Bits Bucket for May 18, 2015
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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A lot more detail than the US MSM is reporting and it clear that this is an improving market:
http://www.shanghaidaily.com/business/real-estate/China-housing-prices-post-first-rise-in-10-months/shdaily.shtml
What the headline of the article doeth giveth …
“China housing prices post first rise in 10 months”
The body of the article doeth taketh away …
“On an annual basis, prices dropped in all cities except Shenzhen …”
“On an annual basis, prices dropped in all cities except Shenzhen …”
Maybe that’s the improvement.
No this is the improvement:
Increases in new home price were recorded in 18 cities last month, compared to 12 in March. Prices remained unchanged in four and dropped in the rest 48, compared to eight and 50 in March, the National Bureau of Statistics, which monitors home prices in 70 major cities, said on its website today.
….and demand collapsing.
Remember…… I can ask $50k for my 10 year old Chevy pickup but where is the buyer at that price?
So it is with any depreciating asset. Houses in this case.
There are 200 year old homes that are still in style.
DEFINITION of ‘Functional Obsolescence’
A reduction in the usefulness or desirability of an object because of an outdated design feature, usually one that cannot be easily changed. The term is commonly used in real estate, but has a wide application.
Can you imagine the losses to depreciation on a house over 200 years?
$2.50/sqft depreciation/yr by 200 years is a couple lifetimes of earnings in losses.
I have a 100-year-old house.
If it wasn’t constantly reinvested in, it would be an abandoned shell by now. People forget that.
The gas pipes for the gas lighting are still in the ceilings. I think the rewiring we just completed was the third round of electrical. Most of the pipes are new. The pipe in from the street was lead, and replaced. The electric in from the street was original, and failed over the winter. So now it is new.
Etc. Etc.
Depreciation. Obsolete. All losses.
You gotta get over to the other thread, dude!
Story from the link:
HOUSING prices in China rose for the first time in 10 months in April with mixed performances continuously registered across the country, a latest national survey showed.
Increases in new home price were recorded in 18 cities last month, compared to 12 in March. Prices remained unchanged in four and dropped in the rest 48, compared to eight and 50 in March, the National Bureau of Statistics, which monitors home prices in 70 major cities, said on its website today.
In the existing home market, meanwhile, 28 cities recorded price increases from a month earlier, compared to 12 in March, the bureau said. Eight cities saw their prices flat while another 34 suffered setbacks, compared to 10 and 48, respectively, registered in the previous month, the bureau’s data showed.
“Nationwide, prices of new homes climbed an average 0.3 percent in April as buying momentum continued to rebound amid a couple of reasons including loosening mortgage policies as well as a high-season impact,” said Liu Jianwei, a senior statistician at the bureau. “However, price increases were mainly confined to first-tier and a limited number of second-tier cities whereas the rest ones still suffered declines.”
Shenzhen continued to lead gainers among the country’s four first-tier cities with a month-over-month increase of 1.8 percent, followed by Beijing, Shanghai and Guangzhou, where new home prices climbed 0.8 percent, 0.7 percent and 0.4 percent, respectively, from March.
In the existing market, Shenzhen was also the top gainer with a monthly increase of 2.4 percent. In Beijing, Guangzhou and Shanghai, prices rose 2.1 percent, 1 percent and 0.6 percent, respectively.
On an annual basis, prices dropped in all cities except Shenzhen, where a 0.7-percent annual rise was recorded for new homes and a 2.8 percent gain for existing houses, the bureau said.
“On an annual basis, prices dropped in ALL CITIES except Shenzhen, where a 0.7-percent annual rise was recorded for new homes and a 2.8 percent gain for existing houses, the bureau said.”
And that’s good news because…?
Markets don’t move in straight lines, Dan. The trend is lower, and very much so.
To still be defending China’s near term economic prospects at this point suggests one of two things; either you are flat out delusional, or you are a fully indoctrinated attorney that will never cease the fight even after every ounce of a vast mass of evidence stands in stark contrast against that which you argue.
either you are flat out delusional, or you are a fully indoctrinated attorney that will never cease the fight even after every ounce of a vast mass of evidence stands in stark contrast against that which you argue.
Those two aren’t mutally exclusive. I’d say both apply in Dan’s case.
The majority of this board has been predicted a collapse in Chinese housing prices followed by a collapse in the Chinese economy. But the data is showing a minor fall in housing prices and an economy still growing around 7%. I am not the one delusional around here my forecasts have been dead on and I am hated because I am telling the truth and ruining people’s fantasies. Sorry but an objective observer would see that housing is starting to level out in China.
‘housing is starting to level out in China’
Wait, I recall you saying there was a housing bubble in China and it would be good for their economy for it to be reversed.
‘I am hated because I am telling the truth and ruining people’s fantasies’
Too much coffee this morning?
There was a bubble and it is still being addressed. There are two main ways to deal with unaffordable housing, one way is a large reduction in housing and the other is slightly lower housing prices with rapid income growth. The latter is occurring in China. No, not too much coffee Ben, just too much truth for the board. The Economist Magazine recently had a poll of top economists on China, they are predicting around 7% growth both this year and next. I have not predicted 2016, I am waiting for a few more months data. However, I am sure for 2016, it will not be lower than 6.5%.
falling prices to dramatically lower and more affordable levels is the only solution. The price declines have already begun.
By your own admission the “truth” is yet to be seen.
“There are two main ways to deal with unaffordable housing, one way is a large reduction in housing and the other is slightly lower housing prices with rapid income growth.”
No invisible hand here!
No invisible hand here!
It is the invisible hand that set the conditions for the wage increases. China follows the Singapore model of development, authoritarian government, capitalism with state guidance. Not strictly speaking pure capitalism but when Milton Freeman was talking about Asia, the same development pattern was in place that China is now emulating.
However, I am sure for 2016, it will not be lower than 6.5% ??
105, then 9%, then 8%, then 7%, now 6.5%…Now add to that the BOC cutting interest rates three times in the past 12 months and loosening reserve requirements on the banks…Then ask yourself, how China achieved those rates of growth and are those same drivers sustainable…See the trend Adan ?? Some of us see the trend as a warning sign…You see it as a normal shift from production to consumption…We shall see…I also think its not just a coincidence that China is now decided to expand their Military complex…
I am hated because ??
