Bits Bucket for June 20, 2015
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Realtors are liars.
You can say that again.
CR8R
What if China’s stock market crashed and Greece grexited at about the same time?
Would world markets collectively yawn a sigh of relief?
What would Prof do - as an individual - should California’s housing market crater and at the same time, you run out of water and an 8.00 earthquake hits?
What’s your Plan A, Plan B, Plan C?
I’m surprised that hasn’t been a discussion here on the HBB.
What would you do?
So am I. The 8 earthquake is more likely to hit than China collapsing. BTW, I find this interesting from India:
http://timesofindia.indiatimes.com/business/india-business/Path-to-10-per-cent-not-impossible-FM-Arun-Jaitley/articleshow/47745016.cms
While India’s economy is only 1/5 the size of China’s economy still 10% growth is going to use up a lot of commodities, if it achieves anything close to the growth the super bull cycle in commodities comes back to life.
Thanks for the Saturday morning irony. If China were growing at 7%, the commodities boom would still be going strong.
A 10% growth boom in India would be like 2% growth in China, and even that is not happening.
China can grow at 7% by increasing service industry growth and it does not cause commodity prices to spike. That is what the data is showing, China has a strong service sector while the least efficient factories, mines etc. are closing. Many of those factories were using technology that was fifty years or more old. You are right about India right now, but exponential growth is just that it would not take many years of 10% growth to create a huge increased demand on commodities.
And crumbling GDP, housing and copper too.
“China Gross Domestic Product (GDP) Grew 7.4% in 2014, The Lowest Rate In Nearly A Quarter Of A Century”
*FYI*- Chinas GDP growth rate is still falling
http://www.theguardian.com/business/2015/jun/08/chinas-economic-weakness-continues-imports-and-exports-fall
Falling prices are what we need.
Yes, Dan was wrong about copper and continues to ignore it.
As for “service industry growth”, the story changed pretty quickly from “we will shift to service” to “we have shifted to service” growth. Another of those Chinese magic tricks.
As we learned in Pittsburgh after the close of the Steel Age, service industry brings wealth to a region only if it is exported. The Chinese will not grow to world domination servicing each other, which includes building empty housing.
Another old technology they are cracking down on is prostitution. Seems counter productive. There can be no happy ending.
The drop in copper allowed China to buy up copper mines cheaply, I am not sure if China did not help engineer the drop:
http://www.mining.com/gigantic-copper-mine-reaches-milestone/
…. just like buying pets.com on the way down to zero.
McKinney, TX Housing Prices Fall 12%
http://www.movoto.com/mckinney-tx/market-trends/
Excerpt, by buying the mine they show that they expect cooper prices to rise over the next few years and implicitly where they think their economy is going, by waiting they show that they “knew” the price was going to fall, did they destock their warehouses and engage in a little paper copper manipulation to “steal” a massive copper mine? We may never know:
The Swiss-based firm had already lavished $4 billion on the project by then and China took its sweet time to ink a deal.
While negotiations of the sale dragged on for another year Las Bambas was being thoroughly de-risked by one of the more experienced teams in the global copper mining game.
At the same time the copper price was sliding to a near four-year low, strengthening China’s hand in the final month of talks.
Look at the 5 year graph:
http://www.movoto.com/mckinney-tx/market-trends/#city=&time=5Y&metric=Median%20List%20Price&type=0
Sure, prices double in 5 years all the time. No bubble there.
Interesting how McKinney, TX’s housing prices are dropping concurrently with China’s stock market. I wonder if there’s a causal link?
China can grow at 7% by increasing service industry growth
Sure, just like the US circa 1996. We could afford to let manufacturing go because we were all going to have “knowledge jobs.” How did that work out? And don’t give me crap about China having a higher IQ. Even in the US there were plenty enough smart people. There just weren’t enough jobs. The same will happen in China…
..especially if there are Chinese dudes spending 14 hour days developing that housecleaning robot. He’s going to put a hundred million people out of work.
There are only two diffences between the chances for your scenario and mine; otherwise they are equally likely:
1. China’s stock market saw the biggest crash since Lehman Brothers imploded in 2008 –JUST THIS PAST WEEK;
2. Barring yet another deus ex machina ending to the current round of negotiations, a Grexit is in the bag.
P.S. Didn’t mean to suggest that the CA large earthquake / water shortage scenario is not worrisome, especially if a quake hits the Delta Area. Just not imminent or already underway as my own crisis examples are.
Biggest correction since 2008. Still up around 100% over the last twelve months. It is direction that counts as long as China is moving toward free enterprise and a way from socialism it will do well, if it ever does like Brazil and stop going down that path like Brazil did then it will stop growing just like Brazil or the U.S. for that matter.
“Still up around 100% over the last twelve months.”
You can watch the market through the rear-view mirror while I watch the crash through the windshield, and we’ll both enjoy the ride!
I can watch China’s economy grow around 7% this year as I predicted as you watch your rent go up with the money probably going back to China.
No, our landlords are American blue collar workers and self-styled real estate investors who live in Poway, CA.
Anyway:
Finance More: China
China’s economy is hitting a wall — and it’s going to affect everyone
Mike Bird
Jun. 18, 2015, 5:19 AM
For years, Chinese growth rates have been a byword for extremely fast economic development, and the phrase is still used that way.
Unfortunately for China, the country doesn’t actually have “Chinese growth rates” anymore. And pretty much nobody is expecting them to return.
China grew 7.4% last year, missing its own 7.5% target and notching its slowest expansion since 1990. Some analysts think even that is a massive overestimation.
…
GDP is not a good indication of China’s growth, mostly because it’s bogus.
GDP is not a good indication of China’s growth, mostly because it’s bogus.
Just like Rasmussen polling numbers.
If China is moving away from socialism, then that’s only because they’re communist, not socialist.
Yo, California Dude in New Mexico:
I’m in China right now, and when I return to the U.S. and fly over the China’s Great Firewall…I’ll be posting!
The Open
China stocks plunge as bubble fears grow
By Charles Riley
Your video will play in 00:24
This has been one terrible, horrible, no good, very bad week for the Chinese stock market.
