Bits Bucket for August 21, 2015
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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I love Fridays! We get the desk clearing HBB report.
My electric bill is less than $55 last month
How many loanowners can say that?
They can’t, because they are BROKE
“With rental rates half the cost of buying, you’d have to have rocks in your head to buy a house right now.”
You better believe it mister.
My electric bill was $0. How many renters can say that? None, because they don’t have solor installed.
It’s not really $0, since I paid $8,000 (after a 30% tax credit) for a 5.4kW system, but after 12 months, my $1450/year electrical cost is now a small credit! I will never pay for electricity again (unless I buy an electric car, but I can expand my system).
You’re so BROKE you can’t even pay attention
You not comprehending. I don’t have to pay anything. My bill is zero!
Nada, zilch, $0.
I live in a van down by the river, I dont even have an Electric Bill! I have a 5 gal bucket full of kitty litter as a toilet. I spend nothing, life is grand!
Pick yourself up off the floor and cheer up. Falling prices are your best friend.
A few thoughts.
1. Would you have done this without the massive tax credit?
2. A 5.4kW system for entire house is on the very small size. You must live in a very temperate region.
3. And yes - you are paying for it. Your real cost is $11,000. Back in the day before government controlled all the banks - you might have have a ROI of 6/7% per year almost risk free. You system will need maintenance and has a lifespan of maybe 20 years.
All in all - it is about a break even. And that is with a massive tax credit on a very small system.
1) Yes.
2) Sierra foothills. We use or energy wisely and have passive shade and great solar gain orientation. Our annual use was about 8,000kWh.
3). Back in the day? Is that where you live? Today I recover $1400/year for an $8,000 investment. That is a solid ROI.
I would do that if I had the tax credit and a stucco box. My motto is take as many tax credits as you can without being stuc ko.
We have been doing some math here at work it looks like one can split their W2 income and realized long term gains for a total not exceeding ~100k and get a real low tax rate because of the favorable treatment of LTCG much lower than W2 alone.
Younger programmer I work with is all over this with charts and on the white board, etc. Its nice to see it on a white board not a web page.
Pretty much means working part time at ~55 years old to achieve this.
We try to keep our W-2 Income under $100,000/year so we can use our real estate depreciation deductions (it disappears at $150,000) and fund $6,500 each into IRAs (if we stay under $95,000). We do this by funding 401(k), 403(b) and 457 plans.
The depreciation of the real estate (even though we have positive cash flow) shelters about $15,000/year, add the IRAs for another $13,000 and we drop into the 10% tax rate.
The rub is that depreciation is recaptured upon sale and the tax rate is 25%, no matter what the income. So once again, there is no free lunch.
I do practice tax returns 3 times a year on Turbo Tax just to see where we stand with our income and taxes (July, Sept, & Dec). We then send them to our accountant to complete. It probably takes about 40 hours of my time, but we avoid about $10,000 in taxes. That is $250/hour. I would rather just have a simplified tax code and pay my 10% that way.
I would think so. I don’t think I could do any retirement savings on 100k while even paying $1350 rent in OC.
Yes, I agree SH. It is quite eye opening to do a real budget and see what it costs to live these days. $100,000 seems like a fairly skimpy budget to us.
We don’t live lavishly. No car payments (7 year old used cars), no electrical utility payments (solar), no big ticket vacations. We try to stay with friends and family when we travel.
Jingle math, the same used on those 3 owner occupied homes.
“3 owner occupied homes”.
You didn’t get the joke. There are no owner occupied home loans, except for the one in which I live. Investor loans are .125% higher in rate and 1/4 more in fees. The difference is almost negligible at 3.5%.
Now it’s all a joke. “There are no …” You are being Bill Clinton. Whether you refi’d out of them by now or not doesn’t make lying on the original purchase app any less of a crime. x3. Lotta backpedalling excuses minimizing your prior admission to fraud. You’re still on the hook.
Jingle_Fraud can’t keep all is bull$hit straight anymore.
HA, you’re the only one that can’t keep it straight….cause you know nothing!
You’re backpedalling again Jingle_Fraud.
That’s why they call them Mortgage BROKERS.
Goon
So ca- Ours runs $65 mo w/ a pool running off peal hours 3 hrs a day. We pee in the dark as well. 2,000 sq ft home/no kids.
Good Lord - I’ve heard about this -
http://www.youtube.com/watch?v=fEs6O2NGdrs - 222k -
Animal rights activist beaten with duck in Spain
AFP
19 hours ago
Madrid (AFP) - An animal rights activist was beaten with a duck by a Spanish woman defending one of the country’s most bizarre and controversial festival traditions.
The man was whacked with the bird while he filmed the annual “duck chase” in the Catalonian seaside town of Roses, where every August ducks are thrown into the Mediterranean and then caught and brought back to the shore by swimmers.
“Continue, continue. Continue to abuse, I am filming you. A little bit of empathy for the animals. They also have a life, like your children or your family,” the man who was filming can be heard saying in a video of the incident released by animal rights group Animal Rescue Espana.
The footage shows a young woman wearing a white bathing suit attack the man with a duck — holding it by the legs as she repeatedly lashes him with it.
news.yahoo.com/animal-rights-activist-beaten-duck-spain-135054948.html -
Global warming is real
That lady seems like a real quack.
But seriously, this type animal abuse is right up there with cat juggling, and it must be stopped!
Was the duck alive?
How Wall Street’s Bankers Stayed Out of Jail
The probes into bank fraud leading up to the financial industry’s crash have been quietly closed. Is this justice?
by William D. Cohan
September 2015 Issue
The Atlantic
http://www.theatlantic.com/magazine/archive/2015/09/how-wall-streets-bankers-stayed-out-of-jail/399368/
Still plenty of time left on that 10 year statute of limitations to go after bit players and little guys.
Our society wanted and still wants housing prices high. They don’t wanna see how the sausage is made though.
Not even a smidgen…on the right thread
————
Since 2009, 49 financial institutions have paid various government entities and private plaintiffs nearly $190 billion in fines and settlements, according to an analysis by the investment bank Keefe, Bruyette & Woods. That may seem like a big number, but the money has come from shareholders, not individual bankers. (Settlements were levied on corporations, not specific employees, and paid out as corporate expenses—in some cases, tax-deductible ones.) In early 2014, just weeks after Jamie Dimon, the CEO of JPMorgan Chase, settled out of court with the Justice Department, the bank’s board of directors gave him a 74 percent raise, bringing his salary to $20 million.
The more meaningful number is how many Wall Street executives have gone to jail for playing a part in the crisis. That number is one. (Kareem Serageldin, a senior trader at Credit Suisse, is serving a 30-month sentence for inflating the value of mortgage bonds in his trading portfolio, allowing them to appear more valuable than they really were.) By way of contrast, following the savings-and-loan crisis of the 1980s, more than 1,000 bankers of all stripes were jailed for their transgressions.
Holder, meanwhile, along with his old colleague Lanny Breuer, has returned to the white-shoe law firm that he left in order to join the Justice Department—Covington & Burling, which counts among its clients Bank of America, Citigroup, and Wells Fargo. (The firm reportedly kept his office for him.)
“How Wall Street’s Bankers Stayed Out of Jail”
Work will set you free
Being a FOO (Friend of obama) will keep you free.
FREE JOHN CORIZE!
John Paulson Is Starting to Cash In on His Big Land Grab
by Prashant Gopal and John Gittelsohn
August 12, 2015
Bloomberg
Hedge-fund manager John Paulson, who made billions wagering against subprime mortgages, has started to profit from a U.S. housing bet that took longer to ripen: owning land.
After acquiring about 35,000 lots since 2009, Paulson & Co. shifted toward selling last year and is accelerating its disposition pace, according to Michael Barr, who manages the firm’s real estate. Paulson’s funds had invested $770 million, mostly in lots bought out of bankruptcies or other distressed sales, and acquired two dozen communities in Arizona, California, Colorado, Florida and Nevada.
http://www.bloomberg.com/news/articles/2015-08-12/john-paulson-starts-selling-land-to-reap-gains-in-u-s-housing
I wonder if Paulson reads the Housing Bubble Blog? He should make a big donation from some of his profits.
He purchased 350 acres just south of Folsom, CA, (Sacramento foothills, along Hwy 50). It was a 2012 BK opportunity from a homebuilder who became overextended.
I wonder if he got an “O.O. loan” claiming to be occupying the property so he could get a lower interest rate.
Joke’s on his arse this time. That land is contaminated with perchlorate from Aerojet’s rockety operations– and was designated an unremediable Superfund site years ago. The whole aquifer is contaminated. Forever. They’ve been trying to unload it on some real estate consortium ever since Rocketdyne bought them out in 2013.
It will be fascinating to see how old Hank gets THIS one past the state EPA, because Jerry Brown has a reputation for not staying bought.
PS. Hi everyone. Thought I’d drop in to watch the market tank with y’all.
Miss you and your keen comments.
Keeping an eye on your site.
“Fuzzing into Forever” brought a lump to my throat as I have an old GSD and other reasons best left unsaid.
“That land is contaminated”
Sounds like the rest of Californica.
“John Paulson Is Starting to Cash In on His Big Land Grab”
aka Public Private partnership.
Those who are purchasing this land right now are getting scalped.
I think it depends on where they are buying and what they are buying.
In some parts of So Cal, finished lots are still selling for not much more than the hard costs and impact fees. In other words, the land isn’t selling for much more than $0.
But if you bought the finished lots for a small fraction of the hard costs/impact fees (like what Paulson did), it still represents a profitable sale.
Bring on the huddled masses!
http://www.breitbart.com/big-government/2015/08/20/stonewalled-feds-hide-fiscal-details-about-vast-operation-to-resettle-illegal-alien-minors/
Andrew Breitbart was murdered under direct orders from King Obama
“Forget it, Jake… it’s Chinatown.”
Our whole economy is Chinatown now. That metaphor works in so many ways.
The oligarchs are in firm control of the world, now.
Not even a smidgen…
————
Since 2009, 49 financial institutions have paid various government entities and private plaintiffs nearly $190 billion in fines and settlements, according to an analysis by the investment bank Keefe, Bruyette & Woods. That may seem like a big number, but the money has come from shareholders, not individual bankers. (Settlements were levied on corporations, not specific employees, and paid out as corporate expenses—in some cases, tax-deductible ones.) In early 2014, just weeks after Jamie Dimon, the CEO of JPMorgan Chase, settled out of court with the Justice Department, the bank’s board of directors gave him a 74 percent raise, bringing his salary to $20 million.
The more meaningful number is how many Wall Street executives have gone to jail for playing a part in the crisis. That number is one. (Kareem Serageldin, a senior trader at Credit Suisse, is serving a 30-month sentence for inflating the value of mortgage bonds in his trading portfolio, allowing them to appear more valuable than they really were.) By way of contrast, following the savings-and-loan crisis of the 1980s, more than 1,000 bankers of all stripes were jailed for their transgressions.
Holder, meanwhile, along with his old colleague Lanny Breuer, has returned to the white-shoe law firm that he left in order to join the Justice Department—Covington & Burling, which counts among its clients Bank of America, Citigroup, and Wells Fargo. (The firm reportedly kept his office for him.)