Little bit of over reaction Adan…There are a few here that are spineless and love to throw arrows but most are in for constructive dialogue and debate….
There are a few here that are spineless and love to throw arrows but most are in for constructive dialogue and debate….
I agree it was a bit of hyperbola to match the quote of who tends to be loved and who tends to be hated and the fact that it is inverse to the telling the truth. Actually, I think it is normal due to the law of large numbers as I said a while back. China growing at 6.5% now adds more to the economy in dollars that 10% did seven years ago. However, China cannot grow its exports at around 5 times the growth of the world’s economy which is what is would have to do to maintain 10% growth.
“…constructive dialogue and debate…”
Throwing out a steady stream of lies doesn’t qualify as debate.
Because of continued contraction in China’s economy, achieving growth targets will be “difficult”.
China has a lot of momentum. A crash may well stretch out over decades. The key point is that a credit expansion based growth miracle is over the moment expansion stops.
“I am hated because I am telling the truth and ruining people’s fantasies.”
Delusional self-importance. Nobody hates you. You aren’t ruining fantasies. It is all simply backlash against someone that knows not on what he speaks.
“The key point is that a credit expansion based growth miracle is over the moment expansion stops.”
We have a winner. Let’s assign loan growth the variable L. dL/dt < 0. The end of an era. Period. End of story.
…. next topic please.
“China has a lot of momentum. A crash may well stretch out over decades.”
Then, we have a different definition of crash. If China continues to add debt faster than its economy grows for decades will it crash? Of course, I will agree with that statement. It is the prospect of an imminent crash that I disagree with so maybe we disagree more on the term “crash” than the future of China.
“I am hated because I am telling the truth and ruining people’s fantasies.”
You’re not hated. You’re mocked.
Can we mock him for pretending that he’s hated? It’s a purposeful-victim over-exaggeration meant to elicit praise. Women are FAMOUS for this tactic.
Yes. There are multiple dimensions of mockery to explore here.
“…you are a fully indoctrinated attorney that will never cease the fight even after every ounce of a vast mass of evidence stands in stark contrast against that which you argue.”
That is how lawyer-think is different from the way the rest of us think! Remember, they often have to defend clients in court as innocent who the facts and circumstances clearly indicate are guilty (and vice versa).
I am sick of hearing about China. Can’t we talk about a stable economy, like Greece?
There’s a lawyer saying … ‘if the facts are on your side, argue the facts, if the law is on your side, argue the law, if neither is on your side, just argue!’
Q. How can you tell if an attorney is lying?
A. Check whether his lips are moving.
We need another round of QE to goose home prices so I can afford my next wine shipment from napa.
Houses stand the test of time!!!
It’s never been a better time to buy with these low rates.
It was a better time to buy 4 years ago.
Houses aren’t for sale four years ago, they are for sale now. And sitting.
Wine or houses?
Wow, you actually think the party is going to last, or you are a realtor. The “buy when rates are low” line makes me think realtor, because when rates start trending up, that’s when the whole housing fantasy will implode.
Thats what u dont get dman. Rates aren’t going up for a very long time. U keep bringing up that excuse with nothing to back it up.
Rates hikes are off the table for 2015.
How do you raise rates? You sell treasuries and pull cash out of the system.
Who is the biggest buyer of treasuries now? You cant sell when you are the only buyer in town.
How many treasuries will be rolled over this year cause there is no money to pay the principal back?
“Rates hikes are off the table for 2015.”
When you’re signed onto a 30 year mortgage, it doesn’t matter if rates rise next year or ten years from now. Eventually you’re going to be underwater.
No, eventually you will be PAID OFF and above water even if the rates go to infinity and the house worth drops to a penny.
That kind of thinking will keep you broke for a long time.
How much have you lost by missing the boat again?
“Why pay a grossly inflated price for a depreciating asset like a house and then double down on those losses by financing it when you can rent it for half the monthly cost?”
Exactly.
I will have to say, the longer the Fed can play this kick the can thing, the better oxide’s decision is looking.
There is an expiration date on the can. Demand is collapsing.
with housing demand collapsing what does it matter?
how long have u been out of the labor force?
Lenders keep giving out 30 year loans on 50 year old homes. Depreciation doesn’t appear to be a big concern here. Nothing to see here. Insignificant.
You’re backpedaling Poet.
Yes, there’s nothing more maintenance free than an 80 year old house. Vastly overpaying for a house at current prices is great, because you’ll still own that 80 year old house when you retire, if you’re lucky. You’d be crazy to rent and put your savings in a retirement account, because nothing appreciates like a house, until it doesn’t.
There is nothing more costly than paying a grossly inflated price for a depreciating asset.
Because a house or apartment “knows” when it’s a rental and politely won’t deteriorate?
The only time I don’t mind paying for a depreciating asset is when all the depreciation is wrung out of the sucker.
No Donk. Because rental rates are half the cost of buying and you’re stuck with the depreciating asset.
Hillary Clinton’s brothers are as bad as she is when it comes to influence peddling and crony capitalism.
http://www.businessinsider.com/hillary-clintons-brothers-tony-and-hugh-rodham-2015-5
“Will they be a problem? Yes. They underscore everything that people fear and hate about the Clintons,” the aide said. “They’re essentially the id of Bill and Hillary Clinton. A bunch of money-grubbing and opportunistic hillbillies with no sense of ethics, decency, or even legality.”
Indeed, while Hugh Rodham has yet to make headlines this cycle, last weekend, the New York Times published a story delving into Clinton’s youngest brother, Tony Rodham. The paper reported he had repeatedly tried to profit from his connection to the former first family.
The newspaper pointed to a wide range of Tony Rodham’s business activities including a Haitian gold mining venture and speeches he gave before Chinese investor conferences and a California cosmetics company.
“The connections to the Clintons have given Mr. Rodham, a self-described ‘facilitator,’ a unique appeal and a range of opportunities,” The Times’ Steve Eder wrote. “But his business dealings have often invited public scrutiny and uncomfortable questions for the Clintons.”
Kinda reminds me of Billy Carter back in the day but with a different agenda - Billy wanted a six pack - these bozos want a multi million dollar newly minted penthouse in Manhattan.
It is all about scale.
