Bits Bucket for June 4, 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.
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Name:Ben Jones
Location:Northern Arizona, United States
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Suppose you woke up one morning to discover yourself living on a strange planet where money had evolved from a medium of exchange to support a free enterprise economy, into a centrally-controlled, electronically executed system of wealth redistribution.
How would you cope with the situation at hand?
“How would you cope with the situation at hand?”
Rent
Wine
Lovey time with wife
Post here
Cool…we seem to be on the right track over here on the Left Coast.
houses appreciate rapidly usually.
usuallyrarely in historyRobert Shiller: “Houses Depreciate”
http://www.pragcap.com/robert-shiller-dont-invest-in-housing
Yes they do Mr. Shiller. Yes they do.
As a renter whose coworkers live paycheck to paycheck, while I buy what I want with the money I saved by renting, I appreciate the fact that houses do indeed depreciate.
Of course, we already have a system that heavily favors the “in the know” people at the top who have foresight and a good starting position, with a few bones thrown to people at the bottom to keep them complacent. The “invisible hand of the market” has become increasingly perverted from the 70s until today. Usually the people running around shrieking “b-b-but the FREE MARKET!” are unknowingly brainwashed by truly wealthy into being their mouthpieces.
1. Understand how the system works.
2. Figure out how to work the system to benefit you/your fam.
3. Profit.
You need capital to do this; it’s most helpful if this comes from your family, otherwise you have to waste a decade or two of your own saving it up. You also need to be able to make some connections, so it helps to be able to signal the right things to the right people. If you’re merely a good programmer, you end up doing the work. If you’re a good programmer who went to the right school and can get a meeting with a VC, you get to run the show. Same for any industry, to different degrees. BTW, there’s nothing wrong with being the person doing the work, it just means you never get anything beyond a token equity stake in your life. Sad but true. Best to learn to deal with it and take the steps to change it.
Downlow Joe has entered the building
“Of course, we already have a system that heavily favors the “in the know” people at the top who have foresight and a good starting position …”
… and can borrow lots of money for next to nuthin’.
That, that last part, sort of helps a wee bit.
What’s really neat if you are connected is the money that you get to borrow for next to nuthin’ has the same buying power of the money that less-than-connected schmucks toil for every day of their lives.
What’s the neatest of all is somebody that is so well-connected that he gets to become a CEO of a huge corporation (huge corporation = a huge pile of other people’s money) and thus this CEO is in an excellent position to set his corporation on a course of borrowing lots and lots of money in order to buy up lots and lots of corporate stock and this buying adds value, adds lots and lots of value, to the stock options he relentlessly gets granted.
Lotsa grousing over what the other guy has, but Joey is right. You gotta go out and get yours, first and foremost. Education and hard work. Like anything in life, a little bit of luck and a lot of discipline and perseverence.
Also the soon to be superfluous 85 percent have an overall average standard of living higher than at any time in history.
“You gotta go out and get yours, first and foremost.”
1. Borrow OPM.
2. Buy house.
3. PROFIT!
What you want is out there. You just have to take it from the bastards that have it.
That’s exactly right. Yes, it’s terrible that our country discourages working and responsibility by a perverse set of incentives for the lowest rungs of society. But the $$ involved are actually minimal compared to a) structural policies favoring people who are born into money or can make the necessary connections which are far superior to actually doing good work and b) entitlements spending overwhelmingly paid to people who are at their least productive point in life, diverting money away from investing in future potential.
The US, Japan, and Germany all have this problem. China will soon have it, too. If given a clean slate, no one would structure an economy to give its largest rewards primarily on the basis of connections or family money. Similarly, you would never want a system that was unable to invest in its own future bc of obligations like unlimited healthcare for old people. Safety net, yes. But we get the government we elect and we all know what groups take the time to vote. It’s their right. But it’s also important to realize that this is a very serious barrier to economic growth.
We spend time in this country arguing over relatively minor things and skip over the big ones.
“We spend time in this country arguing over relatively minor things and skip over the big ones.”
A work of art.
1. Dumb ‘em down.
2. Profit.
“2. Figure out how to work the system to benefit you/your fam.”
Vote buying LBJ took care of that responsibility.
Can you explain further? I can’t tell what you mean? Do you mean to suggest that people who rely on Medicaid or section 8 or food stamps are the big winners in all of this?
FWIW, I think those programs are frequently abused. However, focusing all our energy on those things doesn’t even make a dent in the real national issues. These are a very small drain on resources, which anyone who looks at the #’s can see. Shaniqua or Billybob McTeaBilly can get his $150 a month in food stamps and a $500 section 8 voucher… but this pales in comparison to the actual drains on our economy.
I’m not sure how I can say this differently. I think we should limit/phase out these benefits to encourage resourcefulness and self-reliance. However, that does NOTHING to address the real issues. The much larger fact about our economy is that to win you need to have an equity stake in something large enough that it matters. And it especially helps if you are smart enough and/or connected enough to structure your enterprise in such a way that you avoid taxes that are applied to earned income (1099/W-2). Basically, if you work for 1099 or W-2, you are a sucker in the big scheme of things.**
Lastly, and most overlooked, with very few exceptions, you need to be part of the “ownership” by a fairly early point in life in order to escape the rat race entirely. Humans just have a certain tendency to get pigeon-holed by a certain point. I saw this very strongly in my case, I didn’t want to be some idiot lawyer toiling away for the client companies forever, I wanted to be the client company. You have to make that move pretty early on and not sell yourself short. It also helps to be agnostic about the whole situation and not see it as “selling out” or “becoming part of the problem”. It’s just seeing the situation for what it is. In our economy, the people who make things (coders, pipefitters, etc.) can never win. The policies of the 2 big parties virtually assures this.
** There are obviously exceptions, but not everyone can be a movie star, musician, or star athlete. And, if you haven’t noticed, even movie stars and athletes don’t want to rely on 1099/W-2 income anymore, they want to be the PRODUCERS of their own movies or to OWN their own sports marketing fund, which is specifically structured to avoid 1099/W-2 taxes. Notice how many movie stars create a “production company” so they can get producer credits on their own films and the films of others? You think this is a coincidence? No one “in the know” wants to be paid by w2 or 1099, trust me.