Eric Holder said when he left office as Attorney General that not passing stricter gun control was his greatest regret
Remember when King Obama pimped those dead kidz at Sandy Hook and juiced his eyes with Visine to make it look like he was crying?
Palmy sed yesterday that Emperor Obama will be head of the United Nations after he steps down as Fuhrer, and when he does he will employ Bloomberg and his billions on a global campaign to take away all of the scary looking guns owned by white people
You heard it here first
And speaking of pimping dead kidz, here the FoxNewsHate reports about a 9 year old girl shot and killed inside her home in Ferguson, Missouri this week:
http://www.foxnews.com/us/2015/08/20/jamyla-bolden-shot-dead-in-ferguson/
Not a peep from Shaun King the albino African and his Soros-funded rent-a-mob about her, because it doesn’t script the narrative
They will not take your guns by sending armed men door to door confiscating weapons. They will take you guns by making it vulgar and offensive to even admit to owning a weapon. They will foster a culture where your neighbors won’t let children play near the houses where known gun owners live. Things like that. Changing societal attitudes for moron Millenials glued to their smartphone screens. Why do you NEED a gun anyway? (Sarc)
“Why do you NEED a gun anyway? (Sarc)”
+1 Haha… go back to work and wait for Jesus’ return.
They will foster a culture where your neighbors won’t let children play near the houses where known gun owners live.
Perfect — then I don’t need to deal with the noisy/screaming kids running through my yard!
+1 drumminj
My scary looking gun was not noticeable by the babes as I carried it in its original cardboard box. I think I should buy another rifle next.
Babes and nabes.
The difference between the current and previous immigration waves is that this time around, we’re not controlling who’s coming in.
Name all of the cultural and technological contributions made by immigrants that came to the United States between the Civil War and World War II
Now compare that with what’s coming in from Mexico, El Salvador, Guatemala, Honduras
Cultural relativism is the greatest progressive lie ever told
Now compare that with what’s coming in from Mexico
I just looked it up — Mexico is #7 on the list of H1B visas granted. Which means you’ll find them working in the halls of biotech companies, Silicon Valley, etc., contributing to the “technological contributions.” How about that? Not all Mexicans are fruit pickers nor taco truck drivers.
Doctors and astronauts, got it
And the Spanish speaking children of the mom and dad with neck tattoos at my local grocery store will all go to Harvard and win Nobel Prizes someday, right?
There is no level of cultural rot that you progressives won’t apologize or make excuses for
There is no level of cultural rot that you progressives won’t apologize or make excuses for
I’m not defending Being that you like to brag about banging college girls, your moralizing rings a tad hollow.
Rockstar, don’t lie to yourself if you were 30 years younger and not married you’d be on Tinder too
Not all Mexicans are fruit pickers nor taco truck drivers.
According to OECD reports 23% of Mexicans youth from ages 23–35 have a college degree. The best and brightest are coming here, but since they are not:
illegal immigrants
felons
rapists
murderers
welfare cheats
And they tend to be “whiter” than illegals, no one notices them.
If we were exporting all of our mouth-breathing, 300+ lb oxy-addicted, Pepsi-guzzling Walmart shoppers to a wealthier country for cheap labor, they might start to suspect that’s all we had, too.
And they are also overwhelmingly from countries that share a common language and to a lesser extent culture. They have no need to assimilate in to the host culture because they are forming a secondary culture that rivals the existing one in size and influence.
And they are also overwhelmingly from countries that share a common language
LOL, that’s not even close to being true. There’s community tensions in California and elsewhere between spanish-speaking Mexicans and Oaxacan indians, many of whom don’t speak spanish. A good proportion of illegals are Mexican indians.
Yeah and there are some Cajuns in America who only speak creole. So I guess if a few tens of millions of us all up and moved to China we’d have no idea how to communicate with each other without assimilating in to the native culture because a few Cajuns came along for the ride? You’re isolating a small exception, amplifying it and insisting it is the rule.
They attacked us on 9/11 because they hate our freedoms, LOLZ
http://www.picpaste.com/IMG_20150821_062224-YILX7CEP.jpg
And here, some nice illustrations of the “freedoms” we invaded Iran to defend:
http://www.boredpanda.com/modern-world-caricature-illustrations-steve-cutts
If any of you will be in town next month for the Great American Beer Festival, I will buy you a beer, Falling Rock Taphouse, on Blake Street by Coors Field, be there!
All religions and cultures are equal.
—————-
Muslims Believe That All Those Who Aren’t Muslim, Are Their Property
Shoebat | 8/20/15 | Thomas King
The worse part about this is that forcible taking of property of non-Muslims by banditry and foul means are acceptable in Islam and are seen clearly in the example of the founder of Islam, Muhammad the so-called “Prophet”.
To begin with, it is best to start with the Surahs in the Qu’ran that teach such an abominable teaching:
“And all married women (are forbidden unto you) save those (captives) whom your right hands possess. It is a decree of Allah for you. Lawful unto you are all beyond those mentioned, so that ye seek them with your wealth in honest wedlock, not debauchery. And those of whom ye seek content (by marrying them) give unto them their portions as a duty. And there is no sin for you in what ye do by mutual agreement after the duty (hath been done). Lo! Allah is ever Knower, Wise.” (Surah 4:24) So married women are off limits unless you have captured them in war!
The forcing of Muhammad onto the wife of Kinana, a Jewish chieftain of the Jewish tribe of Khaybar, after first torturing him to get his treasure and next forcing himself onto his wife, Safiya bint Huyay, after killing a number of her relatives in battle.
We arrived at Khaibar, and when Allah helped His Apostle to open the fort, the beauty of Safiya bint Huyai bin Akhtaq whose husband had been killed while she was a bride, was mentioned to Allah’s Apostle. The Prophet selected her for himself.
“He who kills someone, has the right to all his belongings.” (Sahih Bukhari, Vol 4, Book 53, #370; Sahih Muslim, Book 19, Chapter 13.
Conclusion: Taking of the property of non-Muslims and the women of non-Muslims is clearly decreed in the Qu’ran and in the behaviour and sayings of Muhammad as outlined in the Hadiths. What is worse is that this behaviour is continuous throughout all Islamic countries or anywhere where Muslims have an upper hand.
Those wacky Muslims, what will they say next? Meanwhile what’s being said by the, uh, Christians?
“I’m the most militaristic person there is,” Donald Trump boldy bragged upon his return to Fox News Tuesday morning. Even for the Donald, this is a boast that goes a bit too far. In the 2016 election cycle, the “serious and responsible” candidates for the presidency are so bellicose they make Trump look Cindy Sheehan. He can’t even compete with the current Democratic president or the most likely Democratic nominee.’
‘Barack Obama still enjoys an unearned reputation as a reluctant warrior, but by December 2009, when he hit the dais in Oslo to accept the Nobel Peace Prize, Obama had already launched more drone strikes than “war president” George W. Bush managed during two full terms. Since then, “44” has racked up nearly nine times as many drone attacks as “43,” launched two undeclared wars, and—as Obama bragged in last week’s speech defending the Iran deal—bombed no fewer than seven countries. He was being uncharacteristically modest, however: the number is actually eight.’
‘For her part, the leading Democratic contender has rarely met a war she didn’t love. From First Lady to Senator and then to Secretary of State, the running theme of Hillary Clinton’s ghoulish career has been “I urged him to bomb.” That’s how HRC described the March 1999 phone conversation in which she ended eight months of post-Lewinsky silent treatment to tell her husband that, if he knew what was good for him, he’d attack Serbia. Monicagate had been pretty rough on their marriage, but a shared love of airstrikes got Hill and Bill talking again. As they say, the family that slays together stays together.’
‘In 2011, Hillary urged President Obama to bomb Libya. That hasn’t worked out so well for Libya, but at least it gave the then-Secretary of State the opportunity for a classic Schwarzenegger-style sendoff. Upon hearing that Qaddafi had been killed by a rebel mob, Clinton cracked, “we came, we saw, he died.“ That’s pretty hardcore—especially when you consider that Colonel Q. slipped this mortal coil while being sodomized with a combat knife. The best Trump could do at the time was brag how, this one time, he bilked Qaddafi on a real estate deal.’
‘When it comes to the GOP race, the Donald can’t begin to match his competitors in warmongering bluster. “Most militaristic?” In this field? These guys have blood coming out of their eyeballs, blood even coming out of their… wherevers.’
‘Can Trump really tell us with a straight face that he’s more belligerent than Senator Lindsey Graham, who’s said he would “literally use the military” to keep Congress in session until they approve more military spending? Graham further proclaimed that “if I’m president of the United States and you’re thinking about joining al-Qaeda or ISIL, I’m not gonna call a judge, I’m gonna call a drone and we will kill you.”
‘Can Trump out-hawk Wisconsin governor Scott Walker, who in June, refused a reporter’s invitation to rule out “a full-blown re-invasion of Iraq,” and in July, announced that he’d “very possibly” need to start bombing Iran on his first day in office? Come on. Walker’s informal advisor and one time Iranian hostage Kevin Hermening, who serves as the “face of Walker’s foreign policy,” has even called for a “massive military response” to 9/11 “that includes the destruction of the capitals of Iran, Iraq, Lebanon, Libya, Sudan, and Yemen,” possibly with nuclear weapons.’
‘And does the Donald expect us to believe he can get around Marco Rubio’s right flank on militarism? Good luck, Mr. Trump: the Florida senator stands out among his competitors as the sole Republican to argue that Obama’s real mistake in Libya was that he didn’t start bombing even sooner. Rubio wants to double down on the profligate interventionism of the George W. Bush era so badly that he’s built his campaign on B-movie slogans and neocon buzzwords. A Liam-Neeson style “we will find you; and we will kill you” message to ISIS has his characterized his platform, and his website promises “A New American Century,” –a pledge that ought to give pause to anybody old enough to remember how that worked out in the last decade.’
‘But Rubio knows the score: if you want to win the GOP nomination, you don’t admit that the biggest foreign policy disaster in a generation was a mistake until your interrogators leave you with no other option. And even if you cave under enhanced interrogation, you recant the first chance you get, as Jeb Bush did at a campaign event this week: “taking out Saddam Hussein turned out to be a pretty good deal,” all in all.’
‘Just when did being the biggest militarist in the room become something to strive for—and much less brag about? Republicans love to drape themselves in the mantle of the Founding Fathers, but they’re not getting this from Ben Franklin, who called the army “a devouring monster,” or George Washington, who warned that “overgrown military establishments… under any form of government, are inauspicious to liberty.” James Madison believed that “of all the enemies to public liberty war is, perhaps, the most to be dreaded, because it comprises and develops the germ of every other”—among them being “debts and taxes,” an expansion in “the discretionary power of the executive,” and “the degeneracy of manners and morals.”
‘It’s even stranger to imagine that promiscuous war-making is a conservative virtue. There was a time when leading intellectuals on the Right recognized that war is a government program, and an especially destructive one at that.’
Ben,
What are you trying to say?
That Trump, Hillary and obama happen to live in a majority Christian country so therefore all Christians are hypocrites?
Only if they were quoting the Bible and performing deeds just like Jesus Christ.
But they are not.
But good muslims are acting just like mohamed in his prime.
Taking slaves, selling slaves, raping little girls, genocide, robbery and ethnic cleansing…to name a few.
Like I said.
All cultures and religions are equal.
