Bits Bucket for May 26, 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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When housing finally melted down, I was at long last acknowledged amongst friends as the one who saw it coming and not just some doomsday downer who was trying to kick sand on everybodies party. But at the bottom, those same people confidently proclaimed prices would be going right back up because the low prices were the anomaly, and artificial. I argued otherwise. Turns out they were right, prices went right back up and i got pwned. I still believe it is another bubble and they have to come down, but this current price move up is insane and made me look the fool.
+1
Here is a house on my street that just sold:
08 May 2015 $325,000 Q
05 Apr 2013 $245,000 U
29 Mar 2013 $195,600 U
26 Nov 1997 $95,000
When I moved to this ‘hood in 2010 it was a zombie and abandoned.
Here is the one we were under contract on in 2010 ($215k + $8k credit):
28 Feb 2013 $265,000 Q
03 Nov 2010 $210,000 Q
16 May 2006 $369,900
Now going for around $300k in that ‘hood
Here are my own “back of the napkin” calcs:
2008 crash
2010 bottom
2015 peak
2019 bottom
So maybe 3-4 more years of renting? Then I’ll be in my forties and my oldest will be 5-6 years from college. At that point, I will have spent roughly $200k renting. It still comes out better than buying, especially when I factor in maintenance, repairs, and transaction costs.
Where I live (Pinellas County, FL), the difference between 2 bedrooms and 3 bedrooms is unbelievable. I’d rather rent until we’re empty-nesters, then pay cash for something smaller. Our current house is a 3/2 1,350 sq. ft. We could make it work with kids, but I’m guessing the owners would expect about $280k and it needs work.
One thing’s for sure: the bubble wrecked my plans to lead a quiet, tiny, unassuming teacher life.
Here’s the thing we all have to remember: people *REALLY LIKE* to buy houses and have them magically make money. One might argue that our entire political and economic system is geared toward expansion and building and selling more chit.
Plan accordingly.
“Here’s the thing we all have to remember: people *REALLY LIKE* to buy houses and have them magically make money. One might argue that our entire political and economic system is geared toward expansion and building and selling more chit.”
“… our entire political and economic system is geared toward expansion and building and selling more chit.”
AKA a consumer based economy, powered, in part, by …
“… people *REALLY LIKE* to buy houses and have them magically make money.”
“Magically make money” means magically going up in price.
Magically going up in price means equity is magically created, and this magically created equity can then be converted into spending money by exchanging this magically created equity for debt, and this spending money then gets spent and this spending helps to keep the consumer-based economy humming.
And this will work as long as the magic is there but if the magic somehow disappears then all that will be left will be the debt.
This magic may appear, at root, to be nothing but an illusion and that’s because, at root, an illusion is what it is.
“an illusion is what it is.”
Agree, but the illusion might last longer than me.
“Markets can remain irrational longer than you can remain solvent.” - J.M. Keynes
In my neck of the woods, there are For Sale and Open House signs galore. Inventory is moving steadily, despite slightly bubbly prices. When I say “slightly” I mean that prices are going for 3-5% over an IMO fair price. (unlike, say, Denver)
The inventory is so varied that I can’t make good comparisons house to house. Extra additions, finished basements, no basement, garage, variation in the amount of land, filled-in carport, kitchen-only flips, all degrees of landscaping …. this stuff leads to a $50K range in prices for similar 3/2s.
When I was house hunting 3 years ago, many many houses were obviously Latino worker group houses, fully occupied with junk. Now, almost every house is emptied, cleaned-up (sometimes with reno sometimes not), and staged. The bottom feeders have obviously finished their sweep.
Is the 2-3%/year inflation appreciation magic too, or just the amounts over that?
Have prices risen by double digits the past 3 years? If yes, definitely a bubble. It’s that simple. And it is unsustainable.
“an illusion is what it is.”
Agree, but the illusion might last longer than me.
I am coming to the same conclusion. It will definitely eventually crash and stay down, but I might be taking my dirt by the time that happens. In a way, I hope that is the case, because when that time comes things will get ugly.
The good news is there should be a lot fewer people working in construction now than there were at the time of the last bubble peak.
People also go ape chit over the idea of creating some crappy App or “business idea” with the goal of selling it for 10 billion dollars.
The good news is there should be a lot fewer people working in construction now than there were at the time of the last bubble peak.
Yup, they’re building a fraction of the homes this time in my little burg.
“Agree, but the illusion might last longer than me.”
a very good point many of us overlook. Standing on the sidelines instead of getting in the game.
a very good point many of us overlook. Standing on the sidelines instead of getting in the game.
Then again, it could all blow up soon.
Paid for assets, a sizable liquid cushion and no debt takes a ton of risk out of the equation.
Same boat. Delayed not denied.
“…the low prices were the anomaly, and artificial. I argued otherwise. Turns out they were right, prices went right back up and i got pwned.”
Are you suggesting deliberate government bubble reflation measures were not artificial?
Are you suggesting deliberate government bubble reflation measures were not artificial?
I think we all agree that the real estate market is rigged. What surprised many of us was how quickly the PTB intervened to reinflate it.
What surprised many of us was how quickly the PTB intervened to reinflate it.
It didn’t surprise me how quickly they intervened; it surprised me how successful they were. My thinking early on was that once bubble psychology was pricked/popped (30% price drop, oh my!), that it would be impossible to reignite the bubble-think. I was wrong about that, obviously.
“Are you suggesting deliberate government bubble reflation measures were not artificial?”
Of course not, but try hammering that into the heads of these loanowner chuckleheads.
The Federal Reserve has been around since 1913, are the actions it takes to pump up the economy still artificial after more than 100 years? Do what people like me advocate and abolish it and return to the gold standard and houses will become affordable, if you don’t do it, don’t hate people that understand the “game” and knew that the Federal Reserve could and would re-inflate.
Show us the prediction you (doubtless) made that the Bernanke Fed would step way outside of its dual mandate to directly target housing prices.
And since you claim this is business as usual going back to 1913, how about a list of all the many other times the Fed put a floor under housing prices?
how about a list of all the many other times the Fed put a floor under housing prices?
Or if that’s too hard, we’ll settle for a list of the many other times that they put a floor under any other asset class…
They are only right for a moment.
Crappily, this “moment” is lasting for 4+ years..
comparatively a blip….but the pain of the hangover will last a lifetime or one tatoo’d generation.
I sold my last place in mid 2007 thanks in large part to the HBB, lived there for 10 years, buying it in 1997 worked very well.
Tried to buy again in 2011/2012, had a preapproved mortgage and enough cash for 50% down but it was virtually impossible, my offers were ignored several times as I was competing with 100% cash flippers and speculators.
Prices are now up 60% locally (Calif. wine country) but inventory is up 130% from last year and climbing FAST so I’m expecting a pop soon.
A 30% + drop would get me back in the market but I’m wondering if I’ll have to compete with cash buyers again, that was NOT fun…OTOH if there is a big crash I’ll be able to pay cash myself, can already withdraw 401K money without penalty (you can do that after 55 if retired, many do not know that) and can do the same with IRA money in another 18 months.