“Lastly, and most overlooked, with very few exceptions, you need to be part of the “ownership” by a fairly early point in life in order to escape the rat race entirely.”
Borrow as much as possible to buy the biggest home you can afford in order to maximize your tax-free capital gains.
I think we should limit/phase out these benefits to encourage resourcefulness and self-reliance.
A lot of the people who use Medicaid, food stamps, etc. work for a living. They’re eligible for those programs because their jobs pay very little. It’s hard to imagine a scenario in which eliminating those programs would cause those people to get better jobs. There are a fairly small number of good jobs in the US economy.
By all means, let’s keep the tax break for companies that ship jobs to China. It’s John Boehner’s number one plan to help the American economy. All that money going to China will eventually trickle back here, right?
Liberace!
“How would you cope with the situation at hand?”
I’d reduce my standard of living, save money from my income thereby, and then spend on a cash-only basis quite prudently on things that further reduce my expenses or reduce my dependency on suppliers.
Oh, oh wait, that means I’d feel poor and look poor. Jesus Christ, I can’t do that! My neighbors would sneer and laugh at me. My wife or GF would sneer and laugh at me. My co-workers would sneer and laugh at me. My family would sneer and laugh at me. So I guess I’d just keep borrowing and spending until I fell into bankruptcy, foreclosure, divorce, stress-related hospitalization, etc.
Note the previous paragraph may be sarcasm, but it’s what people tend to do. The American middle class is deranged.
Plot a coup from my secret lair, dozens of miles beneath the earth’s crust.
2brony has the day off, and I’m busy, so today’s rally is self-serve. Help yourself:
http://www.drudgereport.com
What are 2b’s thoughts on the Hastert sex scandal/hush money? Has he tried arguing it is evidence of IRS/FBI tyranny?
Both parties are full of scum, obviously, so it’s always amusing when 2b trumpets DEM crimes and completely ignores/justifies GOP crimes. Reality is, with the way the media works and elections require crazy amounts of private $$, normal people are strongly dissuaded from running for office. It basically ensures the mix of loud-mouth simpletons, power-hungry sociopaths, and kooks that are lining up to run for president on both sides of the aisle.
Supposedly Hastert is going to be arraigned today.
Is it possible for him to make some sort of deal? Like ratting out some “folks” in exchange for leniency?
I assume you don’t mean crimes related to his suckling of young boys back in IL?
You mean for crimes related to his structuring? It sounds amazing, but it seems like Hastert himself handled the withdrawals by actually going to a bank with a briefcase. And he took out $50,000 cash several times, then later took out just under $10,000 on something like 100 trips to the bank… amazing. Even if he was the most non-partisan non-political person in the world, the bank and the Feds would pick up on this. It’s funny, Hastert was literally the speaker of the house and one of the sponsors of this legislation when it passed in the mid-00s.
As a former extremely pro-business congressman, speaker of the house, and lobbyist for corporations, Hastert undoubtedly knows about a lot of crimes. It would be interesting to see if he ever speaks up. He doesn’t have a wife or kids to worry about. And it would give him a shot at redemption.
On a side note, seems really interesting that congress people and the media all knew that Denny was gay, but he never came out bc of his home state constituents? (He was living/partnered with one of his male staffers for a while, and might currently be, I’m not sure.) This always baffles me about Lindsey Graham and 5-6 other current GOP senators and congressmen who are _obviously_ gay but no one is allowed to say it out loud. How does a person get to be 50 or 60 yrs old, have a position of power, and still hide his sexuality as if it is some dirty secret? And how does the GOP base not know? Or do they just not care as long as the closeted guy votes the party line?
He does too have a wife and kids to worry about.
“Hastert has been married to Jean Hastert (née Kahl) from 1973 to the present.[7] They have two children, Ethan and Joshua.[7] Hastert’s older son, Joshua, was a lobbyist for the firm PodestaMattoon,[125] representing clients ranging from Amgen, a biotech company, to Lockheed Martin, a defense contractor. This provoked criticism from Congress Watch: “There definitely should be restrictions [on family members registering as lobbyists] … This is family members cashing in on connections … [and it] is an ideal opportunity for special interest groups to exploit family relationships for personal gain.” Joshua rejoined that he does not lobby House Republican leaders.[126]
Hastert’s son Ethan ran in 2010 as a Republican for his father’s old congressional seat (Illinois’ 14th congressional district), but was defeated in the primary by Illinois State Senator Randy Hultgren.[127] Hultgren received 55 percent of the vote, while Hastert received 45 percent.[127] In 2011, Ethan won a seat on the village board of Elburn, Illinois.[128] Ethan left the Elburn village board in 2014 because he and his family moved to nearby Campton Hills.[129] Ethan is a partner at the Chicago office of the law firm Mayer Brown.[5][130]”
http://en.wikipedia.org/wiki/Dennis_Hastert
And yes, I do mean the crimes related to structuring. That’s what the FBI seems to be interested in, that and the fact that he lied about it. No one seems to be going after him for pedophilia, although I would imagine the Yorkville school district is hearing from a coupla of his former “students” right about now.
The other thing is, it seems his blackmailer is scot-free. Gets to keep the money and all that.
“Gets to keep the money and all that.”
No income taxes (extortion, forgiven debt, tips, etc.) due?
LOL, I’m sure there’s some income tax due, there always is. Probably penalties if it wasn’t reported as income. I guess, when you put it that way, his blackmailer will have to pay the piper somehow, even if he isn’t prosecuted for blackmail.
My main question here, though, is if Hastert is, even as I type this, being sweated by the FBI. I hope so, because I’d like to see Jeb’s campaign announcement cancelled. Meaning, I’m hoping Hastert has something that can be solidly linked to shrub.
I don’t know, I normally see the conservatives taking the position “hang em” when their own are caught being crooked. I also normally see the feelings crowd on the other end defend their guy to their last breath, even when caught red handed and obvious scum.
