Bits Bucket for September 10, 2015
Post off-topic ideas, links, and Craigslist finds here. Please visit my Youtube channel which you can also find here:
http:tinyurl.com/http-hbb-com
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
To donate by mail, or to otherwise contact this blogger, please send emails to: thehousingbubble@gmail.com
PayPal is a secure online payment method which accepts ALL major credit cards.
Links
-
November 2024 M T W T F S S « Sep 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Photo Submission: hbbphotos@gmail.com
View the HBB Photo Gallery *updated 4/13/2008
Justice Dept. sets its sights on white-collar crimes:
http://www.miamiherald.com/news/nation-world/national/article34641576.html
I’ll believe it when I see it, but at least they seem to be making an effort. Even if nobody goes to jail, the legal harassment alone will be enough to make some people think twice. The fact that it will be individuals and not “the corporation” is good. Maybe Ms. Lynch will be about more than “social justice”. At the very least, this is encouraging. Although I do wonder what’s behind the change of heart.
Since we’re telling jokes here today, here’s a good one for ya:
“They attacked us on 9/11 because they hate our freedoms”
Kurt Schilling has some math problems for you. They must be turned in by tomorrow (9/11) along with you gun(s).
I guess we’ll see how much of a joke it is. So, besides Uncle Shel, who’s on your bucket list for prosecution? Although my guess is they’ll be going after a lot of middle management types. Which isn’t the worst thing. The guys at the top couldn’t do their dirty work without these mokes, so I say, fire away. Make some of these yes-men miserable for the rest of their lives. Won’t be able to get jobs. It will set a chilling example for those that aspire to follow them.
Richard “Dick” Fuld, former CEO of Lehman Brothers.
Angelo Mozilo, Countrywide Mortgage.
Henry Paulson, former Goldman Sachs and U.S. Treasury.
Jon Corzine (Obama’s former campaign “bundler” who stole $1.6 billion from MF Global customer accounts).
All walking around free as birds.
All animals are equal but some are more equal than others.
Can they still go after Mozilo? I’d love to see it.
Paulson would be #1 on my bucket list, except I don’t think there’s anything to get him on, unfortunately.
Dimon and Blankfein, on the other hand…
And then there’s Corzine…
I really hope this pans out. You go, Lorettie girl!
Why beat yourself up over this? Can they still go after Mozillo? Yes, absolutely. The bank fraud statusteof limitations is 10 years. I’d think they have things occuring as late as 2008 that starts that clock, so they still have 3 plus years. Will they? Absolutely not, they made that decision several years ago and it was in the news. Water under the bridge and a closed file.
And then there’s Corzine…
Free Jon Corzine!!
‘Can they still go after Mozillo? ‘ So unlikely, the current Pres called to check on him when he was doing his cancer treatments. Hardly seems like a precursor to prosecution.
Window dressing and political theater. And at the same time Mo Credik.
You need to read the story. I really think they’re gonna do something. It’ll be like the whole Stevie Cohen thing. Go after the upper management rung below top management and get them to turn on others. I followed that story, it was very interesting. Some of Cohen’s capos were put away and although Cohen “got off”, he can no longer trade with money other than his own.
The strategy is interesting and I think they’ll have some success with it. They’re also admitting they have a tough job ahead and may not be entirely successful, but they’re going to try. My guess is that Comey at FBI will be heavily involved and if that’s true, all bets are off. I’ll bet right now there are more than a few managers in the field of finance who are pitting their shants. And that will be part of the beauty of it, these guys living under the Sword of Damocles.
Not a single TBTF bankster will go to prison under this administration. Wait and see.
Keep voting for the status quo, lemmings.
You need to read the story.
Why bother with reading? Reading is for sissies anyway. It’s better to just go with the thoughts floating around in our heads than to bother with facts.
I read about it yesterday. I also read several years ago about the mortgage fraud task force that was formed out of DC with an eye on prosecuting fraudsters on an Enron type level.
Then I see what happened. Small fish and nothing much more.
“Small fish and nothing much more.”
Small, brown-skinned fish of foreign origin…no Skull and Bones society types.
“Since we’re telling jokes here today, here’s a good one for ya:”
Jesus is coming, returning from the dead.
An oldie but a goodie!!
Jesus has been back 17 times, and died in prison each time.
Just ask Prince Bandar.
Shariah law, which is based on the Quran, covers a range of issues within a “moral framework,” which doesn’t exactly jibe with outlandish past media reports about the royal family of Brunei. The family is thought to be one of the wealthiest royal families in the world. The Sultan alone is reportedly worth $20 billion.
Read more: http://www.businessinsider.com/royal-family-of-brunei-wealth-2014-5#ixzz3lNAWomYh
Thanks for the replies in yesterday’s bits. Basically the bubble is fueling my midlife crisis. I’ll be forty in not too long and I have nothing to show for it. The thought of having a paid for house for retirement is something I am less concerned about at this point. What I am concerned about is saving for retirement and having enough of a cushion to handle the usual bumps of life. When you factor in car repairs, clothing, dental work, etc. my family is basically living month-to-month. We’ve had a few raises here and there, but we’ve never been able to pull ahead. Our car insurance, food costs, water/electric are high. So, I figure I have three choices, get out of Florida, get out of public education, or both. Bubbles 1.0 and 2.0 really messed up my plans to buy a little cheap house and be the music-on-the-side science teacher. The house we tried to buy in 2010 for $215k (with $8k credit) is now appraising at $330k. Fifteen years ago when I fled NYC to Hoboken I was running from the “priced out blade” then, too. I’ve never stopped running.
Please note, I say all of this as not “woe is me,” but simply dealing in fact. My plans haven’t panned out, so I either need to make a change or accept the current circumstances. I have two amazing kids, and me and the old lady are doing well, so I am thankful for that. Our kids’ school is great as well.
I guess option 4 would be to stay in a holding pattern until the kids graduate high school and then go Oil City. It’s new to me to think in terms of decades, but I’ve been here on HBB nearly ten years, and in ten years — if not sooner — my boy will be a freshman in college.
Cool story bro.
“Be a loyal plastic robot for a world that doesn’t care” — Frank Zappa
Do your job, do it right
Life’s a ball
TV tonight.
America Drinks and Goes Home by Frank Zappa
I feel for you. From the song middle age crazy:
And today he’s forty years old, going on twenty
Don’t look for the gray in his hair ’cause he ain’t got any
He’s got a young thing beside him that just melts in his hand
He’s middle aged crazy, trying to prove he still can
Hang in there.