‘good muslims are acting just like mohamed in his prime’
The only people fighting ISIS are Muslims; Syrians and Iranians. Turkey is allowing ISIS to be reinforced. Israel is treating their wounded and sending them back to fight. The Saudi’s gave them the start up money. The US defense intelligence circulated a paper years ago predicting the rise of a caliphate in Syria and said the US wanted just that. If you want to know who’s behind ISIS, look in the mirror, because it’s your tax dollars at work.
It is a good point. America has meddled in ME politics for a long time.
But we meddle in many places. And we don’t see 12 year old sex slaves, suicide truck bombs against hospitals and mass beheading in those places.
So there seems to more to the equation.
But as far as “The only people fighting ISIS are Muslims”
Muslims have ethnically cleansed everyone else. At one time - Syria, Egypt, Libya, Lebanon, Turkey, etc. were Christian countries. They were conquered by islamic armies and the non mulsims were put to death, forced to convert or treated as third class citizens until they converted (or genocide at a later date).
Muslims hate each other too. Sunni vs Shia. They are infidels to each other and will be treated how just mohamed treated infidels in his time.
And it will never end. Their holy koran gives them many blessing for killing infidels and taking them as slaves. In fact - it is the only SURE way to get to heaven (being killed in battle against the infidels).
All cultures are equal. Diversity is our strength. America is always to blame.
banana: “Their holy koran gives them many blessing for killing infidels and taking them as slaves.”
Dick Cheney smiles upon you.
“Meddling” is that what you call it? A little “meddling” here and there, doesn’t sound so bad at all.
A double Dick Cheney blessing upon you.
Salon dot com, the most chronically encopretic real journalists to ever befoul the internet, drop this Noam Chomsky gold nugget:
http://www.salon.com/2015/08/21/noam_chomsky_america_is_the_gravest_danger_to_world_peace_partner
Shouldn’t something here be about how the Dow dropped almost 400 points yesterday? Is that indicative that the decision has been made not to raise the interest rate a tad?
The thesis on Wall Street has been that Fed rate hikes this fall would bode poorly for prospective share prices.
Turns out they got it backwards: Rather collapsing share prices bode poorly for the prospect of interest rate liftoff.
BTFD cause QE4 is coming. Welcome to the roach motel of uncle FED economics.
I agree QE 4 is coming. But not until a big drop/scare. Cancel Christmas.
And I hadn’t even gone to MarketWatch yet to read the headline “Sept Fed Hike Bets dropping like a stone”
lmao It never was on the table. all hype. the printing has to continue to keep stocks levitating and get more retail sheep in the market to hold the bag again. These guys are excellent promoters.
Shouldn’t something here be about how the Dow dropped almost 400 points yesterday?
I haven’t seen evidence that anyone on this board knows how read a stock chart and do rudimentary technical analysis, which is why the commenters here miss the significance of certain price and volume movements on the market. 90% of the market “analysis” stuff linked here is useless and just noise.
There is some serious technical damage being done on the charts right now, and it’s in all sectors. The rapid dip in the S&P500 to just under 2000 is not good. It’s also not good that selling is occurring on increasing volume. It’s also not good that market leaders, like AAPL, are selling off badly.
Probably due for a little bounce next week. From a probability standpoint the odds favor using a bounce to take a short position to ride the next leg down. BTW, best book on Tech Analysis is “How to Make Money in Stocks” by Wm. O’Neil — his method generated a 100% buy signal in early 2013.
Tech analysis and chart reading are for people who practice voodoo and astrology.
It’s dropping like a rock again today. Crude touched the $30’s for the first time since the recession, yet fuel is around $3.50 per gallon here. SCAM WORLD.
If you’re in CA the stubborn gas prices are the result of lack of refinery capacity. Mobil wants to bring an older process device online at the plant that had that accident but the AQMD is dragging its feet. You’ll note that #2 Diesel is about $3/gal right now…
Even if oil were $1/bbl we Cali-dwellers will continue to be raped by gas prices. If the retailers could get stocks from other states we’d be fine. Having to sell only “CA formula” fuel hobbles the retailers.
The obama fake economy is about to meet its maker according to some…
——————
The Great Financial Catastrophe
GOLD Switzerland | August 20, 2015 | Egon von Greyerz
Most people are blissfully ignorant of the fact that 2007-8 was just a mild rehearsal of what we soon are going to experience. The additional $60 trillion in credit and printed money since then and the lowering of interest rates to zero have given the world the impression that all is now well again.
Let me be very clear, nothing is well. As a matter of fact in the 8 years since the start of the Great Financial Crisis the bubble economy has now properly spread to the world’s second largest economy – China. China has had exponential growth in debt from $2 trillion to $28T this century. A major part of this debt has financed white elephant projects and ghost cities. It would be surprising if the total Chinese bad debts were below $10 trillion before all of this is finished.
The bubble contagion has also totally infected most emerging markets. With massive growth in debts, a stronger dollar and collapsing commodity prices, almost every emerging economy is now starring into the abyss. As Michael Snyder of the Economic Collapse Blog recently pointed out, 23 stock markets around the world are now crashing. Of the 23, there are 22 emerging economies and the 23rd is Greece which definitively is not emerging but sinking into the Mediterranean.
So the Great Financial Crisis of 2007-9 will now transcend into the Great Financial Catastrophe. This could very well involve a total reset or more likely a collapse of the world economy, financial system and world political system. And it won’t be orderly. It is likely to take a very long time and will involve bankruptcies of major parts of the financial system as well as many major nations. It will also lead to social unrest, escalation of wars, major poverty and famine with the world population going down significantly.
Isn’t August a couple of months early for Mr Market to hit the panic button?
That said, it seemed like August 2007 and 2008 as well were quite unkind to traders. I’ll try to find time over the weekend to look up and post some specifics.
TheGuardian
Chinese economy
Global stocks in ‘panic mode’ as Chinese factory slump drags on markets
Asia Pacific markets mimic heavy selling in US and Europe as latest data adds to expectations that Beijing will have to give its spluttering economy another boost
A succession of devaluations in China’s yuan focused attention on the country’s weakening economy.
Photograph: Aly Song/Reuters
Shane Hickey and Martin Farrer
Friday 21 August 2015 01.20 EDT
Last modified on Friday 21 August 2015 09.28 EDT
The FTSE 100 has hit its lowest level this year after further signs of a weakening Chinese economy spooked investors.
Britain’s leading share index fell 1.2% to 6,286 on Friday morning immediately after opening . By lunchtime in London it had fallen further to 6,274.
The drop mirrored stock markets across Asia-Pacific after they went into “panic mode” when further signs of a weakening Chinese economy compounded overnight losses on Wall Street and European bourses.
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China’s factory sector shrank at its fastest pace in more than six years in August as domestic and export demand dwindled, a private survey showed, adding to worries that the world’s second-largest economy may be slowing sharply and sending financial markets into a tailspin.
Tony Cross, an analyst with Trustnet Direct in London, said the FTSE could be heading for its worst week this year. “As it stands, the FTSE 100 is on course to post its biggest weekly decline of the year so far and there’s not a great deal on the agenda that would appear to have the ability to salvage the situation before the weekend break,” he said.
Connor Campbell, an analyst at Financials, also predicted fresh lows. Oil and mining stocks were “drowning in losses” from the beginning of the day, he said.
European shares fell to a seven-month low on growing concerns about China’s economy. The FTSEurofirst 300 index of top European shares fell 1% to 1,462.78 points, its lowest level since January and on course for its biggest weekly fall of the year. Germany’s DAX declined 0.5%, which was some 16% below record highs reached in April.
In the US, the reaction on Wall Street was mixed. Futures for the Dow Jones industrial average were down 0.1%, while the Standard & Poor’s 500 index up by a similar margin.
China’s surprise devaluation of the yuan and heavy selling in its stock markets in recent weeks have sparked fears that it could be at risk of a hard landing, which would hammer world growth.
Markets in countries whose economic fortunes are closely linked to China’s growth tumbled. Japan’s Nikkei average dropped almost 3% to six-week lows on Friday, while the Kopsi index in South Korea fell 1.92%.
“Global markets are in panic mode as the full scale of China’s slowdown becomes clearer,” said Angus Nicholson at IG Markets in Sydney.
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I love a good barbecue.
Bulletin Russell 2000’s losses build, falls into correction territory
Need to Know
The bull market is burning, taking all those lovely streaks with it
By Shawn Langlois
Published: Aug 21, 2015 7:32 a.m. ET
Critical intelligence before the U.S. market opens
Getty
The bull market is burning
The destruction in yesterday’s market wasn’t caused by some unsettling geopolitical headline or a batch of worrisome economic data. No, this was “a break created by buyer exhaustion,” according to Michael O’Rourke of Jones Trading. And those can be a bit more difficult to recover from.
Following the biggest drop in a year and half for the S&P, there’s no bounce so far this morning. The dip buyers who licked their chops after kinder, gentler declines earlier this year are nowhere to be seen. The leaders that have held up this tired rally are showing signs of wear, as O’Rourke pointed out in his daily update. Biotech is getting hammered. So are discretionary stocks, with visible cracks appearing in the likes of Amazon (AMZN, -1.46%) and Netflix (NFLX, -3.61%).
From death crosses looming over the market’s show pony, Apple, to a troubling Fibonacci extension on the S&P (see the chart of the day), trend lines are a mess.
Remember, not so long ago, when most of the trends and streaks we talked about were positive? Eight days without this! Four months of that! Twenty Tuesdays in a row! Bullish records, dropping left and right. Well, those kinds of trends, like this one below, are dying.
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BBQ - I am going to smoke some baby back ribs this weekend. Technically not smoking as I am using a gas grill. Recipe involves marinade in apple cider vinegar, then a rub, apple wood chip smoke bombs, brown the ribs, then wrap in foil with applejuice and boil for a short time, then finish on the grill with sauce. Results in apple infused smoky ribs, really good, maybe 3 hours start to finish. I can post a link to the recipe.
Housing - Even with recent rent increases - Dallas is still has fairly affordable rents.
http://www.dallasnews.com/business/columnists/steve-brown/20150820-even-with-recent-increases-dallas-apartment-rents-are-middle-of-the-road-compared-with-other-big-markets.ece
P Bear:
This……
https://www.stlouisfed.org/financial-crisis/full-timeline
Thx, though I suspect that some key events might be missing, such as when Ben Bernanke announced that “subprime will be contained to $200 bn” (August 2007?).
You are welcome - the thing about the linky article is the length (indicated by the long timeline), breadth and massive amount of program money infused by the Fed and other entities into what was / is a bankrupt econonmy. Some of those money creating programs I had never heard of nor do I think had heard the press talk about it all that much - what they seemed to focus on were the big names, Bear, Lehman etc. but there were and are so many other smaller players who have been obliterated by all this money swapping and program creation going on - witness the obliteration of the community banks - 50% less in sheer numbers than 8 years ago. All about control and centralizing power IMHO.
I think the current tanking of the Dow, oil, Dr. Copper, gold etc is just a long shadow of what was ‘created’ out of the ashes of the 07/08 meltdown.
Fortune
International China
China stocks plunge to post their worst week since June
by Reuters
August 21, 2015, 7:49 AM EDT
Photograph by On Man Kevin Lee — Getty Images
Doubt over Beijing’s ability to prevent another bout of panic selling.
