Bits Bucket for June 17, 2015
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For how much longer will the fingerpointing and posturing continue from here?
ft dot com > World >
Europe
Last updated: June 17, 2015 7:48 am
Juncker accuses Athens of misleading Greek people
Peter Spiegel in Brussels, Kerin Hope in Athens and John Aglionby and Elaine Moore in London
Jean-Claude Juncker, European Commission president: ‘We cannot leave [this] solely to member states’
Jean-Claude Juncker, the European Commission president, has accused the government in Athens of misleading the Greek people about proposals by creditor institutions to resolve the country’s debt crisis.
In an increasingly bitter war of words ahead of a crucial eurozone finance ministers’ meeting on Thursday, Alexis Tsipras, the Greek prime minister, told the Greek parliament on Tuesday that among the creditors’ proposals was a 10-percentage point hike in the value added tax on electricity. Some of his ministers have criticised suggested increases in taxes on medicines.
He denounced Brussels, the International Monetary Fund and the European Central Bank for trying to “humiliate” his country and accused the IMF of “criminal responsibility” for the country’s economic woes
But Mr Juncker said he was not in favour of either tax increase, describing them as a “major mistake”.
“I am blaming the Greeks [for telling] things to the Greek public which are not consistent with what I’ve told the Greek prime minister,” he said. “I don’t care about the Greek government. I do care about the Greek people, mainly the poorest part.
“The debate in Greece and outside Greece would be easier if the Greek government would tell exactly what the Commission . . . are really proposing,” he added.
…
“I don’t care about the Greek government. I do care about the Greek people, mainly the poorest part.”
Said the man who represents the interests of the European banks.
Better than “Let them eat cake.”
How is the leftist Greek government helping the poor when this dispute killed the modest recovery that was occurring?
See Iceland for details.
If we don’t save the bankers the poor will be poor.
The reality is the bailout of Greece is really a bailout of European banks. Keeping Greece in the Euro and unstable weakens the Euro and keeps German manufacturing more competitive. It also is a way to sell products to the Greeks with money borrowed into existence.
Think of the poor, please don’t make me laugh.
It’s a race to the bottom in terms of wages otherwise you loose manufacturing. The fastest way there is to devalue your currency. Greeks will get a big head start and there unemployment will fall quickly after they leave the Euro. Those Europeans still brave enough to go to Turkey, or Italy for vacation will be flocking to the 50% off sales in Greece.
Greece did not have and does not have a basically sound economy like Iceland. It did not live on subsidies in fact it was not even part of the EU before it’s banks collapsed. The price it paid to avoid paying its creditors was actually being forced to join the EU. Years from now the true cost of that will be known.
Greece did not have and does not have a basically sound economy
The Greek economy was chugging along at a Greek pace before joining the Euro Union. They could have kept chugging along at a Greek pace for decades. (Not all cultures value “growth” over everything.) Then Greece was offered super easy Euro credit and they took it.
It’s almost like the predatory lending scam. Now the predatory lenders are freaking out they might not get paid back.
Heard this French banker dude on CNN Intl. today saying “I’ve never seen anything like it in my life the way Greece is negotiating bla blah blah.” No kidding Sherlock? They’re this close to defaulting. Deal with it. It’s going to be a sight imo.
(I guess the Germans didn’t get the memo that Greeks are not Germans.)
Greece joined the EU in 1981.
Greece joined the EU in 1981.
Taking the Euro changed more.
Currency: Euro since 1 January 2001 (formerly Greek drachma, GRD)
As a full member or like GB?
I think if you bother to research it, they gave up the Krona and became a full member only after the banking crisis but thanks for playing.
Sorry, I was talking about Iceland not Greece.
Iceland is a member of the EFTA, not the EU. It has never joined the euro.
From Wikipedia about the crisis and the role that seeing membership played:
Finally, the third major factor behind the resolution of the financial crisis was the decision by the government of Iceland to apply for membership in the EU in July 2009. While views on the feasibility of EU membership are quite mixed in Iceland, this action has served to enhance the credibility of the country on international financial markets. One sign of the success of the above efforts is the fact that the Icelandic government was successfully able to raise $1 billion with a bond issue on 9 June 2011. This development indicates that international investors have given the government and the new banking system, with two of the three biggest banks now in foreign hands, a clean bill of health.[242][243] The first two major measures were implemented by the government of Geir H. Haarde but also carried out by the government of Johanna Sigurdardottir, which then took the step to apply for EU membership.
Also from Wikipedia I do not know that the application has been in limbo all these years but clearly the EU (globalists) does not want to take no for an answer particularly since the help they received was tied up to joining the EU and the Euro:
Iceland applied to join the EU on 16 July 2009 and formal negotiations began on 27 July 2010.[1] However, on 13 September 2013 the Government of Iceland dissolved its accession team and thus suspended its application to join the European Union. On 12 March 2015, Foreign Minister of Iceland Gunnar Bragi Sveinsson stated that he had sent a letter to the EU withdrawing the application for membership, without the approval of the Althing, though the European Union stated that Iceland had not formally withdrawn the application.[2]
Wed, Jun 17, 2015, 4:20AM EDT
Lamenting no progress, Merkel says it’s up to Greece now
Reuters
16 hours ago
* Merkel says ‘little new to report’ on Greece debt talks
* German leader says all attention on Thursday meeting
* Chancellor wants Greece to stay in euro zone
By Paul Carrel
BERLIN, June 16 (Reuters) - German Chancellor Angela Merkel said on Tuesday she was willing to do all she could to keep Greece in the euro zone but insisted the onus remained on Athens and its creditors to break a deadlock and reach a deal.
Lamenting a lack of progress in the negotiations for an aid-for-reforms deal, Merkel put the focus squarely on Athens and its international creditors, the European Union, the European Central Bank and the International Monetary Fund.
Greece has been trying to bypass its creditors by urging Merkel and other leaders to strike a “political deal” to unlock aid.
But Merkel did not waver, emboldened by unflinching support for her firm line both from her conservative party and her Social Democrat (SPD) coalition partners.
“Unfortunately, there is little new to report,” she told a news conference after meeting Luxembourg Prime Minister Xavier Bettel. “I’m concentrating all my energy on helping the three institutions and Greece to find a solution.”
…
Until the end of time. Because posturing and finger pointing are in our DNA.
A closely-watched pot never boils over.
Will a Grexit cause the most predictable crash in history?
Published: June 16, 2015 10:46 a.m. ET
By Michael A. Gayed
I’m fortunate in the past year or so to have talked with hundreds of financial advisors and high-net-worth investors about the current state of markets, with much of the interest focused on the underlying fear that something ugly could soon come to equities. Interestingly, though, despite the nagging feeling that something wicked this way comes, not a single person I’ve interacted with face to face thinks Greece will cause the inevitable correction and period of fear.
The argument? Everyone knows about Greece. Even if the low-probability event of an exit from the eurozone and default does take place, so what? Quantitative easing in Europe is in place, and presumably those “in the know” have insured themselves against a Greek exit (or Grexit).
The level of complacency on Greece, because it’s been so talked about, always seemed odd to me. Often times in markets, it is not the event that causes some kind of spike in volatility and fear, but the secondary and tertiary effects that happen following which no one really sees coming.
The problem with Greece isn’t Greece leaving, but rather what kinds of ripple effects that might have in parts of the financial system that no one really is addressing or focusing on. For those who are naturally inclined to be contrarian in macro thinking, the contrarian trade isn’t on betting that Greece defaults or not. The contrarian trade is actually on betting that everyone else’s dismissal of such an event is the real threat to financial markets.
To be clear, I personally don’t believe that a “Lehman 2.0″ is coming from Greece, however the complacency that exists in the “happy-go-lucky” S&P 500 (SPY, +0.55%) is ammunition for bears to wake from their slumber and unleash a volatility tsunami in the Summer, with Greece as the earthquake.
Take a look below at the price ratio of the Global X FTSE Greece 20 ETF (GREK, -4.35%) relative to the Beta Rotation Index (BETAEQ). As a reminder, a rising price ratio means the numerator/GREK is outperforming (up more/down less) the denominator/BETAEQ. A falling ratio means the opposite. The Beta Rotation Index is based off of the 2014 Dow Award-winning paper I co-authored, and provides good context on the power of being defensive when volatility hits.
The ratio appears to have stabilized in recent months relative to the Beta Rotation Index, suggesting that despite headline fears and day-to-day volatility, Greek stocks and U.S. large caps have been in a tight trading range relative to each other.
Should the above ratio suddenly break support (a legitimate risk), that would could result in the U.S. market subsequently starting to get meaningfully concerned with contagion to come. The Beta Rotation Index would likely itself begin tracking defensive sectors (utilities, consumer staples, and health care) in response.
A crashing ratio would likely precede a crashing stock market, which no one thinks can happen because central banks have our backs. The problem with this line of thinking is that, as Europe is now showing us, quantitative easing may not prevent declining equity prices given the action in the German DAX index in particular.
If everyone thinks the shock won’t come, then the contrarian trade is to bet that the event could be more shocking than anyone can possibly imagine. Again, this is not my base-case scenario, but complacency has been shown to be the biggest threat of all to wealth creation over long periods of time.
If no one thinks Greece can cause a collapsing stock market, then you have to ask yourself if the risk is being massively underestimated that it actually does. A lot of people saw housing ending badly, too, and the thought was that any fallout from depreciating home values would be contained. We all know how that turned out.
Practically speaking what does this mean? Surprise, surprise — it might actually mean Treasurys aggressively rally in the months ahead, making Yellen’s life a wee-bit harder.
…
Project Syndicate
Opinion: Why can’t Greece just declare bankruptcy?
Published: June 15, 2015 12:44 p.m. ET
We need to create a rule of law for sovereign debt
By Joseph E. Stiglitz
Martin Guzman
Getty Images
Demonstrators in Athens protest the debt restructuring deal imposed by Germany, the ECB and the IMF.
NEW YORK (Project Syndicate) — Governments sometimes need to restructure their debts. Otherwise, a country’s economic and political stability may be threatened. But, in the absence of an international rule of law for resolving sovereign defaults, the world pays a higher price than it should for such restructurings.
The result is a poorly functioning sovereign-debt market, marked by unnecessary strife and costly delays in addressing problems when they arise.
…
The reason they can’t just restructure their debt is because they still have a negative cash flow, and their cash on hand is ZERO. Rather than defaulting before cash on hand was zero, they waited until the situation was totally out of control. Now they MUST have loans to get cash to pay anything.