Maybe this is my own confirmation bias at work, but I don’t think so.
I normally see the conservatives taking the position “hang em” when their own are caught being crooked
We certainly didn’t see that here.
He’ll get the Duggar treatment from both sides.
Hatert arraignment has been postponed as noted in the Trib a couple of days ago - no reason as to why this has happened.
Interesting, rj. Probably he is in confab with the FBI and they’re turning him, is my guess.
Stay tuned.
Wait, Hastert is married? hahahahahaha.
That blows my mind. He was known to be “living with” one of his male staffers in DC for a long time. Hastert being gay wasn’t really a secret.
But I always thought he was more like Lindsey Graham than Larry Craig or Charlie Crist.
It adds a whole new layer to this thing if Hastert is married and had kids. Like, it’s not really just your own money you’re using to pay off some male students you sexually abused. I’m sure his wife knew nothing of this. I wonder if she knew he was gay all along. I wonder if she’ll leave him like McGreevy’s wife did, or will stay around like Larry Craig’s wife has.
“It adds a whole new layer to this thing if Hastert is married”
You are so what’s the difference Liberace?
Sorry RAL, I haven’t diddled any underaged boys. Perhaps you can tell us about your experiences?
You seem to be obsessed with the notion Liberace.
It’s been a rough few weeks for the “family values” types who always want to legislate what other people do with their bodies. Josh Duggar is outed for molesting his little sisters. Denny Hastert is outed for groping teenage boys. And now you have Caitlyn Jenner who is on the record as a Republican Party voter, making her coordinated media debut as the public face of tranny.
That is some awesome maneuvering right there, trying to put the Jenner stuff in the Republican camp. Nice work.
Is it not a republican?
Own it. Own all the freaks in that party, who do dark things in the shadows while condemning them as unholy.
I bet you’re wearing a tutu and a leather teddy as you type. Nasty republicanses!
First Gingrich had to resign after voting to impeach Clinton, then Bob Livingston, after their hypocrisy became known. Then Hastert came along to make repubs feel safe to proclaim how much more moral they are than democrats. Look at what was actually going on. Behind the words of every family values republican is a child molesting, whore chasing piece of white trash in an expensive suit.
Cue the circus music. The freakshow act is on stage.
What are 2b’s thoughts on the Hastert sex scandal/hush money?
That “conservatives” are happy to abide by and live under the laws that they pass and don’ expect to exempted from them, because unlike “libruls” their hearts are pure and uncorrupted.
drive until you qualify b@thcez!
Let your robotic car drive you effortlessly to the exurbs.
Better get RICO
“After all, just 40 percent of Americans believe the increasingly discredited man-made global-warming theory, according to polls”
UN Climate Regime Must Bypass U.S. Congress, French Govt Says
Written by Alex Newman
Wednesday, 03 June 2015
The powerful Socialist Party foreign minister, who will host the upcoming UN “climate change” confab in Paris, told assembled African delegates at a UN summit in Bonn, Germany, that “we know the politics in the United States.” “Whether we like it or not, if it comes to the [U.S.] Congress, they will refuse” to approve a planetary regime ostensibly aimed at curbing alleged man-made global warming by regulating and taxing emissions of the essential-to-life gas CO2. Of course, Fabius did not mention the fact that the U.S. Constitution requires congressional approval for the UN schemes and all international agreements — and even then they must be constitutional. He also failed to mention that there has been no global warming in over 18 years despite UN predictions, or the fact that human emissions of CO2 represent a fraction of one percent of all the greenhouse gases present naturally in the atmosphere.
Of course, the Obama administration has already threatened to bypass Congress to impose a UN global-warming regime on America. So, in that sense, the outlandish comments of the Socialist French politician attacking Americans are not surprising (imagine if Secretary of State John Kerry demanded bypassing the French Parliament to impose draconian policies on France!). As The New American reported last year, the radical White House strategy to defy the American people and the Constitution involves primarily semantics and legal quackery: Instead of calling the controversial scheme a “treaty,” Obama and the UN will pursue what they call an international “accord.” According to the New York Times, Obama’s “climate negotiators” have been busy plotting the circumvention of the U.S. Constitution and the American people’s elected representatives since at least last year. The idea was to adopt a “politically binding” regime that Obama would implement by decree, as he vowed to do on myriad issues with his “pen and phone” machinations if Congress would not submit to his agenda.
As if to shout the lawlessness from the rooftops, Obama traveled to Beijing last November and inked an almost comical pseudo-treaty with brutal communist dictator Xi Jinping. Under the fake treaty, which Obama claims will be implemented despite it having never been ratified by the Senate or specifically funded by the House of Representatives, the White House purported to commit America to slashing CO2 emissions by more than 25 percent from 2005 levels by 2025. The dictator in Beijing, meanwhile, who does not need permission from those he rules under the communist system he runs (and the UN climate czar admires), vowed to stop “increasing” the CO2 output of the more than one billion people his regime enslaves by around 2030. “Today, I am proud we can announce a historic agreement,” Obama proclaimed after signing the deal. Many of the lawless commitments were already being implemented by decree through EPA regulations, executive orders, and more.
http://www.thenewamerican.com/…n-climate-regime-must-bypass-u-s-congress-french-govt-says - 78k -
they want to tax oil so alternatives become competitive. solar is the trendy thing to do.
Copernicus.
Galileo.
Tesla.
Fossil fuels are going to be far less important and costly in the future, phony, so Koch propaganda won’t matter in the long run.
Building out solar and wind only increase global consumption of oil, gas and coal. Ironic, isn’t it?
How bout some Obama propaganda
I love me some big fat presidential climate lies.
| April 8, 2015 | 9:00 PM EDT
Wednesday’s edition of the CBS Evening News chose to re-air portions of chief medical correspondent Dr. Jon LaPook’s interview with President Obama on climate change
PELLEY: President Obama says that climate change poses a serious threat to health. He spoke with our Dr. Jon LaPook who joins us right now.