China’s benchmark Shanghai Composite index is now in correction territory after falling 13% over the past five trading sessions, as investors grow increasingly wary of what many analysts describe as a bubble.
The pain was most acute on Friday, when the Shanghai Composite shed more than 6%, with losses accelerating in afternoon trading. The Shenzhen Composite, which is heavy on tech stocks, dropped by the roughly the same amount.
For investors, the pullback is a major reality check. The Shanghai stock market has more than doubled over the past year. The smaller Shenzhen market has grown by 160% over the same time period.
Some observers have been using the “bubble” word for months. Still, the Shanghai Composite has powered on, gaining nearly 40% since Jan. 1. By comparison, the S&P 500 has gained only 2% over the same time period.
…
U.S. investors on Wall Street need not worry about the China stock market crash, as it is contained to China.
Look out below
China’s stock market fell hard this week—really hard
A Chinese investor monitors stock prices at a securities firm in Shanghai.
It’s a totally understandable feeling.
(Reuters/Claro Cortes IV)
Written by Melvin Backman
June 19, 2015
The Shanghai Composite and Shenzhen A Share stock markets had bad weeks. Really bad weeks. Both lost more than 10% of their market value, and each fell about 6% in Friday’s trading alone. The catalyst for this week’s volatility? Queaziness from abroad (paywall).
Bloomberg had a prescient story about the Chinese equity bubble two days ago (if you ignore that bubble chatter has been following the indices all year), and it highlighted many of the recurring themes that have been echoed over the past few months:
But as Quartz’s Lily Kuo noted in a post that put the rough week in (charted) perspective, things were good while they lasted before the correction:
Don’t weep too hard for the Chinese traders. Shenzhen stocks are are still up 94% on the year, and Shanghai’s main index is up 38%.
…
Luckily for Wall Street investors, there is no “inherent need for a correction” in U.S. stocks, which are properly valued at current levels for incipient Fed interest rate liftoff.
Chinese shares slump raises questions about length of correction
Correction from 12 June peak wipes £6.7tn off value of China’s stock markets, with analysts warning indexes have become too frothy since November
An investor looks at stock information at a trading hall in a securities firm in Haikou, Hainan province, on Friday. The benchmark Shanghai Composite Index ended the week down 13.3%.
Photograph: Zhao Yingquan/Xinhua Press/Corbi
Reuters in Shanghai
Friday 19 June 2015 08.19 EDT
Last modified on Friday 19 June 2015 08.54 EDT
China’s main stock indexes have finished the week on a grim note, with the Shanghai Composite ending down 13.3%, its worst showing since the global financial crisis.
Many analysts had warned that Chinese bourses had become too frothy since November, with some companies trading at 200 or 300 times earnings amid incredible volatility.
The doubling in primary indexes in Shanghai and Shenzhen since late last year has made Chinese markets the world’s best performers. But net market capitalisation of the equity markets, at 66.2tn yuan (£6.7tn), now exceeds the size of China’s GDP.
The correction from the 12 June peak has wiped out 9.24tn yuan worth of value.
“Today’s fall was more savage than we had expected. Investors were panicking,” said Zhang Chen, an analyst at the Shanghai-based hedge fund manager Hongyi Investment. “The market had gained so much previously, so I think there’s an inherent need for a correction.”
…
Remain calm, there is no need to panic. In fact, the situation is fully contained!
Home
“Calm Reigns” Everywhere As Greece Inches Closer To Default, China Crashes
Tyler Durden’s picture
Submitted by Tyler Durden on 06/19/2015 06:58 -0400
In what is perhaps the most glaring instance of central bank intervention yet, Reuters today captured the market mood as follows: “Calm ruled Europe’s stock and currency markets on Friday as Greece inched closer to a default later this month….the euro was down just 0.3 percent against the dollar and major European stock markets gained in early trade.” Why is Europe (and by extension US futures) so desperate to show green today even with a Greek default imminent? The same reason we explained back in January when we said the ECB and the Fed would do everything in their power to eliminate all Greek “negotiating” leverage which from day one was the attempt to create market contagion from Grexit. Unfortunately for Greece, the ECB’s QE intervened and blew a hole right through its plans, and now,
The inverse, however, is certainly not true as ECB “sources” leak each and every day just how bad the Greek bank run is, and promptly put this information into the public domain in hopes of accelerating the already terminal bank run which unless halted will lead to capital controls and ultimately the fall of the Tsipras regime: precisely what the Troika has been after all along, as we also explained all the way back in February. Sure enough, just a few hours ago Reuters “sources” reported that after €2 billion exited the Greek financial system in the first three days of the week, on Thursday the outflow hit what may have been a record €1 billion in one day.
Varoufakis quickly slammed such rumors: “Regrettably, no discussion of our proposal took place within the Eurogroup. Even more regrettably, instead of that essential discussion, we observed pernicious ‘leaks’ to the press regarding Greece’s banking system.” Rumors which have done their job, and have put the Greek financial system in a toxic spiral from which there is now no return absent total surrender by the government, or, of course, a last minute bailout by the Russia-China axis which would diametrically change the shape of things in Europe.
But we’ll cross that bridge when we get to it, especially since overnight China had other problems, and as noted earlier, had its stock market not only enter the third 10% correction in the past few weeks, but its stocks tumbled 6.4%!
..
Economics & Finance
6/19/2015 @ 4:25AM
Greek Bank Run Accelerates; Emergency Assistance Called For
As I’ve been saying for some time now whether or not Greece stays in the euro is not something entirely under the control of the politicians sitting around the table and discussing the debt. If the Greek banks are drained of their deposits then it becomes the decision of the European Central Bank as to whether they will continue to prop up said banks. And that draining of those deposits is accelerating as the debt talks get nowhere. It really is possible that the depositors will bring matters to a head faster than anyone can conclude those negotiations:
…
Is panic selling in China good news for Indian markets?
