goldberg
But they are amusing times, at least for those of us capable of extracting some measure of mirth and schadenfreude from the president’s predicament.
That is, until this month. President Obama wants to get a trade deal passed. He needs Democrats to do it. But, Milbank laments, Obama’s blowing it.
“Such a method of a persuasion is likelier to get you a black eye than a convert,” Milbank notes. “Yet this is how President Obama treats his fellow Democrats on trade . . .”
Republicans, in Obama’s view, are always dishonest, fabricating falsehoods and denying reality with their knee-jerk responses.
To pick just one of countless examples, there was a White House summit on health care in 2010. The president invited members of Congress to discuss the issue in good faith. He then proceeded to treat every concern, objection, and argument from Republicans as dumb, dishonest, or emotional. They were, according to a column by Milbank, “stepping into Prof. Obama’s classroom.” Milbank marveled at how the “teacher” treated them all “like his undisciplined pupils.” Whenever someone said anything politically inconvenient, the president replied that those were just partisan “talking points.”
When Senator John McCain, his opponent in the previous election, noted that Obama had broken numerous promises and that the 2,400-page bill was a feeding trough for special interests, Obama eye-rolled. “Let me just make this point, John,” Obama said. “We’re not campaigning anymore. The election’s over.”
He responded to Senator Lamar Alexander — he called him “Lamar” — “this is an example of where we’ve got to get our facts straight.” When it was Representative John Boehner’s turn to speak, Obama reprimanded “John” for trotting out “the standard talking points” and, in the words of a palpably impressed Milbank, forced Boehner to “wear the dunce cap.”
Again, this was all quintessential Obama then, and it’s quintessential Obama now. All that has changed is that he’s doing the exact same thing to Democrats, and it’s making them sad. Specifically, he’s accused Senator Elizabeth Warren of not having her facts straight. He says she’s just a politician following her partisan self-interest.
But here’s the hilarious part: Liberals can’t take it. The president of NOW, Terry O’Neill, accused Obama of being sexist. O’Neill sniped that Obama’s “clear subtext is that the little lady just doesn’t know what she’s talking about.” She added, “I think it was disrespectful.” Both O’Neill and Senator Sherrod Brown also sniff sexism in the fact that Obama referred to Warren as “Elizabeth.”
The great irony is that when Republicans complain about Obama’s haughtiness and arrogance, liberals accuse them of being racist. I hope I don’t miss that phase of this spat while I’m off making the popcorn.
Health care Mutual funds sure took off after Obama care was passed.
I guess profits must really be up
Now you know who is going to be paying $300K per speech once Obama leaves “public service.”
Green Light for American Empire / Endless War
http://www.ronpaulinstitute.org/archives/featured-articles/2015/march/14/a-green-light-for-the-american-empire/
+1 Bill
We will “win” the HBB when nobody here votes for Democrat or Republican candidates anymore
Even 2brony is not beyond salvation, and you can call me Harriet Tubman, because I am here to set you FREE
Thanks Harriet!
You guys here are far more libertarian than my FB friends, even though not quite half my friends are all voluntaryists and anarchists.
I rejoined Facebook last year because it’s required to have a Tinder account. It’s actually rather fun, collecting female “friends” from age 18 to 50+ both single and married.
I try not to give Mark Phuckerberg anything to monetize, the only things I “like” are Ron Paul and Lindsey Vonn.
What the hell is a “voluntarist”?
If you can get onto the Housing Bubble blog I am 99.999% sure you have access to the Google search.
But anyway
http://en.wikipedia.org/wiki/Voluntaryism
“Voluntaryism (UK /ˈvɒləntərɪˌɪzəm/,[2] US /ˈvɒləntɛriˌɪzəm/;[3] sometimes voluntarism /ˈvɒləntəˌrɪzəm/[4]), is a libertarian philosophy which holds that all forms of human association should be voluntary.[5][better source needed] The principle most frequently used to support voluntaryism is the non-aggression principle (NAP). It is closely associated with, and sometimes used synonymously with, the anarcho-capitalist philosophy.”
Conservative and/or Libertarian.
Patrick Buchanan will perform your immersion baptism, and you will be cleansed of the sin of neocon
But didn’t you hear? George W. let congress vote on the Iraq war he lied to get us into. Obama won’t even allow congress to vote on all the wars he hasn’t gotten us into. Bad, bad Obama.
Break free of your red pill/blue pill fallacy. Both parties are puppets of the .1%.
“Conservative and/or libertarian”
We libertarians find a conservative or a “progressive” amongst us, we kindly show them the door. Or at least annoy the conservatives so much by lighting up a joint and discussing how hypocritical religionist war mongers are. Or we discuss our next tax protest to the “progressive.” Our procedure is to make them want to go back to their $hitholes and not pollute us with collectivism/statism.