LAPOOK: Did that bring it home for you with Malia, this is affecting my daughter? I have to do something about it.
OBAMA: You know, there’s no doubt about it. In the same way I think there are families right now in south Florida who see two feet of water coming into their house every time it rains and start thinking, you know what? Rising temperatures and rising ocean levels are going to affect my property. Part of what I’m trying to communicate here is that there is a cost to inaction.
- See more at: http://newsbusters.org/blogs/curtis-houck/2015/04/08/cbss-dr-jon-lapook-frets-climate-change-legislation-has-stalled#sthash.J3lRMBKm.dpuf
Who needs a pipeline to move the dirtiest tar oil on the planet when natural gas and sunshine are plentiful and cheap? The Koch’s will do anything to make this country dependent on their overpriced filth. But some people have other plans.
In the same way I think there are families right now in south Florida who don’t see two feet of water coming into their house every time it rains and see the president’s closest friends buying ocean front property and start thinking, you know what? I think president Obama is full of sh#t just like Al Gore when it comes to this climate change cr@p.
It’s been said that it’s difficult to get a man to vote against his own wallet. It’s equally difficult to get a man to vote against his own culture and lifestyle. Americans will have to reduce their standards of living for perfectly obvious reasons of environment and access to affordable energy sources; we’re only 4.5% of the world population but we routinely consume about 20% of world production of resources, particular energy. So Americans are prone to finding any little reason to deny any calls to reduce their standards of living.
Granted, the means of reducing those standards from above, so to speak, are largely going to be done quite punitively and using the same sort of crony system that was used to expand our economy. I understand the ire that is raised when people complain about carbon credits and the like. But I challenge my fellow Americans to stop whining and instead start cutting their living standards voluntarily and according to their own terms. Don’t wait until those cuts are imposed on you. Don’t sit there like a fool and deny the cuts have to be made, either.
“increasingly discredited man-made global-warming theory”
Only in the dreams of coal mine owners and frackers.
Comment by phony scandals
2015-06-04 05:50:18
UN Climate Regime Must Bypass U.S. Congress, French Govt Says
thenewamerican.com/tech/environment/item/20995-un-climate-regime-must-bypass-u-s-congress-french-govt-says
Yes, well, it won’t be hard to bypass Congress, they just love it when that happens. Already let Obama do it, NSA do it, banksters do it, etc. Strange that the French goobermin thinks Congress would even be a problem.
Here’s something interesting that I ran across (at least I think it’s interesting).
It’s about coal seam fires - fires that, once lit can’t be put out and sometimes burn for centuries.
Like this one at Burning Mountain, Australia:
“The scientific estimate is that the fire has burned for approximately 6,000 years and is the oldest known coal fire.”
https://en.wikipedia.org/wiki/Burning_Mountain
Amazing.
Now that the oil companies are becoming natural gas companies, they will push to regulate coal because its “bad for the environment.” Coal’s days are numbered - now it’s not just environmentalists working against it, it’s the guys who give buckets of money to congress too.
Heh, my father’s side of the family is from Scranton, PA, not far from which is a town called Clark’s Summit, former coal mining area. I don’t know how it is now, but when I wuz a pup, dad used to drive us over to the see the smoldering mountain of what they called “culm”, which I guess was mining waste that just kept on burning.
There was a buffet at a place called the Woodlands (I think) that I used to visit on drives up to Scranton. It featured the height of Western Civilization, honey dipped bacon.
Ahh, Scranton memories. There was a time I was trying to gain weight.
I remember driving by that burning pile in the early ’60s on the way from Buffalo to NYC. I don’t think it was back up the hill in Clark’s Summit, but just north of Scranton.
Centralia, PA is a town that sits over a burning coal mine. That fire started in 1962 and continues to burn.
http://en.wikipedia.org/wiki/Centralia,_Pennsylvania
Black Chicago Pastor: Dems ‘Failing’ Us
06.04.155:25 AM ET
A pastor on the South Side is asking Republicans to talk to his flock after what he says are 50 years of disappointment from the other party.
“African-Americans have been loyal to the Democratic Party,” Pastor Corey Brooks said. “But there is a group of African-Americans that feel like the Democratic Party has not been loyal to us.”
Look around the neighborhood that contains O Block — Woodlawn — and you’ll see why, Brooks said.
“We have a large, disproportionate number of people who are impoverished. We have a disproportionate number of people who are incarcerated, we have a disproportionate number of people who are unemployed, the educational system has totally failed, and all of this primarily has been under Democratic regimes in our neighborhoods.” Brooks said from the office of New Beginnings Church of Chicago, his own, Wednesday morning. “So, the question for me becomes, how can our neighborhoods be doing so awful and so bad when we’re so loyal to this party who is in power? It’s a matter of them taking complete advantage of our vote.”
“They have a failing plan,” he said of Democrats. “A business owner wouldn’t allow the person who runs it to remain in charge for 50 years, constantly running it into the ground.”
http://www.thedailybeast.com/politics.html - 205k -
Makes me wonder what B Herbert, Charles Ford and other prominent south side pastors are thinking at the present time.
One thing that has to be understood in the US of A as relates to Chicago and its south side churches - the churches and their attendant pastors are the political machine here in Chi town. The race hustlers like Jesse and Farakahn get their fire and brimstone b.s. going and rally the rabble but the REAL power resides with the inumerable south side churches where politics and religion are comfortable bed fellows.
Just look at the paradise republicans have made Mississippi.
It’s going to be epic when the Dems “bundlers” inform them that their oligarch bankrollers need to step up their looting of the productive economy and corporate enrichment schemes like Obamacare, which means the public unions and Free Sh*t Army are going to get thrown under the bus in the name of “austerity.”
Won’t that be rich, when the Democrat votes-for-entitlements base figures out who REALLY runs the plantation.
‘Whatever the truth about the shooting itself turns out to be, think about what happened here. A black Muslim man charged with no crime was standing at a bus stop when approached by the FBI and BPD, who had no warrant to arrest him. Within minutes, he was dead. And literally within hours, he was universally vilified in the American media — with zero evidence — as an ISIS-inspired terrorist in the midst of a plot potentially involving multiple unnamed “others,” all based on nothing more than police accusations.’
