A Dominant Theme: When Will It End?
The Longmont Times-Call reports on Colorado. “Positivity was the theme of the evening at the 2016 Economic Forecast event, put on by the Boulder Economic Council. The first question asked of Rich Wobbekind, executive director of the business research division at CU’s Leeds School of Business, was a dominant theme in nearly every conversation about the local economy, as recent upward trends in nearly every category have people asking: When will it end? One area that Wobbekind conceded might be a bit of a bubble is housing. ‘Our housing prices clearly are outrunning the income levels of a lot of people,’ he said — and there’s no indication that things will slow down in the coming year, as building remains slow.”
The Silicon Valley Business Journal in California. “New data from housing site Zillow shows a trend that might come as a surprise to many watchers of Bay Area real estate: When it comes to all-cash deals, the San Francisco metro region didn’t even crack the list of top 10 U.S. markets seeing such transactions. Zillow also pointed out that cash, which was king during the recession when it was difficult for many buyers to get mortgages, is no longer a large crutch for buyers. That is particularly true in the Bay Area, where massive price tags discourage a lot of cash buyers, said Svenja Gudell, a chief economist at Zillow.”
“‘Much of that is driven by the fact that homes cost so much more in San Francisco, with a median home value of $781,900 for the metro,’ she told the Business Times. ‘The median home value in Miami is $224,900 and in Detroit $121,300, making buying with cash there much easier.’”
The Real Deal on Florida. “In a bold move to sell the leftover units at Brickell Heights and SLS Lux, the Related Group is now offering real estate agents 10 percent commissions — in addition to lowering buyers’ deposit requirements — at both Miami projects. The commissions at the two nearby Brickell area projects equate to as much as double the standard 5 percent to 6 percent sales fee most condo projects offer, several top real estate brokers and executives told The Real Deal.”
“It’s the latest incentive as the Miami market slows down and flattens, amid foreign currency devaluations that are hampering spending. ‘I think it shows signs of desperation,’ said Harvey Daniels, VP of development sales for ONE Sotheby’s International Realty, which is handling preconstruction sales at such upscale projects as One Thousand Museum, Three Hundred Collins and L’Atelier — all at 5 percent commissions.”
“At a Bisnow conference last week, Related Chairman Jorge Perez said that 80 percent of Related’s preconstruction condo sales are to foreign buyers, and he conceded that declining foreign currencies have had the ‘largest dampening effect’ on the local real estate market. A key issue for the future, he said: ‘How do we get this market to be more local?’ When Related dropped deposit requirements to 30 percent from 50 percent at Brickell Heights 02 in October and at SLS Lux in November, Rosso had said it was so that the projects could be quickly sold out and the sales centers closed to move on to other developments. He disputed the idea that it was a sign that the preconstruction luxury condo boom had reached its peak.”
WTOP on Virginia. “Northern Virginia remains one of the most expensive places to buy a house or a condo in the D.C. region, but, by one measure, prices got a little cheaper last month. The Northern Virginia Association of Realtors says the average price of a home that sold in December was $551,451, down 3.71 percent from a year ago. Even so, the median price, a more accurate measure of selling prices, was down just 0.2 percent from a year earlier to $479,900. The median selling prices in both Arlington and Fairfax counties were down more than 2 percent.”
“‘Considering we have a year with new closing laws, a slower-than-usual market in the summer, a strong fall market, and sometimes a flurry of bidding wars, our buyers and sellers had a great 2015,’ says NVAR Chairman Virgil Frizzell. ‘Our region could always benefit from affordably priced new homes that will help our renter population make the move to homeownership.’”
The Urban News Service on Maryland. “Affluence is no antidote to foreclosure. In Prince George’s County, Maryland — one of the United States’ wealthiest majority-black jurisdictions — the foreclosure crisis has hammered several solidly middle-class communities. ‘They didn’t understand what it meant to take out a second mortgage, to refinance or to receive a subprime loan, they just made purchases,’ said Bob Ross, president of the NAACP chapter in Prince George’s County. ‘So when the bubble burst, they were stuck.’”
“One woman who attended the NAACP meeting in Maryland said she was there because she and her husband’s 3,800-square-foot home in the Woodmore South community was foreclosed after they failed to pay their mortgage for more than six months. She was laid off from her paralegal job more than a year ago. Her husband owns an entertainment company. She said she and her husband bought their home for about $700,000 in 2008. It now is worth less than $500,000. ‘My husband is in the luxury entertainment business, and when people started cutting back on luxuries, we had less money coming in,’ she said. ‘Then I lost my job.’”