Napa area or central coast?
sorry, neither, I’m in Sonoma County….I should have been more specific since wine is made in large quantities in a few Calif. areas (like Lodi, Amador Co., etc…)
I’ll never understand what apparently makes cash buyers so much more desirable. If I’m selling a house and you offer me 1% more than a cash buyer I’m taking your offer (assuming I can see that you were already approved for the mortgage). Why do I care if the check comes from a person or a bank?
There are lots of reasons to take a cash buyer, among them:
1. You are in contract to buy another house, and speed/certainty of close is more important than the last 1%. A lender is one more entity to say “yes”.
2. You are worried about some kind of global disruption–a sooner close is better.
3. You think that prices are set to tank any minute, and you would rather reel in the sucker now than wait any more time.
4. The price is higher than comps, and you prefer to not have an appraiser derail the deal.
Sounds like the things keeping you up at night.
There are no cash buyers at these grossly inflated prices Rental_Fraud.
A deal with a mortgage can fall apart for all sorts of reasons…the bank wants an appraisal, a pest report, maybe other inspections etc. and if any of these fail the deal is off unless repairs are made ASAP..also if the borrower was not 100% honest on assets and income the preapproval may evaporate once the actual loan approval is underway.
It is very hard to compete with a cash buyer under any circumstances but during Bubble 2.0 many cash buyers were waiving all inspections and appraisals so unless the seller has decided to sell as a matter of principal to an individual or family who actually intends to live in the house an offer with a mortgage will very likely be ignored.
Look at Shiller’s long-term price graph from his Yale website (you can get the raw data in an Excel file from from his website)–I’ll post that next.
Prices go up too high, then prices come down. It happens over and over again. The 2004-2007 cycle had insanely high prices (way above a “normal” market top) due to crazy credit standards (meaning WAAAAY too easy). So far, this cycle is looking more like a “normal” cycle in terms of credit (credit is cheap, but not nearly as easy to get as the bubble years), but so far there is not very much construction of new homes relative to historically normal times.
Right now, IMHO, prices are too high, and consistent with a market top, but I believe that the timing of the correction will depend largely on when construction ramps back up to more “normal” levels.
Case Shiller shows prices still double the long term trend Rental_Fraud.
http://img802.imageshack.us/img802/7812/caseshiller.jpg
“Prices go up too high, then prices come down. It happens over and over again.”
Bullshit alert! It only has happened once in history back to 1890 (well now twice if you count the 1997-2007 bubble price runup and the 2011-2015 reflation as separate episodes, which they are not).
“Bullshit alert!”
Bullshit alerts are standard protocol whenever reading Rental Fraud’s posts.
I admire your honesty and I do not mean that sarcastically. I have suggested that others are this board are so hostile to me precisely because the dynamic you describe. I was fortune to avoid your situation. I talked a close friend from buying a house in San Diego in 2006. In 2010, when she wanted to buy an income property PB, I told her it could go either way. She bought and did well so I did not assume the label of a permabear forecaster. I think the U.S. economy would be stronger had we allowed the market to clear. I will probably not have much time to post all week.
She’s underwater just like you.
“I have suggested that others are this board are so hostile to me precisely because the dynamic you describe.”
Hostile to price fixing.
For those that do not know the area, PB means Pacific Beach, I was posting in a hurry sorry for the abbreviation.
I admire….I do….I have suggested… I was fortune…I talked….I told her i…..I did not assume …..I think the ….
I will probably not have much time to post all week.
Thanks for the warning. I, I, I, I, I….I…..I…..I…..will miss your posts.
The punchbowl is here to stay folks. There are no gains in financial markets without the FED. Prices of assets have risen but how do you keep them levitated? Is there really value at these prices?
Do you think the Fed governors are deliberately misleading the public with their forward guidance on the timing of liftoff?
The Wall Street Journal
Fed’s Fischer sees short-term rate at 3.25%-4% in three to four years
By Joshua Mitnick
Published: May 26, 2015 1:12 a.m. ET
‘Gradual and relatively slow’ rate rises, says Fed Reserve Vice Chair Stanley Fischer.
HERZLIYA, Israel—Federal Reserve Vice Chairman Stanley Fischer said Monday the central bank expects to follow a “gradual and relatively slow” trajectory of short-term interest-rate increases over the next three to four years to bring borrowing costs back to “normal” levels.
Mr. Fischer said observers focus too much on when the Fed will start raising its benchmark short-term rate from near zero, and instead should think more about where interest rates are headed over time. He said Fed economists expect the rate will reach from 3.25% to 4% in three to four years.
“There is so much importance given to the first move. But I think it’s misleading,” said Mr. Fischer in a lecture at the Interdisciplinary Center Herzliya, a college in a suburb outside Tel Aviv.
Mr. Fischer, who served as chief of Israel’s central bank for eight years before becoming the No. 2 U.S. central banker, said the coming Fed rate increases “will be a gradual process.”
…
Based on Fischer’s statements, one might guess the first rate increase will occur by year-end 2015, but with subsequent increases spread out over time, allowing Mr Market a chance to gradually realize that ZIRP isn’t forever after all, rather than force feeding him cold turkey.
Always six more months away. Talk, talk, talk. They can’t do jack. They are stuck and they know it. Raise rates and the whole ponzi collapses. Nobody will willingly step on the brake.
They just have to keep the balls in the air until the next war.
Got mushroom cloud?
The longer the delay it the more damage it will do, but you are right even now even a 1/4 point move will lead to a freak-out.
The Fed has one mandate: to keep the this rigged Ponzi market going long enough for its .1% accomplices to cash out at the top, then by up distressed assets of the 99% for a song when it all goes south.
Seems like Mr Market heard Mr Fischer:
MarketWatch dot com
Dow
-110.24 (-0.60%)
Nasdaq
-19.68 (-0.39%)
S&P
-10.27 (-0.48%)
“They are stuck and they know it.”
Like Charlie Brown preparing to kick the football, I know for certain that this time is different, and Lucy wil not pull the ball away again when I try to kick it.
One of the frustrating things they play off is regional variation. Phoenix is way ahead on the next crash path compared to SoCal. The investor and flipper 40 percent of the market has pulled out already. They are still there and drinking the koolaid in SoCal. Once price gets to a certain point they stop buying and collapse ensues.
An attractive feature of forward guidanceis that is that if the Fed successfully convinces traders that rate hikes are coming in advance, then market adjustment can precede tightening, avoiding the perception the Fed caused a correction.
But this can backfire in case too much forward guidance sans action leads to a “boy who cried wolf” problem.
““There is so much importance given to the first move. But I think it’s misleading,” said Mr. Fischer…”
It’s not misleading - it’s the first sign that the punchbowl is being taken away, and will lead to a major freak out as it always does. And it will be the first sign of the second housing bubble popping, except for those people who fall for the “better buy now while the rates are low” line.
“Mr. Fischer, who served as chief of Israel’s central bank for eight years before becoming the No. 2 U.S. central banker, said the coming Fed rate increases “will be a gradual process.”
This guy gets around.
Why is he in Israel? Meeting with the overlords?
Do you think the Fed governors are deliberately misleading the public
Yes.
Do you think the Fed governors are deliberately misleading the public
Yes.
Though “misleading” may be a touch too harsh—I prefer the term “sabre rattling”.
“sabre rattling”
Aka “why go to all of the trouble of taking action to move the markets the direction you want them to go, when you can move them with mere jawboning?”
Seems like Mr Market begins to doubt that low rates are here to stay.