By Kshitij Anand, ECONOMICTIMES.COM | 20 Jun, 2015, 12.06PM IST
…
Fear and panic grows as billions flow out of Greek accounts
GERMAN PRESS AGENCY - DPA
ATHENS
Published 22 hours ago
Fear and panic grows as billions flow out of Greek accounts
From 1.7 billion to 2 billion euros (1.93 billion to 2.27 billion dollars) flowed out of bank accounts in Greece on Friday alone as its government is threatened with insolvency, Greek media reported Saturday.
The withdrawals came a day after talks between Athens and its eurozone partners failed to reach a breakthrough on Greece receiving the remaining money in its international bailout. They brought the withdrawals for the week to 5 billion euros, the conservative Athens newspaper Kathimerini reported.
A run on the banks has not occurred. Depositors have not lined up at banks to take out their money, but business at the country’s ATMs Saturday was brisk.
Fears are rife that Greece’s government is about to run out of money after months of talks between it and its creditors have failed to achieve an agreement to unlock 7.2 billion euros in bailout aid. The European Commission, European Central Bank and International Monetary Fund (IMF) are demanding reforms from Greece’s leftist government, which took office in January, in return for the money.
After Thursday’s talks with eurozone finance ministers also failed, an emergency summit was called for Monday as time is running out for Greece. The European part of its bailout is expiring on June 30, the same day that the country is to repay 1.6 billion euros to the IMF.
German Chancellor Angela Merkel warned Greece that action must be taken before Monday.
“A decision can only be reached at the summit Monday if the basis for a decision is made beforehand,” she said Friday in Berlin.
Otherwise, Monday’s meeting in Brussels will be for consultations only, she said.
EU President Donald Tusk, meanwhile, warned against having excessive expectations about the meeting of eurozone leaders.
“We must free ourselves of any illusions that there is a magic solution at the highest level,” he said.
As a result, Bitcoin is a great alternative. Could shift the balance of power in Greece.
http://www.cnbc.com/id/102771200
Journal
Bank run feared in Greece
Greeks have withdrawn billions of euros from the country’s banks this week. Many appear to be losing hope that their government will avert bankruptcy by the end of the month. Eurozone leaders have called an emergency meeting for Monday. But many Greeks are coming to terms with the idea that the Euro might not be their currency much longer.
I’m not the Prof. but do live in Calif. and have thought about those potential calamities (long term drought and earthquake) but I’m currently renting and retired early 3 years ago so it would be relatively easy to relocate…would probably move north to Oregon where there is too much water. If these things come to pass having been shut out of buying a house in 2011/2012 could be a blessing in disguise. Did own a house for 10 years and liked it but no way I’m buying locally unless Bubble 2.0 pops in a big way and prices drop at least 30%. In the meantime life as a renter in the wine country is very good…
Oregon (and Washington) has the potential of catastrophic earthquakes:
http://www.portlandmonthlymag.com/news-and-profiles/city-and-region/articles/the-big-one-an-earthquake-survival-guide-july-2014
But the PNW does have lots of water (still).
After being in San Antonio for nearly two weeks (just got back to Orange County, CA this afternoon), I was impressed by the green and the very abundant shade trees of that part of Texas. The locals say you can have a storm cellar to ride out the tornados. They prefer tornados over earthquakes. Earthquakes are unpredictable.
Real estate taxes in Texas are much talked about. And yes some places (at least in Austin) cost about as much as you’d pay in my part of Orange County. But there is a lot of real estate that is under $250,000 in the San Antonio area. The other pluses: No gun confiscation laws, Texas is about to establish a $1 billion gold reserve of its own, and Texas is liberalizing marijuana usage. Yes Texas is just about out of its drought. No brown rot in Texas.
Casual observation:
Other than different identities to the principle nations involved, the current international financial situation is shaping up much like the 1997 Asian financial crisis.
Not trying to suggest the Grexit is the same mechanism as the Thai baht currency crisis, but rather that thanks to the globalized network of too-big-to-fail investment banks, a crisis in a small seemingly-inconsequential national economy has the potential to morph into an international financial crisis, unless a bailout can be crafted soon enough to save the planet from financial contagion!
The effect of this situation on ordinary Greek citizens is beyond ugly. I sure hope Goldman Sachs is making a bundle off their misfortune!
ft dot com > Comment >
The Big Read
June 19, 2015 7:37 pm
Greece: Dispatches from the brink
Henry Foy and Kerin Hope
Pensioners, nurses, activists and entrepreneurs offer an insight into the national mood
For Mikis, a trim-looking 73-year-old, the defining moment of Greece’s six-year long financial crisis came in 2012, when his 68-year-old neighbour committed suicide by jumping off the terrace of the next-door apartment building.
“He was someone everyone here knew,” he says. “It was a terrible shock.”
Over small cups of grainy Greek coffee, Mikis explains the plight of pensioners like him, hit by 10 successive income cuts in less than four years thanks to austerity measures agreed with the EU and International Monetary Fund.
“By the end of it my pension had been reduced by almost half . . . We went from being comfortably off to worrying about whether we could afford to buy heating fuel,” says Mikis, who did not want his surname to be used. “My wife took it badly. She’s been on antidepressants for nearly three years.”
Greece’s date with economic destiny appears closer than ever after last-ditch talks to avert bankruptcy at the end of the month failed and exasperated EU leaders were summoned to an emergency meeting on Monday. Though it could mark the final attempt to avert the country’s exit from the eurozone, crisis-weary Greek citizens show few public signs of panic. They have seen this movie too many times before.
Mikis is strolling down a quiet street in the Athens suburb of Neo Psychico towards his favourite café, holding a copy of Ta Nea, a Greek newspaper that costs €1.30 at the kiosk. “I share it with a friend,” he says. “We buy it on alternate days to save on the expense.”
Greece’s suicide rate jumped by 35 per cent between 2010 and 2012, with older men and women mostly affected, according to a study published this year by the British Medical Journal.
“That my neighbour chose to commit suicide made me deeply angry at the troika [bailout monitors from the EU, European Central Bank and International Monetary Fund],” Mikis, a former senior civil servant at the transport ministry, says. “Now they want to cut my pension yet again. I just hope [prime minister Alexis] Tsipras stands firm against them.”