The Suffolk Times Review in New York. “As incumbent assessor Richard Caggiano took the oath of public office for the second time Jan. 4, a separate proceeding related to his personal assets was taking place on town grounds. Following a two-year foreclosure process, his home was being auctioned off at Town Hall. Court records show the former Planning Board member and Southold Board of Education president and his wife owe more than $500,000 in principal and interest on a home loan after refinancing in 2010.”
“After refinancing his home, Mr. Caggiano was later laid off from his job as a budget analyst with the county. He did not find full-time employment again until he was elected as an assessor in 2013. ‘When you lose two-thirds of your income, there’s no way you can pay your mortgage, get your kids through college and deal with other expenses,’ he said. ‘It ain’t happening.’”
“Long Island has been hit particularly hard by the mortgage crisis in the past decade, something the state comptroller’s office noted in an August report. Suffolk County led the state in 2015 in the percentage of housing units being foreclosed on. ‘The foreclosure problem has tended to hit hardest in areas where the housing market had ‘boomed’ in the years preceding the recession,’ the comptroller’s report stated. Mr. Caggiano said his foreclosure reflects that boom. While a future buyer of his home may end up paying less in taxes, ‘the home is overvalued today,’ he said.”
“Town tax rolls list the home’s full market value at $545,455. Monday’s auction at Town Hall began with a starting bid of $450,000. No other bids were made, leaving the bank in possession of the home.”
“It’s the latest incentive as the Miami market slows down and flattens, amid foreign currency devaluations that are hampering spending. ‘I think it shows signs of desperation,’
Call me when the Mercedes with the “free with condo purchase” sign appears on the front drive of the complex. That will be the absolute top.
Buy a condo, get a car - Sun Sentinel
http://www.sun-sentinel.com/…/fl-condos-cars-20151218-story.ht...
Sun‑Sentinel
Dec 18, 2015 - Condo buyers can get a leased car through a program this weekend at the Boca Raton Resort & Spa.
Buy a Condo, Get a Free Nissan Leaf EV - Gas 2
gas2.org/2015/…/buy-a-condo-in-toronto-get-a-free-nissan-leaf-e…
Gas 2.0
Nov 10, 2015 - Owning an EV can be tough for apartment and condo dwellers, so many don’t buy one- but if you buy one of these condos, you’ll get a free Nissan Leaf! … who purchase a parking space equipped with an electric vehicle (EV) …
Don’t get stuck with a tough-to-sell condo | Interest.com
http://www.interest.com › Mortgages
Dec 27, 2015 - If you’re in the market for a condo, you probably won’t live there long. So buying with an eye on resale potential is critical.
In Toronto: Buy A Condo, Get A Free Nissan LEAF - Inside EVs
insideevs.com/toronto-buy-condo-get-free-nissan-leaf/
Buy a parking space equipped with an electric vehicle (EV) charging station along with your condo in Toronto to get a FREE Nissan LEAF …
Buy a condo, get a car - Spokane, North Idaho News …
http://www.khq.com/story/10544132/buy-a-condo-get-a-carKHQ‑TV
SPOKANE, Wash. - A realtor in Spokane is trying a unique approach to sell several
You’re looking in the rearview mirror. Miami median price is falling.
‘She said she and her husband bought their home for about $700,000 in 2008. It now is worth less than $500,000. ‘My husband is in the luxury entertainment business, and when people started cutting back on luxuries, we had less money coming in,’ she said. ‘Then I lost my job.’
People are cutting back on luxuries? Well anyway, so you have less money coming in, yadda yadda. What does it matter that the house is worth $200,000 less? That doesn’t change the payment.
Did you or the writer just throw that in there? Why?
“What does it matter that the house is worth $200,000 less?”
It’s amazing how nonchalant people are about losing a few hundred thousand dollars on the back end of a bubble. I suppose it’s no big deal provided they did not have to make a down payment, they used borrowed money for the purchase, and they can walk away at any time with little consequence to their credit rating if the mortgage ends up permanently underwater.
2008 was just before the recovery started in 2009. These people got in before Jingle Mail even. Why aren’t they licking their chops counting their equity? It says they are affluent.