$2 billion “pay to play” money laundering scheme.
Rich people from around the world give the Clintons big bucks for political influence and the donors get a tax credit - what a scam….
————-
Clintons’ foundation has raised nearly $2 billion — and some key questions
Washingtonpost | Feb 2015 | By Rosalind S. Helderman, Tom Hamburger and Steven Rich
Since its creation in 2001, the Bill, Hillary and Chelsea Clinton Foundation has raised close to $2 billion from a vast global network that includes corporate titans, political donors, foreign governments and other wealthy interests, according to a Washington Post review of public records and newly released contribution data.
The total, representing cash and pledges reported in tax filings, includes $262 million that was raised in 2013 — the year Hillary Rodham Clinton stepped down as secretary of state and began to devote her energies to the foundation and to a likely second run for president.
The financial success of the foundation, which funds charitable work around the world, underscores the highly unusual nature of another Clinton candidacy. The organization has given contributors entree, outside the traditional political arena, to a possible president. Foreign donors and countries that are likely to have interests before a potential Clinton administration — and yet are ineligible to give to U.S. political campaigns — have affirmed their support for the family’s work through the charitable giving.
Clinton partisans do not care about any of this. They really don’t. It is for the greater good. Much like the Messiah, Hillary can do no wrong. There is nothing she can do or be caught doing that would cause them not to vote for her. Nothing.
The gamble they are running is whether there are enough of them to beat the other side when the independents and nonClinton D’s stay home.
Hillary voters are willfully stupid.
Jeb voters are willfully stupid.
Cruz voters are willfully stupid.
Walker voters are willfully stupid.
Etc., etc….
A couple Dem/Independents have told me that they are NOT voting for Hilary. They will write in Elizabeth Warren, or Bernie Sanders, or just leave the top slot on the ballot blank.
They are so frustrated with the Democrats that they are almost willing to let a Republican win just to teach the Dems a lesson. Economically, Dems and Republicans aren’t much different. Hilary is just as warlike as the Republicans. The only thing keeping Dems voting Dem is the recent surge in Evangelical Christianity threatening to put women back into the kitchen.
The only thing keeping Dems voting Dem is the recent surge in Evangelical Christianity threatening to put women back into the kitchen.
Most Evang women I know work and have careers.
That’s part of the whole red state/blue state divide. A lot of the educated coastal liberal types don’t know much about middle American fundamentalists.
A lot of the educated coastal liberal types don’t know much about middle American fundamentalists.
California has no shortage of fundies. In fact, I’d dare say that I had MORE of them as coworkers when I lived there than here in the Centennial State.
My brother is a hard core fundie. One of his daughters is planning on becoming an MD and his other daughter wants to be a pharmacist. Curiously, it’s his son who is “aiming low” and is studying to be a teacher.
Do you know if your nieces believe in evolution? age of earth in excess of 4 billion years? etc..
If my “choice” is HillaryJeb, I’ll write in Bernie Sanders, if he runs as an independent, or Rand Paul. I refuse to sanction crony capitalism by voting for its water carriers in this or any election.
Oi Amigos! Tudo bem? Quanto tempo?
They are so frustrated with the Democrats that they are almost willing to let a Republican win just to teach the Dems a lesson.
Like Ralph Nader taught Dems a lesson? I don’t think so. (Stockholm Syndrome much?)
economically, Dems and Republicans aren’t much different.
Then neither are night and day.
the recent surge in Evangelical Christianity threatening to put women back into the kitchen.
Religion aside, many women would be glad to be “back in the kitchen” but it’s almost impossible nowadays economically. (See above on what the “difference” between Democrat populism and Repub supply-side has wrought on women’s ability to stay at home.)
Clinton partisans do not care about any of this. They really don’t. It is for the greater good. Much like the Messiah, Hillary can do no wrong
I disagree. Let’s look at the reality of the situation and human behavior when confronted by real choices. Clinton sucks, and Dems know she can do wrong but they’ll vote for her anyway because the Repubs are off the reservation.
To say Repubs and Dems are one-and the same at this point in history defies reality.
Sure, and Bush/Walker/Cruz partisans shrug when it is revealed the Koch brothers will spend nearly a billion in 2016 through shadow organizations to get a rightie in the White House.
I do give the mainstream Repub party credit for full disclosure. They’ve made it clear they condone and welcome corporate bribery. It’s what they do and it’s how they function. You do know what you’re getting when you vote (R).
+1
‘Clinton partisans do not care about any of this. They really don’t. It is for the greater good. Much like the Messiah, Hillary can do no wrong. There is nothing she can do or be caught doing that would cause them not to vote for her. Nothing.’
I work with one of those partisan supporters. At times I swear he must know Bill personally based on his support of him.
I’m an independent and no hillary fan but i won’t hesitate to vote for her just to keep the republican taliban at bay.
And another dupe falls for the Republicrat duopoly’s “bad or worse” paradigm. Voting for the lesser of two evils is still voting for evil, and I decline.
Hillary isn’t the president, and is free to organize any charities she wants. Charitable donations aren’t campaign contributions. But it really offends repubs when rich people give money to help poor people - it goes against everything they believe.
How much of that money ended up their pockets and how much actually did any charitable work? Everyone should be against fraud and exploiting charities for personal gain, the fact that some will defend Clinton due to her belonging to the right “tribe” shows how we are becoming more like Africa each day.
” the fact that some will defend Clinton due to her belonging to the right “tribe” shows how we are becoming more like Africa each day.”
As if you wouldn’t be defending her every day if she was the Republican candidate.
I did and do not defend Bush II on this blob. I attacked his immigration policies almost daily and attacked his naïve attempts to bring democracy to the Middle East. Attempts like his Gaza vote, there is an example of a successful policy. (not).
“I did and do not defend Bush II on this blob”
What about on other blobs?
What do you think of Jeb?
What do you think of Jeb?
Hate him I have said on this blog if the choice was between him and Bernie I would vote for Bernie. Now, Bernie’s open border’s talk has me questioning that but I will not vote for Jeb no matter what.
Bad news, I thought I traveling today but I am not leaving until tomorrow.
” I will not vote for Jeb no matter what.”
Wow, that almost makes me want Jeb to get the nomination.
Hold on, will you mournfully tell us how Jeb is going to win anyway? And how , unfortunately, he’s better on most issues than Hillary? Every day?
No, not a dime’s worth of difference between Jeb and Hillary.
Prime, will you click that for me? I’ve misplaced or lost my clicker.
No, not a dime’s worth of difference between Jeb and Hillary.
Click!
How much of that money ended up their pockets and how much actually did any charitable work?
The best part about this kind of legalized bribery/pay-to-play:
- no estate taxes (e.g. they will pass the “legacy” on to Chelsea, who will “work” for the charity for the remainder of her years
- no generation-skipping taxes, when the “estate” similar passes to Chelsea’s children.
It’s brilliant, really.
Gotta love how the hypocrite neo-cons want to restrict freedoms if it fits their needs. Or grow gov for their special purpose and spend billions if it goes to their state.
know your party
http://www.orlandosentinel.com/business/os-florida-home-sales-20150521-story.html
Here we go again.