Jeblary
2016
http://img.ifcdn.com/images/e80c73e4e0bf3b49aa893f841b65ec44f30e4fe180567a4c25431c9ce3d39656_1.jpg
Backward!!!
Oh, that is just horrendous. And so sadly true.
Both plutocrats.
Both corporate statists.
Both neo-cons.
Both crony capitalists.
Both are members of and water carriers for the .1%.
Iraq war taking on a more sectarian character - people who hate us fighting other people who hate us.
http://news.yahoo.com/shiite-forces-ordered-deploy-fall-iraqi-city-083801017.html
That’s an accurate statement (Radical anti-USA forces fighting each other). Incredibly, some people who acknowledge the fact still advocate USA military intervention. Must be the same people (26% of Americans) who think, KNOWING WHAT WE KNOW NOW, the invasion of Iraq was a good idea.
It was nice of the Iraqi government forces to resupply ISIS by abandoning their weapons including tanks, I believe more than a few U.S. M-1 tanks. What the left does not want to admit on this is that a large percentage of Muslims support ISIS’s ideology which is the reason they can replace battlefield loses. What is more the inconvenient truth is the radical nuts are more willing to die because of their faith and thus win when they are outnumbered and outgunned. It is not just Mexicans that are benefitting from Obama’s amnesty it is plenty of Islamic fanatics that are in the country.
BTW, the invasion was not the problem, the nation building was the problem. However, since our government is unwilling to admit that Islam and democracy are incompatible we should never had invaded. Turkey only worked when the military made sure that Islamic parties could not take power. Now, they are heading down the same Islamic sewer as the rest of the Islamic world.
Those M-1s wont do them much good.
Give it a couple of weeks, and they will be parked due to lack of spares/maintenance.
With state of the art weapons come the requirement of state of the art logistics and infrastructure.
Saudi Arabia, Egypt, Iraq etc. have the M1s, ISIS could have attracted to its ranks people that actually serviced such weapons, they probably even have the manuals. Even if they did not they have attacked engineers to the “cause” so they would keep the tanks running.
They’re better at destroying or overthrowing things than actually running anything, much less building a better society. They’ve already sown the seeds of their own demise by insisting on an inflexible interpretation of a dogma that humans will inevitably resist because of the sheer misery and oppression it imposes on them.
No, the invasion was the problem. Toppling a bad guy with firm control leads to…well we see what it leads to. Saddam must go! Assad must go! Khaddafi must go! NEo-cons are completely nuts. Fortunately, even the most aggressive fear mongering won’t get them votes from anyone but their hardcore fans.
How ironic that the neo-cons banter about stopping radical Islam- implying IRan or ISIS, whne in fact BY FAR the leading exporters of radical Islam are teh Saudis followed closely by some Pakistanis.
Assad must go! Khaddafi must go!
I was against their removals in 2011, you are comparing apples or oranges. Saddam was actively working against our security.
BTW, the invasion was not the problem, the nation building was the problem. However, since our government is unwilling to admit that Islam and democracy are incompatible we should never had invaded. Turkey only worked when the military made sure that Islamic parties could not take power.
So what you’re saying is that we should not have tried to set up a democracy after we toppled Saddam Hussein. We should have installed another brutal strongman in his place, one who would be more friendly to us.
No, what I am saying that it was not unreasonable to remove a person that tried to kill one of our presidents and posed a potential threat after 9/11. Saudi Arabia could have worked with the existing army to come up with a replacement.
So you’re using the “He tried to kill my dad” justification? International just doesn’t matter. People all over the world would therefore be justified in overthrowing the American government given the millions that it has killed in dozens of countries.
Saddam invaded both Kuwait and a portion of Saudi Arabia during the Gulf War, he tried to kill a man that was President during that war and had arranged the coalition that fought during the war, which was paid for largely by the Saudis and Kuwait. (there were even charges at the time we were acting like mercenaries.) An attack on a sitting president or even a former president is a sufficient act to cause the removal of a foreign leader. “Daddy” has nothing to do with it.
You and Hannity, about the only ones that believe this crap. Even Jeb had to crawl down out of that tree house.
You and Hannity, about the only ones that believe this crap. Even Jeb had to crawl down out of that tree house.
They invaded to promote globalism not protect legitimate interests, that required nation building. We could have destroyed the Saddam regime and been out of there within months with minimum casualties and money spent. It would have sent the same message that Khaddafi received and gave up his nuclear and chemical weapons program at 1/10 the cost. It probably would have sent an even stronger message to Iran since it would not have allowed them to bloody us in the war.
You’re a mental case.
“Iraq war taking on a more sectarian character - people who hate us fighting other people who hate us.”
People who hate everyone fighting other people who hate everyone.
Sometimes the rest of the world makes the USA look good.
‘Iraqi security forces attempting to retake control of the western city of Ramadi were routed in heavy fighting Sunday, the worst defeat for Iraq’s central government since Islamic State militants stormed across the country last June. In a replay of last year’s military debacle, elite units abandoned their U.S.-provided equipment to Islamic State fighters and fled the area.’
‘The units that had been attempting to retake Ramadi, which was attacked late Thursday evening and had fallen mostly into militant hands by Saturday, were in the process of fleeing the city and had abandoned dozens of U.S.-supplied armored vehicles, as well as artillery, heavy machine guns and other military gear as they fled mostly on foot from the fighting.’
‘One police officer confirmed that at least 30 U.S. supplied armored Humvees, which had been sent as reinforcements on Saturday, had been abandoned in the neighborhood of Malaab alone.’
‘Adding to the stress was word that the town of Baghdadi to the north was itself surrounded and likely to fall in the coming days or hours without significant outside help. Although not a large town, Baghdadi had remained in government control because it is a key supply line to the government garrison at the Haditha Dam, one of Iraq’s largest infrastructure facilities that controls both agricultural water flow and produces hydro-electric power. The loss of Baghdadi would mean the garrison was surrounded and cut off.’
“We call the Iraqi government to send helps to us immediately we are surrounded from all axis by Daash,” said Hussein al Dulami from inside the town. “Send food for our families send ammunition and guns to us from the U.S.”
http://www.mcclatchydc.com/2015/05/17/266937/islamic-state-routs-last-elite.html#storylink=cpy
HBB update: Al Dulami was later revealed to be working for ISIS.