China stock markets tanked more than 4 percent on Friday, taking weekly losses for the main indexes to nearly 12 percent and casting doubt over Beijing’s ability to prevent another bout of panic selling as the market neared collapse again.
The latest tumble followed similar declines in global markets and reflected sharp across-the-board falls in Chinese stock index futures as bears claimed victory over bulls on the settlement day for August index futures contracts.
Friday’s plunge may also have been exacerbated by a private survey showing Chinese factory activity shrinking in August at the fastest pace in nearly 6-1/2 years.
But many investors also pointed to signs that regulators’ commitment to pushing up the market has weakened. On Aug. 14, the China Securities Regulatory Commission (CSRC) said it would allow market forces to play a greater role, while keeping state investors involved to maintain stability.
On Friday, the CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 4.6 percent, to 3,589.54, bringing the week’s loss to 11.9 percent — the worst performance since mid-June. The CSI300 has now given up all the gains it made since mid-March.
The Shanghai Composite Index lost 4.2 percent, to 3,507.74 points. For the week, that index tumbled 11.5 percent, the sharpest drop since the week ending July 3, and near the low it hit on July 9 during the height of the recent market rout.
…
I find this Special Report: U.S. banks moved billions in trades beyond CFTC’s reach interesting.
This spring, traders and analysts working deep in the global swaps markets began picking up peculiar readings: Hundreds of billions of dollars of trades by U.S. banks had seemingly vanished.
…
Rallying the base:
http://mobile.wnd.com/2015/08/america-a-6000-year-miracle
Ben Jones asked us to moderate the tone around here, so no more jokes about incest
But remember, always remember, the people who actually believe these fairy tales elect a Congress that controls a $600,000,000,000+ a year war machine
You have to look both humbly Christian and hawkish to have a shot at the WH. Machiavelli figured out the formula centuries ago.
Global warming is God giving humanity the middle finger
July 2015 was the hottest month in recorded history
And now back to your regularly scheduled Drudge Report links
“July 2015 was the hottest month in recorded history”
June 2015 set records up my way.
“The only security of all is in a free press. The force of public opinion cannot be resisted when permitted freely to be expressed. The agitation it produces must be submitted to. It is necessary, to keep the waters pure.” –Thomas Jefferson to Lafayette, 1823
————
NYT Reporter: ‘You Want Me to Indict and Damn Hillary Clinton? I’m Not Going to Do That’
NewsBusters - Mark Finkelstein - 8/21/2015
On today’s Morning Joe, Mika Brzezinski and Joe Scarborough repeatedly tried to get Jeremy Peters to state whether he agreed with the federal judge who yesterday declared that Hillary had not “followed government policy” regarding her email. After haplessly trying to do anything but answer the question, an exasperated Peters finally sputtered: “you want, you want me to indict and damn Hillary? I’m not going to do that.”
It doesn’t get much more real than the real journalists at the New York Times:
http://www.infowars.com/feinstein-youre-not-a-real-journalist-unless-you-draw-a-salary/
Yep - he doesn’t want to end up like Vince Foster, Andrew Breitbart and a slew of others who had been outing the Clinton clan and their minions.
No dirt nap for Peters.
Is today the best day ever for shorts? It seems as though bulls all over the planet collectively lost their balls at exactly the same time!
A clear message is being sent to the FED:
Raise rates and we will sink this market badly.
A wall street temper tantrum.
Announce QE4 and the party goes on.
What if the Fed takes the middle way?
No liftoff, no rate hikes.
In that case it would be hard for Wall Street types to blame their current problems on the Fed.
Meant to say:
No liftoff, no QE4.
It’s definitely time for coffee!
300 down last I looked, but the PPT ought to be showing up any minute now.
PPT better hurry!
Market Snapshot
Stock selloff accelerates as Dow dives more than 300 points
By Anora Mahmudova and Barbara Kollmeyer
Published: Aug 21, 2015 11:25 a.m. ET
Dollar tumbles, Shanghai Composite sinks 5.4%
AFP/Getty Images
U.S. stocks extended this week’s sharp losses with a renewed selloff on Friday. The main indexes are on track to post their steepest weekly declines of this year.
The S&P 500 (SPX, -1.92%) fell 36 points, or 1.8%, to 1,999, falling below the 2,000 level for the first time since February, with all the benchmark-indexes’ sectors trading in the red. Consumer discretionary and technology stocks are hit hardest.
The S&P 500 index is trading well below the 200-day moving average level after breaching it on Thursday as is the Nasdaq 100 (NDX, -2.47%) For many technical analysts, breaching of those levels means further declines.
A measure of implied volatility on the S&P 500, the CBOE Volatility index jumped 16% to 22.25, which is above the 10-year average level of 20.
The Dow Jones Industrial Average (DJIA, -1.84%) was off 279 points, or 1.6%, to 16,714. The Nasdaq Composite (COMP, -2.18%) fell 92 points, or nearly 2%, to 4,781.
The Russell 2000 (RUT, -1.44%) fell 10 points, or 0.9% to 1,162 and is trading 10% below its peak reached on June 23, meeting a widely-used definition of a correction.
Selling pressure on Wall Street stemmed from downbeat data from China, which resulted in a rout of Asian and European markets.
An early gauge of China’s factory activity fell to a 6½-year low in August. The data come over a week after Beijing’s surprise move to devalue China’s currency.
“Today’s markets are driven by fear, with a lot of momentum shares seeing a retracement,” said Myles Clouston, senior director at Nasdaq Advisory Services.
…
A clear message is being sent to the FED:
Raise rates and we will sink this market badly.
This ain’t got nothing to do with a measly little 1/4% rate raise. This selloff is all about China, nothing more, nothing less. Multinationals had future sales to Chinese companies and people baked in the cake (AAPL); now, with China on verge of a recession, analysts and portfolio managers are no doubt revising estimates downward for major stocks across the board. Welcome to globalization.
China, oil under $40, Iran about to open the spigots, debts, debts and more debts.
And maybe the crazy people running for POTUS is unsettling.
Marketwatch dot com
Jeff Reeves’s Strength in Numbers
Opinion: Investors, it’s time to prepare for a correction in stocks
By Jeff Reeves
Published: Aug 21, 2015 8:11 a.m. ET
The stars have aligned for an extended decline in U.S. markets
Getty Images
The Dow Jones Industrial Average, S&P 500 Index and Nasdaq Composite each fell more than 2% Thursday, with the benchmark S&P 500 now in the red for 2015. It was worst rout of the year for U.S. markets.
This was no knee-jerk drop on a boring summer day, either. The decline was a long time coming, precipitated by weak corporate earnings, a global economic slowdown and concerns over higher borrowing costs as the Federal Reserve prepares to raise official interest rates.
And guess what? There’s not even a guarantee that the Fed will start its “lift-off” in September as some economists have been predicting. Not only does the market have a history of forecasting tighter policy too early, but the current conditions of low inflation and a strong dollar don’t exactly add up to a compelling case for higher rates.
So if these are the fireworks we’re seeing now, just imagine the uncertainty as we approach September’s Fed policy meeting with oil in the $30s and Chinese equities in utter turmoil.
This is the first year-over-year decline in corporate profits since the third quarter of 2012.
The bottom line is that investors would be wise to get defensive now, because stocks are in a world of hurt, and the pain is likely to intensify in the weeks ahead.
…
Where is the PPT when you need them?
What a route! 8:30 pac time and the S&P 500 is at 2000, where it was one year ago.
I so,d $21,000 worth of stocks, large company stock fund and a small company stock fund a couple weeks ago and put the proceeds in cash!
Stock market’s loss is gain for precious metals. Like I been saying PB.
Is the latest wave of panic affecting oil prices?
SkyNews
Petrol Prices Cut As Oil Heads Towards New Low
14:30, UK, Friday 21 August 2015
Petrol prices hit six-month high
Graph showing oil prices from Nov 14 to Aug 15
The global oil price is slipping towards its lowest point of 2015, caused by over-supply and a slump in the Chinese economy.
The RAC says petrol prices could again fall close to £1 per litre if the price goes much lower.
“If Brent Crude were to move to the $40 per barrel mark, the prospect of some enterprising retailers selling fuel for £1 per litre will make a return,” said spokesman Rod Dennis.
It comes as Asda announced another 2p cut to the price of unleaded to 109.7p per litre - a move followed soon after by Sainsbury’s and Morrisons.
Tesco also announced a 2p cut per litre, to come into effect at 1pm on Friday afternoon.
…
The Wall Street Journal
Oil Markets
Oil Prices Fall After Weak Chinese Economic Data
U.S. crude on track for eighth consecutive weekly loss
By Georgi Kantchev
Updated Aug. 21, 2015 7:06 a.m. ET
LONDON—Oil prices slid Friday on weak economic data out of China, with U.S. crude on track for its eighth consecutive weekly loss—its longest losing streak in 29 years.
The Caixin China Manufacturing Purchasing Managers’ Index, a manufacturing gauge, fell to a 77-month low in August, according to preliminary data. A surprise devaluation of the Chinese currency earlier in the month sparked fears about the economic health of the world’s No. 2 oil-consuming nation at a time when the global market remains heavily oversupplied.
“The Chinese slowdown continues to dominate the oil market, causing persistent concerns over a serious decline of Chinese oil demand in the second half of the year,” said Myrto Sokou, senior analyst at Sucden Financial. “It is not a pretty picture for most commodities markets.”
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The oil producers’ game of production volume chicken has led to a spectacular crash with no end in sight.
The Wall Street Journal
Business
No End in Sight for Oil Glut
Crude-price plunge is deepening, yet producers keep pumping
Far from going out of business, American oil companies have stunned their global rivals by maintaining or even adding production as U.S. prices nose-dived.
Photo: Getty Images
By Russell Gold
Aug. 20, 2015 7:35 p.m. ET
When oil prices started to edge down a year ago, most energy mavens thought the drop would be small and short-lived.
Instead, the price of crude has plunged by almost 60% from its 2014 peak—and suddenly looks likely to stay low for months and maybe years to come. The reason: In the global battle for market share, nobody has backed down. Nobody has even blinked. Not Saudi Arabia, not the U.S., and not even troubled producers from Russia to Iraq. Everyone who can seems locked into pumping as much oil as possible.
Far from going out of business, American oil companies have stunned their global rivals by maintaining or even adding production as U.S. prices nose-dived from $100 a barrel to $70 late last year to, as of Thursday, just above $40. Even more surprisingly, the Saudis have actually increased their production in the face of falling prices, in what analysts say is a pre-emptive effort to keep competitors like Iraq from stealing customers in Asia.
The result is the energy-industry version of trench warfare, with producers all trying to gain an inch of market share no matter the cost. And it is producing winners and losers around the world, luring American drivers into gas-guzzling pickup trucks while sending the Venezuelan economy into chaos.
While it might make sense for producing countries or companies to cut back and erase the glut, there is no political will or business rationale to do so, analysts say, as all participants need to keep cash coming in.
“Everyone is in the mode of, ‘Oil prices are down and I need to produce as much as I can to make up for it,’” said Jamie Webster, a senior director at IHS Energy, an energy consultant. “That makes lots of sense on a micro level, but on a macro level it brings us to the situation we are at right now.”