‘As rampant, unjustified police killings have finally entered mainstream discussion, this has become a favored joint tactic of the police and media. Before the killing can be processed by the public, the victim’s character is smeared by media-laundered police claims, often anonymously. Here, the tactic had the sweetened appeal that it could be used to fearmonger over an ISIS attack in the U.S., as Rahim was not only black but also Muslim. As my colleague Murtaza Hussain put it: “14 years after 9/11 law enforcement can kill someone in the street, suggest they were part of a ‘terror network’, and media will just move on.” He added: “Apparently all you have to do to defuse outrage over killing someone is apply the gangster or terrorist label to the still-warm dead body.”
‘The point here is not that the police claims are untrue. The point is that nobody knows if they are true or not. Yet they were aggressively and uncritically amplified by an always pro-police media, resulting in the vilification of the dead victim as an ISIS-linked terror operative within hours after his death. Precisely as intended, that, in turn, precluded any rational discussion of whether the killing was justified.’
+1
Is the IMF calling the shots now for the supposedly - independent Fed? I can’t recall seeing this in the MSM before.
The Fed
IMF sees ‘strong case’ for Fed waiting until next year to hike
By Greg Robb
Published: June 4, 2015 10:09 a.m. ET
Getty Images
IMF managing director Christine Lagarde
WASHINGTON (MarketWatch) — The Federal Reserve should delay raising rates until next year given the risks that moving too soon could stall the economy, the International Monetary Fund said Thursday.
“We think a rate hike would be better off in 2016,” said Christine Lagarde, the IMF’s managing director at a press conference. The IMF comments clash with current thinking at the central bank — 15 out of 17 Federal Reserve officials, including Chairwoman Janet Yellen, have said they plan to lift interest rates this year. Yellen has said waiting too long risks overheating the U.S. economy.
…
The same IMF that’s been running around “warning”countries that they have housing bubbles.
IMF sees ‘strong case’ for Fed waiting until next year to hike
It’ll be “Real Soon Now”
How long have they been threatening to raise interest rates? It seems like its been a few years now.
Manana…..manana….
The banksters know a rate hike means “game over” for their Ponzi schemes. So they will do anything they can to defer the day of reckoning until the global financial system breaks down under the weight of its own fraud.
Guess I wasn’t the only market observer who was taken aback by Lagarde’s Fed guidance. I love El-Erian’s direct approach to describing the policy situation currently in play.
El-Erian: Surprised at Lagarde’s Fed Comments
9:05 AM PDT
June 4, 2015
Bloomberg View Columnist Mohamed El-Erian discusses the IMF’s comments on the Fed. He speaks on “Bloomberg Markets.” His opinions are his own. (Source: Bloomberg)
Marketwatch dot com
Opinion: How J.P. Morgan and Barclays mistakes inflated the housing bubble
By Elliot Blair Smith
Published: June 4, 2015 9:58 a.m. ET
If I had to depend on Wall Street or Washington for an explanation of what ails the U.S. financial economy, I’d probably pick neither one. My choice would be John Griffin, a cowboy boots-wearing University of Texas financial professor, who has been on something of a roll.
Six years before Standard & Poor’s agreed to pay $1.4 billion to settle state and federal government lawsuits alleging it inflated credit ratings on securitized mortgage debt, Griffin revealed—with mathematical precision—how S&P degraded its own analytical model to issue puffed-up grades.
Seven months before J.P. Morgan Chase agreed to pay $13 billion to resolve state and federal claims that it misled investors on toxic mortgage securities—the largest financial settlement with a single entity in U.S. history—Griffin showed how the bank had originated a disproportionate share of securitized mortgages flawed by undisclosed second liens (among other reporting problems).
Today, Griffin is advancing a new argument: that housing prices were more inflated—and the crash even more violent—in markets where lenders who misreported mortgages held concentrated market shares. He concludes that big banks with bad practices drove the credit bubble, and the misreporting deepened it.
“I just want to know the truth,” says Griffin, 45, who grew up playing high school football in Texas and today delivers some of his hardest hits on Wall Street.
In his latest forensic work, Griffin and co-author Gonzalo Maturana, an assistant professor of finance at Emory University in Atlanta, combed through 3.1 million mortgages originated between 2002 and the end of 2007. More than one-quarter of these loans subsequently defaulted.
While looking for inconsistencies in appraisal values and owner-occupancy status, the most interesting part of the investigation exposes how some mortgage securities were riddled with undisclosed second liens. These hidden debts reduced the borrowers’ incentive to repay their obligations. Griffin and Maturana found the gaps by comparing bank securities documents to county courthouse records.
No fewer than 10.2% of the securitized mortgages in their sample contained an undisclosed second lien. Some lenders, such as Barclays BCS, -1.27% and J.P. Morgan Chase JPM, -0.21% , produced nearly double the overall number of missing debts. This is startling for two reasons: first, loans with an unreported lien were 97% more likely to become seriously delinquent than were correctly reported loans; and second, the same lender originated both liens more than two-thirds of the time.
Barclays and J.P. Morgan not only had the highest levels of misreported second liens, but also the highest aggregated misreporting across all categories analyzed, according to Griffin and Maturana’s research. They also discovered owner-occupancy inconsistencies are based on county tax records mailed to a non-business address other than the purchased residence. And they tracked aberrations in appraisal value based on human appraisals that were 20% higher than a standard model-based valuation. This is a conservative measure, four times higher than a statistically significant 5% deviation.
Of the 18 largest players in the securitized market, the highest misreporting was Barclays at 41.5% and J.P. Morgan at 41%, the research finds. J.P. Morgan and Barclays both declined to comment.
Adding to the skepticism, loans with unreported second liens typically bore higher interest rates than correctly reported loans, meaning that lenders “were seemingly aware of and accounted for the second-lien risk,” according to the research, titled “Who Facilitated Misreporting in Securitized Loans?”