I don’t think it helps your analysis to consider avoiding stupid things as “running”. Some stupid things can wreck your life, like gambling, drugs, whoring and taking a long term mortgage on an overpriced house. You’ve been avoiding (narrowly) doing something you think is stupid.
At 40, congratulations on making it half way. At least without debt, you have some freedom to make choices about the next 40 years.
Very good points. Thank you as always.
In our Oligopoly-looted economy there are plenty in the same boat. “Work hard and play by the rules” is now for chumps, as the system is now rigged to favor the well-connected .1% in the financial sector at the expense of everyone else.
Kind of the same. OK salary but half of it goes to rent. Taxes eat a huge chunk. Getting a room mate would cut down the monthly damage but I don’t really want that at this point in life.
I’m thinking more and more about how to make more money. Job hop? Go for crazy cleared jobs that are no fun. Figure out some sort of eCommerce site.
The other side of it is marketing. I keep trying to think of how to market it to the younger that they’re getting screwed by rents and what not. How to get them angry against the older generation, and how to get the renters angry against the landlords. This would be more of an activist take I suppose, but the more in your face in the public the more the topic won’t be kept internal to people’s thoughts.
Rent for half the monthly cost of buying and stash the cash.
It’s not half the cost of buying. Rent is around a $400K mortgage but places sell for $470K or so, so there is some benefit — at the moment. But my landlord is pushing the price up and nearby places have asking rents of a $500K mortgage ($2500/mo.) Sure taxes and insurance, but at least in the beginning the interest tax deduction could be pretty large.
So in theory in 2 years rent will be equal to buying unless I can find another person on Craigslist who bought a long time ago who is priced lower.
Rent absolutely is half the cost of buying at current grossly inflated asking prices of resale housing.
“unless I can find another person on Craigslist who bought a long time ago who is priced lower.”
This is the only reason I’ve been able to stay sane the past five years in our current house; the LLs bought cheap in the 90’s, own outright, and don’t carry insurance on the joint.
“This would be more of an activist take I suppose, but the more in your face in the public the more the topic won’t be kept internal to people’s thoughts.”
I do this. For the most part I get the “are you insane?” response/look, but a few weeks ago I was shocked when out of nowhere one of my close friends said “I’m beginning to wonder what the point of owning this house is.”
He and his family have been there about 8 years and would probably stay at least 15 but even then you’ve spent 10 years renting from the bank with little freedom. Meanwhile, they see the trips we’re able to take and the general freedom we have to not be obsessed with a house.
Suggest you stop blaming the olds like me and turn your anger where it really ought to be - the PTB and the politicos, the unions, the oligarchs and the tyrants who have promised the world to the average Joe and all the while marching to the bank calling avg. Joe’s like me chumps. Get focused and direct your anger appropiately.
As for me - I don’t trust nor respect red nor blue, rich nor poor, white, brown nor black - if they are causing the problem - they ARE the problem.
So who is responsible for electing these corrupt politicians for the last 30+ years? Someone must have been asleep behind the wheel.
When all of your voting choices are corrupt, what do you do, write-in Bozo The Clown?
Muggy. You must be doing something right because you are still in the game. I am also in my early 40’s, with wife and young kids. Also, living in Florida. I have my own business. Somehow, I pay the bills. A lot of my clients are also small businesses and they also complain about too much taxes, overregulation and a slow economy. Everyone in my peer group is just getting by. The economy down here is not as vibrant as people claim. Governor Scott seems to be going around Florida touting jobs, going to Kentucky to get companies to move jobs to Florida. But, it’s the same slow economy. I too have thought about the future and change, but it seems that acting up on it comes with more risk.
Nearly every teacher in my age group that bought either foreclosed, did short sale or deed in lieu, or are “holding on” until they can sell for break even.
“I too have thought about the future and change, but it seems that acting up on it comes with more risk.”
True.
teachers where I am retire at 53 w 70k pensions.
Census shows those leaving teaching usually make less. And definitely work 40 more days a year.
How about tutoring rich kids ?
That depends on which part of Florida he’s in. In most Florida counties the rich people are nearly all retirees whose kids have grown.
Pinellas County
There are some wealthy locals in this area; however I don’t know anyone or work with anyone that lives on the Gulf. I have no idea who those people are, so I assume they are mostly non-locals.
I have friends from NY whose parents own second homes down here. They are almost all public service sector employees with NYS pensions and recently retired. Tier 1 peeps.
“teachers where I am retire at 53 w 70k pensions.”
I wouldn’t care to have their job… being blamed for poor student performance, provide a nurse(s) on campus, free meals, participation trophys, etc., that some inside-out Oreo dreams-up to ameliorate guilt.
$70k a yr with all that vacation time is a fantastic gig! You just need patience.
“teachers where I am retire at 53 w 70k pensions.”
Not newhires
gosh muggy, at 53, you’ll still be relatively young. Great base income to support you (and family) into a new path. OTOH, life is short. I now see the dilemma.
Let me be clear… I have a horrible retirement plan! I received
With current circumstances, I will be able to retire at age 66 and be able to afford 3 years of living expenses.
muggy,
Crappy retirement, then definitely start a new path. The only reason to stay loyal to your profession is a retirement plan.
Have you thought about climbing in the administrative arena?
If you want out of teaching, now is the time. Once your son gets in high school, your options narrow. Figure it out, decide to scale back, and redesign your path.
My husband and I lived off my income, while he started an R&D path. Looking back, those lean years were worth it.
muggy,
Crappy retirement, then definitely start a new path. The only reason to stay loyal to your profession is a retirement plan.
Have you thought about climbing in the administrative arena?
If you want out of teaching, now is the time. Once your son gets in high school, your options narrow. Figure it out, decide to scale back, and redesign your path.
My husband and I lived off my income, while he started an R&D path. Looking back, those lean years were worth it.
muggy
You’re at the perfect rite of passage to take some risk. 40 is still young, but also some wisdom has kicked in. Redesign your life NOW/SOON and never look back. If you go through some struggles, the kids will get some life lessons that stick. You’re smart, creative, and hardworking.
My husband left a corp job and ventured out into the unknown around your age. Lots of turns and twists, and eventually doubled his income in Engineering. Some lean years lead to some very lucrative ones.
At 33, I left a cushy, decent paying boring career, and did a 180 into a more creative one.
Believe in yourself, muggy.
FYI, if you really want to understand the true cost of a house, simply Google “interest calculator” and plug in the values for a mortgage.
And this is one opinion of annual house maintenance costs: http://www.cnbc.com/2015/06/23/the-hidden-costs-of-home-ownership-6000-a-year.html
A house will be more expensive in the near and intermediate term, but somewhat less expensive in the long term. If you think the lifestyle choice of a house will help the kids, that would to me be a very important consideration.
“Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.”
― Charles Dickens, David Copperfield
What do you show and who do you show it to and why do you show it when you are 40?
I guess 46 was supposed to the magic age. I was 46 and renting (still am) when a colleague said a man in his 40s should own a house. That was 2005.
Surfer dude asked me about five times if I’m going to buy a house. I’m 56 now. I really think they use me as some form of barometer on whether the real estate market has more upside or not. So if I buy that would be bullish.
Kind of like when religionists want me to tell them I believe in their particular fairy, out of the 5,000 fairies that have ever been known by humanity. They seem to think if I believe in their fairy, then they must be on the right path.
My Sky Wizard is right, and all of the other 4,999 Sky Wizards known to man are wrong.
buying a home saved my retirement.
…at the same time postponing it for a decade or two. Good for you.
Me buying a home now would save me from ever retiring.
You can do it!
You guys can do this!
Did I Axe You?
The Selfish Hoarder
Smart thinking. The only reason we bought this when my husband was 60+, was this was a cash & close from downsizing. Otherwise, going into debt for a home later in life was not happening.
Our neighbor stepped up to a two-story (nothing house) at 60 and can’t even afford decent cars, or new sliders. They finally bought some furniture. He bought a franchise to keep paying the bills. In other words at 68, he bought himself a job.
Keep on renting. The opportunity to own has a time and money balance. Enjoy your life.
“If you have to borrow for 15 or 30 years, it’s not affordable nor can you afford it.”
mafia
Absolutely not. Most people buy a home and are ok with a reasonable mortgage. BTW, it was Sears who started mortgages to finance their kit homes. The howmuchamonthclub ads are credited to Sears as well.
Credit, if used wisely, is a great tool. You must be related to that mythical guy, Methuselah. He lived to some fairytale age of something like 969. (And people believe such nonsense)
It’s reality my friend. Look no further than your own Empty Pockets.
San Diego, CA Housing Prices Plunge 10% YoY
http://www.zillow.com/san-diego-ca-92109/home-values/
mafia
Our pockets aren’t empty.
Hubby worked for Intel.
I worked for a REIT.
The problem in So Ca is the Joneses
syndrome. We’re too practical.
Remember, we downsized in half.
We’re doing OK. Hubby eyes stabilized.
UCLA doctor rocks!
MT Pockets and kickin’ tires.
“Most people buy a home and are ok with a reasonable mortgage. ”
The pollyanish thing about that is, out of those fools who want a house, the smartest of them know that they should have the 30 year mortgage paid off by the time they retire. Yet that means they better buy the house where they know they want to stay the next 30 frigging years.
How realistic is that? Especially when as a younger man I only wanted a beach house in La Jolla with ocean view. Well I certainly could not get a mortgage there at age 35 (in 1994) with a $52,000 salary could I?
So I would have to settle for a place I hate. That is exactly what I did. I hated where I bought a house.
Home buying does not work the Pollyanna way. You cannot trade up from a house in Podunk to a beach mansion in La Jolla. EVER.
You have to win the lotto.
We love La Jolla, too. We will eventually sell this joint (free & clear and are watching our ROI) and move down there. Del Mar is our 2nd choice.
Has virtually unlimited government intervention finally staunched the bleeding in the Chinese stock market?
Top News
Thu Sep 10, 2015 | 5:02 AM EDT
Growth jitters send stocks, commodities into reverse
By Marc Jones
LONDON (Reuters) - World stocks and commodities moved back into reverse on Thursday after four straight days of gains following a heavy overnight tumble by oil and more uncertain news from China and Japan but also from Brazil and New Zealand.
European stocks snapped a three-day run of gains with falls of more than 1 percent, after most of Asia’s major bourses had drooped and a lack of excitement at Apple’s new gadgets had hit Wall Street.
The latest policy response to signs of stuttering global growth came from the Reserve Bank of New Zealand (RBNZ), which cut its benchmark rate by 25 basis points to 2.75 percent and signaled more easing if China’s economy slows further.
That sent the New Zealand dollar down about 2 percent, back toward a six-year low.
Risks around China growth had already been highlighted as producer prices there fell for the 42nd straight month and car sales dropped, in the most recent sign that deflation remains a significant risk for the world’s No. 2 economy.
“What is China going to do? That is the biggest unknown for people at the moment,” Charles Schwab managing director of Trading and Derivatives, Randy Frederick, said.
Adding to the deflation nerves, the United Nations food agency said world food prices saw their fastest fall since 2008 last month.
Japan’s main gauge of capital spending also unexpectedly fell for a second straight month, data from July showed, highlighting its economic struggles.
That helped send Tokyo’s Nikkei, which had leapt almost 8 percent on Wednesday on hopes Japan would expand its already massive stimulus program, down 2.7 percent.
Chinese stocks also ended between 1.2 percent and 1.4 percent in the red. Hong Kong and Australian stocks both lost more than 2 percent.
…
“Growth jitters send stocks, commodities into reverse”
Here’s some charts:
http://finviz.com/futures_charts.ashx?t=ALL&p=w1
Death Crosses in every dimension of the market! About the only uptrends are in 2- and 5-year Treasurys, presumably a reflection of plummeting short-term yields, as the market becomes ever-more convinced that Fed liftoff is off the table.
It almost looks like an all-around asset price crash is underway, in slow motion no less.
Oddly housing is missing from the range of charts. Would it be trending up or down, had it been included?
Here’s what the monthly charts look like. Monthlys give a longer view, in this case five years.
http://finviz.com/futures_charts.ashx?t=ALL&p=m1
For a very long view, pick out a chart and click on it.
The five-year charts give a mmuch different impression.
– Many PMs have been collapsing for yeara.
– Oil and related products just started their precipitous drop last year.
– Major stock-market declines are a very recent development.
Must … stop … posting … by … ANDROID KEYBOARD!
Does it work to run a market by making it legal to buy but not to sell? Won’t buyers potentially get cold feet if there’s a chance they won’t be able to get their money back?
The New York Times
Asia Pacific
China’s Response to Stock Plunge Rattles Traders
Day traders at a brokerage house in Beijing. The main stock index in Shanghai has fallen 37 percent since the market sell-off began in June.
Kevin Frayer / Getty Images
By EDWARD WONG, NEIL GOUGH and ALEXANDRA STEVENSON
September 9, 2015
BEIJING — The police have been dropping in on investment firms and downloading their transaction records. Senior executives at China’s biggest investment bank have been arrested on suspicion of illegal trading. A business journalist has been detained and shown apologizing on national television for writing an article that could have hurt the market.