“Only God can save us,” said one officer speaking by phone from inside the Anbar operations center, where officers had been coordinating the operation. The officer said that several hundred policemen and soldiers were surrounded inside the command center, which was repeatedly struck by suicide bombers and heavy artillery fire as militants cut off their last routes of escape.”
Oh look the future .. As the US goes broke it will be less and less inclined to help out.
Oh look the future .. As the US goes broke it will be less and less inclined to help out.
Maybe the main reason we’re going broke is because of the many “military interventions” the neo-cons keep pushing us into.
“On Friday, the White House announced that it was rushing shoulder-fired rockets to Iraq ”
Oh awesome. And will the “elite” soldiers be abandoning these beauties to the enemy as well? Why can’t we just send the food and stop there?
I’m not even sure they don’t start off in the enemy’s hands.
“Why can’t we just send the food and stop there?”
Raytheon will be having none of that talk mister.
Update 2: When asked what they had done with their previous guns, Al Dulami said, “We traded the guns for toilet paper. We had all crapped our pants and the stench was unbearable. So we gave the guns to ISIS in exchange for some two-ply.”
So that’s where Venezuela’s toilet paper went.
If you like your crony capitalism, you can keep your crony capitalism….
http://www.zerohedge.com/news/2015-05-18/washington’s-shadowy-energy-partnership-azerbaijan-exposed
Has anyone seen any details on this biker massacre? It’s starting to sound more and more like the 9 dead bikers were killed by cops, and I found this quote interesting:
“At least some of the bikers involved in a gang fight Sunday that left nine people dead and 18 injured were shot by police, authorities said.”
Haven’t seen details, but the potential seems high for retaliation and wider violence.
I’m no biker gang supporter, but the more I read about this situation, the more it smacks of cops with itchy trigger fingers. They were set up outside the restaurant the whole time. I don’t question that bikers were fighting each other, but it sounds like the cops unloaded a hail of gunfire and started cutting people down.
Some eye witness accounts posted on local news sites indicate the two main gangs started slinging lead at one another in the parking lot. Only after the cops tried to intervene did they start shooting at the cops who of course returned fire.
192 arrests, 100’s of guns confiscated, chains, knives, brass knuckles, up to 9 different gangs were present. It was a powder keg that only needed a spark.
Try not to be too upset. It isn’t like any of the deceased were pillars of the community.
Koresh…..Ruby’s……exploding fertilizer plants in the middle of town……..bikers brawling at breastaurants
Note to self: More reasons to stay away from Texas. Especially the greater Waco area.
Used to be a saying that the country was tilted, and the nutcases slid to California
Looks like the tilt has changed. The wackos have moved to Waco. Probably for the “affordable housing”. And the “freedom”.
Used to be a saying that the country was tilted, and the nutcases slid to California”
too expensive here we just get Chinese investors now.
I think it was the ‘fruits and nuts rolled to CA’.
If you ask me Florida has the most crazies per capita. Something to do with the humidity….like the face eater guy from a couple years back.
Waco - they have a HGTV show based in Waco. Funny because there was an article recently about a realtor in Waco saying people had ‘discovered’ Waco. I guess. We quit stopping in Waco after they closed the Chicken Shack. Lake Waco is pretty nice.
http://www.nola.com/crime/index.ssf/2015/05/texas_cops_shot_bikers_during.html
Meanwhile back in Chicago ILLANNOY as reported by the lefty leaning Chicago Tribune……
“49 people shot since Friday afternoon across Chicago”
Don’t move here - you won’t like it.
I find that number shocking, and I live near Detroit.
Do we really want to get in the middle of this?
http://america.aljazeera.com/articles/2015/5/18/iraqi-shia-militias-fight-ISIL.html
Sheldon Adelson says YES.
He has the vote the matters. Onward Christian Soldiers!
What time does the Koch Industries troll room open up for business? I see that Kessel show up for work early. He’s obviously bucking for a promotion.
Hessel posts interesting articles, and I’ve never seen him pimping for Koch. And really, the Koch meme is just a tired, played out leftard boogeyman device for Soros fanboys.
“It’s Bush’s fault” worked up through about 2010.
Then it was Koch in 2012 and 2014.
Now it’s Sheldon Adelson’s turn. You don’t get to have a $30+ billion net worth, think you can buy American (and Israeli) elections, and not get called out on it.
The man is truly EVIL.
Quote from below Bloomberg article:
“If it all sounded familiar, so does the revived fervor for “moral clarity” and “the American idea,” not to mention promises of a (tax-free) military buildup and an attitude of indifference bordering on contempt for every ally but Israel
every ally but Israel
every ally but Israel
every ally but Israel
Follow the money
And really, the Koch meme is just a tired, played out leftard boogeyman device for Soros fanboys.
That’s pretty funny. The Soros meme is a played out rightyard boogeyman device for Koch fanboys.
Both of them are part of a corrupted economic model which benefits precious few.
And let’s not forget Warren Buffet, the guy who cares about the ‘little people’ like his secretary so much.
The Seattle Times is doing a multi-part story on how he is screwing mobile home park residents, among other things . . .
I’ve been seeing his “Berkshire Hathaway” real estate signs popping up all over my neighborhood lately as well - he must know something . . . I’m thinking that they are dumping the foreclosures on the market right now.
You are up early today. Soros paying OT?
What time does the Koch Industries troll room open up for business? I see that Kessel show up for work early. He’s obviously bucking for a promotion.
What kind of retard are you? I’m no fan of the Koch Brothers or Big Money control of our political process, as my posts should make quite clear.
The word is “readtard”, as in someone who can’t read. It’s a variant of “realtard”.
No, in his case “retard” is the shoe that fits.
Then what makes you think Hillary Clinton’s brothers are worth posting about? That’s straight out of the Fox News playbook. So what if he tried to use his sister’s reputation to make money. Do you actually think he’s going to have any influence whatsoever, compared to the big money donors who will be giving to both parties?
Here we go. Koch meme didn’t work, now let’s trot out the Fox News playbook meme.
Jeebus Crikes, knock it off. Go back to Facebook, they need the boost in numbers over there.
Yes Mr. Hannity.
Awwww, you called me Hannity, I’m sooooooooooo hurt.
Would you like a tissue?