2Bentfruit will never listen to anything but GOP talking pts. He has blind faith in them, he wont ever think for himself.
Something something government something something regulations something something taxes. I have BruisedBanana’s talking points practically memorized.
It’s just a job. He probably clocks out and drives home in a Prius with a Hillary! bumper sticker on it.
Ron Paul is right too bad so many don’t see it yet.
Politically and economically Jeb and Hillary are on the wrong side of the immigration issue:
http://www.rasmussenreports.com/public_content/politics/current_events/immigration/immigration
As they have for years, most voters (63%) think gaining control of the border is more important than legalizing the status of undocumented workers already living in the United States.
That’s an odd way to summarize the data. There are other polls that show a majority of Americans would prefer that illegals have the ability to apply for citizenship.
There are other polls that show a majority of Americans would prefer that illegals have the ability to apply for citizenship.
Every poll I’ve ever seen shows that Americans are dead set against amnesty.
Here’s a recent one.
CBS News/New York Times Poll. April 30-May 3, 2015. N=1,027 adults nationwide. Margin of error ± 3.
“Which comes closest to your view about illegal immigrants who are living in the U.S.? They should be allowed to stay in the U.S. and eventually apply for citizenship. They should be allowed to stay in the U.S. legally, but not be allowed to apply for citizenship. OR, They should be required to leave the U.S.”
Stay, apply for citizenship: 57%
Stay, not apply for citizenship: 11%
Be required to leave: 29%
Unsure/No answer: 3%
http://pollingreport.com/immigration.htm
Region VIII
http://www.bizjournals.com/denver/news/2015/05/14/colorados-marijuana-tax-income-doubles-in-march.html
http://finance.yahoo.com/news/silencing-the-roar-of-the-bond-bear-154901769.html
homes seem to be holding their value quite well. If you are gonna be a homeowner I would highly suggest learning some construction skills.
If you have to pay someone to fix stuff then maybe you should rent.
I personally like tinkering and keeping busy so it doesn’t bother me.
Some people just dont cut the mustard to own.
My girlfriend has this figured out.
House depreciate. Rapidly. Sorry Poet.
Vacaville, CA List Prices Sink 4% At Peak Of Season; Inventory Skyrockets 101%
http://www.movoto.com/vacaville-ca/market-trends/
U DONT CUT THE MUSTARD
U HAVE TO CONTAIN THE DEPRICIATION
Depreciation is a loss Poet. Combined with falling prices and its a lifetime of losses.
amen brother!
Time is $$$.
I’d rather go surfing or just about anything else, then mow the lawn every Saturday.
I have a desk job. I get more job satisfaction from mowing my lawn on a Saturday than from six months’ worth of doing my day job!
To each his/her own. I live in the PNW and did weekend hikes every month for years as a Boy Scout. I must have gotten that out of my system, as I can still imagine being at virtually every lake that I visited and don’t have any burning desire to visit them again.
When my kids get older, I’ll take them back to those places (wife doesn’t hike/backpack) since it will be new to them.
There is no doubt that owning a home is a lot of work. I have spent the better part of the best years of my life on it. It’s not for everybody but I like having complete control over my house and yard, and being able to crank up the stereo as loud as I like. And my hobby is working on cars and outdoor equipment and that’s hard to do as a renter.
“…than from six months’ worth of doing my day job!”
Hopefully after 40 years of this you will look back with satisfaction.
40 years of slaving away for a depreciating asset at a grossly inflated price while the value continues to crater doesn’t make much sense. Slave away.
I haven’t mowed a lawn since 2006
Did you lose your job to illegals?
“I personally like tinkering and keeping busy so it doesn’t bother me.”
Lots of others would rather go skiing (Goon), bicycling (me), surfing the net, going on road trips to wine country, just about anything but stupid boring slavish maintenance on a stucco box.
Obamacare meets Obamaphones. LOL:
https://www.yahoo.com/tech/s/wait-gynecologist-accidentally-leaves-mobile-phone-patient-following-202427827.html
Have you been shedding debt and shoring up liquid since 2008?
You’ve had 7 years to financially prepare for the next leg down, hope you used the time wisely.
DONT FIGHT THE FED!
DONT FIGHT THE FED!
If it is problem that it can throw fiat currency at, it is wise advice. The Fed will continue to create money until uncontrollable inflation occurs. Because it has not happen does not mean it will not happen. They can create the money faster than it can go “poof”.
Inflation pays for my depreciation and then some.
And the deflationary spiral rages on.
It is sort of like the song, I fought the law and the law won.
DONT FIGHT THE FED!