The Communist Party’s response to China’s monthslong stock market crisis has been swift and forceful. In addition to spending as much as $235 billion to buy shares and bolster prices, the authorities have imposed a range of extraordinary restrictions on the sale of stocks — and backed them with the full weight of a security apparatus usually more focused on political dissent than equity trades.
The strategy appears to have succeeded, at least for now, in softening the impact of the Chinese market’s biggest rout since the global financial crisis of 2008. But the new limits on trading and the efforts by the police and regulators to enforce them have unsettled investors at home and abroad who are unsure exactly what types of transactions are being banned or criminalized.
After decades of watching China make slow but steady progress in building Western-style financial markets, many are now asking whether the party is reversing course — and whether Chinese officials are willing to tolerate the sometimes turbulent waves of selling that are inherent to such markets.
…
Has oil bottomed out yet?
Business Insider
Markets
Crude oil is getting smoked
Akin Oyedele
19h
On Wednesday afternoon, West Texas Intermediate crude oil futures in New York fell more than 3% to as low as $44.47 per barrel.
Earlier, the Energy Information Administration released its latest short-term energy outlook. The EIA estimated that US oil production fell by 140,000 barrels in August compared to the previous month. It pegged its WTI forecast at $49 per barrel for 2015, and $44 per barrel next year.
It also noted that the current value of futures and options contracts that expire in December indicate that the market expects oil prices anywhere between $32 and $73 per barrel in December.
Later today, the American Petroleum Institute will release its weekly data on US crude stockpiles. The EIA will publish its numbers on Thursday.
…
Crude oil futures see record volatility
By optionMONSTER, September 03, 2015, 09:00:11 AM EDT
(Chart courtesy of optionsHOUSE )
Stocks have been volatile recently, but their moves pale in comparison with the swings in oil.
The realized volatility on CLV5 (Oct ‘15) WTI Crude Oil Futures hit 58 percent this week, a record since the contract started trading. That is more than twice the reading for the S&P 500 in the same time period.
Crude lost about one-third of its value between late June and late August, retesting prices last seen at the nadir of the 2009 financial crisis. That selloff followed a similar move last autumn. Global oversupply and weak growth in China have been the main culprits.
…
Repost from yesterday.
And pay attention hypocrites, because there is nothing “Christian” or “conservative” about voting for candidates that this evil creep purchases. He doesn’t give a f*ck about America except how much he can rape American taxpayers.
http://nymag.com/daily/intelligencer/2015/09/sheldon-adelson-is-ready-to-buy-the-presidency.html
He just wants to protect his interests by keeping pot illegal so it doesn’t compete with the liquor in his hotel empire.
Angry white trash can’t tell the difference between Sikhs and muslims, expect to see alot more of this from Donald Trump voters:
http://www.washingtonpost.com/news/morning-mix/wp/2015/09/10/terrorist-go-back-to-your-country-attacker-yelled-in-alleged-assault-of-sikh-man/
Somehow I don’t think this guy is a Trump voter.
http://www.usatoday.com/story/news/nation/2015/09/08/brothers-killed-florida-convenience-store/71867178/
At this point, what does it even matter?
I can’t wait for Bernie Sanders to announce his 3rd party candidacy.
Maybe we could have a 4 man debate, Hill Jeb Trump and Bernie.
4 way? How is this possible? There is only right and wrong.
Imagine the carnage. Lots of heads will explode. Thankfully, it will mostly be those of the Idiocracy crowd.
Bernie doesn’t have the money.
What about all the kiddies and millenials and socialists? No tech millionaires to put their money where their mouths are?
Lots of Israeli flags flying at the Bomb Iran rally yesterday.
The sister diddlers that get all upset about Mexico flags fail to see the hypocrisy in this, because Rapture.
Angry white trash can’t tell the difference between Sikhs and muslims, expect to see alot more of this from Donald Trump voters:
MAN BITES DOG
Click on enough World Net Daily links, and that’s what you’ll get.
MAN BITES DOG
So you’re saying that angry WTs generally can tell the difference?
The prospect of $80/bbl oil by December is ever more doubtful.
You don’t see any prospect for Debt Donkey Crusade 3.0?
These Debt Donkeys are in deflationary free fall;
“BEIJING/SHANGHAI, Sept 8 (Reuters) - China’s imports shrank far more than expected in August, falling for the 10th straight month and adding to global investors’ concerns that the world’s second-largest economy may be slowing more sharply than earlier expected.
“Imports fell 13.8 percent from a year earlier, more than the 8.2 percent drop economists had expected and an 8.1 percent decline in July, reflecting both lower world commodity prices and persistently sluggish demand at home.”
http://www.reuters.com/article/2015/09/08/china-economy-trade-idUSL4N1182W120150908?
That’s great news, as lower prices and affordability improvements go hand-in-hand.
The problem with bubbles is the creation of bubble jobs. If you’ve got one of these bubble jobs and the bubble pops, affordability may nosedive for you right along with prices.
Nothing accelerates the economy like falling prices to dramatically lower and more affordable levels….. Nothing.
Rallying the base.
FoxNewsHate leads with:
ISIS campaign politicized
Effect of ISIS’ apparent mustard gas attacks
Kurdish soldier on ISIS chemical weapon attack
ISIS claims to hold Norwegian, Chinese captives
Big names on Al Qaeda’s new ‘hit list’
US effort against ISIS seeing mixed results abroad
Because when your neice is also your daughter, you’ll vote for any candidate that Sheldon Adelson purchases.
Bernie Sanders: “Those who have made every effort to thwart the diplomatic process (in Iran) are the same who spoke out forcefully on the need to go to war with Iraq.”
Progressives have not seen the end of the wrath of Goon, I’m just still wound up after seeing Cruz and Trump live on TeeVee at the Bomb Iran rally yesterday.
I hate hypocrites, and these ‘baggers can’t explain who is paying for the next neocon war. Allegedly grown men like 2brony cowering in fear over the conflated ISIS fairy tale, so pathetic.
It does seem that they just don’t know that war is very expensive. But there are more important reasons to avoid war. Many people die in wars.
Does this table show Lola was lying yesterday about there being 2.1 million federal workers under Obama?
https://www.opm.gov/policy-data-oversight/data-analysis-documentation/federal-employment-reports/historical-tables/total-government-employment-since-1962/
What lies will Lola spread today pushing her agenda, comrade?
Interesting chart. Looks like there are fewer fed employees now than under Reagan. That will dissonate some cognition.
I service gov offices, fed, state and utilities, and retirements currently outpace new hires by a wide margin. As the workload piles up those left are pulling the eject handle sooner than planned.