…
Goldman Sachs, Greece Didn’t Disclose Swap Contract (Update1)
By Elisa Martinuzzi - February 17, 2010 13:31 EST
Feb. 17 (Bloomberg) — Goldman Sachs Group Inc. managed $15 billion of bond sales for Greece after arranging a currency swap that allowed the government to hide the extent of its deficit.
No mention was made of the swap in sales documents for the securities in at least six of the 10 sales the bank arranged for Greece since the transaction, according to a review of the prospectuses by Bloomberg. The New York-based firm helped Greece raise $1 billion of off-balance-sheet funding in 2002 through the swap, which European Union regulators said they knew nothing about until recent days.
Failing to disclose the swap may have allowed Goldman, a co-lead manager on many of the sales, other underwriters and Greece to get a better price for the securities, said Bill Blain, co-head of fixed income at Matrix Corporate Capital LLP, a London-based broker and fund manager.
“The price of bonds should reflect the reality of Greece’s finances,” Blain said. “If a bank was selling them to investors on the basis of publicly available information, and they were aware that information was incorrect, then investors have been fooled.”
Michael DuVally, a spokesman at Goldman Sachs in New York, declined to comment.
Legal ‘At the Time’
Goldman Sachs, Wall Street’s most profitable securities firm, is being criticized by European politicians including Germany’s ruling Christian Democrats, who have questioned whether the firm helped Greece hide its deficit to comply with the currency’s membership criteria. Greece is also being faulted by fellow euro-region countries for failing to disclose the swaps to EU regulators.
…
Interesting aside on the Fed response to Long Term Capital Management collapsing: http://www.pbs.org/wgbh/pages/frontline/warning/themes/ltcm.html
“…but was leveraged something like 30 or 40:1.”
What could possibly go wrong?
Marketwatch dot com
The Tell
Greece may be forced to curb bank withdrawals next week
By Sara Sjolin
Published: June 19, 2015 10:49 a.m. ET
Barclays warns of bank capital controls if no near-term deal
After another round of failed negotiations Thursday, Greece is inching closer to the fiscal abyss, and Athens could be forced to limit the amount of cash people can withdraw from the banks as soon as next week, Barclays analysts said.
Eurozone leaders have been called in for an emergency meeting in Brussels on Monday in what could be the last-ditch attempt to strike a deal before Greece runs out of cash. But hopes of a resolution are low.
…
crushing.housing.losses.
Housing Prices Inflated 200% Higher Than Long Term Trend
http://img802.imageshack.us/img802/7812/caseshiller.jpg
Washington, DC Housing Prices Fall 6%
http://www.movoto.com/washington-dc/market-trends/
China’s two big problems: (1) excessive savings rate (2) unavoidable huge current account surplus:
http://news.xinhuanet.com/english/2015-06/17/c_134335417.htm
I just hope the Christian churches in China can grow fast enough to temper the Chinese government’s global ambitions since they are going to have the wealth, the will, and the military to do pretty much what they want in the next twenty years. We have effectively conceded the world to them, but hey a lot of people received free Obama phones while they build their economy.
(3) a $28 Trillion debt bubble
(4) capital flight
(5) deflation
Its all built on a foundation of sand.
You mean silicon?
(3) massive overbuilding of unoccupied, unneeded urban housing (4) stock market correction of 13% in one week gathering steam and threatening to morph into a historic financial panic
Spending your days on the HBB as China’s unpaid panegyrist is puzzling and pathetic. You spam up the board daily with China puff pieces, apropos of nothing. Why? You’ve been proven wrong here repeatedly, with your own premises, and you just can’t seem get your mind around that.
I’ll ask you again. Think back on your life. When have you ever been wrong, about anything? Coming up blank aren’t you? This can only mean one thing… you are some kind of super genius who has never made a mistake! The world is simply full of inferiors that can or will not recognize your greatness, and you NEED to set them straight.
…or it might mean you’re a narcissist, desperate for approval and incapable of recognizing his own faults. If I were kinder, I’d pat your head and tell you what a man of rare insight you are. Unfortunately, I find narcissists annoying, and tend to smack them and call them dumba$$ instead. One of my many weaknesses.
Kidding aside, this is a housing blog, after all. Maybe you could direct your energies to a blog about China, as that seems to be your primary interest.
Now now, take it easy on Dan. Have you ever seen one of those hot dog eating contests? He’s getting ready for a crow eating contest and I for one want to see it.
From the looks of his recent posting barrage, he is in training for a crow-eating marathon.
We will probably have to have the party without him. He did say he would run away and hide if he were ever wrong.
But if he never owns up to his mistakes, he will never need to run away and hide.
http://www.usdebtclock.org/world-debt-clock.html
Look at China’s debt compared to other countries and particularly look at the clock, China’s debt compared to its GDP is actually going down, thus the clock is running backwards.
“China Deflating; Japanese Yen Breaking Down”
http://www.valuewalk.com/2015/06/albert-edwards-yen/
http://www.politico.com/story/2015/06/adam-kinzinger-blames-drudge-trade-119199.html
‘Illinois Republican Rep. Adam Kinzinger this week blamed misinformation from sites like ObamaTrade.com and other sites like Drudge Report that pass along those links for distorting information about trade legislation, including bills on trade promotion authority, trade adjustment assistance and the Trans-Pacific Partnership, the massive trade deal that has yet to be finalized.’
“If you look at Drudge, if you look at Obamatrade[.com], people are saying, you know, ‘Paul Ryan has said it’s in secret and you’ve got to pass it to find out what’s in it.’ Well that’s not true,” Kinzinger told WROK-AM on Wednesday. “What he was saying is, we have to pass TPA so that TPP even exists and so that we have an opportunity to read it and vote on it.”
These websites are just how the public is finding information. That the public didn’t like what they found is another thing. What is it with these secret laws? Is this a banana republic?
Are multi-generational family trusts for senators and congressman built into these trade agreements?
By Susan Duclos - All News PipeLine
While all eyes were tuned in for the latest news of the shooting at a historic black church in Charleston, South Carolina, which killed nine people, then the capture of the suspect Dylan Storm Roof, then Barack Obama’s little dance on the graves of the dead to push his political agenda, people missed what else was being shoved down their throats by Congress…. the TAA passed the House and was sent back to the Senate.