‘A prevailing sense of anxiety was in the air in the Swiss ski resort of Davos as the World Economic Forum kicked off Wednesday with delegates fretting about the turbulence in financial markets, slowdown in China and plunging oil prices.’
‘As global stock markets suffered another day of hefty losses and oil prices sank to fresh 12-year lows, there was a high degree of concern about the outlook for the global economy this year.’
‘High on the agenda was plunging oil prices and how they’re connected to China’s slowing Chinese economy.’
http://finance.yahoo.com/news/anxiety-air-davos-world-economic-113233395.html
Last year at Davos all the talk was about $80 hot-dogs, etc. Now you can get three barrels of oil for that.
Update 6:48 Arizona time; three and a half barrels.
I like 3.5 for the price of one.
I prefer 5 for the price of one so I’ll wait until next week.
Update 6:48 Arizona time; three and a half barrels ??
How quickly things can change….
I read something in the paper earlier this month about a donut covered with 24-karat gold dust and Cristal icing. It costs $100; a dozen are $1,000. I don’t want to sound juvenile, but would you poop gold after eating these?
“What does it matter that the house is worth $200,000 less?”
It matters because this $200,000 represents equity, equity that was magically sprung into being due to the previous price, a price that was $200,000 higher than it is now.
Losing $200,000 of price causes $200,000 of equity to vanish into thin air - as in poof - and this vanishing equity represents vanishing wealth - $200,000 of vanishing wealth - and this vanishing wealth causes one the believe that he is poorer, and one who believes he is poorer will not be a big spender in the same way he was when he believed he was richer, so it matters because our economy is consumer-based economy - a debt-based consumer-based economy - which means it needs a lot of consumer borrowing and consumer spending to make it work.
“Equity” is a fallacy when there is no buyer at that price.
Remember….. I can ask $50k for my 10 year old Chevy pickup but where is the buyer at that price?
So it is with any depreciating assets like houses.
“‘Equity’ is a fallacy when there is no buyer at that price.”
Illusion, I like the word illusion but, yeah, the word fallacy works.
A mass illusion, a mass illusion shared by multitudes of strangers reinforced by what Zillow has to say.
And Taxes on that house?
My guess - At least $23,000/year….
And Taxes on that house? My guess - At least $23,000/year….
No problem, just put it on the HELOC like all the other ponzis…oh, wait, that was 2000-2007, that smoke and mirrors trick don’t work anymore.
Bwahahahahahahahahahahahahahah! Neil, please pass the popcorn!
$7500 for 700k house roun here
“Did you or the writer just throw that in there? Why?”
http://finance.yahoo.com/news/oils-nightmare-scenario-dominates-davos-114532016.html
‘The first mantra of the oil crisis was “lower for longer.” Then “lower for even longer.” Now in Davos, oil executives are starting to talk — or rather, whisper — about a new nightmare scenario: “A lot lower for a lot longer.”
“The lifting of Iran sanctions will in my view continue to add supply, so I don’t see a bottoming-out of oil prices and a re-spiking any time soon,” said UBS Group AG Chairman Axel Weber. Depressed prices give Iran’s rivals, such as OPEC leader Saudi Arabia, all the more incentive to keep pumping, he said.’
Depressed prices = keep pumping? Oh the world has been turned on its head. It’s almost like this easy money is causing deflation.
If you figure that most of the production that was spun up in the US was built on borrowed money, and stopping production means stopping payments, it makes sense.
You’d almost suspect that the powers that be might provoke some international tensions, or more war, to move that price in the other direction. While consumers benefit from low oil prices, there are very powerful interests who do not.
Who is more powerful than the market?
My husband is in the luxury entertainment business
What is that supposed to be? A fancy brothel?
I was thinking the same thing. That, or strippers/strip clubs. I bet that’s what it is.
Entertainment 720!
“…a bit of a bubble is housing.”
Is the concept something like ‘a bit pregnant’?
‘there’s no indication that things will slow down in the coming year, as building remains slow’
When I was in Colorado in September, there was “building” going on all over the place.
I thought the denver POP was labor day 2015
When I was in Colorado in September, there was “building” going on all over the place.
Ben, it was way crazier last time. Back in 2006, about 1300 houses were built in my little burg. Last year 300 were built. I can’t speak for metro Denver’s numbers, but when I do get down there I don’t see anywhere as much building as last time. Sure there are the mega developments, but I seem to recall that they were more ubiquitous in 2006.