“As the workload piles up those left are pulling the eject handle sooner than planned.”
Conversely, as many pull the eject handle sooner than planned, there are no new hires, but the same workload as before piles up on those left.
“Conversely, as many pull the eject handle sooner than planned, there are no new hires, but the same workload as before piles up on those left.”
Some are retiring sooner than planned out of fear that their pension promise will be down-sized.
It is an interesting chart. Boomers retiring? Government shutdowns forcing declines in workforce? Military accounted for.
We want less gov!
Obama has given us that, per your chart. Thanks for the support.
lola@lola
That’s what all the shutting down of govt was about. Glad to see you supported that.
The Financial Times
Best comments from our readers
“Permanent low interest rates are not a viable option for our society. If interest rates stabilise at zero long term, the yield on all assets will fall to 1-2%. That would mean that a retiree in the UK would need a pension pot of c. £2m for a modest retirement income. Someone starting life without assets would have to save c. £50k a year.”
By Mysterion on The case for keeping US interest rates low
“The Fed has communicated clearly many times that it will soon raise rates for about a year now. So, an expected rise of 25bps is not going to be a “shock” and the markets are supposed to have priced that in anyway. In other words, the bulk of ‘fear capital’ had already left a long time ago and that’s why EM equities and currencies are down.”
By iloveft on World Bank chief economist warns Fed to delay rate rise
…
a retiree in the UK would need a pension pot of c. £2m for a modest retirement income
They’ll just have to invest in continuously rising assets.
Or move to Vietnam, along with one of our posters…
Jared Diamond, UCLA, had thing or two to say about the tropics though I can’t recall the details.
Land of the fleeced and home of the slave. Keep voting for the status quo, sheeple, ’cause that’s working out so well for you.
http://www.theburningplatform.com/2015/09/10/if-you-dont-think-americans-have-lost-our-freedoms-read-this/
Ray K -
You check out the other article on TBP that showed the result of the young Swedish woman who had ‘adopted’ some of the Muslim horde? Teh photo is enough to counteract all the tears for the little 3 year old who washed up on the beach a couple of days ago.
Warning - the photo is just hideaous so anyone with a weak stomach - don’t look at the photo - still read the article for some insight.
Awful.
theburningplatform.com/2015/09/10/before-you-follow-pope-francis-command-to-prove-yourselves-worthy-of-him/
I tell with my naive, liberal minded daughter that I don’t warn her about different groups because of racism. It’s about reality. I am encouraged that I don’t get that dismayed, pitying look as often as she has gotten older. I don’t hate anyone, but I grew up in NYC during the “Death Wish” years.
That web site has sunk to new lows with those photographs. And your mind has to be pretty twisted to write something like this:
Teh photo is enough to counteract all the tears for the little 3 year old who washed up on the beach a couple of days ago.
I did a little Googling and found that the trial was over 4 years ago. So these burning platform people were concerned that the photograph of the dead toddler may have been generating sympathy for refugees who are mostly Muslim, so they decided that they needed to find some four year old photographs of a murder victim to counter that. Along with those pictures are one of the black murderer. That’s included so that people can stare at it as their brains fill with thoughts of hatred and violence.
I found the name of the criminal and something that said that he was an immigrant to Sweden, but nothing about his religion. There appears to be more information available in Swedish.
Mike - twisted? Really.
Just a question - what will you do when these guys start to head to your nabe and demand you to kneel to Allah?
Ignore history at your own peril there friend.
Yeah, it’s doubly twisted. You take such pleasure in reading about such a horrific crime and you also think that that murder should affect how people feel about that dead toddler.
And if anyone ever asks me to kneel to Allah, I’ll refuse. I have a cousin who’s been living in the Middle East with his wife and kids for the past 5 years. They haven’t been forced to convert to Islam, so I’m not worried about it happening in America.
75% of those so called refugees are young military aged men. It isn’t a humanitarian crisis as much as an invasion.
Now, who kicked this hornet’s nest and created this mess?
Jeb 2016!!
Would you like your intelligence cooked regular or extra crispy?
http://www.telegraph.co.uk/news/worldnews/northamerica/usa/11855274/Dozens-of-US-spies-complain-Isil-reports-rewritten-to-show-Syria-campaign-is-working.html
Do you remember late 2002 and early 2003? I do.
People were calling into C-SPAN’s Washington Journal and crying on the air in fear of an imminent nuclear attack from Iraq.
The same psychological conditioning is happening right now.
Craven senior officials who tell the Administration what it wants to hear instead of providing objective analysis and advice are a natural result of a system that values syncophants rather than stand-up leaders with intelligence and integrity.
http://www.businessinsider.com/intelligence-analyst-isis-allegations-2015-9
And since we are on the topic of laws, no, the alien smuggling transport and harboring statutes cannot be used to prosecute “sanctuary cities.” I am as much against them and their wanting open borders policies as anyone. But they are only not turning people over to the Feds or calling the feds in situations where they used to. They are actually not holding and harboring them, but turning them loose because the Feds can’t pick them up quick enough or are not informed.
They aren’t actually harboring or providing sanctuary for anyone. To the extent that is actually going on, illegal aliens are being harbored in order to keep them in the country illegally, that could be prosecuted, but this isn’t what is going on in the sanctuary city issue.
This is an article written by real journalists:
https://www.washingtonpost.com/opinions/the-gulf-among-american-jewry/2015/09/09/95d9089c-570d-11e5-b8c9-944725fcd3b9_story.html
Christian Zionists are racist and anti-semitic, because they view Jewish people like they are mascots or pets, a monolithic herd that needs to be schlepped into Israel so that they can hasten their own Rapture.
Rallying the base.
Breitbart leads with “7th graders made to recite ‘Allah is the only God’ in American public school”
The obvious solution to this is another trillion dollar neocon war.
Shouldn’t that say “another THREE trillion dollar neocon war”??
Goon - you hear Hitlery’s ’speech’ yesterday regarding her approach to dealing with the mullah’s if they don’t follow the rules of Obama’s agreement with them? Yikes.
I don’t give a sh*t about Hillary or Iran!
If the 5+ million Israeli Jews want to immigrate to the U.S. then let them, and stop spending $600,000,000,000+ a year for a war machine just to keep a failed experiment on life support. It was a nice idea, especially in the emotional aftermath of World War II, but it is an idea whose time has passed.
Iran poses no threat to the sovereign territory of the United States.
Yikes.
+1 Truth!
When I bring this up I hear that Israel “is our ally” and we need to support them.
I follow up by asking if they are our ally, what do they do for us. Result?