Well this isn’t 100% true, as they COULD just stop paying all kinds of debt, and only spend what they bring in in taxes. This is called austerity. The greek citizens don’t want this though. They want to spend more than they take in.. Sorry, no one will lend you money if that’s your whole plan!
Sorry, no one will lend you money if that’s your whole plan!
I think they could be lent money. Not the best terms but the world is awash in cash. If Greece really defaulted for real, the lenders could be forced to take a haircut if they wanted anything back. It’s business. Once the haircut was finalized, first-in-line new lenders could easily lend Greece money.
The problem here is no lenders want to take a haircut on bad debt. Too bad sometimes. I’ve written off bad debt many times. It’s business.
“Now they MUST have loans to get cash to pay anything.”
Greece should sell their national treasures to George Soros.
Wed, Jun 17, 2015, 4:15AM EDT
Greek PM tears into lenders as euro zone prepares for ‘Grexit’
Reuters
11 hours ago
Greek PM Tsipras gestures during a meeting with leader of the centre-left To Potami party Theodorakis in Maximos Mansion in Athens
By Lefteris Papadimas and Erik Kirschbaum
Related Stories
ATHENS/BERLIN (Reuters) - Prime Minister Alexis Tsipras accused Greece’s creditors on Tuesday of trying to “humiliate” Greeks with more cuts as he defied a growing drumbeat of warnings that Europe was preparing for his country to leave the euro.
The unrepentant address to lawmakers after the collapse of talks with European and IMF lenders at the weekend was the clearest sign yet that the leftist leader has no intention of making a last-minute U-turn and accepting austerity cuts needed to unlock frozen aid and avoid a debt default within two weeks.
Financial markets, for months indifferent to wrangling over releasing billions of euros of aid for Greece, reacted with mounting alarm.
European stock markets hit their lowest level since February and the risk premium on bonds of other vulnerable euro zone states leapt in one of the sharpest episodes of contagion since the height of Europe’s debt crisis in 2012.
The White House warned that agreement was needed to avoid shaking financial markets further and Tsipras assured U.S. Treasury Secretary Jack Lew that Athens aimed to bridge the differences with creditors.
But with senior German lawmakers now openly discussing the once-taboo prospect of a “Grexit” from the single currency area, his fiery words suggested confrontation rather than reconciliation.
“I’m certain future historians will recognise that little Greece, with its little power, is today fighting a battle beyond its capacity not just on its own behalf but on behalf of the people of Europe,” he said in a televised speech to legislators in his Syriza party, drawing loud applause.
…
We just need to let Greece fall as an example to any other countries that think they can operate forever with everyone employed/financed by the government and nobody doing anything productive.
I don’t think there’s any other alternative at this point. Any politician that cuts the government workforce and free money either doesn’t get into office in the first place or is tossed out next election.
We need them to exit and default sooner rather than later. No more debt money flowing in and the checks stop showing up for the FSA.
Maybe they will finally get the message that taking early retirement or fewer hours was a better option than no paycheck at all.
Are you too poor to rent?
Do people who are too poor to rent typically become home owners?
Many low-income Americans can’t even afford to rent
Published: June 16, 2015 9:01 a.m. ET
By Quentin Fottrell
Personal finance reporter
Bloomberg
The poorest Americans… are increasingly priced out of rentals.
There were only 28 adequate and available to rent homes for every 100 extremely low-income renters in 2013, down from 37 in 2000, according to the Urban Institute, a nonprofit and nonpartisan organization that focuses on social and economic policy. “This gap between supply and demand leaves 72% of the country’s poorest families burdened by the high cost of housing,” it found. Extremely low-income renters are households with incomes at or below 30% of the median income in that region.
Not one county in the U.S. has enough affordable housing for all these renters. Among the 100 largest counties, the number of affordable rental homes ranges from eight per 100 in Denton County, Texas, to 51 in Suffolk County, Mass. This regional disparity is partly due to federal assistance not keeping pace with population growth, says Erika Poethig, a director at the Urban Institute. Only nine of the 100 largest counties increased the number of affordable units for extremely low-income renters from 2000 to 2013.
…
Too many poors are breeding
Too many poors are breeding ??
A the consequence is ??
Another generation of poor & likely pregnant or incarcerated people…
Let me repeat:
Incarceration means a free roof, free three squares, free utilities/cable, a free gym, a free library, free laundry service.
And no taxes to pay.
If I was 75 years old and living on the street, I might commit three or four felonies.
Incarceration means ??
How do you “breed” when you are incarcerated ??
Absent conjugal visits, you cannot. To me that is the best reason for incarceration until we pay people to be sterilized.
A bigger problem is too many workers are becoming poors due the action of the elites.
A world of productive consumers is being turned into 20 to a room shack dwellers who scavange for food and run naked in the streets.
And that’s why my family is in this country. My father’s paternal grandfather was the youngest of nine children. And there was no work in the Old Country.
“Only nine of the 100 largest counties increased the number of affordable units for extremely low-income renters from 2000 to 2013.”
And who wouldn’t want to encourage extremely low-income renters to come to their area? It would do wonders for property values.
These folks bust their @SS for a check and then basically hand most of it over to the slumlord.
The working poor.
“And who wouldn’t want to encourage extremely low-income renters to come to their area? It would do wonders for property values.”
Spoken like a true liberal from a coastal state.
They call such people “elitists”.
Dman is being sarcastic, yo.
I wouldn’t be averse in building one-tier-lower housing in neighborhoods if there are strings attached. If you lose the job, bring in roommates, or get in trouble, you’re evicted.
Spoken like a true liberal from a coastal state. They call such people “elitists” ??
Which one of the 19 coastal states or is it all of them ??
Which one of the 19 coastal states or is it all of them ??
That’s an interesting question. If the Gulf coast is included, the coastal states probably have a large majority of the country’s population.
Fixt for you Donk.
If you lose the job, bring in roommates, or get in trouble, you’re
evictedforeclosed on.I live just a few steps away from a low income apartment complex. And, in the 11 years I’ve been at the Arizona Slim Ranch, that place has disturbed my peace, oh, a handful of times at the most.
What is this place doing well? Management. They’re very proactive. Especially when it comes to keeping the place looking nice and getting rid of lousy tenants.
“There were only 28 adequate and available to rent homes for every 100 extremely low-income renters in 2013…”
According to the National Association of Realtors families can own for less than renting. Go shopping… buy something!
Is there such a thing as Compassion Fatigue?
Are they talking low income renters or low income households? Because it’s pretty easy to put 4 people in a small apartment. Not to mention all the illegal basement apartments that are rented out under the table.
Logical solution: Become a home owner!
2015: Year of subprime comeback?
Yahoo Finance
By Susannah Lee
June 8, 2015 8:00 AM
As the housing market continues to stabilize, a possible trend seems to be re-emerging, the demand to invest in subprime loans. “We are beginning to see the opening up of credit and I think that’s a trend that we’re going to begin to see,” said Brad Friedlander, head portfolio manager for Angel Oak Multi-Strategy Income Fund (ANGLX), a Morningstar rated 5-star fund.
But, says Friedlander, it’s not the same subprime that triggered the financial crisis. It’s “being labeled as subprime when really, that’s almost a misnomer,” he said. “Right now there is a real misperception of risk like new ‘nonprime’ as they call it subprime, outside of that pristine box of credit underwriting.”
…
Let me add another paragraph from the article:
——-
To be resilient from the Federal Reserve’s impending interest rate hike, the money manager is looking for opportunities within fixed income including legacy subprime real estate mortgage backed securities. “Most of our attention are in credit and credit investments,” Friedlander said.
——-
Key word being LEGACY. So is article talking about investors buying newly created subprime (which they claim isn’t really subprime) or are they bottom feeding the legacy strawberry picker subprime?
And IMO, dividing every body into just two bins — prime and subprime — is just LAZY. Evidently people can’t distinguish between a low-FICO-steady-income buyer and strawberry picker.
“Prime” or “subprime” is a distinction without a difference considering people are paying 200 to 300% premiums.
Anyone paying that kind of premium is automatically subprime.
HA is right, when the bubble pops, even those with the means to continue their house payments will walk away when the money machine quits working.
Why isn’t every renter walking today, and every day? After all, the value of the house they rent crashes to ZERO (for them), every damn day.
[actually, renters ARE walking, every day, to buy a house and save money. Just as I did three years ago.]
Which money machine is working for renters? The “opportunity cost” of the down payment and/or savings by renting? The talking point about investing the down payment was valid when people put 20% down, but we’re at 3% now. And Bear just posted an article about rents being higher than PITI. There ARE no savings by renting. Even if there were savings by renting, there won’t be in 10 years.
[yes I know about exceptions and special cases.]
And the buyers won’t walk either. Certainly not on a primary residence. Where are they going to walk TO? A rental which costs even more than their PITI? And HBB seems to forget that housing is a long game. Buyers know that if they pay long enough, they will not be underwater.
‘renters ARE walking, every day, to buy a house and save money. Just as I did three years ago’
‘Homeownership rate lowest in 25 years’
http://www.cnbc.com/id/102627205
You’d have to be an idiot to borrow money and pay these prices.
7 Mortgage Loans For Today’s Low- And No-Downpayment Buyers (Updated For 2015)
You Don’t Need A 20% Down Payment
Housing is on the mend.
Since the start of 2012, home values are up nearly thirty percent nationwide. Unfortunately, rents are rising just as fast. In many U.S. markets, it’s more economical to own a home today than to rent one, which is one of the reasons why first-time home buyers represent 30% of today’s home purchases.
This is higher market share as compared to recent years; a figure buoyed by three key factors.
First, mortgage rates are ultra-low, which has boosted home affordability across the country. Rates continue to troll near 4 percent and remain firmly below last year’s levels.
Second, according to mortgage-software provider Ellie Mae, U.S. lenders are approving more purchase loans than during any period this decade. A few years ago, banks barely approved even half of all purchase loans. Today, they’re approving more than two-thirds.
That’s a huge turnaround.
And, third, there are more low- and no-down payment mortgage programs available to today’s home buyers than during any period in the last 10 years.
No matter how much or how little you want to “put down” on a home, there’s a mortgage program which can help you. Rates are low and it’s easier to get approved.
What follows is a preview of seven popular loans available to today’s first-time and repeat home buyers. Each is commonly available with rates which can be previewed anytime online.
…
Building a collapse into the system. Seems deliberate.