For months headlines were focused on the controversial Trans-Pacific Partnership (TPP) and the Trade Adjustment Assistance (TAA) also known as the “fast-track” bill. Both measures needed to be approved in separate votes for the entire package to move forward.
You can click the links above to see why the TPP is so controversial and how the TAA works in conjunction with it, but we are going to take a look at how a topic that has generated tens of thousands of headlines because of the controversial aspects of basically handing U.S. sovereignty away, suddenly was relagated to a back-burner issue on the very day the fast-track bill was passed in the House of Representatives.
We are going to see an amazing visual, in screen shots taken from Memeorandum, which is a website that highlights what political stories are generating the most discussions and headlines on any given day.
Keep in mind TPP and TAA has been the number one topic on the minds of political junkies for months on end as you look at these screenshots, because sometimes seeing things with your own eyes hammers the point home more than a million words in text can.
What we are going to see is how one event, “coincidently” occurring on the very day one of the most controversial bills passes through the House, could be an in-your-face false flag attack to distract a nation and dominate headlines, while crooked politicians sell our country down the river.
The first screen shot is the headlines and accompanying discussion (other articles referencing the main title) of the TAA passing the House, taken on Friday, June 19th, 2015 at 9:00 am ET:
The following screen shots are the same website’s main articles and related discussions over the SC church shooting, the capture of Dylan Roof, Obama’s use of this tragedy for political gain and associated topics related to the shooting:
Is it truly a coincidence that an event occurred and was dominating headlines on the very day that our Representatives in Congress sold us down the river? Or was the South Carolina church shooting a well timed false flag event that accomplished exactly what it was supposed to?
You decide.
allnewspipeline.com/False_Flag_Church_Shooting_TPP.php - 176k -
So either,
A) The Chareston shooting is a giant conspiracy to pass the TPP,
or
B) It is what appears to be, another whacko shooting a bunch of people randomly
Im still going with “B”
A new episode of The Voice is enough to distract most of America from the TPP. No need to shoot up a church.
Leave it to Phony to explain away the inbred white mass killer as an Obama conspiracy. I thought for sure he would say it was a way for the FSA to get free bullets from the oppressed white man.
“Leave it to Phony”
Those narratives won’t script themselves.
There are not too many Jethro Bodines that have that much money even in this country, China does have to figure out how to not tie up a trillion dollars in capital to raise just over ten billion in IPOs even if it is for a short time:
http://www.shanghaidaily.com/business/finance/Shares-fall-64-on-wave-of-IPOs/shdaily.shtml
Housing Dan housing!
“China Stocks Open Lower On Falling Home Prices”
http://www.moneycontrol.com/news/asian-markets/china-stocks-open-lowerfalling-home-prices_1535281.html?utm_source=ref_article
Housing Ha ok. Chinese housing inventories back to normal levels in Tier one cities and even in the worse cities inventory will be absorbed in two years:
http://www.chinaeconomicreview.com/new-home-prices-slightly-lower-tier-cities-face-long-road-recovery
Excerpt, two interesting tidbits, you now need over $80,000 in wealth to get margin and there are only 3.67 million investors using margin, thus the claim that you had a large number of small investors using margin was mostly hype, in a country of around 1.4 billion people it is less than insignificant, sorry Amazing russ, if the stock market crashes, the Chinese are not going back to communism and mass starvation as much as the U.S. left would like that to happen:
A tidal wave of initial public offerings siphoned liquidity as the IPOs of nine companies opened for subscriptions yesterday.
A total of 25 new IPOs are expected to lock up over US$1 trillion in subscriptions.
Li Shaosheng, analyst at Minsheng Securities, blamed the daily tumbles this year to basically a liquidity shortage.
Increasing speculation that the government was moving to tighten margin financing also weighed on investors. The China Securities Regulatory Commission was reported to be drafting even stringent rules on margin financing for brokerages.
In a latest rule change, brokerages’ margin trading is limited to four times their net capital and they are forbidden to lend to individuals with average daily assets of under 500,000 yuan (US$80,506) over the past 20 trading days.
Despite the backdrop of a slowing economy, China’s stock market is largely liquidity driven and propelled by margin loans. By the end of May, margin trading had risen to 2.08 trillion yuan as 3.67 million investors had borrowed capital from 92 brokerages.
Housing Dan… housing.
Palm Springs, CA Housing Prices Fall 4%
http://www.movoto.com/palm-springs-ca/market-trends/
Excerpt from Chinese housing link:
Average new home prices in 70 major mainland cities climbed 0.2% in May over the previous month, the first rise in over a year, Reuters reported, citing data released by the National Bureau of Statistics. While signs of price stabilization will ease economic strain and help banks with heavy exposure to real estate, analysts said a full recovery was a ways off. “Inventories in first-tier cities are back to healthy levels…but in third and fourth-tier cities it will take at least two more years,” said Rosealea Yao, an economist with Gavekal Dragonomics.
… and down year over year and off 40% since 2008.
Ooooooph.
Total BS. China’s housing prices moved up strongly over that period not down.
It’s reality Dan. Just like all the other prices in China. And they have a very long way to fall.
China citizens are deep in debt.
Its time for a cash out refinance again my friends, bills to pay.
Hang in there HELOC bubble boy.
Its a nice savings account to fall back on for sure. Thank u home buyers!
You’re so money, azdude.
You’re So Money: Live Rich, Even When You’re Not Paperback – April 15, 2008
by Farnoosh Torabi (Author), Jim Cramer (Foreword)
27 customer reviews
http://www.amazon.com/Youre-So-Money-Live-Rich/dp/0307406199
Its the american way.
I believe Arizona is a non-recourse state, but I think most HELOC’s are recourse, and even non-recourse debt is taxable.
http://maine.craigslist.org/rej/5082999826.html
I’ve never seen the word “Oreo” used as a verb. What does it mean?
The Urban Dictionary has a definition of oreo as a verb. It’s rated XXX so I won’t repeat here.