And since there haven’t been any dumbazz posts about global warming yet, I’d say the meme is doing its job. And yes, it will continue.
posts about global warming yet
You just did.
Before I finished my coffee, I was confusing you with Phony Scandals. That’s the kind of thing he would post, but you don’t usually get that trivial.
Holeee jeebus, son, it’s gonna take a dozen cups of Drano to clear out your “confusion” here. Hessel and Phony have VERY distinctive posting content styles. That isn’t even a halfway decent walkback.
Sigh. Who else would you like to FoxKoch?
I think you have that backwards. It’s KochFox, say it three times fast.
Oppo research on black sheep siblings has been going on for decades. Can’t really assign it to either side. And usually it never gets much traction anyway. Americans generally realize that the weak-tea siblings don’t have as much influence or merit as the candidate. If they did, they would be the candidate themselves.
Even Jeb is weak tea compared to GW Bush (or more accurately the Bush/PNAC combo). I get the vibe that Jeb doesn’t really want it; he’s just playing along because they want him to. It wouldn’t surprise me if he’s screwing up on purpose as a reason to bow out with some dignity intact.
William Kristol is laughing at you. ALL of you.
+1
Greece “on the edge of default” for the umpteenth time. Will be interesting to see how the banksters find ways to kick the can down the road to defer the financial reckoning day a bit long (and lure more retail “investors” into their rigged Ponzi markets).
http://www.telegraph.co.uk/finance/economics/11612513/Bundesbank-warn-Greeks-are-on-the-edge-of-default.html
John McCain’s lapdog (and fellow neo-con stooge and corporate statist) piles into the Republican clown car.
http://www.washingtonpost.com/blogs/post-politics/wp/2015/05/17/lindsey-graham-to-provide-very-important-update-on-2016-plans-monday/
Is a Greek bail-in (i.e. state-sponsored theft from bank depositors accounts) in the works? No wonder the oligarchs are pushing so hard to move to a “cashless society” to faciliate more efficient larceny from the 99%.
http://www.zerohedge.com/news/2015-05-18/shape-greek-endgame-emerges-imf-discussed-cyprus-plan-after-tsipras-warned-looming-d
Bonds starting to weaken again. At what point will Yellen be forced to raise rates to deal with collapsing faith in the US dollar and bond markets?
http://www.marketwatch.com/investing/bond/tmubmusd30y?countrycode=bx&mod=MW_story_quote
as long as everyone is collapsing around us our currency will be stable?
King Dollar Poet…… King Dollar.
The dollar’s fallen lately, but it’ still worth 15% or 16% more than it was worth a year ago.
http://www.marketwatch.com/investing/index/dxy
Real journalists at the New York Times report the future belongs to Lucky Ducky:
http://www.nytimes.com/2015/05/17/upshot/dont-be-so-sure-the-economy-will-return-to-normal.html
“This sucker could go down” — George W. Bush
We currently have a society where destructive behavior and poor judgement go unpunished……in fact, is rewarded.
American Idiotcracy vs. Chinese/Russian oligarches/kleptocracies vs. Middle East caliphates. Who will prevail?
Throw in Fbook and twitwit and it’s as if the world is going mad. Hmmmmmm.
Wages lose .. Equity wins ..
it’s like a Charles Dickens novel
it’s like a Charles Dickens novel
It was the best of times to be GS, it was the worse of times to be just about anyone else.
The price protection racket failed again
Pimping the fear:
“Why? Because for decades, running on chaos and war has been the party’s most successful strategy”
http://www.bloomberg.com/politics/features/2015-05-18/the-gop-is-campaigning-for-george-w-bush-s-third-term
No “smaller government” or “lower taxes” happening here
Both parties are beholden to the banks, but only one party really seems to get off sending Americans to die around the world.
Did u drink the HA kool aid?
You’re running low on blinker fluid Poet.
Rocklin, CA List Prices Sink 4% At Peak Of Season; Losses Mount As Inventory Billows
http://www.zillow.com/rocklin-ca/home-values/
Remember…. Houses are rapidly depreciating assets that never pay you back.
+1
Could not agree more. And one party lies about their love of deficit spending.
I would argue that it’s really George Bush’s fourth term. Obama was more articulate (as long as he had his teleprompter in front of him), but empty campaign promises aside, he was Bush Lite once in office.
Economic Report
Builders lose confidence in current home sales
Published: May 18, 2015 10:54 a.m. ET
Builders lost some confidence this month in their current sales of single-family homes.
By Ruth Mantell
Economics reporter
Builders lost some confidence this month in current sales of single-family homes, signaling wariness over whether families are ready to take the plunge into the new-home-buying pool, a report released Monday showed.
An overall gauge of confidence among home builders declined two points to 54 in May, missing Wall Street’s forecast, according to National Association of Home Builders/Wells Fargo. Meanwhile, a barometer of builders’ views on present sales of single-family homes fell two points to 59 in May.
“Consumers are exhibiting caution, and want to be on more stable financial footing before purchasing a home,” said David Crowe, NAHB’s chief economist.
But there’s still hope for home sales, he added: “Mortgage rates remain low, and house prices are affordable. These factors should spur the release of pent-up demand moving forward.”
Along those lines, NAHB’s barometer of builders’ views on upcoming sales rose one point to 64 in May. However, a gauge of prospective-buyer traffic ticked down one point to 39.
Economists polled by Dow Jones Newswires had expected a May result of 58 for the overall index. Although May missed that consensus, builders remained upbeat. Readings above 50 signal that builders, generally, are optimistic about sales trends. May markd the 11th consecutive month of above-50 readings.
Analysts are conflicted about the fate of builders. One brokerage recently downgraded shares of seven home builders, reasoning that they typically lag the broader market during the summer. Meanwhile, analysts at Morgan Stanley recently reported that builders may be in a relatively good position this year, thanks to a strengthening economy.
Home builders do have reasons to be hopeful about 2015 sales. Young families and other first-time buyers are tip-toeing into the market, a trend that will support the broader economy and other homeowners who want to buy a new place. Further, applications for mortgages to buy a home recently hit the fastest pace in almost two years.
On Tuesday the government will report its latest reading on new home construction, and economists polled by MarketWatch expect that the annual starts rate rose to 1.03 million in April, which would be the strongest result in three months, from 926,000 in March.