Chirp….chirp….chirp….chirp…
No, here’s what Israel has done for us:
https://en.wikipedia.org/wiki/USS_Liberty_incident
There’s goyim on that ship, bombs awaaaayyyy!
If we’d reacted in the proper manner, Israel wouldn’t be a problem today. But thanks to John McStain’s father and a few other players, it was just a “regrettable mistake.”
goyim
I never knew the spelling, thanks.
I know lots of Jew Chew/Goy Toy marriages, all based in Atheism. Happy as a bacon and egg bagel sandwich.
I been pondering recently the why and the how of ZIRP being responsible for massive mal-investment. My belief is that it is.
You can look at the servicing costs for debt as one way to evaluate whether an investment makes sense: if you can make a major investment in building some form of infrastructure, and then others will pay enough for the use of the infrastructure to service the cost of the debt used to produce that infrastructure, then the investment may be rational; if others will not pay enough to service the debt, then investment is likely not rational. (Yes, I’m simplifying–normally investors want to see a profit-margin over and above the costs of debt-service; but let’s keep it simple for the sake of this argument.)
Now add ZIRP to the picture: debt-service is near ZERO, so all kinds of investments look rational that would definitely NOT be rational in a non-ZIRP environment. Many many projects are being funded as a result of this. This is all mal-investment—ZIRP directly causes mal-investment.
The bubble ran for many years (rather than argue about when it started, let’s just say that it ran for more than a few years); we avoided washing out many of the excesses by making use of ZIRP, so much of that mal-investment is still in the system. Now, after 7-8yrs of ZIRP, we have also produced a vast amount of economic activity that was irrational in a rational world—e.g. much more mal-investment.
Still with me?
Conclusion: the aftermath of ZIRP will be WORSE than the aftermath of the initial bubble that caused them to bust out ZIRP.
ZIRP and QE are the Fed’s best tools for accomplishing its mission of concentrating all wealth and power into the hands of a corrupt and venal .1% in the financial sector. A docile, stupid serf population that votes for its own fleecing makes the task immensely easier.
Fairness is a very interesting topic, especially when applied to how to slice up the pie.
Does it matter who actually made the pie or whose owed the resources that were used as the ingredients ?
Do you need to work on creating the pie to be entitled to a share?
Does it matter if there are 1000 pies and only 500 people to feed?
Can more pies be made?
What say you comrades?
Agreed.
Greenspan’s comment about history’s unkindness in the aftermath of periods of low risk premiums comes to mind. As your post explains, lending markets cease to provide a reality check on the rationality of investment when rates are pushed against the zero bound. And this Fed has pinned rates to the mat for the longest period since WWII.
In fairness to Bernanke, he made it clear that QE and ZIRP could not and should not be the only tools used to pull the US out of the Great Recession. He felt that Congress needed to step in and provide the fiscal policy part with expanded spending on infrastructure. The ’stimulus’ we got was too small and spent far too much on ’soft’ financial assistance and not enough on ‘hard’ construction.
Nobody put a gun to BB’s head and forced him to fill the void left by a Congress unwilling to assume its fiscal duties (I think!).
Bernanke did the right thing with QE back in 2009 and 2010. Banks had shut off all lending and there was zero liquidity in the marketplace. Had that continued we were teetering on the edge of a Depression and he deserves credit for preventing it.
OTOH, QE has gone on far, far too long and I’m not sure Yellen knows what to do.
Which further collapsed demand.
Demand for houses skyrocketed in 2012, 2013 as investors threw cash at houses and in many places caused prices to double or more. Not a healthy situation and is evidence that QE went on for too long.
Data my friend…… data
US Housing Demand Plummets To 20 Year Low
http://2.bp.blogspot.com/-fqSztKilps8/VFlPKlr52JI/AAAAAAAAhKU/v5oS41S-y0s/s1600/MBANov52014.PNG
Data is your friend… until you misinterpret it.
Refute it my friend.
PIC,
This is along the same lines that I was discussing yesterday, and I think it makes sense with one caveat: for ZIRP to cause a problematic aftermath, you need to see that ZIRP caused there to be more supply built than would have otherwise been needed.
Let’s stick with real estate, since that is front and center.
Did ZIRP cause developers to build too many industrial buildings? Based on everything that I’ve seen, no–development has been far below the long-term trend, and vacancy rates are historically very low. However, ZIRP did allow developers to build to much lower yields–even though rents are still relatively modest.
So, what happens with respect to those industrial developments when ZIRP is removed? Initially, the value of the buildings fall (yields rise, values fall). However, with higher investment yield requirements, development will also slow, and because of low vacancy rates, rents will need to rise to justify additional development.
Second question, did ZIRP cause developers to build too many apartment buildings? Based on what I’ve seen, we are heading in that direction. Low rates have made it possible for builders to develop apartments that would not otherwise be feasible…however, despite the low rates, the only apartments that make economic sense are higher-end projects. So, rents are very high in the new projects, and development is ramping up.
What happens when ZIRP goes away? The value of the apartment buildings go down, and less will be developed until rents rise to justify that development. However unlike industrial projects, where rents paid by the tenants are a small part of their cost structure, apartment rents already high based on income levels, and are limited by incomes…how do you go from all-time high rents to all-time higher rents without significant income growth? You don’t. Newer apartment projects could be in trouble…especially when they need to refinance their construction loans.
ZIRP altered the economics of real estate development, but it didn’t always result in too much development.
rental watch
What is booming in So Ca is LIHTC Apts. All the newer building have large allocations. I’m taking classes right now, and it’s a growing field.
Geez, when I was growing up, the poor didn’t live so swank, for so little money out of pocket. These communities are nice.
rampant.appraisal.fraud.
One.Big.Ponzi.
Does it seem like asset prices are starting to collapse of their own weight, with nary a Fed rate hike to blame?
Anyone else watch the USA TV show “Mr. Robot?” It’s this strange Fight Clubish TV show where activist hackers are trying to reset all the debt by wiping out all the records of debt. It’s a strange gritty show, I don’t find most of the characters super likable but I think it’s interesting that these type of ideas are ending up the plot in main stream entertainment. It’s a pretty anti large corporation show.
I really like “Mr. Robot”, but I’m confused about what’s happening with the main character’s mental state.
“Rubicon” was good in regard to spying, government.
Jeb Bush: My Tax Overhaul to Unleash 4% Growth
Here, Jeb, let me fix your statement for you: your tax overhaul to unleash 40% growth in the deficit.
Yup, he’s a Bush alright. Just like his brother, a one-trick pony. No matter what the economic problem might be, the proposal is always the same: cut taxes. At this point more supply side is just pushing on a string.