I came across this is in the Urban Dictionary:
Oreo Healing
noun
a : the act or process of regaining health by eating oreos, which is the trademark for the popular sandwich cookies by Nabisco
b : restoration to life, consciousness, vigor, and strength by the eating of an oreo cookie
verb
c : to make young or youthful again through the eating of oreos: give new vigor to
d : to bring back to or put back into a former or original state
My guess is that to Oreo a room means “d”.
http://www.urbandictionary.com/define.php?term=Oreo+Healing&defid=6103580
BTW, that some great marketing at work, no? Associating your product with such positive terms?
Pure genius.
Thanks combo. TIL a new word.
I’ve never seen the word “Oreo” used as a verb. What does it mean?
I’m sure Rachel Dolezal could ’splain it.
Gasoline prices are off by a large percentage from the recent peak, right in the middle of the red hot summer travel season when they normally go up.
Whazzup with that?
It would indicate that supply exceeds demand.. at least thats the way it used to work.
In California it means that a refinery is back on line. Nothing like that has occurred on a national basis, prices have been moving up.
Gasoline heading up, sure it is still down from last year but by about twenty five cents a gallon less than just a few months ago, we will never save a hundred billion or more dollars this year like predicted a few months ago, we will be paying more in December than we were last year:
http://www.eia.gov/petroleum/gasdiesel/
Meanwhile statistics from Texas and ND show that the EIA has been lying through its teeth to support Obama’s war on Putin or just incompetent beyond belief:
http://www.rrc.state.tx.us/oil-gas/research-and-statistics/production-data/texas-monthly-oil-gas-production/
You are getting lost in the weeds of details, which is making it hard for you to see the forest for the trees. The important thing to keep in sight is that oil is down by 40% since last summer and not going back any time soon.
Crude down 40% YoY, retail gas down 35%, fuel oil down 40%…. and falling.
Remember…. falling prices to dramatically lower and more affordable levels is positively bullish and raises the standard of living for everyone.
“the EIA has been lying”
So, Adan links to EIA propaganda were what?
Interesting how the timing works here. Just as the boomerang borrowers (people who were foreclosed upon 7+ years ago) have their credit scores refreshed, the RE market is pricey. Will they buy again only to get foreclosed upon later? Wash, rinse, repeat?
====
TransUnion Identifies 2.2M Potential ‘Boomerang’ Borrowers
A flood of ex-homeowners may be ready to re-enter the mortgage market over the next five years, according to a TransUnion report.
Based on an analysis of the credit scores of about 180 million consumers, TransUnion estimated that so-called boomerang borrowers could obtain a residential mortgage by 2020.
The housing market could see the influx of new buyers because it’s been more than seven years since the beginning of the mortgage crisis, said Joe Mellman head of TransUnion’s mortgage group. That’s enough time for certain negative factors to expire on an individual’s credit history.
“As consumers responsibly manage their credit and pass these milestones, we anticipate a tide of newly mortgage-eligible consumers entering the market,” Mellman said in a news release.
“The housing market could see the influx of new buyers because it’s been more than seven years since the beginning of the mortgage crisis, said Joe Mellman head of TransUnion’s mortgage group. That’s enough time for certain negative factors to expire on an individual’s credit history.”
“’As consumers responsibly manage their credit and pass these milestones, we anticipate a tide of newly mortgage-eligible consumers entering the market,’ Mellman said in a news release.”
Bahahahahaha … do any of you HBB pukes think these deadbeat pukes have learned anything, anything at all?
I learned something: Dumb ‘em down, and profit.
Us slogan, thru the years…..
“Give me liberty, or give me death”
“Remember the Maine/Arizona/9-11″
“All we have to fear is fear itself”
“You can’t fix stupid”
Maybe they should shorten the credit repair window from 7 years to 1.5 years. That way, if a homeowner stops making payments, by the time they are actually about to get foreclosed and evicted they’ll re-qualify to buy back the home they just lost. That way the homeowner never has to move and banks wouldn’t have to go through a lot of costly procedures. Continuous Credit Whitewashing I call it, an idea whose time has come!
Got “cold called” again this week. Sent them a resume. They were up front about it, and said they were looking at local apps first.
California, here I come?
C’mon out, the weather’s fine! Be sure to rent a tanker truck and fill it with 10,000 gallons of water before you leave. Park it in front of your new house and let the neighbors take all the water they want. You’ll be a hero and make lots of new friends.
Any thoughts on which countries are hoarding oil, even as prices remain on the brink of collapse?
Small wonder DannyBoy is so confident that oil is headed to $80/bbl by December. Otherwise the high-IQ Chinese would not be betting the farm on oil!
China is hoarding oil
Yes and you can tell by what people are doing a lot more than you can tell by what they are saying what they really are thinking. Storing oil is not a sign that they expect their country to crash any time soon. I have had enough fun for today. I will be back tomorrow.
Judging from their overinvestment in housing, I would guess the current massive investment in oil will prove to be another money loser when viewed through the lens of history’s rear-view mirror.
It’s a communistic command-and-control tendency to misallocate.
Smoking pot pretty early in the morning aren’t you?
No, just posting factual information to offset your steady BS barrage.
Nothing supports your crash comment. China knows what I know, shale oil production cannot be maintained at less than $80 a barrel, world demand is increasing about 100,000 barrels a day per month and OPEC has reached its capacity peaks except for places like Libya which are at war, and it will take $100 a barrel to increase shale oil production. Thus, this is a great time to buy oil to fill strategic oil reserves. By the end of the month, China will open a new reserve and I would not be surprised to see oil demand go up by a million barrels a day to fill the reserve.
Data, Dan, data…
As US Soars, Chinese Stocks Crash 13% - Worst Week Since Lehman
Tyler Durden’s picture
Submitted by Tyler Durden on 06/19/2015 10:21 -0400
As the carnage began last night in China we noted the extreme levels of volatility the major indices had experienced in recent weeks. By the close, things were ugly with the broad Shanghai Composite down a stunning 13.3% on the week - the most since Lehman in 2008 (with Shenzhen slightly better at down 12.8% and CHINEXT down a record-breaking 14.99%).