Denial. It’s more than a river. Much more.
‘Back in 2006, about 1300 houses were built in my little burg. Last year 300 were built.’
That still adds up to 1600, right? In downtown Denver there are cranes everywhere. When I drove a back road from Colorado Springs to Denver, there was house building in sight almost the entire way.
There is a lot of building going on around Castle Rock. Not so much on the north side of the Denver metro area, not sure why. Back in 2006 the pace of development you saw on the south side was everywhere.
‘owe more than $500,000 in principal and interest on a home loan after refinancing in 2010…Suffolk County led the state in 2015 in the percentage of housing units being foreclosed on. ‘The foreclosure problem has tended to hit hardest in areas where the housing market had ‘boomed’ in the years preceding the recession’
Boomed preceding the recession? But he refinanced in 2010.
‘Town tax rolls list the home’s full market value at $545,455. Monday’s auction at Town Hall began with a starting bid of $450,000. No other bids were made, leaving the bank in possession of the home.’
‘Mr. Caggiano said his foreclosure reflects that boom. While a future buyer of his home may end up paying less in taxes, ‘the home is overvalued today,’ he said.’
I think you are right Dick, it is overvalued. Maybe falling even. Cuz I don’t know where in the heck your town is but I wouldn’t pay half a million to live there.
These stories are falling outside of the “bubble was in the subprime, prices can never go too high” stuff I get here all the time.
‘…he was elected as an assessor in 2013…’
‘Town tax rolls list the home’s full market value at $545,455…’
‘Mr. Caggiano said his foreclosure reflects that boom. While a future buyer of his home may end up paying less in taxes, ‘the home is overvalued today,’ he said.’
According to the article, he is the Town Assessor. Isn’t that the person who sets real estate values for the town tax rolls?
The very valuation which he is claiming is not accurate?
Just to be sure I’m not crazy, I googled it:
[From the New York State Department of Taxation and Finance website: https://www.tax.ny.gov/pubs_and_bulls/orpts/assessjo.htm
The Job of the Assessor > Who is the Assessor?
The assessor is a local government official who estimates the value of real property within a city, town, or village’s boundaries. This value is converted into an assessment, which is one component in the computation of real property tax bills.
Enjoyed the story on the assessor who was foreclosed on…and it reminded me of Norman Vroman who was the infamous ex convict District Attorney when I lived in Mendocino Co., Calif
http://www.sfgate.com/bayarea/article/Norman-Vroman-unconventional-D-A-2487891.php
“One woman who attended the NAACP meeting in Maryland said she was there because she and her husband’s 3,800-square-foot home in the Woodmore South community was foreclosed after they failed to pay their mortgage for more than six months.’”
I’m missing the connection between the foreclosure situation and NAACP meeting attendance. Does this woman believe that white folks who buy houses beyond their means, then stop paying their mortgages don’t get foreclosed?
#BlackForeclosuresMatter
playing dumb for the Man…that’s real progress there…
whitey(taxpayers) owe them
race card expires in 10 months
Does this woman believe that white folks who buy houses beyond their means, then stop paying their mortgages don’t get foreclosed?
Didn’t you see the Eddie Murphy SNL skit where he poorly disguises himself as a white man?
“‘Much of that is driven by the fact that homes cost so much more in San Francisco, with a median home value of $781,900 for the metro,’ she told the Business Times. ‘The median home value in Miami is $224,900 and in Detroit $121,300, making buying with cash there much easier.’”
Did anyone pay over $100K in cash for U.S. homes before the central bankers went bonkers with quantitative easing in the post-2008 period?
Now that we know bay areans are up to their ears in debt, it’s good to know they didn’t pay too much:
http://goldrushcam.com/sierrasuntimes/index.php/real-estate/5789-c-a-r-reports-california-home-sales-bounce-back-in-december-2015-mariposa-county-home-prices-down-4-8-year-over-year
S.F. Bay Area $728,950 $744,750 r $660,200 r -2.1%
Contra-Costa $507,180 $570,440 r $483,330 r -11.1%
Marin $1,120,690 $1,180,000 $990,130 -5.0%
Napa $628,120 $678,570 $516,670 -7.4%
San Francisco $1,215,620 $1,323,860 $1,058,820 r -8.2%
Santa Clara $920,000 $965,000 $846,500 -4.7%
Ventura $601,910 $623,400 $569,600 -3.4%
Santa Barbara $555,000 $634,610 $655,000 -12.5% -15.3%
Down YOY in Santa Barbara?