Biggest year-over-year increases in single-family home prices in Florida markets in April:
1. St. Lucie County … 23.3%
2. Marion County … 19.6%
3. Volusia County … 18.8%
4. Brevard County … 17%
5. Pensacola area … 14.2%
Florida … 11.4%
Metro Orlando … 5.5%
Janet? Are you there Janet?
Biggest year-over-year increases in single-family home prices in Florida markets in April:
1. St. Lucie County … 23.3%
http://www.youtube.com/watch?v=ntcS2Nz1gHY - 252k -
We’re in the money,
We’re in the money;
We’ve got a lot of what it takes to get along
Unbelievable! Port St. Lucie, Deltona, Cape Coral, Palm Bay - all made up towns that that will never be like a real town.
People don’t seem to mind. Vast numbers of retirees move in every year. Of course, one of the main attractions is the low cost of living, which is threatened by these house price increases.
Eerie similar to Florida land speculation from a century ago - lots of fun historical reading on that topic to be had!
A brand new generation of house buyers will be asking “why me?’ in a few years.
Going to be lots of bagholders out there when economic fundamentals catch up to Fed-blown asset bubbles.
http://www.businessinsider.com/case-shiller-home-price-index-march-2015-5
The Greeks elected their Obama. One Big Azz Mistake Athens. Your economy was showing tentative signs of recovery prior to the election. Now, because you have a party in charge that will not face reality, your interest rates are soaring, capital flight is increasing, and investments are not being made in businesses. The austerity you tried to avoid will be even more severe due to the damage. While Ireland and Iceland went in different directions in addressing the housing collapse, they both acted like adults and accepted the consequences of their actions. The Greeks acted like socialists/liberals a.k.a children and thought they could both stay in the EU/Euro and receive the subsidies but avoid austerity. Sorry, that never was a possibility only your adolescent brains convinced you that it was.
More debt doesn’t solve bankruptcy. The shame in loan defaults is that the loans were ever made in the first place.
I doubt that any tentative signs of recovery could be identified.
http://www.brookings.edu/blogs/up-front/posts/2014/12/02-greece-economic-recovery-pelagidis
Interest rates were much lower and employment was just beginning to tick up. The article’s predictions were dead on.
Best be liquidate’in. How much you think the Acropolis would fetch at auction??
When you look at what art work is going for it would have to be in the billions probably tens of billions, if George Soros or someone similar wanted it for the ultimate ego trip.
The Greeks elected their Obama.
Not even.
When Alexis Tsipras shepherds Greece out of a major depression, transcends centuries of his country’s racism in the face of racists, engages decades old enemies like Iran and Cuba and does something as revolutionary as changing the concept of health-care to become a newly understood civilized right, maybe then you can talk about “The Greeks elected their Obama.”
But so far, no.
Obama is like Brazil one big azz failure
No one is even biting on Lola’s line. He may have lost it.
Obviously not.
+1. Thanks for reading and paying attention.
Too many sheeple out there tuned into FOX.
More and more flashing red lights reading “worst since Lehman.”
http://wolfstreet.com/2015/05/25/global-trade-dives-the-most-since-the-financial-crisis/
B…b…but I thought Greece had been “ring fenced” and systemic contagion was inconceivable….
http://www.zerohedge.com/news/2015-05-26/us-equities-tumble-after-greek-talks-cancelled
Greece causes the dollar to be stronger, at least in the short run, which means we will slow down even more since other countries get a competitive advantage due their weaker currencies particularly in the Euro zone.
Strong dollar=weak economy at least in the short term.
Cleveland reaches “excessive force” settlement with Justice Department
Cleveland will now have Loretta Lynch and the Justice Department second guessing their every action
by Hot Air | May 26, 2015
In what is becoming the norm rather than an exception in unusual circumstances, it appears that the federal Department of Justice will now be monitoring the activities of local and state police departments. Cleveland is the latest focus of media attention after the acquittal of Michael Brelo and the previous accidental shooting of 12 year old Tamir Rice, with questions being raised about excessive use of force by the police. But rather than having such questions handled by the city, or even the Governor’s office, Washington is stepping in to offer their own “guidance.”
The city of Cleveland, Ohio, has reached a settlement with the Justice Department over charges of police brutality, according to The New York Times.
The news comes as hundreds took to the streets to protest a judge’s decision not to convict a white police officer in the 2012 fatal shootings of an unarmed black couple. On Saturday, Officer Michael Brelo was cleared in the killing of Timothy Russell, 43, and Malissa Williams, 30, as they sat in their car…
The settlement, the details of which were unknown, could be announced Tuesday, according to The Times. In December, Attorney General Eric Holder said there was reasonable cause to believe that the Cleveland Division of Police engaged in a pattern of excessive force.
—————————————————————————-
Baltimore Bloodshed Continues; 28 Shot, 9 Dead Over Holiday Weekend
May 25, 2015 11:40 PM
BALTIMORE(WJZ)–It’s the deadliest month Baltimore has seen in more than 15 years. More than two dozen shootings over the holiday weekend alone have city police working around the clock.
Now, leaders hope community members come forward to help stop the violence.
From West Baltimore, to the East Side, Govans, to Reservoir Hill–a spike in weekend violence is plaguing all parts of the city. Over the Memorial Day Weekend alone– city police report 28 shootings and 9 homicides.
Baltimore Police say they responded to 6 shootings on Friday night, 7 on Saturday, 5 on Sunday and 10 by night fall on Monday.
baltimore.cbslocal.com/…/ - 138k -
——————————————————————————
12 Killed, 43 Wounded In Memorial Day Weekend Shootings
May 26, 2015 6:16 AM
CHICAGO (STMW) — Twelve people were killed and at least 43 — including a 4-year-old girl — were wounded in shootings across Chicago this Memorial Day weekend, police said.
The 4-year-old, identified by her family as Jacele Johnson, was shot about 8 p.m. Friday in the West Englewood neighborhood. She and her 17-year-old cousin Romare Wilson were inside an SUV in the 7000 block of South Justine when another vehicle pulled up and someone inside opened fire, according to their family and Chicago Police.
The girl was shot in the head and taken to Comer Children’s Hospital in critical condition, authorities said. She has since been upgraded to fair condition, a hospital spokeswoman said Monday morning.
The teen was shot in the chest and grazed by a bullet in the neck. He was in serious condition at Advocate Christ Medical Center in Oak Lawn. A 15-year-old girl standing on a sidewalk nearby was shot in the forehead and was taken to Stroger Hospital, where her condition stabilized, police said.
The weekend’s most recent fatal shooting happened Monday night in the Austin neighborhood on the West Side, police said. About 7:50 p.m., a 17-year-old boy was shot in the back and the leg in the 4900 block of West Erie, police said. He was taken to Mount Sinai Hospital, where he died. The Cook County medical examiner’s office could not confirm the death Monday night.
chicago.cbslocal.com/station/cbs-2/ - 142k -
Our local police need more armored vehicles, grenade launchers, and bayonets.
And camouflage uniforms, so they can blend into the city streets, not so they can play soldier.
So cops will now dress as gang bangers? And their patrol cars will be Escalades with those spinner rims? Or are those out of fashion now?
http://www.youtube.com/watch?v=p4fqYJVGMCE - 221k -
Meanwhile a recent update from the Tribune here in Ch*tcago ILLANNOY - Don’t mover here you won’t like it.