…
The oil producers’ game of production volume chicken has led to a spectacular crash with no end in sight.
An Iran has yet to open its spigot.
+1
Gas is still $3.59 in CA. Trump is leading and people actually believe he will make Mexico pay for a border wall.
its a mad world…
$2.63 at Love’s in Qurtzite, Az today.
At least it’s entertaining to watch!
Here is a question to ponder: Were $100/bbl oil prices merely a transient effect of the Fed’s quantitative easing measures?
Is today the day oil closes below 40?
Don’t look now, but October NYMEX oil is within $0.10 of $40, after having already breached that critical support level.
I’m sure missing the signs that oil prices will double by December!
Crude Oil - Electronic (NYMEX) Oct 2015
Market open $40.10
Change -$1.22 -2.95%
Volume 274,350
Aug 21, 2015 1:27 p.m.
Previous close $ 41.32
Day low $39.86
Day high $41.40
Open: $41.03
52 week low $39.86
52 week high $92.06
I think the China Ponzi economy had more to do with it, and now that it’s collapsing, it doesn’t matter what interest rates are in this country. A slight rise here may speed up the China train wreck a little, but the train wreck is coming hell or high water.
I think the China Ponzi economy had more to do with it, and now that it’s collapsing, it doesn’t matter what interest rates are in this country.
I concur Dman. And a weakening China means weak demand for oil for the foreseeable future, which means the whole “shale miracle” in the US may be over for good.
And not just weak demand for oil, but for iWhatevers, American cars, construction equipment, and anything else that we export or sell over there. That’s bad for our markets - the last hope of increase sales has been dashed.
Here is a question to ponder: Were $100/bbl oil prices merely a transient effect of the Fed’s quantitative easing measures?
Only as a secondary factor. Futures markets used to be a place where producers and buyers would manage risk and actually take physical delivery of the product. Then the big banks, hedge funds, etc. started treating the futures markets like a casino. The total volume of futures contracts is on the order of 10x the physical market, which shows how distorted the futures prices are.
No. From 2010 to 2015, fracking has increased supply by 4MM barrels per day.
If you take out that 4MM barrels per day, prices are WAY above $40, regardless of QE.
You’re missing it. Without those QE-induced $100/bbl prices, there would have been no incentive to ramp up U.S. production.
Oil was in the high $70’s and low $80’s per barrel in 2005. Oil was over $100 in late 2007, and was over $140/bbl in mid-2008.
The fracking boom in North Dakota started in 2007/2008 or so. In 2008, North Dakota overtook Wyoming and New Mexico in terms of oil production (thank you Wikipedia).
QE started in November 2008.
QE didn’t induce oil being over $100 per barrel or fracking in North Dakota.
‘QE didn’t induce oil being over $100 per barrel or fracking in North Dakota.’
Yes it did. I covered this explicitly and directly in many posts. QE is also helping frackers/producers hang on that should have been gone by now. QE is ultimately deflationary.
The EU has a QE, China had some, Japan still has it as policy, Canada, etc. This is why iron ore has crashed, copper, all the commodities. Even farm land and now tractors are piling up.
It’s all one big interconnected bubble; stocks, bonds, real estate, commodities. Because of globalism, we have equity locusts from China crawling all over the world. Canadians lined up by the thousands to buy Phoenix shacks. Russians, Brazilians in Florida, it goes on. And I’ve been all over it like stink on a dog.
Oil hit $100 per barrel and fracking had already commenced before QE started. Surely our calendars match up in this regard.
As such, you can’t completely eliminate the possibility that a big part of oil prices (perhaps even the biggest part) is simply supply and demand (even supply and demand in the absence of QE).
‘Oil was over $100 in late 2007, and was over $140/bbl in mid-2008′
This is so tedious. Was there not a real estate bubble globally by then? QE merely extended it. QE is just part of the bubble.
I’ll add this; right now, all over the bay area there are conference calls going on. “We gotta cut” “I’m pulling out of the Grilled Cheese Trucks”. Hold onto your hat because the big fat housing bubble is sitting on VC money out there and they shat their pants today.
Did QE help frackers get the money to frack? Sure.
Did fracking lead to over-production of oil? It would be hard to deny at this point.
Would frackers have borrowed the money to spend on oil production if the cost of fracking exceeded the market price of oil? No. In large part because the lenders wouldn’t have lent them the money.
Did QE induce oil demand such that prices reached unprecedented levels? Nope. (prices had reached over $100 per barrel before QE)
’simply supply and demand’
It’s China and globalism. China made a bubble in Australia and Chile and Brazil and Singapore, Canada and many others. So much printed money flowed through, it was like nothing ever seen. Debt too, and don’t forget China’s QE dwarfed ours. I explained it to someone the other day:
China pours more concrete in 3 years than the US did in 100. You gotta have trucks and roads. Companies ramp up all over the world to produce commodities. Millions and millions of men and women getting up every day, driving to a mine or office. They go to buy what they need to live and play. More people employed, more activity. One guys said in a post a couple weeks ago that China was over 100% of global growth for many years. If true, that means the rest of the economy shrank. This explains why Chinas slowing down is crashing so many parts of the puzzle. What might happen if China crashes? It certainly isn’t out of the question now.
I was thinking the other day; when the history of all this is written, the most important parts won’t be subprime loans and 2003-06. It will be what’s happened since 2009. Maybe even what happens in 2016 and beyond.
Yes it is tedious. You are describing the tree, and I’m looking at the forest.
With the exception of very few (and brief) periods of decline, global oil demand has been steadily increasing since before you and I were born.
To meet that growing demand, we need to find more and more oil to pull out of the ground.
HOWEVER, the easiest oil to pull out of the ground has been tapped, which is why companies were spending more and more money trying to get to oil in hard to reach places (deep sea, oil sands, etc.).
And then technology was developed (horizontal drilling and fracking) that allowed oil production at prices lower than what was previously though to be the next-cheapest alternative.
And BAM, oil glut. After all, who doesn’t want to spend $60 on something they can sell for $100? No one, that’s who. Which is why tons of money (QE or not) was poured into areas with “tight oil” plays.
You can’t tell me that the housing bubble or QE was the driving force behind decades and decades of global oil consumption growth.
Nor can you tell me that the housing bubble or QE has anything to do with the logic, economics and geology that makes it harder and more expensive over time to get more oil out of the ground.
And lastly, you can’t tell me that the housing bubble or QE has anything to do with the potential for a new and cheaper technology (horizontal drilling and fracking) to drive down the cost of a product (oil).
‘anything to do with the potential for a new and cheaper technology’
I’ve said before that every bubble has a bit of truth to it. There is oil in Texas and Canada, There is ore and coal in Australia. Take Apple; they’ve pinned all their hopes for growth on China. Two days ago they reported phone sales there fell. The problem is, their stock price and all their plans depend on growth. You have a new technology, swept up in the bubble. Everybody is making phones in Asia. We can already see over-capacity in tech of all sorts. Look at the solar debacle. Apple gets burned, pulls back, no need for all these guys with their skinny jeans and condos. “Load up the Tesla Ashton, we’re going back to Kansas. Leave the keys on the coffee table.” This is how it will likely play out in every industry connected to this monster. Heck, we’ve already seen it in raw commodities. Phones aren’t any different.
There will be frackers and phones tomorrow. We just have a few price adjustments to be made in the supply chains.
‘During the bull, investors were counting just how many billions they could make from Apple. Bulls were calling for Apple to be the first company worth $1 trillion. But how things have turned south. Investors have seen more than $150 billion in paper wealth vanish from the top. That’s an enormous destruction in wealth, equivalent to wiping out massive companies like Pepsico (PEP) or Intel (INTC).’
‘Investors are now facing the most serious risks to the iPhone juggernaut Apple has turned into the hero of this bull market. There are mounting signs smartphone growth is stalling as most people have one if not two or three smartphones already. Several wireless carriers such as Verizon and Sprint have recently announced changes to plans that remove smartphone subsidies.’
‘Pricing transparency will show consumers just how much iPhones really cost them - roughly $600 - not the subsided prices of $150 or even less. Some consumers might wonder if they need a premium priced device when there are lower priced alternatives - or if they can keep their phones longer than two years. Meanwhile, Apple’s last big growth market - China - is seriously slowing.’
http://www.usatoday.com/story/money/markets/2015/08/21/apple-crash-gets-ugly/32120759/
“There will be frackers and phones tomorrow. We just have a few price adjustments to be made in the supply chains.”
I think this will play out as usual: production will fall in the Bakken, Niobara, Eagle Ford (as it does naturally with fracked wells). Eventually the oil glut will go away, as oil demand continues to increase, and prices will find their new level that justifies continuing to pull more oil out of the ground…is that $60? $70? $80? I doubt $100.
I know it’s off topic, but I personally think Apple’s problems go much farther than China. What is keeping one tied to an iPhone these days?
Content is going OS independent (spotify, Disney Movies Anywhere, Netflix, Apps across platforms, etc.). If you can get your apps and content on any phone, why pay the premium for “cool”?
IMHO, the Apple Watch was intended to make a new kind of content that would re-strengthen the ties to the iPhone. If your phone had your health history on it (pulse at various times, sleep patterns, etc.) which came from you wearing that device…AND that information was important to you…well then, you might have a disincentive to buy an Android phone. However, people have to see value in that kind of content…I don’t.
I’ve been an iPhone user from the start…and I’m starting to see fewer and fewer reasons for my next phone to be an iPhone–and if I’m thinking that, I’m sure there are lots of people thinking the same thing.
‘The damage spans the globe. Thailand’s baht. Kazakhstan’s tenge. South Africa’s rand. Peru’s nuevo sol. In emerging markets worldwide, currencies are plunging over fears that developing economies are on the verge of a crippling fall. Success stories until recently, emerging economies are seen as casualties now — of slower growth in China, plunging prices for commodities like oil and iron ore, the prospect of higher U.S. interest rates and homegrown threats.’
‘The damage has spilled across oceans, with the turmoil jolting investors in New York, Tokyo and Europe. Investors there worry that China and other major emerging economies will reduce their imports. They also fear a trade-disrupting currency war as some countries desperately lower their currencies’ value to gain a competitive edge.’
‘Analysts point to a primary culprit: “It’s all coming from China,” says Masamichi Adachi, an economist with JP Morgan Chase in Tokyo. “Brazil, South Africa, many countries are commodity exporters, and the final destination is all going to China.”
http://apnews.myway.com/article/20150821/us–world_economy-currency_chaos-769b39e5a5.html
‘The pain seems never-ending for commodities, hurt again by the weakest Chinese factory data since the global financial crisis. The Bloomberg Commodity Index slid to its lowest level since 2002, while oil had the longest run of weekly declines in almost 30 years. Copper, nickel, zinc, aluminum, tin and lead also fell.’
http://www.bloomberg.com/news/articles/2015-08-21/these-charts-show-how-hard-china-has-hit-global-markets
The other point on Apple, which is one that I heard a long time ago:
Some dude (can’t remember his name) was speaking to a room full of money managers. He warned against Apple, and the crowd he was talking to started chuckling under their breath.
He paused. Then asked the crowd who owned Apple directly…everyone raised their hand.
That was his point…it was a crowded investment…EVERYONE already owned Apple. Where was the next buyer of the stock going to come from? AND if there was ever change in sentiment, how far would the stock price need to fall before support was found?