Maybe they figure if they can fend off the crash till after the election, the republicans will be left holding the bag like the democrats were last time.
If the crash is big enough (and the republican president ridiculous enough) they can set the republican party back decades.
That is what they said in the Nation just before Reagan took office.
Yes. I make over six figures and am supporting my wife and son in the Boston area. Our rent went up 10% last year. We are already devoting 1/3rd our take home pay to rent. We can’t really afford to pay more.
In the Boston metro area, all the rentals coming on the market are ‘luxury’ and priced even higher than what we’re paying. They put this place, ‘Vox On Two’ in Cambridge, basically directly on Route 2 highway, and its luxury. What ‘luxury’ person is going to pay $3000 a month to live directly on a highway? They put up huge condo and rental towers in the Fenway area of Boston. All luxury. I can’t for the life of me ever recall an affordable or non-luxury development being built since I graduated college. These units have to be sitting vacant, right? How many ‘luxury’ incomes do we have to support this? Where the hell do our service employees live? Not in Vox on Two, that’s for sure.
Where the hell do our service employees live ??
It is why there is so much pressure to raise the minimum wage significantly…
Sounds like you better hurry up and buy a place before it’s too late!
Check the pockets of town which used to be booming middle class in 1960-1980. Those areas were built up with garden apartments galore. Boxy brick cube buildings, long 2-3 floor buildings lined with balconies, and god-awful skinny floor-to-ceiling windows way over on the corner (giveaway for 1970’s). Look for older cars in the parking lots and LOTS of people at bus stops at 6:30 am.
Ed, you must be lying.
Not being able to afford rent only affects “the poors”. Certainly, you cannot be dull enough to think otherwise (sarcasm).
Now, on to more pressing matters. Such as mass transit for the poor and downtrodden masses (who are moving to places such as rural California and Oklahoma), and lower walk scores!
Yes. I make over six figures and am supporting my wife and son in the Boston area. Our rent went up 10% last year. We are already devoting 1/3rd our take home pay to rent. We can’t really afford to pay more.
Move to an exurb and do the clown car commute. Living in the city is for the young, single and childless.
I think 75%+ of my income goes to taxes and rent.
It could be worse. You could be paying on a mortgage and sustaining losses to depreciation.
Ethan, time to get that ol’ resume circulatin’. McLean Bible Church has resume workshops etc. on Tuesday nights. You might could get yourself a 20K bump with the right phraseology on the ol’ res, and some practice interviews before pros.
I’m in the same boat: single and renting. My rent/taxes:gross is somewhat better than that. The area has several ‘critical mass’ job pools, all of which are spec’d at roughly the same skill sets, all of which are paid at the same high median level. You’ve been in your current place for awhile, right? Two years? Use the free resources available. Put some effort into it, and you’ll get a lot of payback out of it.
Still better than most places I have kept tabs on, I think. The employers in this area are plentiful, and the employee checks deposited right at the stroke of midnight on payday.
Best wishes in cashing in.
Is a reprieve in the works for China’s real estate sector?
Business
No reprieve for China’s real estate sector
While major cities like Shanghai and Beijing saw a bump in home sales, demand in smaller cities like Chengdu and Kunming stayed flat despite lower interest rates and looser home buying rules.
By Valarie Tan, Channel News
Asia’s China Correspondent
POSTED: 16 Jun 2015 19:04
UPDATED: 16 Jun 2015 19:23
Major cities like Shanghai and Beijing saw a bump but in smaller cities like Chengdu and Kunming, demand stayed flat despite lower interest rates and looser home buying rules.
“Rural population entering cities is not exceptionally high,” said Song Huiyin, research director at Centaline Property. “Their main capital for moving to cities, which is the first deposit on a home, has not risen quickly. Their employment is also looking problematic.
“Improvements to homes for residents in third, fourth tier cities are close to saturation. The expansion in this space is not high so third, fourth tier cities face huge barriers in stimulating demand.”
Analysts say China’s severe oversupply of homes in third and fourth tier cities has become so severe that even steep price reductions may not be enough to stimulate demand. It is a consequence of the building binge that followed China’s 4 trillion yuan stimulus to counter the 2008 financial crisis.
Analysts are now expecting developers to speed up projects already under construction to get them launched in the coming months so that they can drive sales in the second half of the year.
“Demand will not see a huge rise. It will come in phases,” said Chen Yanbin, research director at SouFun.com. “Currently, as companies undergo economic restructuring, will their employees be equipped with home-buying abilities? Population import and industries with workers who have purchasing power will determine future demand.”
…
“Analysts say China’s severe oversupply of homes in third and fourth tier cities has become so severe that even steep price reductions may not be enough to stimulate demand.”
“Analysts are now expecting developers to speed up projects already under construction to get them launched in the coming months so that they can drive sales in the second half of the year.”
Yes, nothing drives sales in cities with thousands of empty apartments that won’t sell even with steep price reductions like more empty apartments coming on the market. Did ADan write this article?
The text does not match the title. Clearly, there is a reprieve in the Tier one and Tier two cities. In fact, sales are being held back by lack of supply which will soon be met by more building. Thus, China will soon be using more steel and concrete. Tier four cites make take five years or more to be brought into balance. However, the real estate market is improving so it is less of headwind for China.
make=may
““Improvements to homes for residents in third, fourth tier cities are close to saturation. The expansion in this space is not high so third, fourth tier cities face huge barriers in stimulating demand.”
What the hell do these sentence even mean? Improvements are close to saturation? Yet the expansion faces huge barriers in stimulating demand? This isn’t just a poorly translated article. I think their brains have been so warped by propaganda they don’t know what reality is.
Do foreign investors pose a threat to U.S. residential real estate?
Foreign investors pose threat to residential real estate
Published: June 15, 2015 11:31 a.m. ET
Opinion: Time for the U.S. to act on the influx of foreign money
U.S. real estate purchases by foreign nationals over a recent 12-month period totaled $92 billion.
By Dan Barnabic
The negative impact of foreign investments in American residential real estate might have been badly overlooked by some U.S. government officials — and the potential harm it might cause is largely unknown to the average American.
Reports from a variety of sources suggest that a housing recovery is taking place, though not at the pace expected. As of last month, it was still some 16% below its peak in 2008. Yet at the same time, some U.S. cities are experiencing an unusually high demand for residential real estate, with buyers outbidding each other, often by tens, and sometimes hundreds of thousands of dollars. The same kind of outbidding was going on just prior to the 2007 real-estate crash where wealthy buyers, mostly foreign, were buying homes by paying for them in cash.
Average American home owners, of whom one in three is on the verge of financial ruin, aren’t fueling such buying frenzies. Skyrocketing real-estate prices in America’s selected urban centers are likely the result of a foreign influx of cash, more particularly mainland Chinese money, which is now flooding major American cities in the billions of dollars.
Last year, Bloomberg revealed a secret path that allows wealthy Chinese to transfer billions overseas. Before that, The Wall Street Journal outlined the questionable mechanics of moving cash out of China, where wealthy mainland Chinese bring their funds to Hong Kong and from there to other parts of the world. Most of it ends up invested in favorite foreign destinations — namely the U.S., Australia, and Canada.
Despite some Chinese banks across the border from Hong Kong allowing for a trial program (introduced in 2011) for overseas property purchases and emigration, the Bloomberg report noted that, “China’s foreign-exchange rules cap the maximum amount of yuan that individuals are allowed to convert at $50,000 each year and ban them from transferring the currency abroad directly.” So it’s illegal for mainland Chinese to take more than $50,000 out of the country — but wealthy Chinese are smuggling out billions.
Data from a Global Financial Integrity December 2012 study show that China topped the list of developing countries sending illicit money abroad, exceeding $2.7 trillion for the decade through 2010. In 2010 alone, it totaled $420 billion.
You can bet your last dollar that a good chunk of that Chinese money (of dubious origin) was earmarked for residential real-estate purchases, that is, the roofs over American heads.
The Chinese government turning a blind eye on their fleeing currency is best summarized by Jim Antos, a Hong Kong-based analyst at Mizuho Securities Ltd., cited in the Bloomberg article above. He said that the Chinese government has been trying to internationalize their currency for a lot longer than we thought — with the goal of allowing their Yuan to become freely convertible with other currencies. One can get a more thorough look at the workings of Chinese economy by reading “Trillions of Dollars Missing from the Chinese Economy,” written by Michael Pettis, a senior associate at the Carnegie Asia Programme and professor of finance with Peking University’s Guanghua School of Management.
The National Association of Realtors profiled international home buying activity for 2014. Purchases of U.S. real estate by international clients made during the 12 months ending March 2014 show the total sales volume estimated at $92.2 billion — a 35% increase from the previous period’s level of $68.2 billion. Nearly half, $45.5 billion, of it was attributable to nonresident foreigners which accounted for some 3.5% of the total U.S. existing home sales market of $1.2 trillion. If this trend continues, foreigners will own over 35% of residential real estate in the U.S. over the next 10 years.
General wisdom suggests that a foreign input of moneys flooding commercial U.S. markets might be a good sign for American corporations — but when large sums of those funds are used for snatching up residential real estate, it will, in due time, drive the prices of homes out of reach of middle-class Americans, rendering them unable to afford homes in their own country. Overpriced hubs such as San Francisco, New York, Dallas, Denver, Seattle and others are already becoming out of reach to most Americans.
…
“General wisdom suggests that a foreign input of moneys flooding commercial U.S. markets might be a good sign for American corporations — but when large sums of those funds are used for snatching up residential real estate, it will, in due time, drive the prices of homes out of reach of middle-class Americans, rendering them unable to afford homes in their own country. Overpriced hubs such as San Francisco, New York, Dallas, Denver, Seattle and others are already becoming out of reach to most Americans.”
Foreign money pumping up prices = A lot of city’s tax revenue shortfall problems gets solved and a lot of equity gets magically sprung into existence for cash-outs and spending by the numerous followers of that financial genius David Lereah.
So, it’s all good. Party on.
“… but when large sums of those funds are used for snatching up residential real estate, it will, in due time, drive the prices of homes out of reach of middle-class Americans, rendering them unable to afford homes in their own country.”
Not necessarily true: People can always move to Bodie …
https://www.google.com/search?q=bodie&biw=1813&bih=857&tbm=isch&tbo=u&source=univ&sa=X&ved=0CEYQsARqFQoTCN3W5oPhlsYCFUkuiAodRP4DlA&dpr=0.75
Except Bodie doesn’t have much of an economy, and that’s because there is no money flowing into Bodie.