56 shot — 12 fatally — over Memorial Day weekend
http://www.chicagotribune.com/news/local/breaking/ct-chicago-shootings-memorial-day-20150526-story.html
The lesson seems to be…
Stay out of long term ruled democrat cities.
They are not safe for blacks or whites or taxpayers.
It looks like the spring commodity bounce might be behind us.
Aggressive policing saves innocent black lives. It is the inconvenient truth that many do not want to acknowledge. The inner cities will either be run by the gangs or the police and many of those communities will only respect force.
many of those communities will only respect force
Who told you that?
The commodities traders?
It is always interesting when Dan’s mask slips and his inner totalitarian peeks out.
Oddfellow read up about these folks and tell me what you thing: http://rationalwiki.org/wiki/Falun_Gong
Thing= think, so here is an excerpt from the article about the Falun Gong which publishes the paper that gets this board all excited about the imminent collapse of China:
Li Hongzhi himself believes mixed-race people should be outcasts of every human society. He said his practice will send whites to heaven and Asians to Buddhist heaven. Selling to xenophobes. Yeah, he’s selling his belief to anyone with a price discrimination.
The races in the world are not allowed to be mixed up. Now, the races are mixed up and it has brought about an extraordinarily serious problem. Once races are mixed up, one does not have a corresponding relationship with the higher levels, and he has lost the root. Mixed races have lost their roots, as if nobody in the paradise will take care of them. They belong to nowhere, and no places would accept them. Therefore, you find the place where the continents of Europe and Asia meet a desert in the past and a depopulated zone. When the transportation means were not advanced, it was difficult to pass through it. With the progress of modern means, all these are broken through. Thus, races have become increasingly mixed up, which can lead to serious consequences. Of course, I will not go into details. I’m just saying that the higher levels do not recognize such a human race.
Discarded scientific concepts and pseudo-scientific concepts are a large source for Falun Gong’s worldview. They play a smaller part in the propaganda outside China after the crackdown, but they have not been changed in the texts.
“Falun Gong publishes the widely-distributed and multi-lingual newspaper Epoch Times”
From link. People question my sources which are read by every think tank studying China but cannot see that the information from the Epoch Times is pure propaganda because it is consistent with their hopes. What was that saying about people that tell the truth are hated?
Falun Gong is your example of people who only respect force?
Are you a finger puppet of the Chinese Communist Party or a marionette?
Falun Gong is your example of people who only respect force?
+1—I just realized that AbqDan is posting from somewhere in China, and is an official astro-turfer on their payroll.
Seeing what happens in those communities when force is not used. Even democracies respond to violence with violence nothing totalitarian about it. It is how a society responds to non-violent protests that determines whether it is totalitarian.
many of those communities will only respect force
Who told you that?
Maybe John C. Calhoun.
If you think that the dollar can increase by almost 1% everyday, it is over. However, I think days like today have to be rare since our companies are having trouble with the dollar even at these levels.
“our companies”
Globalization was wonderful for them during the credit expansion. As for now, how are the banks doing?
“Commodity Price Drop Not Over, No Strong Rally In Oil: DBS”
http://www.reuters.com/article/2015/05/21/us-lmeweek-asia-dbs-idUSKBN0O615T20150521
Falling prices are the best sign of an improving economy.
Investors Squeeze Trailer Park Renters: “The Economics Are Compelling… There’s a Lot More Poor People Than Rich”
America is filled with lots of poor people these days, and there’s plenty of money to be made off them.
With Wall Street already turning once-homeowners into renters in housing neighborhoods, billionaires and entrepreneurs are now investing in trailer parks, where they are making considerable fortunes off of raising the rent on the poorest among us.
The economic concept is as easy as shooting fish in a barrel.
Generally speaking, these people moved into trailer parks for the cheap rent, and even with rent prices soaring, these poor people have nowhere else to go.
“The economics are compelling… there’s a lot more poor people than rich people,” one investor said.
The London Guardian spotlighted this trending market for moguls, following a bus load of ‘boot campers’ at Mobile Park University who are learning how to profit from the poor, many of whom are ironically found immobile and ‘trapped’ in their mobile homes:
Trailer parks are big and profitable business – particularly after hundreds of thousands of Americans who lost their homes in the financial crisis created a huge demand for affordable housing. According to US Census figures, more than 20 million people, or 6% of the population, live in trailer parks.
It is a market that has not been lost on some of the country’s richest and most high-profile investors. Sam Zell’s Equity LifeStyle Properties (ELS) is the largest mobile home park owner in America, with controlling interests in nearly 140,000 parks. In 2014, ELS made $777m in revenue, helping boost Zell’s near-$5bn fortune.
Warren Buffett, the nation’s second-richest man with a $72bn fortune, owns the biggest mobile home manufacturer in the US, Clayton Homes, and the two biggest mobile home lenders, 21st Mortgage Corporation and Vanderbilt Mortgage and Finance Company. Buffett’s trailer park investments will feature heavily at his annual meeting this weekend, which will be attended by more than 40,000 shareholders in Omaha.
Even for those who own their own trailers, the cost of moving them is insurmountable – with thousands of dollars to relocate a trailer too much a burden to escape the rising floor of rent prices.
At its worst, investors are becoming slumlords with a captive market of poor people, with new pressures from a market that is none too forgiving of the have-nots.
At its best, the opportunities are lopsided and seem to be squeezing those who can least afford it.
Today, the profits are virtually assured, with rent prices often ‘more than doubling’ over night.
“Raising the rent is typically part of the day one purchase, because often the ‘mom and pop’ [previous, family-run owner of a park] has not raised the rent in years so it’s far below market.
“We traditionally raise our rents by an average of 10% a year or something like that, and it’s pretty much true for the industry. Our world record [rent increase] went from $125 to $275 in one month.”
Not so much back in the 50s and 60s. America was too affluent then, and this kind of investing in low income mobile home housing wasn’t possible – or at least not readily profitable.
Frank Rolfe, who runs Mobile Home University, explains why he focuses on family trailer parks, and why he encourages others to do so as well:
“Family parks tend to have higher expenses. They have households that use more water, they wash cars, whatever. But the big thing is they can really tolerate rent increases really well. So family parks are our favorite parks. Almost all the parks we have, with rare exceptions, are family parks. And it pretty much works throughout America because there’s so much need for affordable housing right now. It didn’t work at all back in the 50s and 60s – there were no poor people.”
“Today, there’s a huge number of poor people, and there’s more poor people like everyday.”
A hand out shown in the video reads, in bold: “Can tolerate rent increases better.”
Raising rents is the whole point of buying a trailer park, of course.
“The rents do not go down,” prospective park buyers are also told.
That pretty much sums up how a class of rent seekers are squeezing the poor for more money, and making it even harder for them to get ahead.
Of course, these 1-percenters and entrepreneurs are just swimming in the waters that we all live in – with market forces creating massive whirlpools and tidal forces after six plus years of cheap money from the Fed’s quantitative easing for those at the top and a difficult if not crushing job market for average and struggling Americans, many of whom are struggling just to make ends meet.
Many of the park residents interviewed in the Guardian’s video are on fixed income or working low wage jobs. Most said they understand the business aspect of raising rents, but thought the rates were too high to handle from a personal standpoint.