These undisclosed second liens spiked “significantly” around benchmark credit thresholds, meaning the omitted debts might have helped borrowers obtain the loans, on the one hand, and helped lenders to securitize them on another.
“This type of misreporting derives from the originator’s incentives to securitize,” Griffin and Maturana conclude in their paper, which is slated for publication in the peer-reviewed Journal of Finance.
Such analysis cuts closer than conventional blame-shifting that would hold faceless borrowers, and expansionary government credit policies, accountable.
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For how long can home prices and rents increase faster than incomes?
The answer seems to depend on a number of factors:
1) How long can interest rates stay at generational lows?
2) How far can lending standards be relaxed?
3) At what point will the recent wave of investors pull up the stakes and try to cash in?
Rising jobs push rents even higher
By Jonathan Horn
5:19 p.m. June 3, 2015
Workers install a window a unit being upgraded at La Mirage apartments overlooking Mission Valley on Tuesday, Feb. 18, 2014.
Workers install a window a unit being upgraded at La Mirage apartments overlooking Mission Valley on Tuesday, Feb. 18, 2014. — Hayne Palmour IV
More evidence emerged Wednesday that San Diego’s accelerating economy is driving up rents faster than employers are increasing wages, pinching many households.
The San Diego County Apartment Association reported that the average rent in the county was $1,514 a month in its April survey. That’s up 20 percent from the same time last year, although association officials cautioned that its survey does not precisely compare the same set of units each year.
Yet other recent, larger surveys have found even higher average costs, ranging from $1,575 to $1,756 per month — with rents rising at annual rates of between 3 percent and 6 percent — roughly double the 2 percent pace of average wage growth.
Still, the outlook isn’t necessarily dire for the average family. Rent consumes less than half of a typical household’s income, and San Diego’s overall inflation rate was low at 1.3 percent in the second half of last year. So rents would have to keep rising faster than wages for years to cut into disposable income.
On the other hand, builders haven’t kept up with demand for more than decade.
“There’s no question rents are on the rise because of the housing shortage,” said Alan Nevin, an apartment industry analyst at Xpera. “The middle class really gets crunched.”
Over the last year, employers in San Diego County have added nearly 41,000 jobs, with the biggest growth coming in higher-paying fields such as biotech, engineering and other professional services. That’s drawn more people to the region who can afford to pay for the newer units coming online, the majority of which are filled with amenities and charge more than $2,000 a month for studio apartments. Additionally, the improved economy has handed more millennials the resources to move out of their parents’ homes, adding to the demand for housing.
It’s all led to a squeeze on current renters, who haven’t seen their paychecks increase as briskly.
“Living in San Diego you expect the rents to be somewhat high. In recent years though, the rents seem to be escalating at an abnormally fast rate,” said 34-year-old Alex Rock, who lives in the UTC area and has seen his rent rise by $445 since 2012. “My girlfriend and I have already done small things to cut down the cost of living, like cutting cable … but we will be relocating this fall without a doubt.”
Rock may not find much out there.
Nevin said developers should be adding 13,000 to 15,000 new housing units per year to satisfy the demand. They’re not even close: In 2014, there were 6,874 new residential units approved in the county, according to the Census.
Still, the county’s vacancy rate, or the number of units available, rose to 4.1 percent, up from 2.7 percent last year, as military deployments increased and some new buildings opened, the association reported. The rate was close to its long-term average of about 5 percent in the county, which had 424,548 multifamily units.
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How do low interest rates, relaxed lending standards, and investors owning homes for rent cause rents to rise?
It seems like all three would tend to push rents down:
1. low interest rates push more people to own, and allow development of apartments despite low yields on cost;
2. Relaxed lending standards allow more people to own vs. rent;
3. Investors NOT selling means that there is more rental stock for people to rent.
Locally many were shut out from buying after Bubble 1.0 popped and I’m one of them, it was virtually impossible to buy with a mortgage in 2011 thanks to legions of 100% cash flippers and speculators and since then prices are up about 60% so buying no longer makes sense for me.
Anyway, that is part of what drives rising rents locally….when prices were reasonable many renters were shut out, now with Bubble 2.0 in full swing they are priced out.
(Sonoma Co., Calif. median household income about $65K, median house price about $500K)
Renters being priced out of the single family market on its own doesn’t drive higher rents though. What drives higher rents is that there are too many renters for too few rentals.
In other words, there is not enough supply of rental housing for the demand.
Not enough supply… So why is it that new houses are not selling? Not selling like they were at least 60 years ago, all things considered. If there is not enough housing, you ought to be able to scoop one of these new shacks and rent it out for a fortune.
25 million excess, empty and defaulted houses out there. There is plenty of supply.
“So why is it that new houses are not selling? Not selling like they were at least 60 years ago, all things considered. If there is not enough housing, you ought to be able to scoop one of these new shacks and rent it out for a fortune.”
The prices are too high.
That’s right Rental_Fraud. Prices are 3x higher than long term trend.
We bought around 2011. At the time we were renting which skyrocketed. So we decided to look for rentals as well as buying to compare. At that time rent was more than a mortgage plus insurance. In fact after we moved in I found out that 2 houses up the person was renting for about $600 more than our mortgage plus insurance. They bought about 6 months earlier.
I doubt you could buy a similar house now and pull that off. But just as housing goes up in the LA area, rent has increased. Probably makes more sense to rent at this point.
And after losses to depreciation are included, the mantra falls apart.
“1) How long can interest rates stay at generational lows?”
As long as the savings glut lasts and the demand for “safe” short-term government and AAA bonds continues to swamp supply. Under normal day-to-day conditions it’s the bond market, not the Fed or ECB, that sets interest rates. There’s this urban myth that the Fed continuously controls rates. Most of the time they do not; frequently the Fed follow the market instead of leading it.
“As long as the savings glut lasts…”
That, in turn, depends on how long monetary policy can remain historically loose and interest rates can stay at historically low levels without driving headline inflation measures to worrisome heights.
“There’s this urban myth that the Fed continuously controls rates.”