With a $700B, oops $600B company, there need to be lots of buyers to keep the stock price up in the face of pessimism.
I tell you what though, if the stock price falls to $60, $70 or $80, I just might be a buyer…at this point though, I’m content to stay on the sidelines and a NON-owner of Apple.
‘everyone raised their hand’
How many hands would have raised if he asked them if they owned a house?
It’s sure great to have Rental Watch on hand to fill in for AlbqDan in absentia.
“Hold onto your hat because the big fat housing bubble is sitting on VC money out there and they shat their pants today.”
I’m looking forward to watching this development play out.
Time to check up on the popcorn supply!
‘Investors are now facing the most serious risks to the iPhone juggernaut Apple has turned into the hero of this bull market.’
Is this guy suggesting the future of the bull market hinges on the sales trajectory of an overpriced cell phone model?
Gulp…
I just checked on my popcorn supply, and realized, to my consternation, that I should never have left my Trader Joe’s Popcorn in a Pickle where the kids could find it.
I suppose there is more where that came from…
should uncle fed cut off the gambling money?
Its like corporations have been the biggest margin gamblers.
Shareholders are essentially big gamblers based on corporate boards buyback binges.
I heard some shrill on tv yesterday sayn to buy stocks that have announced big buybacks. Is this a joke or what?
2banana :All in all - it is about a break even. And that is with a massive tax credit on a very small system.
Thread on solar is interesting (useful vs. name calling,etc) to follow up on. I have friends in Bakersfield, Napomo, Salinas who are leasing a system for fixed 19 year rate. Only one was able to give me usable feed back on costs and savings over time. Most say they just want to get PG&E out of their life. The one in Bako did show a savings because of days of sunshine and summer heat. He recently move to Salinas, purchased a house an is planning to have a leased system installed. He stated that at the present time, based on his current usage that it is break even to $10/month more but he is most interested in locking in a long term rate. PG&E is planning over the next 4 years to increase rates and go from the current 4 tier rate to a 2 tier rate.
As long as you do the numbers.
And solar’s numbers have been getting better as we march through time.
It still makes no sense for about 80% of America.
As for leasing - make sure your friend has read the lease - EVERY WORD.
And has for “getting off the grid” - many towns/municipalities will not let you do that either. You pay even if you don’t use a KW.
Public union goon pensions WILL BE PAID.
I thought this was interesting with regard to solar:
https://www.google.com/get/sunroof/about/
I wouldn’t rely on their math for any final decision, but at least it gives you a reasonable guesstimate from which to start.
One reason you can’t fully “get off the grid” is that as long as you are hooked up to the utility (and expect to use their power as a backup), you are using their infrastructure. You should pay something for that infrastructure as long as you are using it for insurance.
If you want to stop paying PG&E, that’s fine, they’ll shut off your power…but don’t expect them to cry for you if don’t have any power because your alternative of choice failed.
I talked to PG@E about solar power,which I happen to feel is a scam, and they said they encourage it because they make their money from the transportation of the electricity. the more local production usage in homes, means they don’t have to buy that power, but they still get to charge for the usage of the lines, and the cost of billing.
Now I don’t know if that is correct or not, but that is what the guy said.
PG&E is planning over the next 4 years to increase rates and go from the current 4 tier rate to a 2 tier rate.
That’s not the whole story. The utilities want to go to time of day pricing, to make electricity very cheap at noon but expensive around dinner time and early evening. This will undermine the cost effectiveness of solar — unless Tesla delivers cheap battery storage so you can time shift the solar power from 1 pm to 7pm.
Well there is no surprise there - the peak demand periods are in the AM and then after people get home from work, so that’s when they have to run the peaking plants (and/or buy power on the spot market for top $/kwh). There is no conspiracy there - just the power markets at work.
Grid-connected electric cars could serve as energy providers during peak load periods, recharging in the overnight hours when demand and power costs are the lowest. If we did this on a widespread basis, it could be a huge win-win for consumers and energy producers alike.
Anyone know about TILA - RESPA?
http://www.housingwire.com/articles/34184-tila-respa-integrated-disclosure-will-add-a-week-or-more-to-closings
This is an article written by real journalists that notes that Japan has almost 33 million people age 65 and older:
https://www.washingtonpost.com/news/worldviews/wp/2015/08/21/japan-has-so-many-super-old-people-that-it-cant-afford-to-give-them-special-sake-cups-anymore/
The amnesty bedwetters use this to script the narrative that USA must legalize 20,000,000+ criminal alien invaders to save economy
Maybe the reason whitey isn’t breeding is because whitey doesn’t think this world is a nice place to bring more children into
Sad panda boohoo whitey
So what are you saying - How the Japanese became white?
FYI - Japan has very restrictive immigration laws. And no anchor babies either.
So guess what - even 100 years from now Japan will still be Japan with a Japanese culture no matter the demographics.
Funny how that works.
“…whitey doesn’t think this world is a nice place to bring more children into…”
I get that a lot from the childless Millennials in my circle.
Some goons in Boston beat up a homeless Hispanic looking person while chanting Trump’s name, and now the urine soaked mattress real journalists at the Washington Post say Trump supporters are like the Brownshirts in the 1930s
heh, that’s so obviously a put-up job. Especially since it’s in Boston.
So nice to get a security alarm setup today in my OC place. Had this type of thing for years. While it won’t stop theft, it is a deterrent. Got some good firearms put away that any burgers would have to spend a lot of time going through to get to. But I also have eyes of my neighbors facing my front entrance so that any potential burger would be discouraged. Also have eyes of the street. My greatest fear is my firearms being stolen and used to harm innocent people. Shh! It’s California! I am in a very safe Orange County community, much safer than my Phoenix place but I love firearms and my right to self defense.
any potential burger would be discouraged
Tell us again about salmon and broccoli and living to age 150, Daddy Bill!
Burger! Ha!
Moderation is a virtue. Salmon is healthier than poultry or red meat for sure. Hell when I retire I should spend summers in the northwest and fish for salmon.
A coworker did just that with his Midwestern parents here north of Seattle this week. They limited out quickly.
The salmon are circling in Puget Sound, waiting to swim upstream as the water temperature in the rivers is too high for them to survive right now.
Public Service Announcement:
We are sold out of Golden Goat and don’t know when we will get more
We do have Golden Dawg (hybrid strain of Chem Dawg and Golden Goat)
Come see us, we are at ____ South Broadway, and say you have the HBB coupon
I remember when a Japanese company bought 4 golf courses at Pebble Beach in the 90’s, they sold at a loss 9 years later.
“BIG SUR’S first and largest luxury resort — and its
biggest employer — Ventana Inn and Spa sold two weeks ago
for $64 million.
Geolo Capital, which bought Carmel Valley Ranch in
2009 for $20 million, announced this week that it had formed
a partnership with Wanxiang America to buy Ventana and
other resort properties. Wanxiang America is a subsidiary of
Wanxiang Group Corporation, China’s largest private auto-
motive components company. Wanxiang America also “pur-
chased a significant interest” in the Carmel Valley Ranch.”
Carmel Pine Cone pdf file
Yep, it’s like dejavu all over again! In a few years, the Chinese will be selling off stuff at a loss.
Dow off big again today - at 10.30 am Dow down 250+ points. There is a blood letting going on.
Thanks China!!
But think how much ZIRP has artificially driven up stocks. Don’t forget to send Janet Yellen a thank you note too.
It seems like the trend line should be closer to 12K on stocks. My hope is that it dips WAAAAAY below that for another epic buy in like we had in 2009!
What happened to all the “China doesn’t matter” posters? They seem to have evaporated into the fundamental ether.
FWIW -
Ben - just want to thank you for monitoring this site……and I just want to acknowledge the intelligence that exists on this site. I read other economic and finance sites - many each and every day and this site is in the top five for me in terms of opinion, insight, and just sheer commentary.
Yea we got Goon, oxie, 2B and others who have their slants on the news of the day but you guys just keep me on my toes and for that I am grateful.
As I tell my son and daughter from time to time when they / I get our shorts in a bunch - can we have a DISCUSSION on a topic? Can you envision anything that will change your mind on this topic? I always hope they say yes but in the end many times that is not the case and so we move on to the next topic for discussion. I have learned that I won’t beat my head against a wall to try to convince them of looking at an issue from a different vantage point when they won’t even consider it. So why do myself harm in the process. Here it is a bit different.
I say this because seeing the discussions / attacks / slight of hand etc. that goes on here - not only is it entertaining but it keeps me questioning the what I value, the people I have in my life and why I like being with them and other things that make daily life worth getting up in the morning for.
Just my nickels worth for the day.
Keep it comin guys.
Ole rj gonna have himself a weepy eye moment about HBB?
You need a hug. From Oprah
You make me laugh my friend!!!
I am serious - no weepy eye stuff - just a big smile when I read the stuff I read on this site - really gets me to think and think some more and that is not a bad thing.
Cheers!!!
Have a great weekend.
And Goon - where you headed this weekend? Suggest a small hike up to Heart’s Lake west of Boulder - really nice up on the high ridge up there.
Grand Lake, west side of Rocky Mountain National Park
The water is frigid but the ladies love those jetskis!
Valero (VLO) down by 7.7% for the day so far.
But yet up 50% for the lat 12 months…
Isn’t the Chinese stock index up something like 60% over the last 12 months after all of the drops its had so far?
The FSA is not dumb.
And they vote!
But I really have no sympathy for Starbucks or anyone who pays $7 for coffee.
————————-
How a jerk scams a free quadruple espresso at Starbucks 365 days a year
boing boing | 8-21-2015 | Mark Frauenfelder
A Starbucks barista named Brad describes a guy who bought 365 Starbucks gift cards and registered each of them with a different birthday so he can get a free drink every day. That’s already a dick move, but the guy makes it worse by being a real jerk to the barista. When he comes in to the store he asks for a Venti cup and a marker and writes instructions on the cup before handing it back:
[He draws lines and arrows and writes all over the cup while telling me: “Two pumps of white mocha here, then add five pumps of vanilla. That should take us to this line here where you’re gonna add cold heavy cream up to this ridge here…it should be halfway between this line and this line. Make sure to add the heavy whipping cream before the espresso, it changes the taste if you do it out of order. Then add your four shots, three regular and one long shot. That long shot is important, since you guys reformulated your machines, it’s been Hell trying to get my drink right. That long shot helps balance it. Then stir it for me, Mister Brad. Now do me a favor and add ice to the top there and it’ll be easy as pie. I’m not picky so don’t worry about shaking it or anything like that.”
A drink like this is normally $6.50, which would make it ineligible for the free birthday coffee, so he instructs the barista to ring it up as a “one quad espresso, add white mocha, sub vanilla, sub heavy cream.”
Actually, I’d be willing to bet this guy (in addition to being a d-bag) is a free market type, like my friends who pirate music.
The FSA germ infects both sides of the political spectrum, but the symptoms vary.
When a nation does not control its borders.
It is not a nation.
————————
AZ Sheriff Paul Babeu: Drug Cartels With AK-47s Control American Soil 30 Miles from Phoenix
Breitbart News Network | 20 Aug 2015 | Pam Key
Pinal Co., AZ Sheriff Paul Babeu said drug cartels armed with AK-47’s “control many areas on American soil” noting that they are only 30 miles from Phoenix.