So if you want a strong economy then you will need some money flow, and if you have money flow then you will have rising prices.
“People can always move to Bodie …”
OR they can rent from foreign landlords!
OR they can rent from foreign landlords!”
Because its cheaper than owning…
” it will…drive the prices of homes out of reach of middle-class Americans”
It’s just a case of trying to explain away the mania. Prices will not remain ridiculously high unless the local people continue to buy at those prices.
This is why housing demand is at 20 year lows. And that’s not going to change until housing prices fall to the long term trend.
And we know that’s a very long way down from current levels.
New estimates from the U.S. Census Bureau put China in the lead with 1.34 billion residents, followed by India with 1.19 billion. The United States is a distant third with 311.1 million people.’
I wonder if people like water flow from high to low ?
China has now exceeded Canada in the purchase of U.S. real estate so they might be something to that.
Prices will not remain ridiculously high unless the local people continue to buy at those prices ??
But there really is only three choices are there…Buy…Rent…Or leave….
So rent for half the monthly cost of buying. Easy solution.
“only three choices”
Ironically, if rents are too high some will choose to rent a smallish place or one in a less convenient location. When house prices are too high, the herd goes after bigger and bigger houses.
or one in a less convenient location ??
That is a form of leaving…
Along with that ends any feasibility for the mass transit and low walk scores that are much fussed about among elitists.
Guess what? Feasible mass transit and low walk scores require inexpensive housing.
Want people to move to the cities? Make it economically possible for them to live there.
The cities are full.
To the contrary; there is more excess, empty and defaulted housing in urban areas than the rest of the country.
Ironically, if rents are too high some will choose to rent a smallish place or one in a less convenient location.
Or take on (more) roommates.
Since the local people cannot afford to buy at the ridiculous prices paid by the all-cash foreign investors, it’s destined to crash in due time, just like CRE crashed on the Japanese investors in the early-1990s.
Tell that to the locals in Austin.
A classic case of: What goes around comes around.
For decades, American citizens from wealthy geographic areas have had no problem taking their oftentimes new-found or inherited wealth out of town or out of state, only to destroy the economics of their new location.
That was just fine. To price out locals in places like Portland, Denver and Austin was more than okay because they profited. Because doing so allowed them to live large and show up the Joneses.
But now, they’re starting to b@tch about what is happening in THEIR prized locales as they, too, find themselves priced out.
Poor babies.
In a credit-driven world, the number of losers increases at a rapid clip. And it will continue thusly.
A society no longer interested in generating wealth, in producing profit, can expect nothing less.
MacBeth read this:
http://www.businessinsider.com/hiring-more-tech-workers-makes-cities-more-expensive-2015-6?op=1
What this tells you is that there’s a singular industry that is ripe for massive pay cuts.
It also tells you the mindset of typical tech workers. High living, high spending. Trending liberal, trending elitist.
Need proof? Look at geographic voting trends. Overlay that with where money tends to pool. Overlay that with concentration of workers by industry. None of it is rocket science.
Geographic trends easily mean just as much as demographic trends.
I work in the tech industry. I think if you look at the cities where the tech people are making good pay, it’s pretty much being taken away with high rents. I could never imagine that salary I make now, but it doesn’t go far at all because rents are high and taxes are high. I probably eat out more than I should, but that spending is what keeps the economy moving I suppose. Most restaurants aren’t slow. And high priced apartments everywhere. Apartment rents per square foot in the area probably match the class A office space rents.
Sure there are the people that win the IPO lottery or get great stock options, but that isn’t a majority. The sales people probably get more cash than the tech people that build the things, not to mention the already rich VCs. And in hot areas like the Bay Area, it costs a million dollars to buy what would be a $100K house on a small plot of land. So once again, the money goes away easily.
But those high priced apartments are all empty.
“For decades, American citizens from wealthy geographic areas have had no problem taking their oftentimes new-found or inherited wealth out of town or out of state, only to destroy the economics of their new location.”
The Equity Locust?
Yep.
But now it’s coming back to haunt them. The very locusts who had a “let them eat cake” attitude toward others in other locations are now having it done TO them.
Naturally, it’s only becoming an issue because they’re increasingly being left holding the bag.
it will, in due time, drive the prices of homes out of reach of middle-class Americans, rendering them unable to afford homes in their own country. Overpriced hubs such as San Francisco, New York, Dallas, Denver, Seattle and others are already becoming out of reach to most Americans.”
How long have we been talking about this here?? 2 years ??
Is oil out of the woods now that the crash is a fading memory?
Wed, Jun 17, 2015, 4:22 AM EDT
A year after the crash, oil markets risk more trouble ahead
Reuters
10 hours ago
A worker rests next to an oil pump on a sunny day in Baku, Azerbaijan, June 16 , 2015. REUTERS/Kai Pfaffenbach
SINGAPORE/LONDON/NEW YORK/TOKYO (Reuters) - A year on from the start of one of the biggest oil price crashes in history, the driving force behind the slide remains intact: there is still too much crude.
While output continues to grow, the economic outlook has darkened in top energy consumer China, where oil demand has been one of the few bright spots in the market.
Add to the mix record output by the Organization of the Petroleum Exporting Countries (OPEC) and the possibility of a return of Iranian crude exports, and further price turbulence looks almost certain.
Oil prices began a seven-month rout this time last year that took Brent crude futures (LCOc1) from $116 per barrel to around $45 by January.
While prices have crawled up since, there are few signs yet that OPEC’s strategy of keeping output high in a bid to drive out competitors, such as U.S. shale oil, is doing enough yet to change market fundamentals.
“The real bearish change is OPEC production that has risen from 29.79 million barrels per day (bpd) last year to over 31 million bpd. I think this is the most significant fundamental change of the last 12 months,” said PVM oil analyst Tamas Varga.
…
“there is still too much crude”
The question is whether China will step up and build another 50 million empty houses. Without that, the miracle is over.
China is still growing rapidly, by closing its least energy efficient plants it is using less energy per unit of output, but the output is rising and is needed to meet increased demand:
http://www.shanghaidaily.com/business/economy/Shanghais-retail-sales-expand-8-percent-in-May/shdaily.shtml
Electricity consumption is supposedly up 1% YoY. Hardly “rapid”. More like “halted”. This is a key point because it is a grow faster or fall down thing.
Repeat, they are closing down the least energy efficient production. You can increase production with energy use actually falling. BTW, for the month of May energy use was up 1.6%.
Possibly confusing consumption with production.
http://finance.yahoo.com/news/oil-prices-stable-strong-fuel-022818901.html
Oil price has been flat for two months.
Is there another miracle credit explosion coming or not?
BTW, this was supposed to be Magic Week on the Chinese stock exchange. $1 Tr in IPOs. Not hearing of any success stories yet, and the air is leaking out of the exchange. Oh well.
No not one trillion in IPOs and lock up of one trillion dollars to buy about ten billion in shares.
BTW, it is going well hence the partial recovery of the market today.
Up for the hour, down for the week. “Going well”.
“China’s turbo-speed stock market may hit a major roadblock in June, when large numbers of IPOs will freeze some 7 trillion yuan (US$1.12 trillion) in funds from the market, reports Shanghai’s China Business News.”
So what exactly does “freeze” mean?
The way you get part of an IPO in China is to commit funds to buy the shares and the more you commit the more you will be allocated. But the IPOs are always seriously over subscribed, thus the 1.12 trillion dollars probably means an IPO(s) of about 11 billion. After the IPO, the excess funds are released.
US Housing Demand Plunges To 20 Year Low
http://2.bp.blogspot.com/-fqSztKilps8/VFlPKlr52JI/AAAAAAAAhKU/v5oS41S-y0s/s1600/MBANov52014.PNG
Some day you will be right but you have been wrong at least 5 years now.
For full disclosure to our audience, WHAT R YOUR LOSSES?
Data Poet data…
Pasadena, CA Housing Prices Fall 5%
http://www.movoto.com/pasadena-ca/market-trends/
Some day you will be right but you have been wrong at least 5 years now.
lol Only 5 years? HA? You still read his barks? Why? The Joshua Tree Extension has a great ignore feature in Firefox.
It’s fun! 99% of the time all I see is brown HA skid-marks. You must have riled HA up good because I see a bunch after your post.
See-Oh-EL-Aye Cola!
Sherman Oaks, CA Housing Prices Fall 4%
http://www.movoto.com/sherman-oaks-ca/market-trends/
Falls Church, VA(DC Metro) Housing Prices Fall 5%
http://www.movoto.com/falls-church-va/market-trends/
Ridgefield, CT Housing Prices Fall 6%
http://www.movoto.com/ridgefield-ct/market-trends/
Lyon Realtors CEO Sued By Woman Alleging Secret Sex Recordings
http://www.sacbee.com/news/local/article23676100.html
Realtors gonna perv
Right? Hide your children and animals, lock your windows and doors. There’s a realtor in the neighborhood.
This may slow the Chinese crapshack buying binge. Fewer Chinese.
“Cameras at the ready, the 12 occupants ran straight toward the sow that had been strolling with her brood along the Gibbon River. Alarmed at the humans’ menacing approach, the now-frantic mother bruin barked a command to her offspring, sending them scurrying across the water to the far bank.
The Chinese observers, unaware of the peril they placed themselves in, stood just 30 yards away from the agitated, teeth-gnashing parent.”
http://www.jhnewsandguide.com/opinion/columnists/the_new_west_todd_wilkinson/for-chinese-wildness-gets-lost-in-translation/article_40908090-187b-5f94-94bb-6560ab9f5a94.html
Gay marriage is commie:
http://www.wnd.com/2015/06/communists-aim-gay-marriage-at-american-family/
And speaking of gay, here Lindsey Graham quoted as saying “don’t vote for me if you’re worn out by war”
http://thehill.com/policy/defense/244022-graham-dont-vote-for-me-if-youre-anti-war
I doubt 99% of people in the US know who Graham is, much less would vote for him. So why is he running? I covered 700 miles yesterday. I had a lot of time to listen to the radio. A few things became obvious; one, there are a bunch of people making a full time living “commenting” on politics.
One mentioned that many of these people running for president are doing so to sell books or get on the speakers circuit or to get a TV show. Let’s take Trump seriously for a second; he is the only one that mentions globalism/trade. I suppose that’s so it can be easily tossed away as an issue. But other things aren’t scrutinized. He says we should have “kept” Iraq’s oil. You know, we tried that. Remember the dozens of bases the US built? It only took weeks for the pipelines to be sabotaged.