With which the Fed is happy to play along…
I love, love, love, falling prices!! The problem is they are not falling fast enough…yet.
As long as your wages don’t follow them down the drain, it’s all good.
Wages already fell my friend. So did laborforce participation rate.
Markets Credit Markets
U.S. Government Bond-Market Volatility Sparks Talk of Circuit Breakers
Big brokerage ICAP weighs pausing trading after big price moves
By Katy Burne
Updated June 2, 2015 7:00 p.m. ET
Turbulent government-bond markets are prompting one large brokerage firm to take a cue from the stock-trading world and consider installing circuit breakers.
ICAP PLC is studying the possibility of temporarily halting Treasurys trading following large price moves, according to people familiar with the matter.
Such a program would mark the first use of such safeguards in the $12.5 trillion U.S. Treasury market. Circuit breakers are routinely used to halt trading in stocks when price fluctuations exceed predetermined ranges.
London-based ICAP is raising the idea with some of its customers, one of the people said, and weighing the pros and cons of adopting such controls, which already are commonplace in equity markets in the U.S. and elsewhere. According to Sandler O’Neill + Partners estimates, ICAP’s BrokerTec unit handles about 60% of Treasurys trading activity between banks and high-speed trading firms, which account for a large share of overall trading.
Some traders worry that timeout periods in the world’s most liquid securities market would reduce investors’ access to the perceived safety of Treasurys when other markets are declining, and could raise the possibility of distorted prices in related markets like derivatives that are closely tied to government bonds.
Even so, the development is the latest sign that price gyrations sweeping financial markets are unnerving traders and pushing participants to consider unprecedented steps.
Some market participants have discussed the idea of circuit breakers in bonds with officials at the U.S. Treasury Department, a person familiar with the talks said.
“Given the recent extreme swings in bond prices, safeguards to prevent the market going into free fall are worth exploring,” said Kevin McPartland, head of market-structure research at Greenwich Associates.
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Repeat after me “Free Shit Army”!!!!
http://www.latimes.com/local/political/la-me-pc-california-senate-approves-health-coverage-for-some-immigrants-here-illegally-20150602-story.html
The Ramirez-Lopez strawberry picking family just moved into the $950,000 up scale neighborhood. The family has a total of 15 family members. 7 kids,grandparents{2}, and 4 cousins.
A total of 9 people work and all contribute to the mortgage. Mr.Ramirez-Lopez who is living the American dream wonders why a gringo familiy that makes $100,000 don’t qualify for a mortgage in Los Angeles.
The Ramirez-Lopez family put $32,000 down with a FHA loan. The Ramirez-Lopez beat out 25 bidders.
The Ramirez-Lopez family out bid everybody by promising to feed the Squirrel who live in the backyard trees.
http://www.Truestories.com
So give ‘em amnesty so they can pay taxes like the rest of us mortgage slaves / renter serfs.
Wouldn’t they need to show tax returns to get a mortgage these days? AFAIK, NINJA loans still haven’t made a comeback.
3.5% downpayment is a NINJA loan.
Housing prices are going up in Central Florida!!
http://www.orlandosentinel.com/news/breaking-news/os-central-florida-property-values-going-up-20150604-story.html
Concerned Floridian,
Does that mean you will change your name to “Depressed Floridian or Terrified Floridian”? :}
Lol. With the rise in assessments, there will be higher property taxes. Maybe a poor Floridian. How’s the drought in CA?
We got beaches too :}
But the water is ice cold
You knew it was going to happen: Caitlyn Jenner parody songs. Here’s one:
https://www.youtube.com/watch?v=r2fC6dMUSvo
Calling PBear:
me thinks this has an familiar odor to it no? Worldcom, Enron, current Fed, pick your villain.
http://www.zerohedge.com/news/futures-brokerage-pfg-best-freezes-accounts-following-discovery-accounting-irregularity
It’s a Wonderful Life
Indeed!
My rent continues it’s northward march. It’s called property taxes!
So Greece stiffed the IMF today, and will supposedly “bundle” its payments at the end of the month. Cue bank runs in Greece starting in 3-2-1. No worries, though, Greece is just a little ol’ domino in the big scheme of things….
https://www.youtube.com/watch?v=y97rBdSYbkg
Reminds you of a brother-in-law who keeps saying “yeah, yeah…i got yer money, it’s comin’ “
Nobody could have seen it coming!
ft dot com > World >
Europe
Last updated: June 4, 2015 6:33 pm
Greece to delay IMF repayment as Tsipras faces backlash
Kerin Hope in Athens and Peter Spiegel in Brussels
Greek Prime Minister Alexis Tsipras delivers a speech during the Economist conference entitled “Europe: The comeback ? Greece: How resilient?” in Athens on May 15, 2015. Greece’s left-wing government will not abandon its defence of social rights and salaries in tough talks with its EU-IMF creditors, Prime Minister Alexis Tsipras said. AFP PHOTO/LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
©AFP
Alexis Tsipras. Greek prime minister
Greece has notified the International Monetary Fund that it will not make a scheduled €300m loan repayment on Friday after opposition to a bailout compromise with creditors erupted inside the governing party.
Following a rarely used procedure permitted under IMF rules, the Greek government intends to bundle all the payments it owes in June totalling €1.5bn and transfer it at the end of the month.
Alexis Tsipras, the Greek prime minister, has come under intense pressure from within his left-wing Syriza party to withhold payment to the IMF as a sign of the country’s defiance to terms required by its international creditors to access desperately-needed €7.2bn in bailout aid.
But as recently as early Thursday morning, Mr Tsipras had signalled his government intended to make the payment. Asked by reporters after a four-hour Brussels meeting with Jean-Claude Juncker, European Commission president, whether the instalment would be made, the Greek prime minister said: “Don’t worry about that.”
Christine Lagarde, the IMF chief, had also said earlier on Thursday she was “confident” Athens would make the payment and dismissed talk that Greece would opt for the bundling option, last used by Zambia in the 1980s.
But according to a Greek central bank official, Athens made the request late on Thursday. Gerry Rice, the IMF spokesman, confirmed the request, saying the rule allows countries “to address the administrative difficulty of making multiple payments in a short period.”