…
Collapsing global oil demand, a global oil glut, Chinese and US citizens deep deep in debt, falling housing prices in China and the US…..
What did you think was going to happen?
“China knows what I know”
Sounds dangerous.
I’m gonna throw my hat in the ring here.
china is on borrowed time financially. Beggar they neighbor?
I dont know how many times I have tried to explain the scheme.
To sell stuff cheap the central bank of china has to basically print money to mop of excess dollars from trade with us.
Inflation is out of control over there. wages arent keeping up.
Inflating assets can only work so long. Same old story.
ft dot com > personalfinance >
Advice & Comment
Life & Arts
June 19, 2015 6:06 pm
Bond markets alternate between panic and greed
John Redwood
I remain a nervous and unconvinced bondholder
John Redwood, picture for Money FT byline
The notional FT fund has had a good 12 months. The investments in China and Japan have been particularly good contributors, helping the fund to an overall return of 10 per cent.
This positive performance is despite bad news in the bond market. So-called defensive lower risk funds have struggled in recent weeks. Most have very high levels of investment in bonds which are meant to be more stable than shares and used to offer a reasonable running income. When interest rates rise from unusually low levels or when the bond market has a bad time they do not protect your capital as you hope.
The bonds in this portfolio have not been great in recent weeks either. Running a balanced fund, you have to keep a minimum in bonds. I have kept it to the minimum allowed under typical balanced fund rules. The guideline for a balanced fund is 50 per cent in bonds, so I have run it at 40 per cent, which is the usual lowest level permitted.
It’s been difficult to know what to buy and hold when interest rates are so low and prospects are not good for capital gains. I have kept the bonds balanced themselves, with a mixture of index linked longer bonds, short dated corporates, average gilts and some higher yielding emerging market paper. They have all had their off days. Perversely at a time of very low inflation, the index linked ones had more good days than the others, performing very strongly over last year as a whole, but they too fell sharply in recent weeks.
…
Interesting note on U.S. Treasury yields: Despite China and Greece on the brink of financial panic, U.S. long-term yields have not gone down much. Suggests that if the EU punts again on Greece, we might see a significant “relief” pop in l-t Treasury yields.
Daily Treasury Yield Curve Rates
Date 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr
06/01/15 0.02 0.02 0.07 0.26 0.64 0.99 1.55 1.93 2.19 2.69 2.94
06/02/15 0.02 0.01 0.07 0.26 0.64 1.02 1.61 2.01 2.27 2.77 3.02
06/03/15 0.02 0.02 0.07 0.26 0.69 1.07 1.69 2.12 2.38 2.87 3.11
06/04/15 0.02 0.02 0.08 0.27 0.66 1.04 1.65 2.05 2.31 2.78 3.03
06/05/15 0.02 0.03 0.08 0.29 0.73 1.13 1.75 2.16 2.41 2.87 3.11
06/08/15 0.01 0.02 0.09 0.27 0.70 1.09 1.72 2.13 2.39 2.86 3.11
06/09/15 0.01 0.02 0.08 0.27 0.72 1.12 1.74 2.16 2.42 2.89 3.15
06/10/15 0.01 0.02 0.10 0.28 0.75 1.15 1.80 2.22 2.50 2.96 3.22
06/11/15 0.01 0.01 0.10 0.28 0.73 1.12 1.74 2.14 2.39 2.84 3.11
06/12/15 0.01 0.02 0.10 0.28 0.74 1.12 1.75 2.15 2.39 2.84 3.10
06/15/15 0.00 0.02 0.11 0.28 0.72 1.10 1.71 2.11 2.36 2.83 3.09
06/16/15 0.00 0.01 0.11 0.28 0.71 1.08 1.68 2.07 2.32 2.79 3.06
06/17/15 0.00 0.01 0.10 0.27 0.67 1.03 1.63 2.05 2.32 2.82 3.09
06/18/15 0.00 0.01 0.08 0.26 0.66 1.03 1.65 2.08 2.35 2.86 3.14
06/19/15 0.00 0.01 0.05 0.25 0.65 0.99 1.59 1.99 2.26 2.76 3.05
Are the commercial banks using their excess reserves to buy treasuries?
I have read that the re are trillions of derivitive contracts tied to interest rates. If rates were to rise substantially these trades could cause a financial disaster. If the collateral for the trades goes to sh@t then all hell breaks lose.
Wall street is levered up to its eyeballs with all kinds of casino bets. To them gambling is work.
Once upon a time “investing” meant spending money on capital goods (like say building a factory) that would generate genuine products of value and provide investors with a reasonable rate of return (say a few percentage points above whatever a CD paid at the time).
Now, it’s just gambling. Granted, trading stocks and call/put options is nothing new, but it seems that these days that’s all that is happening. Large companies have mountains of cash, and what do they use it for? R&D? Nope. New factories? Nope … what they do is buy back shares to boost their P/E ratios.
yeah exactly companies have become big gamblers in the rigged monte carlo.
All I see is speculation going on here.
all this boring housing stuff today…….
http://finance.yahoo.com/news/horrible-tasting-mexican-beer-popular-105700662.html
I have never liked that beer. I like hops! There are a lot of craft beers in ca. Some of them are fairly overrated imo.
One beer I really like is Founders out of michigan. They dont sell it in CA though.
While in San Antonio this week I had Shiner Bock on tap. It was just right for me. It fills my need for not having a “wheatie”-tasting beer. I tried shiner from a bottle and it just did not work for me. Gotta have it from the tap. the taste is so much better for any beer (JMO) when on tap. Just checked and Yardhouse in Irvine has Shiner Bock on tap.
Chocolate consumption is down in China, along with their stock prices. In the meanwhile, the bubbles in US stocks and houses rages on maniacally. When will the madness end? For how much longer must I keep my powder dry? This is getting OLD.
Why worry? build up assets that do not correlate with the U.S. stock market and bond market.
‘Why worry? build up assets that do not correlate with the U.S. stock market and bond market.’
Which assets would those be Bill? Precious metals?
It’s for you to decide. I will get flamed for saying precious metals.
I’m in Shangai, there is a lot of things down over here!