One resident, who liked his park, said he was forced to move because of increasing rents, while discussing other residents who were selling their trailers for $100 – or even giving them away – because they couldn’t find anyone to buy them.
“They are trapped.. actually they are,” the resident told the Guardian’s Rupert Neate.
Neate interviewed trailer park mogul Frank Rolfe about the impact rising rents were having on poor residents:
“But did you feel bad at all, with people on social security or earning minimum wage, and then suddenly they’ve got to pay double the money?”
“I didn’t feel badly about it, because I’m bringing it to market, and I don’t dictate what market is. So to be honest with you, if we hadn’t raised the rent, the park wouldn’t exist, because it would have been made into a different use.”
That may be, but as many have pointed out, the effect of Federal Reserve intervention to the 2008 crisis has been a massive inflation of asset prices, putting more pressure on everyone down the line. Wolf Street noted that: “Speculative buying drove up prices beyond the reach of many potential buyers.”
Rolfe said he sends letters to his residents ahead of rent surges, but few, if any, move on account of the extra cost:
“If you don’t like this or you think you can do better, here’s a list of all the other parks in Grapevine and a list of the owners,” he said in the letter. “Go ahead, call them if you want to move. How many customers do you think we lost? Zero. Where were they going to go?”
And it’s not just the poor who are facing these challenges.
It is worth noting, as SHTF has before, that homeownership is now at its lowest point since the 1980s, and it is primarily affecting young, middle class families who would have been investing in their biggest and most personal asset, but instead, find themselves renting single family homes from distant brokers on Wall Street:
The American Dream is dissipating at a record pace, Wolf Richter argues:
Homeownership in the fourth quarter dropped to 63.9% on a seasonally adjusted basis, the lowest level since Q3 1994, according to the Commerce Department. In all of 2014, homeownership plunged by 1.2 percentage points, the largest annual drop in the history of the data series going back to 1980.
These are the age groups where the first-time buyers are concentrated. And they’re being sidelined.
That’s because home owners, particularly first time buyers, are being priced out and pushed way, while renters – in both apartments and homes – are rising.
Since 2008, homeownership has been fading in all age groups. But in these two age groups, it plunged respectively 6 points and 7.9 points!
And the bitter irony in the report? The vacancy rate in the rental market dropped to 7.0%, the lowest since 1993. America is turning into a country of renters.
Along with the decline of the middle class, come the rise of Wall Street mega-landlords and, indeed, mega-slumlords putting new rent pressures on the poor.
With Wall Street already turning once-homeowners into renters in housing neighborhoods, billionaires and entrepreneurs are now investing in trailer parks, where they are making considerable fortunes off of raising the rent on the poorest among us.
I was under the impression that the poor were all living in posh nabes with their Section 8 vouchers.
Some of those quotes read like something out of the Onion:
“Today, there’s a huge number of poor people, and there’s more poor people like everyday.”
“We traditionally raise our rents by an average of 10% a year or something like that, and it’s pretty much true for the industry. Our world record [rent increase] went from $125 to $275 in one month.”
“Go ahead, call them if you want to move. How many customers do you think we lost? Zero. Where were they going to go?”
I lived in a trailer park years ago. The park owner lived in town, in a house. He, at times, pointed out I should buy the trailer I lived in since it would benefit me with a fixed cost, etc. Glad I only stuck around for a year out there. No doubt, the owner was thinking of unloading the metal box on me and having me responsible for upkeep and tenancy and rent of it in perpetuity. Nice guy. Just a businessman, that is all folks.
Why is anyone surprised at this? This is the free market in action. Isn’t this what HBB wants? Get the government out of housing? Very well — so now we have have investors bidding up the prices to each other and setting rents as they please. At worst, no one will afford the rents and will live a shanty, while the investors will amortize the loss as a tax write-off.
Renting blows and this kind of crap always happens.
Every once in a while things get so unbalanced its worth a risk to sell and rent but you’re fighting the FED doing this , a tough fight for sure.
The government loves slum lords better than poors.
All housing that should be cheap will be expensive as long as the majority of the housing market is artificially inflated. Allow SFHs to drop to where incomes suggest they should be and watch trailer park lot rents go back to $125 a month.
residents who were selling their trailers for $100 – or even giving them away – because they couldn’t find anyone to buy them.
I’m waiting for these slumlords to buy the trailers from the displaced owners and renting them out to other renters.
No, the slumlords are waiting for their big payday when a developer wants to buy the land . . .
Exactly. Which is tricky business in Boulder because you can’t just do simply that…the city will force you to keep renting to the low income people that depend on you. They don’t allow renting the trailers because then all the section 8 people come and the place truly disintegrates. As it is, they have a lot of power over the tenants and everything runs the way the want it to.
Over time they raise the rents and refuse to allow trailers manufactured before X date be sold unless they are moved out and slowly move toward the day when they can sell out for a big payday.
I’ve seen this happen in Fort Collins. Trailer parks get shut down, tenants are evicted and the land is redeveloped into something else.
Is also happening in Kirkland, WA right now:
http://www.komonews.com/news/local/Kirkland-community-forced-out-to-make-room-for-high-end-homes-304951191.html
The best cure for grossly inflated prices is higher prices.
Remember….. housing demand is at 20 year lows and falling.
PRODIGY
Your muffler bearings are a squawking again Poet.
Davis, CA List Prices Sink 4% YoY
http://www.movoto.com/davis-ca/market-trends/
At the moment euphoria prevails… but the global collapse will be spectacular.
I do hope the sacking of Washington, Manhattan, Silly Valley, etc. will be part of that.
Those are the places you DON’T want to be in when it does.
I suspect flyover will also be sacked and plundered. The uber rich will hire their own private armies to guard their enclaves, and if it gets really bad they’ll hop onto their Gulfstreams and fly to their safe houses in New Zealand.
The same sheeple who feel for “hope and change” or the even worse GOP “alternatives” will be the first to vote for any messiah who offers them “security” in exchange for the loss of what few liberties they have left.”
https://www.youtube.com/watch?v=KKvvOFIHs4k
Please note that Obama/US troops were thrown out of Iraq by Bush’s agreement and his “Mission Accomplished - http://en.wikipedia.org/wiki/U.S.%E2%80%93Iraq_Status_of_Forces_Agreement -
ISIS formed in Bush Iraqi torture prisons, esp. camp Bucca - http://www.cbsnews.com/news/the-origins-of-isis-finding-the-birthplace-of-jihad/
“Here’s a BushToll nugget that pretty much speaks for itself. When George W. Bush took office on Jan. 20, 2001, the S&P 500 stock market index stood at $1,342.54. The day he left office, it was $805.22, a drop of 40 percent”
http://www.bushtoll.com/2012/10/08/the-bush-stock-market-collapse/
The stock market has more than doubled under Obama.
Oh, and Republicans have controlled BOTH House and Senate FOR OVER SIX MONTHS.
Read more: http://blogs.cfr.org/cook/2015/05/26/lost-in-iraq/#ixzz3bGmqd01m
Redfin CEO says all markets (but Miami) are red hot. People trying to lock in want to buy now. If you don’t need to borrow wait ’til fall.
Denver and Seattle are particularly hot as people flee California.
(I heard him on the television.)
oooooooph..
Seattle, WA Sale Prices Crater 7% YoY
http://www.zillow.com/seattle-wa-98119/home-values/
WRONG!