However, senior IMF officials believe that any non-payment by Athens would be a political decision rather than a financial one; in an economy as large as Greece’s, €300m is a relatively small sum and Greek officials had been working to raid undisbursed EU funds for infrastructure projects to cover the payment as well as another €350m instalment due to the IMF on June 12.
As a result, Greece’s decision — coming less than 24 hours after Mr Tsipras was presented a five-page list of policy commitments by Mr Juncker that Athens needed to implement to win the €7.2bn in aid — will be seen as a negotiating tactic as well as a sign of a shortness of cash.
“This move is almost unprecedented and based on Tsipras’s comments yesterday unexpected,” said Mujtaba Rahman, head of European analysis at the Eurasia Group risk consultancy. “It unnecessarily raises the stakes and will further undermine the goodwill of Greece’s creditors.”
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No bubble here….
http://wolfstreet.com/2015/06/04/dumbest-man-in-china-or-when-will-chinese-stocks-crash/
Methinks there might be a plunge in mortgage applications next week.
http://www.marketwatch.com/investing/bond/tmubmusd30y?countrycode=bx&mod=MW_story_quote
They must have heard that Lil’ Sis was about to put one of her three homes on the market!
FBs sueing an Anapolis realtor for knowingly selling them a snake-infested house.
http://baltimore.cbslocal.com/2015/06/03/snakes-in-walls-realtor-accused-of-selling-infested-home/
You’re interfering with tomorrows HBB headline.
LOSSES?
Losses upon losses Poet.
Chino Hills, CA Housing Prices Fall 6% YoY
http://www.zillow.com/ca/home-values/
What’s worse: Snake infestation, or pig occupancy?
Lawmakers Probe FBI’s ‘Disturbing’ Use of Spy Planes
The FBI has reportedly been using planes equipped with high-tech cameras and cell-phone tracking technology.
By Brendan Sasso
June 4, 2015
Members of Congress are demanding that the FBI turn over more information about its use of airplanes to conduct surveillance of Americans.
The FBI is using at least 50 planes to conduct surveillance operations over U.S. cities and rural areas, the Associated Press reported earlier this week. The planes, registered under fake company names, are equipped with high-tech cameras and, in some circumstances, technology that can track thousands of cell phones below.
“In the wake of the president’s signature on a surveillance reform law that ends warrantless bulk collection of Americans’ phone records, it is highly disturbing that your agency may be doing just that and more with a secret fleet of aircraft engaged in surveillance missions in the United States,” 16 lawmakers, including Reps. Suzan DelBene, Zoe Lofgren, and Chris Van Hollen, wrote in a letter Thursday to FBI Director James Comey.
The lawmakers requested that the FBI brief Congress on the legal theories justifying the program, when it seeks warrants, the technologies it uses on the flights, and how it limits spying on innocent Americans.
In a statement Thursday, the FBI denied that it was collecting any information in bulk or that the program was classified. The bureau said it uses fake company names to protect the security of the operations, and that the Justice Department conducts “rigorous oversight.” The flights use cell-phone-tracking technology only in rare circumstances, such as hostage situations, the FBI said.
“It should come as no surprise that the FBI uses planes to follow terrorists, spies, and serious criminals,” FBI Deputy Director Mark Giuliano said. “We have an obligation to follow those people who want to hurt our country and its citizens, and we will continue to do so.”
http://www.nationaljournal.com/tech/lawmakers-probe-fbi-s-disturbing-use-of-spy-planes-20150604
Have you ever been mystified over why men and women have such a hard time understanding each other? Here is a video which I believe goes quite far to explain the communication gap:
It’s Not About the Nail
Got red numbers?
I keep wondering at what point the Lilliputians will gather sufficient strength to bring down Megabank, Inc once and for all!
Market Pulse
Hong Kong stocks fall with HSBC weak
Published: June 5, 2015 1:10 a.m. ET
By Laura He
Asia markets reporter
Corrects the amount of money allegedly taken by the PetroChina sales manager.
HONG KONG (MarketWatch) — Hong Kong stocks fell Friday morning, with the benchmark Hang Seng Index trading 0.5% lower as index heavyweight HSBC Holdings PLC 0005, -0.68% HSBC, -0.92% HSBA, -1.04% likewise dropped 0.5% after news it had agreed to pay $43 million to settle a Swiss money-laundering probe. Among other notable movers, electric-car and battery maker BYD Co. 1211, -6.16% BYDDF, +10.12% 002594, -3.95% sank 5.4%, eating into its previous 8.8% surge, after newly issued central-government regulations lowered access to the electric-vehicle manufacturing industry. Oil stocks mostly suffered losses as international crude futures extended their slide: PetroChina Co. 0857, -0.88% 601857, +0.32% PTR, -0.97% declined 1.4%, also weighed down by news reports that a sales manager absconded with about 500 million yuan ($800 million) along with her family. Meanwhile, China Petroleum & Chemical Corp. (Sinopec) 0386, -1.80% SNP, -1.34% lost 1.8%, and Cnooc Ltd. 0883, -0.67% CEO, -1.96% moved 0.5% lower. Cheung Kong Property Holdings Ltd. 1113, -4.35% Hong Kong tycoon Li Ka-shing’s recently spun-off property arm, extended losses by 3.7%. Banking shares also pulled back after previous gains, with Bank of Communications Co. 3328, -1.99% BKFCF, +0.52% 601328, -1.35% off 1.7%, China Construction Bank Corp. 0939, -0.63% CICHF, +1.99% 601939, -1.16% down 1.1%, and Bank of China Ltd. 3988, -0.96% BACHY, +0.26% 601988, -0.64% lower by 1%. However, on the Chinese mainland, the Shanghai Composite Index advanced 1.6% after a wild swing in the previous day, with the index now back above 5,000 for the first time in more than seven years. The Shanghai move came even as Hong Kong’s mainland-China-tracking Hang Seng China Enterprises Index HSCEI, -1.03% was quoted down 0.9%.
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