Babeu detailed touring the border yesterday with Republican presidential candidate Ben Carson and said, “We flew him in our helicopter, showed him the drug smuggling routes, the actual caves—these cartel scouts live on top of mountains, 30 days at a time. And how on mountain top to mountain top, over a 50-mile swath of land, and this is only 30 miles from Phoenix.”
Do we start buying funds at DOW 16,100? or wait?
I hate this part, feels like standing at the roulette wheel with $50k cash to blow.
Wait. If you feel that you can’t, send me that 50k. I’ll make sure it’s safe until the time is right.
“send me that 50k. I’ll make sure it’s safe until the time is right.”
http://www.youtube.com/watch?v=zOXtWxhlsUg - 200k -
Patience Grasshopper - don’t get sucked in to the frenzy - it will die down and when the chips are being counted - THAT is when you jump in.
Patience.
picking up speed: DOW 16,535.28, Down 455.41(2.68%)
Where be the PPT?
16500-ish is a major support/resistance line from the Jan 2014 high, roughly the same number of the Oct 2014 V-bottom. Watch for an attempt for a bounce next week. Next major support/resistance is around 15600 for the next leg down. Might wait for the bounce then buy DOG (inverse ETF that goes up when Dow goes down).
CLOSED: DOW 16,459.88
Down 530.81(3.12%)
And this is a summer Friday. Not October.
In percentage terms, a 500+ point drop isn’t anything near what it was back in October 1987. ‘Tis a mere flesh wound.
That said, one has to wonder if the recent big downside volatility signifies an unannounced change in policy to ween Mr Market off of plunge protection support, similar to what appears to be happening in China. What if policymakers collectively decided that blowing bubbles is not a desirable way to run a market?
“Watch for an attempt for a bounce next week.”
What does that even mean? Don’t tell us you are among those who believes Mr Market is a living, thinking, sentient being!?
If we could predict the right time to buy the dip, I guess we could all be millionaires soon!
I just figured the group can discuss it and debate it.
I remember looking at the market drops in early 2008, thinking the time to buy was at hand.
Wasn’t I surprised to see the entire global financial economy go up in flames in the fall!
My biggest area of self-doubt regarding price movements is that while I tend to notice the gathering storm clouds well in advance of the rain, I have difficulty timing the arrival of the tornado later in the storm.
Pffffft. I wouldn’t even consider it until we fly below 12K. Cash in the wings at the ready…
Our forecast is Dow 5000.
CRATER
TINDERRRRRR!!!!!
Lol, I checked that out for the first time yesterday. Seems a bit complex, but then I’m not the sharpest tool in the shed when it comes to tech. We used to just go to the bar.
Reposted in case you didn’t read this last week:
http://www.vanityfair.com/culture/2015/08/tinder-hook-up-culture-end-of-dating
“U.S. stocks closed deep in the red on Friday as global growth concerns accelerated selling pressure to push the Dow into correction territory.
The Dow Jones industrial average closed at session lows, off 531 points and in correction territory for the first time since 2011 as all blue chips declined.
The last time the index closed more than 500 points lower was on Aug. 10, 2011.
In the last five years, the index has only had four instances with closing losses of more than 400 points.”
http://www.cnbc.com/2015/08/21/us-markets-global-growth.html
The sell-off in commodities
Goodbye to all that
A decade of bingeing on raw materials may leave an even longer hangover
Aug 22nd 2015 | From the print edition
Timekeeper
IT WAS only a decade or so ago that Scotland was hit by the “Great Drain Robbery”, the disappearance of 50 manhole covers in Fife. It gave an inkling of the emergence of a new era in commodity markets, spurred by insatiable demand from China. Scrap-metal prices—and so scrap-metal thefts—soared. Africa was over-run by Chinese engineers; Australia elected a Mandarin-speaking prime minister; and emerging markets from Argentina to Zambia relished the rising values of their farmland and mines. The boom was fanned by a weak American dollar, the currency in which most stuff that comes out of the ground is priced.
The gears have now gone into reverse. A resurgent dollar has hammered commodity prices: many have recently fallen below their levels of a decade ago. That is a fate not shared by other tradeable assets: not since the late 1990s have commodity prices been so weak compared with shares (see chart 1). The American economy is strengthening, but by no means enough to encourage thieves to filch bronze bells from Chinese temples to send as scrap to the United States. The impact of its recovery is dwarfed by slowing demand in China, which still consumes about half the world’s metals such as iron, aluminium, and zinc.
The real curse for producers is over-supply in almost all raw materials. Yet they continue to act as if they are blithely unaware of it. Capital is still pouring into holes in the ground, creating a hangover that may last at least a decade. Jeff Currie of Goldman Sachs, a bank, says past cycles suggest it can take up to 15 years to work through the over-investment. “The world has just flip-flopped,” he says.
Analysts point out that not all commodities act the same way. Coal prices started falling in 2011; crude oil hung on until mid-2014; agricultural prices hinge on the weather. But a generalised whiff of fear about China’s economic prospects has re-emerged in recent weeks, partly caused by sliding stockmarkets and by the unexpected devaluation of the yuan this month. So far this year, almost all major commodities—energy, industrial metals and agriculture—have fallen in a 10-20% range, a fairly homogenous performance. What’s more, the supply glut is being fed by three common factors. Cost-cutting has led producers to think they can bear the pain of falling prices for longer. Heavy hitters, whether OPEC princes or global miners, still yearn to increase market share. And funding is still available.
The cost cuts are part of a self-reinforcing downward spiral. Outside America, cheap currencies vis-à-vis the dollar have made domestic inputs, such as manpower, appear less pricey. Ironically, cheaper energy and steel help, too. In Australia, for example, Gina Rinehart, a mining tycoon, uses low costs to justify opening a $13 billion mine in the outback that is expected to produce 55m tonnes of iron ore a year—as much as America’s annual output.
In the oil world, cost cuts have come from producers once thought likely to be wiped out by falling oil prices: shale producers. “Frackers” have slashed a third off their cost bases, and continue to pump enough black stuff to depress prices. Lower costs may give them a false sense of security about where prices will go: when crude prices temporarily ticked higher in America this spring, the number of drilling rigs rose for the first time since December. Shortly afterward prices fell again.
…
Markets Commodities
Farmland Prices Steady to Lower in Much of Central U.S.
Federal Reserve reports underline continuing slowdown in the U.S. farm economy, farmland values
Corn plants grow in a field near in Princeton, Ill., in May. Consecutive years of record crops have pressured prices for corn, weighing on land values.
Photo: Bloomberg News
By Jesse Newman
Updated Aug. 13, 2015 2:30 p.m. ET
Farmland values were flat to lower in parts of the U.S. Midwest and Great Plains in the second quarter, according to Federal Reserve reports Thursday, reflecting the continued impact of lower grain prices on farmers’ incomes and the broader agricultural economy.
The average price of farmland in the Federal Reserve Bank of Chicago’s district, which includes Illinois, Iowa and other big farm states, fell 3% compared with year-ago levels and 1% compared with the first quarter of 2015, the bank said. Agricultural land values in Illinois and Iowa, the two largest U.S. corn-producing states, both declined on a yearly basis for at least the fourth consecutive quarter, while values in Indiana and Michigan rose from year-ago levels.
In the Federal Reserve Bank of Kansas City district, which includes Kansas, Nebraska and Missouri, the average price of nonirrigated cropland dropped more than 4% compared with the first quarter and was down nearly 3% from the year-earlier period, the bank said. Irrigated land values held steady on a quarter-to-quarter basis but fell more than 3% from a year earlier. Irrigated cropland, common in the region, depends on man-made water systems for moisture rather than rainfall.
In the St. Louis Fed’s district, which also includes parts of Illinois, Kentucky and Arkansas, prices for “quality” farmland remained largely the same in the second quarter compared with a year ago, despite lower farm incomes in the region, the bank said in a report.
The three reports underline a continuing slowdown in the U.S. farm economy and for land values after prices soared for much of the past decade. Agricultural land values, which were buoyed by rising demand for grain and drought-stricken crops that shrunk supply, reached such lofty heights that some analysts cautioned a bubble was forming in the market.
…
Another bubble bites the dust…
Commodity Prices
What is a “technical correction”? Is the concept analogous to that of a “technical recession”?
Financial Times
Last updated: August 21, 2015 10:03 pm
US stocks plunge on global growth fears
Eric Platt in New York
Pedestrians pass in front of the exterior of the New York Stock Exchange (NYSE) in New York, U.S., on Wednesday, May 9, 2012. U.S. stock futures retreated, indicating the Dow Jones Industrial Average will drop for a sixth straight day, as Greece’s political impasse intensified concern about a worsening of the European sovereign-debt crisis.
Photographer: Scott Eells/Bloomberg
©Bloomberg
US stocks were stung for a fourth straight day after lacklustre Chinese and American manufacturing data sent investors barrelling into haven assets as concerns intensified that global growth is cooling.
The three main US equity bourses plunged on heavy selling pressures that accelerated over the course of the day, with the Dow Jones Industrial Average, Nasdaq and Russell 2000, home to small US capitalised stocks, suffering technical corrections on Friday.
The benchmark S&P 500 declined 3.2 per cent to 1,970.97, taking its losses from a May high to 7.7 per cent, while the Dow Jones Industrial Average fell 3.1 per cent to 16,459.55 on Friday. The Dow has sunk 10.3 per cent from its May peak.
The weak data, which showed Chinese manufacturing activity shrunk for the sixth straight month while American producers indicated a loss of momentum, underlined anxiety that a slowdown from Asia’s largest economy could send tremors through both the developed and emerging world.
Investors have shovelled money into haven assets as a result, pouring $1.3bn into US-based Treasury funds in the latest week — the largest inflow since April — according to Lipper. Inflows into money market funds have continued at a brisk pace, with investors shifting roughly $31.7bn into the asset class as they switch out of domestic stock and bond funds.
“It is volatility abroad, it’s the Chinese stock market plunge and the fact it seems to a lot of people that the global recovery is starting to flounder more seriously than we’ve seen in the last couple of months,” Gennadiy Goldberg, a strategist with TD Securities, said.
“We’ve seen the [economy] slowing and now markets think it is coming to a head. It might be a little overblown, just a series of unfortunate events.”
…
A Series of Unfortunate Events
Was trading volume really low today?
If you:
• go to finance.yahoo.com,
• click on the link towards the top, for the Dow,
• then enter a custom date range (say 1995 to today)
It provides the trading volume for that day at the bottom of the chart. For the Dow, it’s showing a volume last seen in the mid 90s.
Implications?
Additionally, with consistently declining volume, the Dow has been been going up for 6 years at a 45 degree angle. Seems like there’s a lot of room for profit-taking.
Krugman and Bernanke are walking down the street…
By Straw Man Follow Tue, 18 Aug 2015, 9:40am PDT
Krugman and Bernanke are walking down the street and see a pile of dog shit. Bernanke says “I’ll give you twenty thousand dollars to eat that pile of shit.” Krugman does it, gets paid, and they keep walking.
After a while they see another pile of shit on the road. Seeing an opportunity for revenge, Krugman says “Tell you what, I’ll give YOU twenty grand to eat that pile of shit.” Bernanke does it, Krugman gives him back the money, and they keep walking.