They’re not going to take this well in Marin County. So very many spoiled brats masquerading as adults.
Also the teeming mass of wriggling Realtors here might have to be thinned out a bit.
‘Chinese stocks in Hong Kong tumbled to the lowest level since the depths of the global financial crisis as a slide in the city’s dollar spurred concerns over capital outflows. Oil producers and property developers led declines.’
‘The Hang Seng China Enterprises Index plunged as much as 5.5 percent before paring losses to close 4.3 percent lower in Hong Kong. PetroChina Co. fell to an almost 11-year low as oil extended its decline and Cnooc Ltd., China’s largest offshore oil company, said it will cut output for the first time in more than a decade. Hong Kong’s dollar traded near its weakest level since 2007 as concern about China’s slowing economy curbs demand for the city’s assets. The Shanghai Composite Index lost 1 percent.’
“The local dollar’s slide is igniting concerns that capital outflows are accelerating as funds are selling equities en masse,” said Castor Pang, head of research at Core-Pacific Yamaichi Hong Kong. “Overall sentiment is very bad in Hong Kong.”
‘Similar to their mainland counterparts, Hong Kong policy makers are fighting to prevent a vicious cycle of capital outflows and a weakening currency with the resulting financial-market volatility heightening concern that China’s deepest economic slowdown since 1990 will worsen.’
“To protect the Hong Kong dollar peg the government has to raise the interest rate,” said Louis Tse, a Hong Kong-based director at VC Brokerage Ltd. “The property companies are high-beta stocks because you have to borrow during the development phase,” with higher borrowing costs potentially weighing on home owners as well, he said.’
http://www.bloomberg.com/news/articles/2016-01-20/china-stocks-fall-as-commodity-shares-slump-on-economic-concerns?cmpid=yhoo.headline
Higher borrowing costs potentially weighing on home owners? Well this could get serious. Somebody call Mel “Asshat” Watts.
“When Correlation Is Causation - The Most Important Chart In The World If You’re A Realtor In London Or NYC”
http://www.zerohedge.com/news/2016-01-19/when-correlation-causation-most-important-chart-world-if-youre-realtor-london-or-nyc
“As explained before, it is all thanks to the National Association of Realtors - those wonderful people who bring you the existing home sales update every month (with a documented upward bias every single time) - which just so happens is the only organization that actively lobbied for and received an exemption from AML regulation compliance. In other words, unlike HSBC, the NAR is untouchable, even if it were to sell a triplex to Ahmedinejad on West 57th street.”
Check out the mindset …
“When it comes to all-cash deals, the San Francisco metro region didn’t even crack the list of top 10 U.S. markets seeing such transactions. Zillow also pointed out that cash, which was king during the recession when it was difficult for many buyers to get mortgages, is no longer a large crutch for buyers.”
So instead of using cash these high-priced houses are bought with debt.
“That is particularly true in the Bay Area, where massive price tags discourage a lot of cash buyers, said Svenja Gudell, a chief economist at Zillow.”
Discouraged cash buyers then become buyers by using lots of debt.
“Much of that is driven by the fact that homes cost so much more in San Francisco, with a median home value of $781,900 for the metro.”
Using lots of debt is able to do this, is able to drive prices up out of sight, because debt is readily available while cash isn’t.
A debt-driven pricey market; It’s pricey because of the availability of debt, and this priceiness magically springs into being equity, equity that is used to give value - to backstop - the debt, the same debt that is used to drive the price.
http://www.telegraph.co.uk/finance/financetopics/davos/12108569/World-faces-wave-of-epic-debt-defaults-fears-central-bank-veteran.html
‘The global financial system has become dangerously unstable and faces an avalanche of bankruptcies that will test social and political stability, a leading monetary theorist has warned. “The situation is worse than it was in 2007. Our macroeconomic ammunition to fight downturns is essentially all used up,” said William White, the Swiss-based chairman of the OECD’s review committee and former chief economist of the Bank for International Settlements (BIS). ‘
“It will become obvious in the next recession that many of these debts will never be serviced or repaid, and this will be uncomfortable for a lot of people who think they own assets that are worth something,” he told The Telegraph on the eve of the World Economic Forum in Davos. “The only question is whether we are able to look reality in the eye and face what is coming in an orderly fashion, or whether it will be disorderly. Debt jubilees have been going on for 5,000 years, as far back as the Sumerians.”