Please do tell!!!
Haven’t posted in sometime, but I am currently China doing a quick stop in Shanghai after visiting relatives in Chongqing.
When I return to the U.S. I will do a decent post with some economic data from over here.
Who will when the epic financial debate on China?
Ben Jones or that guy from California posting in New Mexico???
Stay tuned!
When have you posted? Are you sure you have the right blog?
Here come the too-big-to-fail scare tactics!
Europe ‘gives Greece ANOTHER £2billion’ to prevent banks closing as Tsipras snubs Brussels talks to ‘make a deal with Putin’
By Gerri Peev and Hugo Duncan for the Daily Mail and Tom Mctague, Deputy Political Editor and Simon Tomlinson for MailOnline
Published: 03:07 EST, 19 June 2015 | Updated: 18:13 EST, 19 June 2015
European finance chiefs have poured fresh emergency funds into Greek banks in a desperate attempt to keep them afloat after panicking savers withdrew more than £3billion this week.
The amount being offered by the European Central Bank has not been revealed, but it is believed to be around £2billion.
It is the bank’s second intervention in three days, having earlier agreed to make almost £1billion available.
The lifeline came as Greek banking officials insisted they had ‘no financing problems’ despite withdrawals by savers, with around £1billion being taken out yesterday alone.
Greece has to pay back £1.15billion to the International Monetary Fund by June 30, but says it will be unable to meet this deadline – or its obligations to pensioners and state employers – unless it can unlock an extra £5.15billion bailout. However, the money is unlikely to be given unless the country agrees to economic reforms.
An emergency summit of the eurozone’s 19 leaders will be held in Brussels to discuss the crisis on Monday. If Greece refuses to agree reforms and a tighter budget, the central bank will come under intense pressure to stop pumping money into its banks.
Alexis Tsipras, the Greek prime minister, warned that a Greek exit from the eurozone – one of the potential outcomes of the crisis – could trigger the single currency’s collapse.
‘The famous Grexit cannot be an option either for the Greeks or the European Union,’ he said in an Austrian newspaper interview.
…
Greece and the euro
My big fat Greek divorce
Greece and the euro zone are stuck in an abusive relationship
Jun 20th 2015 | From the print edition
Timekeeper
IT IS never pleasant to watch a relationship founder. Greece’s prime minister, Alexis Tsipras, has charged its creditors with trying to humiliate the country; he has accused the IMF of “criminal responsibility” for Greece’s suffering. Prominent euro-zone politicians are saying openly that, without a deal to release rescue funds in the next few days, default and “Grexit” loom.
The urgency is because of a repayment of €1.5 billion ($1.7 billion), which Greece seemingly cannot afford, to the IMF on June 30th and because Greece’s European bail-out expires that day. Cue the last-ditch negotiations that have become a Euro-speciality: just after The Economist went to press, finance ministers were to assemble in Luxembourg; leaders may meet over the weekend; a European Union summit is scheduled at the end of next week. It may come down to a head-to-head between Mr Tsipras and Angela Merkel, Germany’s chancellor. A deal is still possible, but the sides have come to loathe each other. If this were a marriage, the lawyers would be circling.
Divorce would be a disaster—for everyone. The trouble is that, unless Greece and the euro zone change the terms of their relationship, staying together would not be a great deal better.
…
Lew Says Euro Exit Would Hurt Greek People, Economy
by Elizabeth Dexheimer
June 20, 2015 — 8:16 AM PST
Updated on June 20, 2015 — 3:56 PM PST
U.S. Treasury Secretary Jacob Lew. Photographer: Andrew Harrer/Bloomberg
U.S. Treasury Secretary Jacob J. Lew said that a possible Greek exit from the euro would have a major impact on the country’s citizens and economy and that risks of potential consequences for other nations remains unclear.
European Union leaders and Greece’s creditors are making last-ditch efforts to avert a Greek exit from the joint euro-zone currency and unlock aid for the nation at risk of default.
“Within Greece, the consequence of a failure here would mean a terrible, terrible decline in their economic performance,” Lew said in an interview on “CNN’s Fareed Zakaria GPS” that will air Sunday. “They will bear the first brunt of a failure.”
…
I wouldn’t trust any pronouncements from Jacob Lew.
China Stocks Enter Correction as BlackRock Sees Bubble Bursting
June 19, 2015 — 1:10 AM PST
Customers look at a monitor displaying stock prices at a China Construction Bank Corp. branch.
Lam Yik Fei/Bloomberg
Chinese stocks tumbled, capping their worst week since the global financial crisis in 2008, amid mounting concern that the nation’s longest bull market has propelled valuations to unsustainable levels.
The Shanghai Composite Index sank 6.4 percent to 4,478.36 at the close on Friday. The gauge lost 13 percent this week, entering a correction after falling more than 10 percent from its June 12 high. About 400 Shanghai shares fell by the daily limit as a gauge of volatility jumped to the highest since 2009.
Strategists at BlackRock Inc., Credit Suisse Group AG and Bank of America Corp. all issued bubble warnings this week after the market value of Chinese shares jumped by more than $6 trillion in 12 months. Fueled by record numbers of novice investors and an unprecedented $363 billion of margin debt, the median stock on Chinese bourses is valued at 95 times earnings, versus 68 at the height of the nation’s equity mania in 2007.
“The tide is going to go out, and there’s going to be a lot of people without their swimming trunks on,” Ewen Cameron Watt, chief investment strategist at BlackRock, which oversees $4.8 trillion as the world’s biggest money manager, said in an interview on Bloomberg Television in London. “We’re seeing it deflating quite rapidly.”
The Shanghai Composite’s bull market, which turned 928 days old Friday, is the longest since Chinese bourses opened for trading in 1990 and more than five times the average lifespan of previous rallies. The gauge has tumbled at the fastest pace among global equity indexes this week, after a world-beating 152 percent gain in the previous 12 months.
Rising Volatility
“The market is becoming ever-more volatile,” said Michael Every, the head of financial markets research at Rabobank Group in Hong Kong. “Ultimately, today is a taster of what is surely to come.”
…
phony scandals