Seattle housing prices UP 7.5% YOY:
http://seattlebubble.com/blog/2015/05/26/case-shiller-home-prices-shot-up-in-march/
Data my friend, (good) data!
He keeps saying that the bubble has popped, but I keep seeing houses selling quickly with multiple offers.
The bubble has definitely not popped yet in Seattle. That’s all that I am pointing out. I don’t know why HA can’t seem to wrap his mind about this.
Do I think it will eventually? Yes.
Has it happened yet? No.
I’ll be the first one to post when the market turns here. As of now, multiple-offer bidding wars are the norm rather than the exception.
A house just behind me in Redmond just sold for at least $40K over asking after 4 days on the market - 2300SF 3BR, built in the 1980s, for somewhere around $800K. Still plenty of DINK techies that want to live close to Microsoft.
Notice that HA didn’t pick out Seattle as a whole, but just one zip code in Seattle.
Small sample sizes are his friend…as he looks through all the data in a particular market, he often finds a small sample that bucks the overall trend.
Large sample sizes are the friend of those looking for reality.
Large sample sizes are the friend of those looking for reality.
Exactly. If you cherry pick any data set you can find something to support any argument. It is why I always argue for big picture data.
Speaking of big picture this article expects drilling to resume at $85 to $90 a barrel, I still think $80 will be enough to they exhaust more drilling spots, should be interesting:
http://www.valuewalk.com/2015/05/oil-prices-vs-rig-count/
Old indices aren’t real time prices my friend. Especially from a paid hack operating as a “blogger”.
Data my friends data~
Redmond, WA List Prices Plummet 13% YoY
http://www.movoto.com/redmond-wa/market-trends/
And don’t forget plunging oil prices.
Update: Crude Oil Plummets 43% YoY As Global Energy Demand Craters
http://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic
If you cherry pick any data set you can find something to support any argument….It is why I always argue for big picture data.
I don’t think so Adan.
I think you’re much more likely to cherry pick a 1998 type event “to support your argument” than to argue the “big picture”.
Like this big picture.
http://www.theglobalwarmingfoundation.org/charts/
Try 400000 years of data shows that we are 2 degrees Celsius cooler than we should be.
400000 years of data shows that we are 2 degrees Celsius cooler than we should be
No. 400000 years of data? What about 1998? That’s my point. You are not consistent.
If you cared about your “400000 years of data” you would not constantly cherry pick your 1998 type event “to support your big picture argument”.
Falling prices my friends…. You too you DC streetwalker.
Frisco, TX List Prices Crater 8% As Oil Prices Dive
http://www.movoto.com/frisco-tx/market-trends/
HA - you truly are an idiot. Your movoto data for Redmond is completely bogus. I live here and have been looking lately. Four days on the market is the norm for our area right now.
Your beef is with the data my friend.
Kirkland, WA List Prices Plummet 15% YoY As Prices Fall Statewide
http://www.movoto.com/kirkland-wa/market-trends/
Your beef is with the data my friend.
Kirkland, WA List Prices Plummet 15% YoY As Prices Fall Statewide
http://www.movoto.com/kirkland-wa/market-trends/
Redmond, WA List Prices Plummet 13% YoY
Note that Median $/Sq. Ft. is up 5% YoY.
The median list price is down because they are listing smaller houses (10% smaller); price per square foot is still rising in Redmond.
People don’t roll up to the house store and say ‘gimme’ `1500sq ft of house. And toss 10 sq ft in the back to go.
Sale prices are falling. List prices are falling. Get over it and get on with your life.
Sale prices are falling. List prices are falling.
If that were really true, it would show up in the per-square-foot data. But it is not. You don’t seem to like the data, my friend—except for the data-points that you cherry-pick.
I’ll repeat for those slow on the uptake:
“price per square foot is still rising in Redmond.”
It’s really is true my friend. Its showing up in lower transaction prices Year over Year.
Capiche?
Well FU is in the name:
http://www.shanghaidaily.com/business/finance/Zhongfu-defaults-on-bond/shdaily.shtml
Speaking of FU, PETA completely loses it:
http://www.shanghaidaily.com/world/Farm-worker-swears-at-sheep-PETA-files-legal-complaint/shdaily.shtml
http://www.shanghaidaily.com/business/economy/IMF-confirms-yuan-no-longer-undervalued-after-appreciation/shdaily.shtml
Goon, is this a rally the base link from Drudge?
http://freebeacon.com/national-security/terrorist-rockets-hit-israel/
More on the incident.
http://www.haaretz.com/news/diplomacy-defense/1.658196
Interesting article I talked about this years ago but it was just speculation:
http://wattsupwiththat.com/2015/05/26/the-role-of-sulfur-dioxide-aerosols-in-climate-change/
Is the pot be closely watched anymore?
Good article on Iraq:
http://www.vox.com/2015/5/26/8657965/isis-pollack
Does the Fed really need to eventually unwind its balance sheet, or is that just talk?
If they truly need to do unwind, what are the reasons?
ft dot com > Markets >
Capital Markets
May 26, 2015 10:21 am
The taming of the Fed’s balance sheet
Robin Wigglesworth and Sam Fleming
Federal Reserve Chair Janet Yellen testifies at a Senate Banking, Housing and Urban Affairs Committee hearing on “Semiannual Monetary Policy Report to Congress” on Capitol Hill in Washington, February 24, 2015. World shares held near record highs on Tuesday after Greece produced a list of proposed economic reforms, and the dollar rose on expectations Federal Reserve chair Janet Yellen would signal the Fed was still moving towards raising interest rates. REUTERS/Kevin Lamarque
The exact timing of the Federal Reserve’s first interest rate rise is uncertain, but even less clear is what will happen to the $4tn pile of bonds the central bank amassed during the financial crisis.
Optimists take the view that, like a skilled pilot, Fed chairwoman Janet Yellen will be able to bring the size of the balance sheet down smoothly and steadily without hitting too much turbulence.
Pessimists, however, believe the pilot is flying blindly through dense clouds with a faulty radar and constant risk of storms, making the policy normalisation process particularly risky.
“For me the new thing to look out for is what they do to the portfolio,” says Robert Michele, chief investment officer at JPMorgan Asset Management. “We know about moving the [interest rate] corridor. What we should be worried about is what they do with the balance sheet.”
The Fed’s strategy for reducing its bloated balance sheet has evolved over time, but in September policy makers said the Fed will cease or start phasing out reinvestments only after it first begins increasing short-term interest rates. The balance sheet would shrink in a “gradual and predictable manner”, but the details were left unclear — as well as the timing, which will depend on how economic and financial conditions evolve.
One market concern is that allowing assets to roll off automatically as they mature could lead to a jagged path of balance-sheet reduction. BlackRock’s Investment Institute pointed out in a recent report that a third of the Fed’s entire Treasury portfolio, about $785bn, comes due by the end of 2018. Allowing the balance sheet to deflate that quickly could spook markets.
“Letting these bonds run off represents an additional tightening of monetary policy — a dynamic that may well have greater impact on financial markets than the ending of [zero interest rates] in the short run,” the BlackRock report said.
…
They dont really have to do anything but print more cash as needed to cover losses.
If they truly need to do unwind, what are the reasons?