Phew, what a relief! Jingle, get down to the local NAACP meeting pronto!
“It will become obvious in the next recession that many of these debts will never be serviced or repaid, and this will be uncomfortable for a lot of people who think they own assets that are worth something,”
Cash … go to cash.
‘The situation is worse than it was in 2007. Our macroeconomic ammunition to fight downturns is essentially all used up’
Not all Will, Janet raised rates recently.
‘Americans are flooding the government with appeals to have their student loans forgiven on the grounds that schools deceived them with false promises of a well-paying career—part of a growing protest against years of surging college costs.’
“I feel robbed of my life,” wrote one student who said she owes $114,000 in federal student debt—most of it in her mother’s name—for her time at a branch of the Art Institutes chain of for-profit schools. “Even after paying my student loans on time and in full every month for over seven years, I’ve barely made a dent.”
‘Syd Andrade’s story is emblematic. He said in an interview that during his high-school senior year, he received a call from an Art Institutes recruiter promising “great facilities, great teachers, use of industry-standard software” for a game-art design program.’
‘Mr. Andrade, who graduated from the company’s Tampa, Fla., location, said the classes used outdated software and were taught by an instructor who knew less than the students. “Most of the time spent in her classes were us teaching her,” he said. “It was a group effort of everyone trying to learn together.”
‘The school had also promised to help him land an industry job, he said. But when he graduated in 2011, the school placed him in an $8-an-hour job working behind the counter at a local Office Depot. He said they did the same for his girlfriend, another graduate of the school.’
‘Mr. Andrade and his girlfriend moved to Austin, Texas, where he now makes $44,000 a year working in technical support for a major media company, outside his desired field. “They promised us to get jobs in the field, and most of us ended up at Office Depot,” he said.’
http://finance.yahoo.com/news/thousands-apply-to-u-s–to-forgive-their-student-loans–saying-schools-defrauded-them-133720706.html
‘the classes used outdated software and were taught by an instructor who knew less than the students. “Most of the time spent in her classes were us teaching her,” he said.’
The jokes write themselves.
Artists make poot in the game industry anyway. He’s probably better off.
The saddest thing is, I doubt you need to attend an Art Institute to develop the skills you might attain there. You’d be much better off apprenticing yourself for $12 per hour for four years. You’d be broke, but you wouldn’t be broke and in debt. Why don’t prospective students grasp that?
I’m guessing the instructors there make close to $12 per hour also.
“I’m guessing the instructors there make close to $12 per hour also.”
$12 per hour Instructors = Previous graduates from the same art school?
Back in the late 90s-mid 2000s I worked at a radio facility where many of our applicants came to us from “The Academy of Radio Broadcasting.”
They spent over $10,000 for about 6 months of study.
Of course they all worked part-time at “The Academy.” So yeah, former students teaching students.
I got the SAME education and hands on experience by taking a couple of community college classes, which at the time were $11 a unit x 3 units = $33 a class plus books. They also had a licensed FM radio station with state-of-the-art facilities.
I paid about $400ish when all was said and done. 96% discount.
Syd looks like he has acquired a pretty sweet home set up there. Though I’m not sure he’s projecting the image of a debt slave deserving of forgiveness.
p.s. The comments section on this article contains some true gems as well:
“I was told I would have the education /experience to be an art director making $64k/yr… They never said art directors need over 10 years of feild experience.”
…or have to live places where 64k = 10k in flyover.
“It will become obvious in the next recession that many of these debts will never be serviced or repaid, and this will be uncomfortable for a lot of people who think they own assets that are worth something,”
But who are the people who think they own assets that are worth something? It’s not just the “owners” of overpriced shacks and shale oil companies. The real people who “think they own assets that are worth something” are the holders of the debt instruments. I know that has been pointed out many times on this blog, but I feel the need to emphasize it, because it’s so easy to just read over these words without realizing what’s going on.
“The only question is whether we are able to look reality in the eye and face what is coming in an orderly fashion, or whether it will be disorderly. Debt jubilees have been going on for 5,000 years, as far back as the Sumerians.”
Who is the “we” he is referring to in this sentence?
‘The next task awaiting the global authorities is how to manage debt write-offs - and therefore a massive reordering of winners and losers in society - without setting off a political storm.’