Shares of an exchange-traded fund of builders, iShares U.S. Home Construction (ETF ITB, +0.24%) have increased about 15% over the past year and held near the flat line on Monday.
…
Air conditioning died last night. Guess Im going to be dealing with that all day.
Wait……. Im a renter.
Never mind.
Like realtors say, every time building management has to fix a problem for a renter, it makes baby Jesus cry.
N.M.P. - The renter acronym for freedom.
Not My Problem.
Some unintentionally funny stuff in the article about China building a ghost city in Africa. They say the problem isn’t that the locals have no money. They say the problem is that the apartments are fairly priced but it’s difficult to make the credit work as it should. So basically we’re to the point that nobody connects price to local incomes any more. Only credit.
http://www.dailymail.co.uk/news/article-2168507/Footage-shows-brand-new-Angolan-city-designed-500-000-lying-empty.html
“With little fanfare, a staggering 750,000 Chinese have settled in Africa over the past decade. And more are believed to be on their way.”
It will be interesting to see how long this goes on before people in Africa actually start to notice.
Italics Mine, Center Ossippi, NH, 2 years ago
The difference, as I understand it, is that China bought the land and constructed buildings. Historically the other nations of the world barged in, stole resources, and people.
“The Chinese are contemptuous of such criticism. To them, Africa is about pragmatism, not human rights. While the bounty has, not surprisingly, been welcomed by African dictators, the people of Africa are less impressed.
“There have also been riots in Zambia, Angola and Congo over the flood of Chinese immigrant workers. The Chinese do not use African labour where possible, saying black Africans are lazy and unskilled.
“In Angola, the government has agreed that 70 per cent of tendered public works must go to Chinese firms, most of which do not employ Angolans. As well as enticing hundreds of thousands to settle in Africa, they have even shipped Chinese prisoners to produce the goods cheaply.”
“In Angola, the government has agreed that 70 per cent of tendered public works must go to Chinese firms, most of which do not employ Angolans. As well as enticing hundreds of thousands to settle in Africa, they have even shipped Chinese prisoners to produce the goods cheaply.”
Why dod Australian history just come to mind?
Washington, DC List Prices Sink 4% YoY As Depreciation Sets In
http://www.movoto.com/washington-dc/market-trends/
The only rising demand I ever see is for my tax dollars.
Demand for US Dollars has never been higher. Enjoy them if you got’em.
What is it about the fact that housing is a depreciating asset that enrages so many?
Could it be the crushing financial losses?
CraterRage Photo Of The Day
http://goo.gl/QZTHr8
The losses are mentally unmanageable for the masses. So they merrily sooth themselves with thoughts of all that M.I.D. and “pride of ownership”.
2.50 x2000 sq ft house = 5000 n depreciation according to your numbers. Its time to put the crack pipe down dude. That is simply ridiculous.
Not my “numbers” Poet. They just are.
Got losses?
AZ, were you immaculately conceived within the last 8 or 9 years? Do you not know what happened to housing before that time? And do you honestly think it can’t happen again?
buy a house and get rich!
Am I mistaken, or are airline flight prices up quite a bit compared to a year ago? Even with lower fuel prices, seems cost of flying to Denver or southern California is up 20% or more since last year.
I havent flown in like 7 years cause of the ridiculous pricing.
Flying is cheaper than it was years ago IMHO. I do not think prices have kept up with inflation. Just seems that there has been no dent in prices with lower fuel costs versus last year. Of course, depends how far in advance I book a flight to get a deal, but Denver has been usually a great deal to fly out to given that it is midwest miles from Maine versus west coast distance. I scratch my head on this one.
You drive everywhere Poet? You should check your tailpipe rectifier. It’s getting noisy.
Pricing and buying was pretty cheap Jan - April. Prices are WAY up (double for some routes) the last month and past few weeks. I’m hoping it’s just timing and they drop again.
Comment by Professor Bear
2015-05-17 15:47:15
[..]
When discount rates equal zero, asset prices are unidentified, in the sense that any price whatever is consistent with an interest rate of zero.
Got random valuations?
Thanks for saying that yesterday, PB. I hadn’t ever really thought of it that way, but I concur; with any sort of discounted-dividend valuation model, the model breaks down as you approach zero. I had never taken the next step to “any price whatever is consistent with an interest rate of zero. Good reminder.
“any price whatever is consistent with an interest rate of zero”
…though you could just as reasonably say that the only reasonable price is infinite.
Yes. But infinitely doesn’t work as a real world price due to budget limits, even if massive leverage is applied. Hence the asset valuation at the zero bound is large and indeterminate.
Beyond the budget constraint, I suspect that it also doesn’t quite rise to infinity because of the expectations that rates will not remain at the zero bound forever. So rather than an infinite series with the same zero discount rate at each term, it is an infinite series with different expected future discount rate at each term of the summation. Make sense?
Granite Bay, CA Housing Prices Dive 5% YoY; California Housing Market Flounders
http://www.movoto.com/granite-bay-ca/market-trends/
5% is a dive? granite bay is way to classy for you. move a long little fella.
Data Poet data….
Napa, CA Sale Prices Dive 6% YoY; Losses Mount For Homeowners
http://www.zillow.com/napa-ca/home-values/
Here in the 95050 zip inventory is exploding. There are 60 house listed for sale in just this zip while a few months ago there were only about 20.
This is Econ 101: supply is expanding as prices increase. The next part is where the increased supply forces prices down - I’m waiting for that part.
The next part is where the increased supply forces prices down - I’m waiting for that part.
Another possibility: liquidity dries up as transactions stop occurring.
Postby z#### » Fri Aug 19, 2011 6:41 am
I see no correlation between today and 2008. IMO, we’re in the beginning of a worldwide panic mode. My vision for the next 12 months is defaults in Europe, US banks requesting bailouts. Not a time I want to be in the market. But what do I know…..”
Not much apparently.
Nothing like delaying the inevitable.
BAGHOLDER
And underwater too I presume Poet.
Right?
your doomsday scenarios are not panning out my friend. Go long!
Pick yourself up off the floor and cheer up Poet and remember….
Falling prices to dramatically lower and more affordable levels is positively bullish and your wallets best friend.
Are bubble fears giving you insomnia, along with things that go “bump” in the night?