I also got to watch Fox in the motel yesterday morning. We don’t even have the pretense of media anymore. It’s pure propaganda. But in all this, there is an actual election taking place. I’m not sure what this plethora of candidates means. There was a time when money wouldn’t be wasted on campaigns that “didn’t have a chance” or were for vanity. Maybe the establishment isn’t as all-powerful as it used to be.
“The best argument against democracy is a five minute conversation with the average voter” — Winston Churchill
I might go to Cleveland next year for the GOP convention, I have free places to stay since I used to live there
I’m sure that this is what the smoke filled rooms assure themselves of. And it is why we don’t have a complete tyranny of the majority. But if not representation, what other way is there? If we do go to hell in a hand-basket, it will be on the back of a two party electoral system.
It’s pure propaganda ??
Yep…Many years ago I would watch & record four programs on Saturday morning on FOX…Bulls & Bears, Cash-in etc…They were informative and I liked hearing the opinions on stocks and the markets….Then, during the election cycle of 2008 they turned into a political bash party and has continued for the entire terms of Obama…Now its onto Hilary…Very little market information offered…
I was talking to my 87 year old aunt last night, her media diet is exclusively the New York Times, the Wall Street Journal, the Christian Science Monitor, CNN, and Princeton Alumni Weekly
She considered herself an informed and well-read reader of the “news”
It is a lot better than just watching the Daily Show and clicking on Google news and thinking you are informed.
I’d vote for Trump. Flame away. I don’t care.
“I’d vote for Trump. Flame away. I don’t care.”
If he selected Dewayne Alonzo Mountain Dew Camacho as his running mate, I would have to vote for him too.
From Think Progress, quoting Trump:
“When do we beat Mexico at the border?” Trump asked the crowd at his announcement at his namesake Trump Tower in New York City. “They are not our friend, believe me…The U.S. has become a dumping ground for everybody else’s problems…When Mexico sends its people, they are not sending their best. They are not sending you. They are sending people that have lots of problems, and they are bringing those problems to us. They are bringing drugs and they are bringing crime, and they’re rapists.”
“Some, I assume are good people. But I speak to border guards and they tell us what we are getting,” Trump continued. “They are not sending us the right people. It’s coming all over South and Latin America and it’s coming probably from the Middle East. But we don’t know because we have no protection and we have no competence. We don’t know what is happening and it has got to stop and it has to stop fast.”
Trump also indicated that he would build a “great, great wall on the southern border” and that he would undo the president’s executive action known as the Deferred Action for Childhood Arrivals (DACA) program.”
And that great wall would be called the Trump Wall, and each section of fence would bear his likeness.
Reality has a liberal/socialist bias.
her media diet is exclusively the New York Times, the Wall Street Journal, the Christian Science Monitor, CNN, and Princeton Alumni Weekly
When you used to the word “exclusively” I thought it would be followed by one news source. That’s not a bad list. I suppose that you could have clued her in to the wonderful world of Drudge. She may not have ever heard of it.
“And that great wall would be called the Trump Wall, and each section of fence would bear his likeness.”
Awesome. Let’s do it. Heck, if he actually got that wall built, he deserves his likeness on it, comb-over and all. Besides, it gives me a tingle down my leg to think of multiple massive Trump faces staring south from the border. Better even than a middle finger.
The combover would need to be real hair, so it could flap in the breeze.
Ben wrote: Let’s take Trump seriously for a second; he is the only one that mentions globalism/trade.
Just for the record Bernie Sanders has made globalism a major plank in his platform.
“During my 23 years in Congress, I helped lead the fight against NAFTA and PNTR with China. During the coming session of Congress, I will be working with organized labor, environmentalists, religious organizations, Democrats, and Republicans against the secretive TPP trade deal.
Let’s be clear: the TPP is much more than a “free trade” agreement. It is part of a global race to the bottom to boost the profits of large corporations and Wall Street by outsourcing jobs; undercutting worker rights; dismantling labor, environmental, health, food safety and financial laws; and allowing corporations to challenge our laws in international tribunals rather than our own court system.”
We’ve had our bread. It’s circus time. Send in the clowns!
This an interesting quote from Graham’s remarks:
“[ISIS] is large, rich and entrenched,” he added, referring to the Islamic State in Iraq and Syria. “If I’m president they will be poor, small and on the run.”
He doesn’t actually say that he could defeat ISIS. So we could spend eight years at war with ISIS under President Graham.
Graham & McCain are two peas in a pod…
” “If I’m president they will be poor”
“They” being “us”.
It’s another fine day for……. https://goo.gl/yRCqOC
when in doubt, DISCLOSE!
Drink from the cup of rage and embrace your housing losses. Drink up Poet.
Simi Valley, CA Housing Prices Fall 5%
http://www.movoto.com/simi-valley-ca/market-trends/
‘We’ve sure come a long way from “you’re either with us, or you’re with the terrorists.”
‘Another American fan of Al Qaeda is Adm. James Stavridis, former NATO supreme allied commander: “It is unlikely we are going to operate side by side with cadres from Nusra, but if our allies are working with them, that is acceptable. If you look back to World War II, we had coalitions with people that we had extreme disagreements with, including Stalin’s Russia. I don’t think that is a showstopper for the US in terms of engaging with that coalition.”
The mouth breathers and window lickers can’t think at this level of complexity, their base is rallied as long as the people being bombed have brown skin…
+1
We’ve sure come a long way from “you’re either with us, or you’re with the terrorists.”
And if you are going to operate in the Middle East you have to make such compromises. The head of the Druze allied with the Syrians shortly after they killed his father.
This is an article written by real journalists at the Washington Post:
http://www.washingtonpost.com/news/energy-environment/wp/2015/06/10/sorry-skeptics-global-warming-may-not-be-so-great-for-plant-life-after-all/
And now back to your regularly scheduled Drudge Report links
Media you should be part of the Royal Society, they will not admit they are wrong either:
http://wattsupwiththat.com/2015/06/16/royal-society-it-will-take-another-50-years-without-warming-before-we-admit-we-were-wrong/
Heh, global warming. I was at my local public health clinic this morning for an eye appointment and looked around the waiting room and all of a sudden it hit me that “global warming” is code for overpopulation, but they can’t say it because that would be racist, or ethnic insult or whatever. But that’s all it is. There was also a report this morning about how groundwater is being used up at an alarming rate worldwide. I believe that, and overpopulation is why. Want more overpopulation? Reward people for breeding,and definitely “empower” those who breed the most, without thought for the future.
Sacrilege!
Tell that to the hypocrite Pope currently inhabiting the Vatican
Why would the Pope not support the real goal of the AGW crowd. World government that would tax countries like the U.S. to provide money to poor countries throughout the world? That is what Goldman Sachs likes to brag about, creating more equality in the world, that is why they are claiming that they are doing God’s work. Of course, doing God’s work does seem to pay well for some. If you are living in the developing world, what the Pope and the globalists want is a good thing, if you are living in the developed world like the U.S. it is a very bad thing. If they succeed the average American will live like the average Mexican in Mexico and so will the rest of the world. For the majority of the world it will be quite an improvement.
Why would the Pope not support the real goal of the AGW crowd. World government that would tax countries like the U.S. to provide money to poor countries throughout the world?
You are off. This Pope is the real deal. If you can’t tell that, you’re not paying attention, have an agenda or you have a cheap soul imo.
“Those who know the price of everything know the value of nothing”.
“global warming” is code for overpopulation’
I’ve had the same thought myself
The stealth Greek bank run continues. How long before we see panicked lines at ATMs?
http://www.theguardian.com/world/2015/jun/16/greece-eurozone-exit-athens-imf
One bubble is bursting….
http://www.marketwatch.com/story/spiking-farmland-prices-can-offer-a-lesson-for-stock-investors-2015-06-17
Oil glut continuing to build.
http://wolfstreet.com/2015/06/16/biggest-glut-in-crude-oil-history-takes-shape-us-russia-opec-saudi-arabia-production/
Or maybe not:
http://finance.yahoo.com/news/global-oil-production-substantially-lower-175257546.html
Somehow…. despite decreasing production, oil in storage is increasing.
What oh what could that possibly mean?
Deep thoughts with Adan.
oil in storage is increasing.
Not crude oil in the US and data is too inaccurate to know whether we are increasing or decreasing.
Sure it is. Tank farm prices are record highs.
What is the world going to do with all this excess oil and crude capacity?
While yahoo is posting the older numbers the EIA released its latest numbers, this whole “oil glut” consists of less than 8% more oil in storage than last year. That is nothing. Crude oil in storage has been dropping like a rock for more than a month. We do have a lot more NGLs in storage but that is not the same as crude oil as I explained earlier today:
http://www.eia.gov/petroleum/supply/weekly/pdf/table1.pdf
And last year it was at decade highs so we’re 8% higher than decade highs. Good to know.
Remember…. Falling prices of all items to dramatically lower and more affordable levels results in a rising standard of living and is good for the economy.
“Deep thoughts with Adan.”
Querque: “data is too inaccurate to know whether we are increasing or decreasing.”
He didn’t disappoint.
I often wonder why he avoids disclosing what is losses are on that shack he overpaid and financed.
Querque: “data is too inaccurate to know whether we are increasing or decreasing.”
Really do you know where to find out how much Saudi Arabia or the rest of OPEC has in storage?
Yes. 8% higher than last years decade high.
Key excerpt from link that will post soon:
Production of natural gas plant liquids in the United States has grown rapidly as a result of increasing exploitation of natural gas in deep shale deposits, so-called shale gas. These liquids are useful, but they are not oil and only displace oil in a minor way. Moreover, their energy content is around 65 percent that of crude oil and so counting barrels of natural gas plant liquids as equivalent to oil is doubly misleading.
The second question media outlets could have asked is whether natural gas plant liquids can be sold as oil on the world market. The answer is a resounding “no.” In fact, major exchanges accept neither natural gas plant liquids nor lease condensates as satisfactory delivery for crude oil. And, if we subtract lease condensate from each country’s total, U.S. production will actually look relatively lower. It turns out that U.S. wells now produce a higher proportion of condensate as a result of growth in oil extraction from shale deposits (which tend to be rich in these condensates).
I read the article, what nonsense. The Saudis are going to produce more oil than their tired fields can produce because they need the money? They may want to produce more but you can only produce what the fields will produce. Shale oil producers are going to produce more oil despite drilling far fewer wells than is needed to maintain production? He neglects to tells us how that miracle is going to occur.