Cutting corporate taxes makes sense if capital investment was being curtailed by a lack of cash. That’s not we have today — companies and institutions are swimming in cash. Cutting taxes and giving them even more cash while driving up the deficit isn’t going to create growth or make jobs trickle down.
Add an Iran war to the mix and watch the deficits really spiral out of control. Jeb = George.
And he wants to “privatize” Social Security. If the Trump campaign does nothing more than bury JEB! with ridicule and closes the door on the Bush dynasty in politics, it will have been worth it. It will have been a public service on the the Don’s dime.
Well said and I heartily extend a +1 to you Sir!
Bush on Trump: You can’t insult your way to the White House
No, but you can sure bomb the daylights out of brown people once you’re there.
Today is a good day
“Bernie Sanders overtakes Hillary Clinton in Iowa 41 to 40, Quinnipiac University poll shows”
And Trump leading at 30%. This is what I’d like to see, Sanders vs. Trump: two outspoken unleashed candidates who both give the middle finger to the MSM and Chamber of Commerce handlers. Two starkly different ideologies to choose from.
and both of them have horrible ideas:
Trump: wall that mex pays for and go get Iraqi oil
Bernie - Raising the Minimum Wage to $15 min wage
I guess since none of that will pass, lets vote on who has the best hair.
raising minimum wage is a great idea
That way my tax dollars won’t have to go to support walmarts profits.
They pay a wage so low their workers qualify for state aid. Then they get them state aid. ie I’m subsidizing Walmart’s profits.
We need to tax products coming from low wage states as well.
We have the natural resources, we have the technology and we have the workers.
egregious.realtor.corruption.
do “financial advisers” still use a 4 % depletion factor?
3% at best going forward
most of them are clueless and just spew what wall street says. Everyone is on the aaple bandwagon. It gets old hearing the same old bs lines.
Asia vs socialist Brasil
Malaysia
A- STABLE A3 POSITIVE A
lots of challenges ,but they work for a living
Singap[ore, same deal- no unemployment insurance etc
Brazil= junk
Whelp, this is the big end of the Shemitah (Sunday) weekend. Any bets that something big goes down? Sure seems quiet on the financial front. Unless there is some big rock hurtling towards us I think it will be an average joe weekend…Hmmmmmm.
Just got this message from my employer - this is only part of the message - All I have to say is thanks Congress, thanks Otrauma, thanks Insurance oligopoly - Thanks you f….ing a…holes!!!
“It’s that time of year again – to perform our annual healthcare renewal. Healthcare continues to be one of the fastest rising costs for companies and the upcoming year is no exception with our current insurer United Healthcare (UHC) projecting a double digit increase for the 2015 – 2016 plan year.”
china should park a cruiseliner off the coast 3 miles out and offer affordable care.
u be gonna save $2500 per yr for the average family”
b bama
Business as usual, double digit rate increases are nothing new. In fact, they have been the norm for decades.
Double digits for us too. Which I find odd because that leaves less tax money for Obama to give to the FSA. So befuddled…
Why are you befuddled?
The ACA, with it’s 3x limitation on premiums (the most unhealthy payer can only pay 3x the healthiest payer), has pushed us in this direction. I saw an analysis a while back that to be “fair” this number should have been 6x (on average, the sickest patients use 6x the medical care of the healthiest patients).
This pushes the pool of insured people to be sicker generally, as the penalties for not buying insurance aren’t very high currently, but the cost of coverage for “young invincibles” is too high relative to their propensity to use medical care.
I don’t know if this will work itself out as the penalties increase, but I’d be shocked if a significant part of the increase isn’t due to a slightly sicker pool of insured patients.
Turn yer headlights on when entering the risk corridor!
There is also the issue of universal coverage which tends to increase the average cost of healthy people’s insurance due to cross-subsidizing the insurance costs of folks who were formerly classified as “uninsurable.”
and nothing changes! THEY LEAVE IT AS IS!! Vote them all out. ACA is a joke!
Blue Cross wins again.
All I know is my premium since the enactment of the sold called ACA (Obamacare) has now tripled out of pocket and ya know what? My salary has increased to cover that amount over that time period.
More fleecing of the sheep and sadly I am being shorn as I write this.
Thanks Obamao!! You f….ing commie idiot!!!
rj
When I pd it direct I paid about $190mo to Blue Cross (2009)
Now I use ACA (because I can): I pay $175 mo, gov subsidizes $350 with a horrible $5000 deductible.
ACA added millions more customers and the prices went UP!
thanks Congress and the POTUS.
and no ideas from anyone to bring the costs down to levels other countries pay for even better care.
so if you actually have to use this insurance it seems the deductible plus the payment is 416 / month. So you are paying a lot more.
I wonder how many people will keel over cause they cant afford the deductibles?
CalifoH20-
The problem is that no one wants to talk about the elephant in the room…end of life care.
Proponents of Medicare like to tout it’s “efficiency”…a lower percentage of the total Medicare money goes into administration as compared to private insurers. Isn’t that great? Medicare doesn’t need changing, it is so good. We should have more programs like Medicare (which people love SO much), and less like those evil private insurers.
Well, Medicare is not so great if the way you get your “efficiency” is by paying out huge sums of money without thinking.
Example:
Medicare…Should we approve an expensive brain surgery on a 90-year-old man, who is unlikely to survive the surgery (this is a real example told to me by a friend who’s brother is a neurologist)? Sure, why not? Procedure approved!
Private Insurer would not approve such a procedure (benefit is dubious, cost is high).
Which is more “efficient” According to the “percentage of money that goes to care” math, Medicare is more efficient in this decision…but it is also far more wasteful.
Other countries are more efficient with their dollars in large part because they curtail spending on end of life care.
Right now, we have the worst of both worlds, we have a Medicare system that spends money too freely on EOL care, and we have the ACA, which has created a greater consolidation among private insurers, which harms consumers.
We need to promote competition among private insurers, and we need to reform Medicare. We are doing neither.
With respect to Medicare, I in part blame the GOP for their “death panels” rhetoric which has delayed a national discussion about EOL care…these are unpleasant conversations, but this is the kind of national conversation we need to reduce costs.
And I in part blame the Democrats who, whenever someone brings up reforming Medicare, they claim that the GOP is trying to kill grandma–and so the discussion is delayed again, as the elephant grows larger.
Not good.
Private Insurer would not approve such a procedure (benefit is dubious, cost is high).
That would depend on the terms of the insurance. If there were insurance companies selling health insurance to 90 years olds, some might sell a policy that would pay for such procedures. The premium price for the policy would just be very high.
Sure, but you understand the point, right?