The only reason that I can imagine that could ever cause them to unwind the balance sheet would be runaway inflation.
My gut says strongly that they will bury it at least until it matures, and more likely roll it over even when it does.
Disclaimer: I don’t consider King World News to be a credible source of information, as they seem to have an agenda of causing fear-driven stampedes of consumers into precious metals. That said, any thinking person can’t help but contrast China’s massive buying of physical gold with the Fed’s ongoing debasement of the dollar and encouragement of reckless speculation with never-ending “stimulus” created out of thin air. Do the Chinese intend to back the Yuan with gold? If so, the dollar’s days as the world reserve currency are numbered. Of all the sins that can be laid to the account of the Fed, that just might be the worst.
http://kingworldnews.com/u-s-scared-to-death-as-china-just-secured-larger-flow-of-gold-into-china-as-part-of-plan-to-back-the-yuan-with-gold/
Of all the sins that can be laid to the account of the Fed, that just might be the worst.
Yes, and it would be probably this self-inflicted wound that will kill them, not Liz Warren that gave the audit the Fed bill forty whacks.
Yes, this is the thing that really gives me nightmares - if we lose reserve currency status, we’re toast. So how does the global banking cabal deal with China? Are they the wild card in the deck?
What if China, Russia, and the Saudis agree on a new currency backed by gold/oil? Total speculation on this, but I wouldn’t put it past China to make a move sometime soon . . . interesting times we live in, eh?
Most folks reserve our currency to buy oil. They usually reserve it in the form of treasuries .
Would you reserve a currency yielding 2%?
I would rather reserve good wine and fine art.
Also they reserve our currency because we are the cleanest shirt in the dirty laundry.
The ECB and BOJ are trying to print themselves out of bad political mistakes.
I have a hard time believing Yellen & Co. are so utterly clueless that they can’t see the potential threat to the dollar coming not just from their insane money-printing, but also from China’s accumulation of gold in preparation for a possible gold-backed currency. As such, Yellen may be forced to raise rates prematurely if the dollar is to have any credibilty whatsoever as a reserve currency.
If the Chinese want to do something so silly as going to a gold standard, be my guest. No credible economist backs the gold standard because it’s too inflexible. It causes wild swings in prices for the wrong reasons. You don’t want to tie a trillion dollar economy to the relative abundance or scarcity of a yellow rock.
Yeah, because money backed by nothing but “faith and credit” has worked out so well for the purchasing power of the middle and working class. Moron….
Yes, like the federal reserve has made the economy so stable. Keep drinking the Kool-Aid.
It can be any commodity, scarcity is preferred.
We need longer loan time frames and lower interest so people can afford home payments and borrow more on margin to buy stocks.
If so, the dollar’s days as the world reserve currency are numbered.
Its days certainly are numbered, as is the case with every human institution. The problem is that no one knows what the number is.
Yeah, King World News looks another crackpot website.
Clinton Foundation Donors Got Weapons Deals From Hillary Clinton’s State Department
Under Hillary Clinton, the State Department approved $165 billion worth of commercial arms sales to 20 nations whose governments had given millions to the Clinton Foundation
by David Sirota, Andrew Perez | International Business Times |
May 26, 2015
Even by the standards of arms deals between the United States and Saudi Arabia, this one was enormous. A consortium of American defense contractors led by Boeing would deliver $29 billion worth of advanced fighter jets to the United States’ oil-rich ally in the Middle East.
Israeli officials were agitated, reportedly complaining to the Obama administration that this substantial enhancement to Saudi air power risked disrupting the region’s fragile balance of power. The deal appeared to collide with the State Department’s documented concerns about the repressive policies of the Saudi royal family.
But now, in late 2011, Hillary Clinton’s State Department was formally clearing the sale, asserting that it was in the national interest. At a press conference in Washington to announce the department’s approval, an assistant secretary of state, Andrew Shapiro, declared that the deal had been “a top priority” for Clinton personally. Shapiro, a longtime aide to Clinton since her Senate days, added that the “U.S. Air Force and U.S. Army have excellent relationships in Saudi Arabia.”
These were not the only relationships bridging leaders of the two nations. In the years before Hillary Clinton became secretary of state, the Kingdom of Saudi Arabia contributed at least $10 million to the Clinton Foundation, the philanthropic enterprise she has overseen with her husband, former president Bill Clinton. Just two months before the deal was finalized, Boeing — the defense contractor that manufactures one of the fighter jets the Saudis were especially keen to acquire, the F-15 — contributed $900,000 to the Clinton Foundation, according to a company press release.
The US closed some massive arms deals with the Shah of Iran in the years leading up to his overthrow. Having a well-equipped military is no guarantee of long-term stability or security.
http://www.businessinsider.com/saudi-arabia-is-on-pace-to-set-a-new-record-in-executions-2015-5
Bad guys fighting bad guys in Iraq - remind me again why we should sacrifice more American blood and treasure in this quagmire.
http://english.alarabiya.net/en/News/middle-east/2015/05/26/Pentagon-slams-unhelpful-Iraqi-code-name-for-Ramadi-offensive.html
http://www.motherjones.com/politics/2013/11/wall-street-buying-foreclosed-homes
You can hardly turn on the television or open a newspaper without hearing about the nation’s impressive, much celebrated housing recovery. Home prices are rising! New construction has started! The crisis is over! Yet beneath the fanfare, a whole new get-rich-quick scheme is brewing.
Over the last year and a half, Wall Street hedge funds and private equity firms have quietly amassed an unprecedented rental empire, snapping up Queen Anne Victorians in Atlanta, brick-faced bungalows in Chicago, Spanish revivals in Phoenix. In total, these deep-pocketed investors have bought more than 200,000 cheap, mostly foreclosed houses in cities hardest hit by the economic meltdown.
Wall Street’s foreclosure crisis, which began in late 2007 and forced more than 10 million people from their homes, has created a paradoxical problem. Millions of evicted Americans need a safe place to live, even as millions of vacant, bank-owned houses are blighting neighborhoods and spurring a rise in crime. Lucky for us, Wall Street has devised a solution: It’s going to rent these foreclosed houses back to us. In the process, it’s devised a new form of securitization that could cause this whole plan to blow up—again.
I’m the cleanest dirty shirt around here.
18 months ago, when this article was written, it had already been going on for 18 months. Now that there have been 3 years of double digit price increases, time to dump these “rentals”
In the last two elections, 95% of the electorate has willingly bent over for Wall Street by voting for its Republicrat water carriers. I suspect that percentage might slip, though not by much, once Wall Street goes on a last great looting spree of pension funds.
http://www.zerohedge.com/news/2015-05-26/martin-armstrong-warns-kiss-your-pension-fund-goodbye
raymond, they have u by the b@lls.
Not a fan of Ann Coulter, but I’ll give her props for calling out Comrad Pelosi and the DNC on their open-borders schemes for a permanent Democrat Supermajority.
http://www.amazon.com/Adios-America-Ann-Coulter/dp/1621572676
It may backfire if the immigrants are dumb enough… poor, stupid people tend to vote republican.
You mean Democrat.
Chinese bond defaults are starting to come fast and furious…third so far this month. Hmm….
http://www.bloomberg.com/news/articles/2015-05-26/china-beverage-bottle-maker-says-it-will-miss-full-bond-payment
Region IV