“Shale oil producers are going to produce more oil despite drilling far fewer wells than is needed to maintain production.”
They will focus on increasing production of the most productive wells.
“They will focus on increasing production of the most productive wells.”
What a genius you are, I bet they never thought of doing that before the price fell. I bet you are fond of saying: “Do more with less”. Sorry they started to do that a year before the price fall as soon as they understood the geology. They have exhausted the best wells and are moving on to the just very good wells, the average production figures hides that somewhat since the average or worse wells are no longer being drilled. Even the EIA admits a fall is coming in production. Just like a few months ago when we were told that the storage facilities were going to overflow. However, what we happened is they are being drained and the latest EIA numbers released just a few minutes ago shows that the draining continues, down more than two million barrels.
As they improve drilling techniques, they are able to access supply they know is there, instead of having to leave it in the ground. Or they can stop production, and resume when the price makes drilling more profitable, thus putting a permanent ceiling on prices. Not to mention the huge drop in demand that will come with the next economic downturn, which will hit China and Europe particularly hard.
Geology trumps both technology and cost cutting. We are quickly running out of prime spots to drill.
With a globe awash in oil and a ground full of crude, there is no need to drill.
“We are quickly running out of prime spots to drill.”
Bobby Lee “Tex” McCracker 1967
Why Peak-Oil Predictions Haven’t Come True - WSJ
http://www.wsj.com/…/why-peak-oil-predictions-haven-t-come-true-14119377...
Sep 29, 2014 - U.S. oil production did peak in the 1970s and sank for decades after, exactly as the theory predicted. But then it did something the theory didn’t …
Really, so we drill wells in the U.S that produce 20,000 barrels a day like they did in the twenties and thirties with primitive drilling equipment. We did run out of prime spots and the cost of production soared even with modern production. Because like I said, geology trumps technology. Drilling a hundred wells to produce as much as one well use to produce does not demonstrate the theory was wrong.
geology trumps technology
Maybe but maybe not. One of my degrees is in geology. We might see a new technology in the next generation that will totally trump geology. (Maybe that’s why you’re so against green energy research huh?)
Hey. Why don’t you just post once a day in all caps:
OIL IS GOING HIGHER IN PRICE AND CHINA IS GOING TO GROW
8%7.8%7.5%7%“around” 7% FOREVER.It would save you a lot of time.
A year ago they were bagging about 5,000 barrel a day initial production wells and now we see this on the ND state site, geology is destiny:
PRODUCING WELL COMPLETED:
#28986 - CONTINENTAL RESOURCES, INC., BISMARCK 6-9H1, SESW 9-155N-98W, WILLIAMS CO., 534 BOPD, 761 BWPD - BAKKEN
#28985 - CONTINENTAL RESOURCES, INC., BISMARCK 7-9H, SESW 9-155N-98W, WILLIAMS CO., 700 BOPD, 585 BWPD – BAKKEN
5,000 or 500. It’s raindrops in the desert.
Meanwhile, the world is awash in crude oil and there are billions of barrels just underneath the overburden.
Geology Dan geology. Learn it.
This was suppose to post under the Wolfstreet article.
With crude collapsing 40%+, demand cratering and a global oil glut, what does it matter?
“Even millionaires live paycheck to paycheck”
http://www.king5.com/story/money/2015/06/16/many-affluent-americans-feel-they-are-in-too-much-debt/71256422/
F*ing LOOSERS
yep!
If you’re a keep up with the Jones’s type, you’re going to be poor no matter how much money you have.
And the Chinese are saving 30 to 40% of their incomes and it is their country heading for a collapse? I do not think so.
“And the Chinese are saving 30 to 40% of their incomes..”
And putting it into the stock market, where it can be lost in a matter of minutes.
The difference is it’s all dumb.borrowed.money.
Buying a house on margin is a more painful death sentence than buying stocks on margin.
Housing is more like waterboarding’s daily drip drip of losses, instead of the instant guillotining you get from the stock market.
Hence, the reason why Dollar Tree, etc., are opening stores in San Francisco.
Americans in the Bay Area will be shopping in dollar stores out of necessity. The Chinese won’t be. They won’t have to.
Besides, it’s a rather long flight from Beijing.
They must have an incredible markup to make that rent.
Two bits I saw on Martin Armstrong’s blog, is this a trend of something new?:
‘My sister just bought a house and to get the mortgage she had to explain every deposit and cash withdrawal in her account going back five years. My mother had simply written her a check for $400 to reimburse her for picking up some medicine. They wanted her to explain why my mother gave her $400.
Another friend, who lived with his girlfriend for five years and shared an apartment, encountered the full fury of the government’s hunt for spare change. His girlfriend had written him checks for half the rent for five years. He had to explain every one of those checks before they could get a mortgage to buy a home together.”
“I just bought a house in TN and I had the experience of proving where the money from a Vanguard account transferred into my checking account came from. The lender would not accept the Vanguard or bank account statements. I had to go to the bank and actually get the transmittal numbers and fax that to the lender. The personnel at my bank had never experienced this request before.”
It sounds like some lenders are finally doing their jobs. They must be planning on keeping these mortgages on their books, so they’re checking for more than a pulse.
Shocking, isn’t it?
If they don’t have the warm blanket of a AAA Moody’s rating to sell the paper to the next sucker, they need to make sure the loan is sound.
Maybe they are not keeping them on their books, and want no chance of getting them back when they default.
The appearance of underwriting is not the same as actual underwriting. My bet is they are deliberately throwing in a few oddball request like this so they can say later “look, we tried, don’t blame us”. Meanwhile these ultra-low downpayment schemes loosen up who can qualify.
Is farmland possibly in a bubble?
Market Extra
Spiking farmland prices offer a lesson on market bubbles
Published: June 17, 2015 10:33 a.m. ET
It is hard to know when you’re in a bubble
By William Watts
Deputy markets editor
Investors see bubbles everywhere these days from bonds to Chinese stocks to the U.S. dollar, but determining whether an asset is merely expensive versus completely disconnected from reality is no easy task.
A once red-hot market in farmland that has subsequently cooled off with few ill effects offers a case in point.
As recently as 2013, a sharp rise in U.S. farmland prices was prompting warnings. But since then, prices for prime crop-growing dirt have started to soften, but gently and with few ill effects.
First off, fears of the “next bubble” are understandable. Investors can painfully recall the collapse of two investing bubbles within a decade of each other: the tech bubble in 2001 and the housing bubble in 2007. Both had devastating effects on portfolios, while the latter also served to trigger a devastating global financial crisis.
‘Dizzying prices’
When it comes to farmland, it was Kansas City Federal Reserve Bank President Esther George who made clear in January 2012 that soaring farmland prices were on the radar. She noted at the time that each week seemed to bring “a new tale of dizzying prices at the most recent farmland auction” and that “well-informed, concerned voices” across the region were wondering if these marked a potential bubble.
Her concern certainly seemed justified. After all, it was the collapse of a credit-fueled 1970s farmland bubble that led to the devastating farm crisis of the 1980s.
And it is the Fed’s job to be on the lookout for such irrational exuberance.
There is no uniform definition of a market bubble. In a general sense, economists describe them as instances in which the price of an asset becomes disconnected from its underlying economic fundamentals.
In other words, euphoric investors buy an asset that is been appreciating simply because they expect it to continue appreciating. They’re confident they’ll eventually sell, say, a plot of farmland, to a higher bidder down the road. That is why people paid astronomical sums for tulip bulbs in the Netherlands in the 1630s as Charles Mackay describes in his book “Memoirs of Extraordinary Popular Delusions and the Madness of Crowds,” or revenue-less dot-com stocks in the late 1990s or residential housing in the 2000s. But economists don’t always agree on what constitutes a bubble, with some even arguing that those 17th century Dutch tulip speculators were behaving rationally.
Responding to fundamentals
In the case of farmland, the most recent bubble resulted in the average value of an acre of Iowa farmland nearly quintupling between 1999 and 2013, according to Iowa State University’s long-running annual farmland survey. Price gains accelerated sharply beginning in 2004, posting double-digit percentage gains in eight of the following nine years.
It was a similar story elsewhere in the Corn Belt. But, as the chart above shows, the rise also accompanied a massive rally in crop prices fueled by surging demand in China and emerging markets, which in turn fueled a large jump in farm income.
Since then, however, crop prices have fallen back sharply in the wake of a pair of bumper crops of corn and soybeans. Farm income, which tends to be volatile, is projected to fall sharply in 2015.
Meanwhile, the average price for Iowa farmland fell nearly 9% in 2014 to $7,943 an acre, according to the Iowa State survey. Farmland data from regional Federal Reserve Banks also show a softening of prices across prime row-crop growing areas of the Midwest.
“The fundamentals were good. Now they’re less good and the market is behaving accordingly,” said Brent Gloy, an agricultural economist at Purdue University.
…
You are a couple years too late on that one. Like I was saying when we were discussing Kansas, its main problem is agricultural prices are much lower than a few years ago.
The main problem with Kansas is NOT agricultural prices.
(In fact, beef prices are going UP,
Top 25 Employers in Kansas:
Http://tinyurl.com/pgmdf3w
Gee. Not too many agricultural companies. (In fact zero, if you take meat packers off the list)
Most of the companies on the list operate out of the KC area, or Wichita. A bunch of them in aerospace.
Agriculture isn’t driving the Kansas economy. Private/Corporate aviation does. And there has been zero growth in that business since 2007.
(Cessna had 17,000 employees in 1999 when I left, before the Private/Corporate airplane market died, and offshoring to Mexico began)
Do you really think you can severely impact a sector that makes up 37% of the economy and it is not going to slow that economy?
http://www.ksda.ks.gov/AllNewsItems/2015/01/29/agriculture-drives-kansas-economy-county-level-agriculture-impact-data-now-available
37% of whose economy?
If you count “boots on the ground” jobs, agricultural jobs in Kansas are barely a rounding error.
Unless you count the 4 thousand or so minimum wage legal/illegal immigrants making $10/hour in Dodge City and Liberal.
(FYI National Beef is making lots of money. Most of it going to the HQ in Kansas City, Mo. Or to Minneapolis) How do I know? Because they said so. And because they are flying the crap out of their airplanes.)
And since you can’t tax rich people in Kansas anymore, you have to depend on taxing the wretched refuse, via sales and income taxes.
Agriculture in Kansas hires a ton of minimum wage labor.
Aerospace (including Garmin and Honeywell) hire tons of decently paid people.