Note the proposed action is on “bubble fear” — not the bubble per se, which is obviously a figment of our hyperactive imaginations.
ft dot com > World > US >
US Politics & Policy
May 18, 2015 9:11 am
Finance chiefs urge action on bubble fear
Sam Fleming in Washington
A group of leading financial executives have urged authorities around the world to bolster their crisis-busting arsenals amid fears that ultra-low interest rates have increased the risks of financial instability.
The heads of companies including HSBC, UBS and BlackRock will on Monday release a joint statement backing the use of macroprudential tools, but warn that rules, if too narrowly applied, could push risks into the more thinly regulated realm of shadow banks.
Macroprudential tools are used to guard against emerging dangers such as overvalued property assets, in theory reducing the need for authorities to raise interest rates to rein in investor exuberance. Among the most developed are counter-cyclical capital requirements on banks and caps on the amount of debt customers can borrow relative to their incomes.
Authorities in countries ranging from the UK and Switzerland to Israel and Hong Kong have been making greater use of these regulatory levers to curb rising asset values, especially in the housing market.
The statement also urges authorities to strengthen their systems of governance over macroprudential rules — even as Senate Republicans seek to impose new fetters on the Financial Stability Oversight Council, the main body in the US responsible for dealing with systemic risks.
Some analysts are warning of exuberance building up in parts of the global markets following the long period of ultra-low rates that resulted from the Great Recession. This month, Janet Yellen, Federal Reserve chairwoman, said that share prices were “quite high” and that there was a risk of a sharp jump in longer-term bond yields, while arguing that overall financial risks were contained.
The statement from finance chiefs including Douglas Flint, HSBC chairman, Anshu Jain, Deutsche Bank co-chief executive, Michel Liès, head of Swiss Re, and Larry Fink, chairman and chief executive of BlackRock, is being co-ordinated by the World Economic Forum. It says the inclusion of macroprudential policies in policy makers’ tool kits “helps to address emerging market inefficiencies in the financial system, such as over-exuberance within asset classes, for example in real estate lending”.
In the words of Mr Flint, the policies have the capacity to “lean against something that is making people feel good but is actually going to give them a hangover they will find difficult to cope with”.
…
Dman sure had his panties in a wad this morning.
Bill and Hillary have accumulated quite a nest egg using dubious practices.
By indigenous Follow Sun, 17 May 2015
Follow the money trail to see Hillary evolve from being a hawk to a dove here. “Several multimillion-dollar Clinton Foundation donors were at the center” of the Uranium One sale, Schweizer writes. Over the years, people involved in the deal had given or would give more than $145 million to the Clinton Foundation. Uranium One’s chairman, Ian Tefler, a Canadian, indirectly gave more than $2 million when Hillary was secretary of state. The Obama administration likely never knew about it, though, despite the Clintons’ pledge to disclose key foreign donations to the State Department. Tefler, a Canadian, made the donation through Fernwood, his own foundation, but Fernwood’s disclosures to Canadian tax authorities don’t jibe with those made by the Clinton Foundation.
It gets worse. Between 2010 and 2012, the Clinton Foundation and Bill himself took $2.6 million in donations and a speech fee from Salida Capital Foundation, another Canadian entity. Salida itself had just received a $3.3 million anonymous donation. Schweizer uncovered a subsidiary of Rosatom called Salida Capital. “If it were the same firm,” Schweizer writes, “an entity owned and controlled by Rosatom funneled millions of dollars to the Clinton Foundation at the very time Hillary would have been involved in deciding whether to approve Rosatom’s purchase of Uranium One.”
As Hillary’s State Department was deciding whether to approve the deal, Bill showed up in Russia to meet with Vladimir Putin and to give a half-hour speech there, his first in five years. His fee was $500,000, paid by a company called Renaissance Capital. The Clintons told the State Department that RenCap is an investment bank, but they failed to note that, since Putin took over Russia in 2000, RenCap has become “populated by former Russian intelligence officers with close ties to Putin,” as Schweizer writes. One Putin associate held two jobs from 2006 to 2009: domestic-intelligence officer and RenCap first vice president.
It is hard not to conclude that Hillary Clinton took money from Putin’s Russian spies just as the State Department that she controlled had a key role in approving Russia’s purchase of key American nuclear assets. The money just took a circuitous route. The Uranium One deal fails Plunkitt’s “honest graft” test. As Schweizer writes, “the Russian purchase of a large share of America’s uranium assets raised serious national security concerns.”
http://www.city-journal.org/2015/bc0517ng.html
The Clinton’s are great, true rags to riches for both of them. The American dream, be proud, not a sour grape. They are not Donald Trump.
“What difference, at this point, does it make?”
Don’t forget their hell-spawn, Chelsea. She’s got the same galactic sense of entitlement as her parents.
http://pagesix.com/2015/05/18/chelsea-sends-clinton-foundation-staff-running/
Anecdotal evidence of bubble mania here in Nashville, TN: two co-workers put their homes on the market this past Friday morning. By end of day, both houses had multiple offers over asking price — including one that was cash. By Sunday evening, both homes had been shown 20+ times.
When they told me they had received “please pick me” letters with the offers, I threw up a little in my mouth. 2006, anyone? This can’t end well.
Hmmm… seems sketchy considering housing demand is down 8% YoY in Nashville.
http://files.zillowstatic.com/research/public/Metro/Metro_Turnover_AllHomes.csv
Every bubble contains the seeds of its own destruction. It’s to be expected to have mania qualities existing at the same time as it comes apart. Lot’s of people aren’t following closely and believe what they hear from UHS or strangers or TV. I especially pay attention when an idea like letter writing spreads. It’s a stronger indicator to me than statistics. It shows desperation to get in.
It shows desperation to get in.
+1, Ben. It is a great indicator of psychology, regardless of what the fundamentals are doing. I was stunned to learn that this was back in vogue in Seattle & surroundings. But from what I understand, it is. Welcome to 2005—same song, second verse!
It is great to hear all these first hand stories of bubble 2.0 getting frothy. I wish I had bought 2 yrs ago to sell into this frenzy.