Perhaps I should have stated it as follows:
A private insurer with the same patient cost as Medicare would never approve such a procedure.
On average Medicare beneficiaries receive more than 3x what they contribute. An insurance company would go belly up immediately unless the 3x was reduced by more than 65%, or the amount paid in more than tripled.
A private insurer with the same patient cost as Medicare would never approve such a procedure.
It depends, I guess. There probably are private insurance policies that cover cancer treatments that have less than a 50% chance of saving the patient’s life.
It may be the case that beneficiaries receive more than they contribute as a group. On the other hand, the Medicare trust fund still has money in it, though it is probably declining rather quickly. I don’t know what a private insurance company would do in such a situation.
Of course, private American health insurance is notoriously bad at controlling costs, so maybe we shouldn’t bother comparing Medicare to private insurance policies. It always instructive to look at how other countries handle these things. For example, the British probably don’t think of their National Health Service as being a giant insurance company run by the government. As the name implies, it’s a service provided to the population.
“My salary has increased to cover that amount over that time period.”
Kudos… you’re doing better than me.
Who do we blame. congress or POTUS?
Glass-Steagall Act during the late ’90’s - an event that paved the way for the crash of 2008. The repeal was driven by the Republican-controlled Congress during Bill Clinton’s second term (Clinton had no choice but to sign the bill or else face a Congressional veto override).
Reagan’s: 3 amnesty for 3 million illegals?
How about all of them?
The Fed granted a waiver for the Citi/Travelers merger, which Glass-Steagall made illegal. The merger set the wheels in motion for a repeal.
The final bill that repealed Glass-Steagall passed overwhelmingly, 362-57 in the House, and 90-8 in the Senate.
This was hardly shoved down the throat of Clinton against the stark opposition of his party.
They were all part of the parade, and Wall Street was the grand marshall.
…which unregulated derivatives down the road as well…which Paulson was a huge proponent on the front end and then got the bail out money swingin’ on the back end…
“Glass-Steagall Act during the late ’90’s…”
“The Gramm–Leach–Bliley Act (GLBA), also known as the Financial Services Modernization Act of 1999 and commonly pronounced ″glibba″, (Pub.L. 106–102, 113 Stat. 1338, enacted November 12, 1999) is an act of the 106th United States Congress (1999–2001). It repealed part of the Glass–Steagall Act of 1933, removing barriers in the market among banking companies, securities companies and insurance companies that prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company. With the bipartisan passage of the Gramm–Leach–Bliley Act, commercial banks, investment banks, securities firms, and insurance companies were allowed to consolidate. Furthermore, it failed to give to the SEC or any other financial regulatory agency the authority to regulate large investment bank holding companies.[1] The legislation was signed into law by President Bill Clinton.” —Wikipedia
I really think that if the fed has their way you will not see a 4% fed funds rate for years.
They may raise rates a .25 point for shits and giggles and then cut it down the road.
There is so much debt out there that it needs to stay serviceable to go forward.
you might as well buy some stock cause it will remain the only game in town for years.
Buy the dip!
borrow at zero and be a hero!
Borrow at “O” and be a bro’.
Remember…. houses are depreciating assets that cost you a fortune over the long haul.
FALLING.ASSET.PRICES.
Have you recently noticed odd goings on in the U.S. Treasurys market?
Investing Guide
China is dumping U.S. debt
By Matt Egan
It’s no secret that China is the largest holder of U.S. debt.
So should Americans be concerned that China has started dumping some of its Treasury holdings?
After all, it raises serious questions about whether China will keep lending Washington money to help finance the federal deficit in the future.
But right now, China is selling because it’s in dire need of cash. Recently, it unleashed multiple moves to support its markets and prevent its currency from a freefall, while at the same time trying to stimulate the economy.
China yanks record sum from war chest
China owned $1.3 trillion of U.S. Treasuries as of June, making it the biggest holder of U.S. debt.
But China’s foreign-exchange reserves plunged by a record $94 billion in August, according to the country’s central bank, leaving it with a war chest of $3.6 trillion. Analysts say it’s very safe to believe a big chunk of that decline occurred due to a reduction in U.S. Treasury holdings.
The selling and the potential that China will not be buying U.S. debt in the near future raises questions on its potential to increase America’s borrowing costs.
Some of this might already be happening, at least at a small scale. When stock markets are turbulent, investors usually rush to the safety of U.S. Treasurys and yields fall. However, despite August’s extreme stock volatility, rates on Treasurys actually rose slightly in late August.
Part of that move is likely due to Wall Street betting the Federal Reserve may raise interest rates next week. But market participants also suspect the unusual action in the bond market was driven by China dumping Treasuries.
…
Markets Credit
An Obscure Hedge Fund Is Buying Tens of Billions of Dollars of U.S. Treasurys
Element Capital has been biggest purchaser in several recent auctions
By Carolyn Cui and Gregory Zuckerman
Updated Sept. 8, 2015 3:38 p.m. ET
A little-known New York hedge fund run by a former Yale University math whiz has been buying tens of billions of dollars of U.S. Treasury debt at recent auctions, drawing attention from the Treasury Department and Wall Street.
Element Capital Management LLC, led by trader Jeffrey Talpins, has been the largest purchaser in dozens of government-bond auctions over the past 10 months, people familiar with the matter said. The buying is part of an apparent effort by the fund to use borrowed money to exploit small inefficiencies in the world’s most liquid securities market, a strategy that is delivering sizable profits, said people close to the matter.
Mr. Talpins is an intense and reserved trader formerly at Citigroup Inc. and Goldman Sachs Group Inc. He is known for a tenacious style that can grate on rivals and once tested the patience of former Federal Reserve Chairman Ben Bernanke.
Element has been the largest bidder in many of the 62 Treasury note and bond auctions between last November and July, these people said. At many recent auctions, some of which involved sales of more than $30 billion of debt, Element purchased about 10% of the issue, these people said. That is an unusually large figure, analysts said.
Element’s activity has raised questions because the cumulative purchases far exceed the hedge fund’s $6 billion in assets under management. Treasury officials, who frequently meet with large auction participants, have asked Element about its activity, said someone close to the matter.
“Their buying is eyebrow-raising,” said a trader who once worked for a firm that deals in government securities and witnessed Element’s bidding. These primary dealers often know the identity of other auction bidders. Element “never shared its strategy, but we often asked,” the trader said.
Treasury likes to know who is buying its bonds and why, partly because it prefers long-term holders such as pension funds, insurance companies and central banks. Treasury officials fear purchases by trading-oriented funds could result in sales that increase market swings and potentially drive up borrowing costs.
…