The link speaks for itself. Those farms are incredibly productive.
Do you really think you can severely impact a sector that makes up 37% of the economy and it is not going to slow that economy?
You are a mass of contradictions Adan.
To support your version of reality, you act like you think a global busted commodity cycle should affect Kansas but would not affect Brazil - one of the world’s largest Ag/Natural Resource producers.
Got hypocrisy?
No question it has impacted Brazil but by how much? Kansas is only trailing the U.S. by about a .5%, Brazil has negative growth, and it has been slow for about four years. A lot more is going wrong in Brazil then just commodity prices to go from around 10% growth to negative growth.
Cessna had 17,000 employees in 1999 when I left, before the Private/Corporate airplane market died, and offshoring to Mexico began)
And the present governor is responsible for that how? Did it ever occur to you to keep the remaining industry the tax cuts were necessary?
I’ll explain it in simple words.
1) 2000-current - Small businesses used to buy a lot of airplanes, especially small manufacturers based out in the boondocks. Off shoring has killed tons of businesses like that.
2) 1985-present. - Every time there is a recession, the OEMs go crying to Congress, begging for “Accelerated Depreciation Credits”, to stimulate sales of new airplanes.
3) 2007- present - The financial implosion created by Wall Street. The same “Fog a mirror” financing seen on houses was also available for airplane purchases. Since 2008-09, it’s been real tough getting airplanes financed. No Fannie/Freddie for aerospace.
Also….a lot of these airplanes were sold to companies whose revenue came from the Housing Ponzi.
Items 2) and 3) have created the market we have today. The OEMs aren’t competing with each other, They are competing against their five-ten year old, barely used airplanes that are selling for 10-20% of what a new one costs.
Rich people are laffing their azzes off. They are buying used airplanes at 10 cents on the dollar, paying zero sales taxes on maintenance due to state legislatures passing “gotta protect our high paying airplane jobs” laws, and using the money they’ve saved to pay for their trips to Palm springs/Napa/Vail/Jackson Hole/Europe/anywhere but Kansas.
They aren’t moving any more jobs out of Kansas, especially for tax reasons (and give up all those nice perks for training, and Industrial Revenue Bonds?). As they have since discovered, cost savings in Mexico/Dixie are being offset by other “costs”. (like sub-standard parts……also see my link to Zodiac airliner seats yesterday)
In the meantime……….nobody around here is seeing trucks lined up at the border, moving to Kansas because they want to avoid state income taxes.
In fact, my daughter (and many of her friends) are making it a point to move to Missouri, because they are tired of being asked about the “idiots running Kansas”.
They aren’t moving any more jobs out of Kansas, especially for tax reasons (and give up all those nice perks for training, and Industrial Revenue Bonds?).
You are essentially saying that incentives are now keeping the industry in Kansas. Sounds like it was the former governors that were a sleep at the switch and let the jobs leave. Sorry, I do not think you are a tax expert and really know if the remaining companies would have left without the tax cuts. You should be blaming Clinton and NAFTA and not the present governor who appears trying to make Kansas competitive.
the present governor who appears trying to make Kansas competitive.
The current Kansas governor’s making Kansas “competitive” by gutting schools, hospitals (by no Medicaid expansion), raiding reserves and pensions, letting people die (by no Medicaid expansion) neglecting roads, and raising taxes on the middle-class and poor.
Sounds really “competitive” to me.
PS
I lived in Kansas and knew it then and now. You didn’t and don’t.
You’re not in Kansas anymore, a cardboard box in D.C. just is not the same.
As aerospace goes, so does a giant chunk of the state economy, no matter what taxes are. New airplane sales are going to suck, unless and until there is a turnaround in the “Flyover/Main Street” economy, and/or the glut of low-time used airplanes is worked off.
(or “C”, the upcoming “NEXTGEN/ADS-B/FANS-1A” mandates, in which case unmodified/not updated airplanes turn into pumpkins on January 1, 2020.)
The airplane business is a good example of what the economy would look like, if it were not for the Bankster/FED re creating stock and real estate bubbles.
Several of the guys I used to work with are now at the upper management/VP level. I still talk to them a few times a year. They are done with the offshoring to low skill former slave states and Mexico.
(yeah, that South Carolina deal is working SO WELL for Boeing……)
Besides issues with quality control south of the border, they’ve found they have “employee retention” issues. Specifically, they train a guy/gal, and in 2-3 years (just about the time he becomes productive), they quit, because they have enough money to go back to the farm and retire.
You don’t hear anything about this, because keeping J6P in the dark, and continuing to threaten him with outsourcing/offshoring is a good way to keep him for asking for more cheese.
Either way, Kansas state TAX POLICY is the least of their issues. Mainly because they aren’t paying any taxes to begin with.
BROWNBACK IS A MORON. NOBODY IS GOING TO RELOCATE TO KANSAS BECAUSE OF A ZERO INCOME TAX ON 1%ERS and BUSINESS.
And I don’t turn down work in Missouri, because I have to pay state income tax on my 1099 work.
See me in 5-10 years. Then we’ll see who evaluation is right.
Random observation on the Pope’s climate change encyclical: it’s interesting how the Catholic church is embracing science and saying the hand of man can change the climate.
Back in 1517 the Protestants were the modernists breaking away from a more backwards, stoic Catholic church where leaders mumbled in Latin. Now it almost seems to be a reversal, with the Catholics being a more modern institution while the American protestants are the more backwards ones, rejecting science, saying man can’t change climate, the Earth is 6,000 years old (yet Noah lived to be 600).
Back in 1517 the Protestants were the modernists breaking away from a more backwards, stoic Catholic church where leaders mumbled in Latin
With that statement you show you know nothing about what really happened.
The problem was corruption. The Catholic church preserved Greek and Roman science and was certainly elitist but describing protestants as modernist misstates the history. The protestants believed that interpreting the bible was not just for the elites that anyone was capable of doing it. The movement was populist and the Southern Baptists you see today are very much in the tradition of the original protestants. The protestants were against the art of the Catholic Church and wanted to censor things like nude art.
WPA didn’t say anything about the reason that the Reformation occurred. The Protestants could be called modernists because their actions changed history in a drastic way.
Corruption was one of many factors, and you are wrong to paint it is the only or primary factor in the Reformation movement. Another factor, as important as corruption, was simply the increasing presence of a European laity who had some education and could now read. In that general sense, yes, the Protestants were more modernist.
With that statement you show you know nothing about what really happened.
Dan, meet mirror. Mirror, meet Dan.
You need to stand the term modernist on its head to reach that conclusion. The Calvinists would be considered religious zealots today.
One of the problems with the Catholic church at the time, is it wasn’t burning homosexuals at the stake anymore, it was selling them indulgences. The “modernists” took care of that and gave them the “proper” punishments. The puritans of the Scarlet letter were very much the modernists you are talking about. Compare how they dressed to say the Spanish women of the same era and tell me who these modernists were.
Dan, meet mirror. Mirror, meet Dan.
It might not matter.
I actually think it’s possible that Adan could see a gargoyle in the mirror and think he was beautiful.
Note his obliviousness towards facts that contradict his dogma.
…because dan was THERE! Riding a dinosaur with Jesus.
Wow an ad hominem attack from someone that thinks like a five year old. Prove one thing I said wrong and you will learn to debate like an adult.
Don’t be a Lola.
When was the last time you were proven wrong about anything? What was it about? Coming up blank, aren’t you?
Now does this reflect reality, or does this reflect delusions of adequacy?
Prove one thing I said wrong and you will learn to debate like an adult.
Come on Adan. Your getting soft.
Just call him a wh0re or a “hom0″ Adan, like you do to me. You know…..like and adult.
Got hypocrisy?
“you’re”
and
“an” adult.
Too distracting. Note the time of my post in Brazil time. I’m on the third floor balcony of a house in Brazil with a 240 degree water view at sunset. Dang.
It makes life pretty good right now.
I thank God and fate that I don’t live in a cardboard box, but many better than me do.
Wake me when the Pope starts handing out the Pill.
AFAIK he doesn’t deny the science behind the pill.
Is it possible that the Pope fears more for the long-term existence of the Catholic church more than any purported “global warming”?
Interesting how rapidly a liberal such as yourself is willing to accept the Pope’s actions in good faith.
Must everything be a conspiracy? I don’t have a reason to doubt his sincerity. If his sole purpose is to drum up new members there are more exciting things he could do than talk about climate change.
I don’t look at protecting the earth and what the Pope is going to say as a ‘liberal’ thing. It’s simply the Christian Shepherd Concept.
The Lord is my Shepherd and mankind is the shepherd of the earth. If not us, then who?
It’s actually a (real) conservative concept. Just like hunters generally conserve the land they hunt.
Is it possible that the Pope fears more for the long-term existence of the Catholic church more than any purported “global warming”?
What, do you think that the Soros and the Bilderbergers will put the Catholic church out of business if he doesn’t go along with the global warming scam?
Boston Metro Housing Prices Fall 14%
http://www.zillow.com/ma/home-values/
Yesterday Blue Skye posted:
“I suppose I find the proposal that the biggest housing bubble in our history started in 2004 and peaked one year later preposterous. You are not alone though. I think we have discussed this before.”
One quick data point: New home median prices exceeded $200k for the first time in November 2003. The first full year that they were over $200k was 2004.
To be clear, I am NOT saying that the bubble was somehow a 1-year phenomenon.
Prices were approaching (or at?) a cyclical peak in 2003…and then the credit spigot started to open up more and more (AAA rated, NINJA loans, Option ARMs, etc.), which put rocket motors on the housing markets, driving prices up until the middle of 2006/2007. While prices in 2007 were below 2006, the real crash didn’t start to occur until later in 2007.
The run up didn’t happen over a one-year period, but 3-4 years.
…. and were already inflated 100%+ over long term trend by 2003 Rental_Fraud.
A nice summary of Gexit
The fear?
It isn’t that if Greece leaves the euro EURUSD, -0.0533% , the Greeks will then suffer a terrible economic meltdown.
The fear is that if Greece leaves the euro, the country will return to prosperity — and then other countries might follow suit.
******
Are the Greeks really just a bunch of ouzo-sipping layabouts, as the Champagne-sipping layabouts in Brussels like to claim?
Prior to embracing the euro, the Greeks managed real growth of 4% a year and an average unemployment rate of 7.7%.