The 1989 peak ended in Sept. in CA. I know it well, I closed on my first place Oct 1989 for $228k. It dropped to about $190k over the nex 4 yrs, then sold it in 2003 for $485. It was a townhouse in a beach community, so not much maintenance, just a $200 HOA fee for the pool and tennis. Between the principal being pd down and the tax break it was a huge windfall.
HA calls these losses.
Fools math gets you nowhere here.
Now just who are you going to sell to considering housing demand is at 20 year lows and falling?
Remember…… a house is a depreciating asset that never pays you back.
‘It was a townhouse’
We usually talk about real estate here. I guess we have fun with boxes of air, so row-houses, I mean townhouses are fair game too.
And realtors are shameless liars.
Donald Trump has been a douche for as far back as I can remember, but I’m liking what I’m hearing from the guy just lately, especially on the economy.
http://www.huffingtonpost.com/lauren-windsor/donald-trump-will-end-outsourcing-if-president_b_7307426.html
At the South Carolina Freedom Summit, Donald Trump said that he would impose a hefty 35 percent tariff on American multinational corporations like Ford Motor Company, in order to stop outsourcing to China and elsewhere. According to the Economic Policy Institute, between 2001 and 2013 the U.S. trade deficit with China cost 3.2 million jobs, with the majority of the losses coming from the manufacturing sector.
Why am I not surprised that the banksters found a way to defer the financial reckoning day that would have followed a Greek default for just a bit longer?
http://www.telegraph.co.uk/finance/economics/11612513/Bundesbank-warn-Greeks-are-on-the-edge-of-default.html
Do we really want to get sucked back into this tar pit?
http://www.theguardian.com/world/2015/may/18/shia-militias-ramadi-isis-anbar-iraq
The Creature From Jekyll Island
We have solid evidence of what current central banker’s dogma tells them to do when a bubble burst: crank up QE and ZIRP for as long as necessary.
But what does a central banker do when a bubble bursts and rates are already at zero?
QE to infinity and beyond?
Not sure where it goes from here. I believe there is a fundamental problem with the price mechanism allocating resources to their highest value use when rates areat the zero bound.
Exhibit A:
Look at all the money recently poured down the real estate investing rathole.
fundamental problem with the price mechanism allocating resources to their highest value use when rates areat the zero bound.
Ha! You actually believe that the market does that efficiently in the first place, regardless of zero-bound rates?? Personally, I think there are HUGE error-bars on that in the first place.
But I concur with your concern. The adaptation mechanism depends upon the pricing signals. And pricing signals are apparently all out-of-whack at the zero bound. So the end result is even less efficient allocation of capital.
Wall Street on Parade
A 6-Year Bull Market in Stocks or a 6-Year ZIRP Wealth Transfer
By Pam Martens and Russ Martens: March 10, 2015
BubblesPundits were out in force yesterday celebrating the six-year anniversary of the bull market in stocks. Notably, no one was talking about the fact that the runup in stock prices has coincided with a six-year zero interest-rate policy (ZIRP) by the Federal Reserve, making the stock market a dandy casino to borrow low on margin and speculate high on risk; or, in the case of corporations, to issue tons of new debt and buy back their own stock.
As mind-numbing as it is to comprehend, it was December 16, 2008 when the Federal Open Market Committee of the Federal Reserve released this statement: “The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.” And there we have stayed for six long, arduous years with nothing but periodic threats to hike rates coming from the Fed.
Seniors who were subsidizing their meager Social Security checks with interest from Treasury securities or Certificates of Deposit have watched their supplemental income cut by 50 to 75 percent, depending on the maturity of the instrument, as a result of the long period of low interest rates.
The elderly and those unemployed or underemployed might have been able to withstand these low rates for a year or two without dipping into principal to make up for the yield loss, but after six belt-tightening years, many have succumbed to simply eating into the principal to make up for the shortfall.
The Federal Reserve reports that: “Rates of ownership of certificates of deposits fell markedly between 2010 and 2013, from 12.2 percent to 7.8 percent. The amount held in those accounts also fell, with the median declining 25 percent and the mean declining 17 percent. These declines are, at least in part, attributable to low interest rates over this period…”
ZIRP has effectively been a wealth-stripping mechanism for millions of Americans. In August of last year, the Federal Reserve released a study showing that 52 percent of Americans would not be able to raise $400 in an emergency by tapping their checking, savings or borrowing on a credit card, which they would be able to pay off when the next statement arrived. That statistic puts into somber perspective just who it is that’s benefiting from the six-year bull market in stocks.
The wealth stripping aspects of ZIRP have likely contributed to the marked decline in the number of individuals participating in the stock market since the bull market began. Despite the runup year after year, the participation rate of those buying individual stocks has been on a steady decline.
According to the most recent Federal Reserve Survey of Consumer Finances, which is conducted every three years, direct stock ownership was 15.1 percent in 2010 but fell to 13.8 percent in 2013, the date of the last Survey. That’s down from 17.9 percent in 2007, the year before the financial collapse in 2008.
Combining direct and indirect stock ownership, such as through mutual funds and Exchange Traded Funds (ETFs), stock ownership is still sliding, from 53.2 percent in 2007 to 48.8 percent in 2013.
So exactly who has benefitted from the runaway stock market? The Fed’s Survey of Consumer Finances states that for the top 10 percent income group, the rate of ownership increased 3.9 percentage points from 2010 to 2013, reaching 92.1 percent.
Typically, at a market top, insiders begin to “distribute” their stock to the less savvy investor – the dumb money. Today, there are few willing participants with enough principal left to play the part of dumb sucker. This may turn out to mean that the super rich become, by default, the dumb money. Unless, of course, the corporations continue to play the dumb sucker by buying back their stock at elevated price-to-earnings levels as their own insiders exit.
David Stockman has a clear idea of where ZIRP is taking the U.S. economy, writing that the “Fed’s free money cascade” is causing “financial distortions and deformations.”(Not to put too fine a point on it, but financial distortions and deformations on Wall Street are how we got into this mess in the first place.)
…
The Democrats must renew their push to make insolvent Puerto Rico the 51st state, as all those entitlements-for-votes newly registered Democrats would go a long way toward installing Comrad Pelosi’s permanent Democrat Supermajority.
http://www.bloomberg.com/news/articles/2015-05-17/debt-choked-puerto-rico-at-fiscal-brink-as-bond-buyers-pull-back
phony scandals