After a while Bernanke says “I’m feeling pretty sick. We both ate shit and neither of us is any richer.” Krugman answers “You’re missing the bigger picture. We’ve increased GDP by forty thousand dollars and created two jobs.”
DHS Kept Secret the Release Of Violent Criminal Illegal Immigrants
by Adam Kredo | Washington Free Beacon | August 21, 2015
Obama administration officials only began notifying local law enforcement officials of the release of violent criminal illegal immigrants within the last two weeks, according to Arizona law enforcement officials, who say they have for years been kept in the dark about the release of illegal immigrants back into local towns.
The Department of Homeland Security (DHS) had been keeping secret its release of illegal immigrants with violent criminal records from local law enforcement for at least two years, denying for a time that this was taking place, law enforcement officials disclosed to the Washington Free Beacon.
The public disclosure of this practice, in which Immigration and Customs Enforcement (ICE) frees criminal illegal immigrants back into U.S. communities, came to light earlier this week, when Arizona law enforcement was made aware that three illegal aliens with violent criminal records had been released back onto the streets.
Local law enforcement officials and members of Congress have expressed outrage over the practice and have petitioned DHS in recent days to end a policy they described as “catch and release.”
Happy Friday Stooges! Drink up!
http://goo.gl/yRCqOC
Poor oligarchs…Ben, can’t we take up a collection?
http://www.bloomberg.com/news/articles/2015-08-21/world-s-richest-people-lose-182-billion-as-market-rout-deepens
Just finished watching The Donald speaking live in Mobile, Alabama. Nice speech but I’m still voting for Rand Paul if he can hang in there until the GOP caucus happens here in February 2016…
Is it too late now to get out of the stock market?
Marketwatch dot com
Brett Arends’s ROI
Opinion: Dow 5,000? Yes, it could happen
By Brett Arends
Published: Aug 21, 2015 4:20 p.m. ET
Such a scenario can’t be completely ruled out
Don’t be surprised if stock markets stabilize or bounce back in the next couple of days. Markets are due at least a short-term rally after this week’s dramatic plunge. This usually happens after a sell-off, no matter what the next big move is going to be. It doesn’t mean anything.
But anyone who automatically assumes this is another easy “buying opportunity” is talking nonsense.
For the past couple of years, Wall Street’s perma-bulls have had it their way. They’ve been gloating openly as stocks went up and up and up, seemingly without pause.
It got to the point that those warning about valuations and danger signs had been mocked into silence — or were simply ignored.
Not now.
I don’t mean to be alarmist or to induce panic, but someone needs to tell the public that there is a plausible scenario in which the U.S. stock market now collapses by another 70% until the Dow Jones Industrial Average falls to about 5,000. The index tumbled more than 3% to 16,460 on Friday.
Dow 5,000? Really?
I’m not predicting that will happen, but contrary to what the bulls tell you, it cannot be completely ruled out.
And even if that ranks as an outlier and a worst-case scenario, there are other, more likely scenarios where the Dow falls to somewhere between 10,000 and 12,000.
In other words, although this might be a buying opportunity, a serious reading of history suggests this week’s sell-off might also be the beginning.
Let me say on the record that I am not joining the perma-bears or extreme doom-mongers. I am simply pointing out that the perma-bulls have taken their own arguments way too far. The stock market is not doomed to collapse to oblivion, as some hysterics keep claiming. But it is not certain to keep going up by 10% a year, either. All those claiming that every sell-off is a buying opportunity, and that stocks “always outperform,” are lying to you.
A true understanding of stock market history shows that Wall Street in the past has moved in long, long swings upwards and downwards, often taking years or even a generation or two. There is a great deal of evidence suggesting that the upward move that began in 1982 is one of them — and that the downward move that first began in 2000 has not ended.
As stock market historian Russell Napier points out in his book “Anatomy of the Bear,” on five occasions in the past 100 years — in 1921, 1932, 1949, 1974 and 1982 — those big downward moves have not ended until share valuations have fallen to just 30% of the replacement cost of company assets. That’s using a powerful, if little-known, economic metric known as Tobin’s q.
And, to cut to the chase, if Wall Street stocks followed the same path today that would take the Dow down to about 5,000, and the S&P 500 Index all the way down to around 600. (The S&P 500 slumped more than 3% to 1,971 on Friday.)
Yikes.
…
“Brett Arends’s ROI
Opinion: Dow 5,000? Yes, it could happen”
Brett Arend understands precisely what our data-driven analysis arrives at.
Are China’s economic woes going to blow up into a global recession?
Stock Market Crash: China Could Spark an Economic Collapse in 2016
By Gaurav S. Iyer, IFC • Friday, August 21, 2015
After a colossal stock market crash in June, many analysts are worrying that China is on the brink of an economic collapse. Panic is setting in as the country experiences a dramatic slowdown in exports and growth. A recession in China would precipitate crises across the world, drawing an eerie parallel to the U.S.-led contraction during the last decade.
After markets collapsed in 2008, we often heard the phrase, “the worst recession since the Great Depression.” First off, that’s a nonsensical statement. “Recession” and “depression” have two separate meanings and you can’t just put them on the same scale. That’s like saying, “I just ate the worst apple since that orange I had last week.”
But more importantly, why are we still pretending that 2008 was only a recession? Seven years have passed and very few countries can claim a booming economy. No two periods in history are perfectly analogous, but the common definition of a depression is an extended period of low or negative growth. Sound familiar?
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BREAKING NEWS
MORE TALK OF CHINA AS SOURCE OF GLOBAL RECESSION
August 21, 2015
Nanjiing Road, a major shopping street in Shanghai, China.
Photo by Agnieszka Bojczuk.
(NATIONAL) — Ruchir Sharma, the head of emerging markets at Morgan Stanley Investment Management has an interesting two paragraphs to kick off a new report in the Wall Street Journal about what’s going on in China these days.
For practical purposes, he says, there have been five global recessions since 1970. But since the global recession of 2008-09, for the first time in recent history another economy emerged as the largest contributor to global growth. This decade China has accounted for a third of the expansion in the global economy, compared with 17% from the U.S.—a role reversal from the preceding decade.
And the contribution from the other major economies (Europe’s and Japan’s) has fallen to less than 10%. So the key to global growth, he says, is now in Beijing’s hands.
But there’s a problem with that, he writes. The problem is that China’s economic rise in recent years has been helped along by a “massive and unsustainable stimulus campaign.”
No emerging nation in recorded history, he says, has ever piled up debt at such a raging pace. And it turns out that a rapid increase in debt is the single most reliable predictor of economic slowdowns and financial crisis.
“China’s debt as a share of its economy increased by 80 percentage points between 2008 and 2013 and currently stands at around 300%, with no sign of abating,” writes Sharma.
And that sets the stage for some other problems China has going and all that boils down to, according to Sharma, that “The world is one shock away from recession. A debt-laden China is now the critical link, and another one- or two-percentage point decline in its growth rate could provide that shock.”
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Forbes
Aug 20, 2015 @ 6:00 AM
China’s Problems And Missteps Provoke Global Recession Concerns
John S. Tobey
Contributor
I write about investment themes being overlooked or misinterpreted.
Opinions expressed by Forbes Contributors are their own.
China’s aura of strength, growth and shrewdness is giving way to the reality of a developing country (albeit huge) suffering growing pains and the excesses borne from overconfidence and misplaced optimism. Unfortunately, there is only one cure: A retrenchment back to a sensible base (economic, financial and political), accompanied by a return of natural humbleness by businesses, investors and government leaders.
Disclosure: Author holds 100% in cash reserves
So, where are we now? It appears only in the early stages of an adjustment, complicated by added manmade uncertainties. The Chinese government is aggravating the problems by attempting market-overriding cures long proven to be harmful in the developed world: mainly, capital controls (including in the stock market), banking controls and (continuing) exchange rate controls. This combination of controls has broad, adverse effects that spurs skeptical parties, including the rest of the world, to act so as to avoid being trapped in a losing situation.
Here are the areas of particular concern:
The Chinese stock market bubble burst is not over
What should have been a straightforward reversal of stock market excess has turned into a complex mess by government actions attempting to thwart the natural adjustment. By making stock purchases, banning institutional holders’ sales, and using police enforcement of “malicious” short sellers, the Chinese leaders are heightening knowledgeable investors’ desire to get out. Additionally, they are prolonging the time when they will be willing to get back in. The chart below shows the extent of the Chinese stock bubble – clearly, the burst (that is, the return to normal valuations) is not over. Moreover, that view does not take into account recent fundamental deterioration. Factoring in deteriorating growth prospects likely puts “normal” valuations below what they were a year ago.
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Carnage on Wall Street signals fears about U.S. economy
By Kate Gibson
MoneyWatch August 21, 2015, 4:02 PM
Last Updated Aug 21, 2015 5:21 PM EDT
As U.S. stocks joined a global selloff to mark their biggest weekly decline since 2011, economists and investors cut their projections of what was already lackluster U.S. economic growth.
Markets around the world registered their distress after an August gauge of factory activity in China dropped to a more-than six-year low. The index came on the heels of worse-than expected July data on exports, industrial output and retail sales from that nation, the world’s second-largest economy.
“China’s weakness and response to its own weakness is rippling throughout the global feedback mechanism,” Jim Russell, a principal and portfolio manager at Bahl and Gaynor, which manages and oversees $14 billion in assets, told CBS MoneyWatch.
The nosedive on Wall Street wasn’t spurred only by mounting concerns over the People’s Republic.”Weakness… is not limited to China,” analysts with Oxford Economics said in a note. “The Brazilian economy is in shambles, while the latest data from Russia showed the economy falling further into recession in the second quarter.”
Stocks in China dropped, with the Shanghai Composite Index finishing down 4.3 percent. Equities in Indonesia and Taiwan waded into bear-market terrain and European equities sold off for a third day straight, with the Stoxx Europe 600 Index down nearly 13 percent from its record and in correction mode.
A day after Wall Street’s biggest single-day decline in 18 months, the Dow industrials (DJI) plummeted 531 points, or 3.1 percent, to 16,460, leaving it down 10 percent from its May high. Down more than 7 percent from its May record, the S&P 500 (SPX) fell 65 points, or 3.2 percent, to 1,971. The Nasdaq Composite (COMP) shed 171 points, or 3.5 percent, to 4,706.
The S&P 500 issues lost $1.14 trillion in market value this week, or $1.07 trillion if adjusted for float, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
On the New York Mercantile Exchange, West Texas Intermediate oil for October delivery fell below $40 a barrel for the first time since 2009, before ending at $40.45, down 2.1 percent.
“Oil is a necessary commodity for global growth. If you’re not seeing global growth, you’re not seeing a lot of demand,” Paul Nolte, a senior vice president and portfolio manager at Kingsview Asset Management, said of the eighth weekly price slide for the commodity. “We have a lot of supply at a time when we’re seeing demand coming down, which spells disaster for the oil market.”
About a year ago, China projected a 2015 growth rate of 7 percent for the world’s second-largest economy. It now appears unlikely that China will meet that target. “They may officially, but it’s clear the numbers don’t add up,” Russell said.
Since November, China has attempted to soften the blow as its economy slows, with Beijing cutting interest rates to boost lending and devalue its currency.
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