Since accepting the warm financial embrace of Brussels, Frankfurt and Berlin, Greece has managed growth of 2% a year and average unemployment rate of 14%
http://www.marketwatch.com/story/europe-knows-greece-will-be-better-off-exiting-the-eurozone-2015-06-16?page=1
They bring up Iceland’s success as well, and that Spain,Italy and others are at the door waiting to see what happens.
Might not want to sell those treasuries just yet. Grexit will likely cause a stampede out of the Euro.
The problem is their industrial base is now gone and almost impossible to get back. Do you think they are going to get shipbuilding back from the Chinese and other Asians?
Industrial base is damaged due to the Euro. As the entire western world has used debt to mask the loss of manufacturing.
Lower wages and cheap property and expertise will draw investment. There will be more jobs when they control their own currency.
I agree eventually they might be better off. But like they say everyone wants to go heaven but nobody wants to die. I have seen estimates that immediately they would experience a 60% decline in living. It takes time to rebuild an industrial base even with the right policies in place. It would be several generations before they are better off than they are right now with the EU subsidies.
Dan,
Falling Prices=Rising standard of living.
“It would be several generations before they are better off than they are right now with the EU subsidies.”
It’s the European banks that are being subsidized, not Greece.
Iceland managed a turn around in 4 years.
With a dynamic economy rich in natural resources and as it was pointed out their own currency. I remember their begging for admission to the EU to save themselves but I assumed EU membership had been granted, my bad. However, Greece does not have a functioning economy that can rebound without the EU subsidies.
Neither did Iceland. Iceland didn’t recover until prices fell to dramatically lower and more affordable levels.
Greece does not have a functioning economy that can rebound without the EU subsidies.
Right. Greece is a brand new country that only became a functioning country and society about 20 years ago.
I know it’s painfully obvious by now but I just gotta say…”DEBT IS DUMB”
Massachusetts Housing Prices Fall 16% Statewide
http://www.zillow.com/ma/home-values/
Dang. At least Trump saying somethings that need to be said. You know the USA and especially the Repubs are really messed up when the only Repub candidate saying a lot of this stuff is Donald Trump. He won’t win but maybe he’ll change the debate for the good imo.
Here are the big ideas in Donald Trump’s presidential campaign
http://www.businessinsider.com/donald-trumps-2016-campaign-ideas-2015-6#ixzz3dL06u4fj
…”Our country is in serious trouble,” he said. “We don’t have victories anymore. We used to have victories, but we don’t have them. When was the last time anybody saw us beating, let’s say China, in a trade deal? I beat China all the time. All the time. When did we beat Japan at anything? They send their cars over by the millions. And what do we do? When was the last time you saw a Chevrolet in Tokyo? It doesn’t exist folks; they beat us all the time.”
Unemployment
Trump said the US economy wasn’t growing as fast as it should, which he again linked to international trade.
“Last quarter, it was just announced, our gross domestic product — a sign of strength, right? But not for us: It was below zero. Who ever heard of this? It’s never below zero. Our labor participation rate was the worst since 1978,” he said.
He also said the US unemployment rate of about 5.5% was misleading, as it did not include people who had given up looking for work:
…Trump also said the president’s healthcare legislation should be repealed and “replaced with something much better for everybody … and much less expensive.
…Entitlements
Trump vowed to protect Social Security spending from any cuts.
“We’ve got Social Security that’s going to be destroyed if somebody like me doesn’t bring money into the country,” he said. “All these other people want to cut the hell out of it. I’m not going to cut it at all. I’m going to bring money in and we’re going to save it.”
….Infrastructure
As president, Trump said, he would fix the country’s aging infrastructure system. He touted his own success as a real-estate developer to explain how he could rebuild roads, bridges, and airports far more cheaply than they are currently being constructed.
“Rebuild the country’s infrastructure; nobody can do that like me, believe me,” he said. “It will be done on time, on budget, way below costs, way below what anyone ever thought. I look at these roads being built all over the country and I say, ‘I could build these things for one third.’ We have to rebuild our infrastructure: our bridges, our roadways, our airports. You come into LaGuardia Airport, it’s like we’re in a third-world country.”
Read more: http://www.businessinsider.com/donald-trumps-2016-campaign-ideas-2015-6#ixzz3dL0jPzrR
He’s sounds as clueless as O’Trauma don’t you think Lola?
I thought “trade deals” were supposed to be mutually beneficial?
He’s right, in a way. Any idiot who can do match can see who is going to “win” when a country with a market that is 10% of the size of another country’s is allowed “free market access”.
Made no sense for US manufacturers to develop marketing/distribution/support infrastructure, just to sell cars into a market 10% the size of your own.
The sad fact of the matter is, the US manufacturing industry since the start of the Cold War has been sacrificed, in order to turn Germany, Japan, South Korea, Taiwan, etc. into “allies” and “capitalists”.
Or, in the case of Mexico, keep an even larger number of illegals from crossing the border.
We all agree with Trump, yet nothing ever changes. O had hopes too, but congress killed those.
I wouldn’t say I agree with Trump, just that our trade policies are a mess and I was glad to hear it brought up. I don’t think he will last 10 minutes in a debate, because he would have to explain how stuff would work. Like building a giant wall and having the Mexican government pay for it. Easy enough to say, but good luck trying to get the Mexicans to go along. At least if tried it would put an end to this fence nonsense. They would get a year into it and realize how ridiculous it is. If you want to stop illegal immigration, just use the payrolls, of which every penny is reported to the governments. It could be shut down in months.
Yep, big biz loves illegals as do small biz. Easy to shut down if they really wanted to.
You could make it illegal to rent to illegals, no driver’s licence, no insurance, no bus pass, no schools….
easy to end it.
Chinese manufacturing companies close up shop, invest their capital in leveraged stock speculation with the shoe shine boys.
http://tinyurl.com/nqbpw36
“Idiotcracy” was a documentary.
McKinney, TX Housing Prices Fall 11%
http://www.movoto.com/mckinney-tx/market-trends/
Gas at the Kauai Costco $3.29
Gas in San Luis Obispo, CA $3.99
care to explain?
Burrito in Kauai $14
in SLO $7
And falling housing prices in HI.
HA is spot on again, getting super cheap: http://www.trulia.com/property/3042709452-5204-Weke-Rd-Hanalei-HI-96714
Far from cheap and a long way to fall.
that has has a lot of value.
Data Poet data!
Antioch, CA Housing Prices Fall 6%
http://www.movoto.com/antioch-ca/market-trends/
$38 mill and you get a toaster oven too!
… and not a buyer in sight.
College kids spending daddy’s money.
1. Special blends of gas required for California
2. No new refineries in California in decades
3. New state Cap-and-Trade scheme that drives up prices anywhere from 16 to 76 cents.
http://www.contracostatimes.com/california/ci_27218752/california-fuel-prices-going-up-its-green-house
It’s amazing how many of my friends whine and complain about the high gas prices of California when they visit other states. But they still come back here and pull that D lever.
I voted for Arnold. uhg!
Chicago kicks the debt can again…..
What a clown show.
UPDATE 1-Chicago City Council approves mayor’s $1.1 bln bond plan
Reuters 6/17/2015 3:48 PM ET
Print Article
(Adds city budget schedule change, comment from mayor)
CHICAGO, June 17 (Reuters) - The Chicago City Council on Wednesday approved with no debate Mayor Rahm Emanuel’s proposal to sell $1.1 billion of bonds to continue restructuring outstanding debt and pay other obligations.
“This is a step that is necessary to refund existing debt and begin to take steps to claw out of the financial condition we are in at the present time,” said Alderman Ed Burke, chairman of the council’s finance committee, which approved the bond plan on Monday.
The city is repairing damage from Moody’s Investors Service’s downgrade of its credit rating to junk last month, even as it braces for a possible further drop in the rating as pension payment pressures mount.
Chicago will use the authorization to convert short-term commercial paper into long-term fixed-rate bonds and complete the refinancing of interest rate swap agreements. The bond deal will free up $170 million for the city’s coffers by pushing payments on outstanding bonds into future years.
Proceeds will also be used to cover obligations, including $75 million in retroactive police pay.
The general obligation (GO) bonds will be priced through senior underwriter Morgan Stanley this summer.
Moody’s downgrade of Chicago’s GO bond rating to Ba1 triggered $2.2 billion in accelerated debt and fee payments by the city.
Forbearance agreements with banks that provided letters of credit backing the variable-rate debt or swaps used to hedge interest-rate risk on it gave the city time to convert $918 million of variable-rate debt into fixed-rate bonds so far. Those debt conversions attracted many yield-hungry investors, but still left Chicago with hefty interest costs compared to higher-rated issuers in the U.S. municipal bond market.
The city, the third largest in the United States by population, is struggling with a projected $300 million structural budget deficit and a looming $550 million contribution increase to its public safety workers’ retirement funds.
A bill passed by the Illinois Legislature last month would reduce the pension payment, but Governor Bruce Rauner, who has criticized the legislation, may not sign it into law.
With hope fading, the mayor is moving up the process for the city’s next budget that normally starts in October.
“I think it’s important for the city of Chicago to seize the moment and as best it can determine its own future and not have it held somewhat by (the state government) and their inaction,” Emanuel told reporters after the city council meeting. (Reporting by Karen Pierog; Editing by James Dalgleish and Jeffrey Benkoe)
90 Days: Treasury Says Debt Has Been Frozen at $18,112,975,000,000
By Terence P. Jeffrey | June 15, 2015 | 12:48 PM EDT
(CNSNews.com) - The portion of the federal debt that is subject to a legal limit set by Congress closed Thursday, June 11, at $18,112,975,000,000, according to the latest Daily Treasury Statement, which was published at 4:00 p.m. on Friday.
That, according to the Treasury’s statements, makes 90 straight days the debt subject to the limit has been frozen at $18,112,975,000,000.
RainMaker!
http://www.naturalnews.com/050101_California_drought_property_values_real_estate_collapse.html
California property values collapse as water shut-offs begin… wealthy community to go dry in days… real estate implosion now inevitable
Learn more: http://www.naturalnews.com/050101_California_drought_property_values_real_estate_collapse.html#ixzz3dNZVI8HI
Is there a pick-up truck bubble?
http://www.mrmoneymustache.com/2015/04/28/what-does-your-work-truck-say-about-you/
Very entertaining and true. Thanks!
Shanghai freight index totally collapsed. Oh, the humanity!
http://wolfstreet.com/2015/06/17/shanghai-china-containerized-freight-index-collapses-top-carriers-maersk-price-war-to-form-global-shipping-oligopoly/