When the inevitable hyperinflation caused by the Fed’s deranged money printing and fiscal chicanery finally arrives, the more cogent portion of the population is going to bitterly regret not getting behind the tiny minority of principled politicians like Ron or Rand Paul who tried to fight the Fed.
there is no inflation even after 4 trillion in printing or is there?
Everyone seems so darn confused.
That’s not inflation Poet.
*Learn* the difference.
we can inflate our way to prosperity!
Just think of a big @ss balloon.
Which simply leads to collapsing demand.
Right Poet?
To reiterate Rally -
All regions must check in - Jade Helm anyone!!!?
While I realize the primary importance of building Comrad Pelosi’s permanent Democrat Supermajority, maybe, just maybe, California has too many people already (even after steadily driving out the productive) and needs to curtail the flood of Democrat-on-Arrival migrants.
http://sacramento.cbslocal.com/2015/05/14/tulare-county-drought-situation-dire-as-neighbors-steal-water-from-neighbors/
http://wolfstreet.com/2015/05/15/china-momentum-indicator-cmi-plunges-to-new-low-hard-landing-in-process/
Hard-landing gurus have been predicting an imminent end of the China bubble for years. A “hard landing” would be the optimistic scenario. The other scenario would be a crash-and-burn. But to their greatest frustration, there was no hard landing, or a soft landing, or any landing for that matter. China just kept on flying.
Fueled by an enormous credit bubble and monetary propellants, it kept adding to entire ghost cities, industrial overcapacity, and the most breath-taking infrastructure build-out the world has ever seen. Global demand for its products faded as labor got more expensive, but the 1.35 billion increasingly moneyed Chinese consumers discovered splurging on smartphones, cars, luxury goods, and a million other things. The China bubble stayed aloft, despite all the cracks appearing here and there.
But now it’s running out of air.
We’re 18 trillion dollars in debt, Wall Street is an epic Ponzi, the Fed is debasing the currency, our borders are wide open, the neo-cons are clammoring for moar war everywhere, but what does Goldman Sachs puppet Ted Cruz see as our most pressing problem? “Religious freedom.”
We are so screwed.
http://politics.blog.ajc.com/2015/05/15/ted-cruz-may-be-about-to-stoke-religious-liberty-fight-at-state-gop-convention/#__federated=1
Ted Cruz is the gimp that billionaires keep locked up in a trunk in the basement.
Well this is interesting. A woman falls over a cliff and not only survives, now she’s a genius. So let’s shove all the Obama Zombies, McCain Mutants, and Romney Retards over a cliff and see if the survivors vote for Rand Paul.
http://www.independent.co.uk/news/world/americas/colorado-rancher-becomes-a-genius-after-falling-down-ravine-10252866.html
What the death of a productive economy looks like.
http://www.theguardian.com/artanddesign/gallery/2015/may/15/modern-ruins-the-ghost-factories-of-greece-in-pictures
If you don’t believe in man made global warming, you can’t have any pudding. How can you have any pudding if you don’t believe in man made global warming?
LOL, good one!
Doctors ‘reluctant’ to take Obamacare patients: Hospital CEO
Matthew J. Belvedere | @Matt_Belvedere
10 Hours Ago
http://www.cnbc.com/id/102682553 - 267k -
Cold War 2.0 Caught On Tape: US Military Convoy Crosses Eastern Europe While NATO Sings Karaoke Peace Ballad
Submitted by Tyler Durden on 05/15/2015
With hawkish US Senator John McCain having inadvertently (or purposefully) joined the Ukrainian government this week as a member of Poroshenko’s new advisory committee — which incidentally is headed by former Georgian President and current international fugitive Miheil Saakashvili — one might be inclined to say the odds have just increased in favor of the Ukraine ‘conflict’ transforming into an all-out US-Russia proxy war.
http://www.zerohedge.com/…pe-us-military-convoy-crosses-eastern-europe-while-nato-sings-k - 194k -
Heard a fascinating Terry Gross Fresh Air interview last night with a researcher who traced the origin of segregated housing in the US to FHA policy established in the 1930s. Most interesting bit: George Romney finally tried to reverse the policy when he was HUD Secretary under Nixon. But the effort created such a backlash that Nixon shut it down.
The author of the study lays the blame for policing problems in segregated areas of Baltimore and Ferguson on Uncle Sam.
Will try to post tomorrow.
“That rifle hanging on the wall of the working-class flat or labourer’s cottage is the symbol of Democracy. It is our job to see that it stays there.”
– George Orwell
My scary looking rifle is a safeguard against tyranny and against those ISIS types who are purported to have already placed cells in the USA (I betcha the CIA is nurturing them).
phony scandals