That last one if from the author of the article, not the man being interviewed. But again, who are “the global authorities”? And in what sense can they “manage debt write-offs”?
A debt-driven pricey market; It’s pricey because of the availability of debt ??
IMO, Thats really a poor analysis…Debt is not a prisoner of one or a few places…Move 60 miles away from San Francisco and you cannot make the same argument because the price of housing is 10% of the cost of a equivalent SF home…
And still massively overpriced.
Update: Crude Oil Makes New 52 Low Today; $20 Oil In Sight
http://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic
Also, offer on rios shack down to banana peel only.
Update: Dow Craters 270 Points On Market Open
http://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic
Link correction
http://www.marketwatch.com/investing/index/DJIA
‘The International Institute for Finance, a lobby group backed by most of the western world’s biggest banks, said Wednesday that $735 billion stampeded out of emerging countries last year, as the Federal Reserve moved slowly but surely towards ending the policy of lending money for next to nothing that it had instituted after the 2008 crash.’
‘China was responsible for over 90% of last year’s outflows, as a staggering $676 billion–an average of $13 billion a week–left the country.’
‘The IIF pointed to two main drivers of the trend: Chinese companies were repaying dollar debt faster than ever before, unwilling or unable to refinance it as rates rose throughout the first three quarters of the year. But in the final quarter, the IIF noted more of an increase in mainland individuals trying to get their assets out of the country ahead of an anticipated devaluation of the yuan.’
http://fortune.com/2016/01/20/this-is-how-much-money-fled-from-emerging-markets-last-year/?iid=leftrail
“The 21st Century: An Era Of Fraud”
http://www.zerohedge.com/news/2016-01-19/21st-century-era-fraud
I understand the S&P 500 is 20-50 points from support. A chance for you day-gamblers to get out of your losses:
http://finance.yahoo.com/q?s=^gspc
Bob Brinker, you probably have to re-allocate the portfolio from last Sunday. Azdude, red or black? RED OR BLACK?
I have read in the past that stock prices can plunge through support.
Mini Dow Jones Indus.-$5 Mar 16 (YMH16.CBT) -CBOT
15,501.00 Down 412.00(2.59%)
http://finance.yahoo.com/q?s=ymh16.cbt
This March position is 100 points lower than the Dow?
Dow Jones Industrial Average (^DJI) -DJI
15,609.34 Down 406.68(2.54%) 11:08AM EST
http://finance.yahoo.com/q?s=^dji
Support damn you, support!
‘I understand the S&P 500 is 20-50 points from support.’
Well that’s pretty amazing. Yesterday I was listening to this guy on the radio. He has been saying the market was headed down for a while. He said support was at 1830 on the S&P 500.
Day’s Range: 1,812.29 - 1,876.18
So it bounced at 1812 and went up. He said it should go up 5% from the support before the next leg down. It ended at 1859, retracting 2.59% from the low already. If this 5% is right should go up 43 points from here and turn down. This gambling is interesting, Fibonacci based of course.
Update: Crude Oil Craters Through $27 Floor
http://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic
When will it end? Make it stop!
Transocean Ltd. (RIG) -NYSE
8.72 Down 0.57(6.14%) 11:12AM EST
http://finance.yahoo.com/q?s=rig
Right through 9.
52wk Range: 8.65 - 21.90
Must. Have. Support.
Crude Oil Feb 16 (CLG16.NYM) -NY Mercantile
26.99 Down 1.47(5.17%) 11:23AM
Day’s Range: 26.85 - 28.58
http://finance.yahoo.com/q?s=clg16.nym
Does that say $26 and change?
Double huge manatee!
Fannie Mae Plunges Below $1, Tumbling 70% From 2015 Peak: Chart
http://www.bloomberg.com/news/articles/2016-01-20/fannie-mae-plunges-below-1-tumbling-70-from-2015-peak-chart?cmpid=yhoo.headline
Oooooph. It’s another day of crater.
http://finance.yahoo.com/news/bankers-end-loose-monetary-policy-165631078.html
‘The end of ultra-loose monetary policy and the divergence between central banks in the United States and Europe are contributing to recent volatility in financial markets, top bankers at the World Economic Forum in Davos said.’
‘Raghuram Rajan, the governor of India’s central bank, acknowledged that we may now be experiencing the darker side of the massive monetary stimulus of past years.’
“With many central banks with their foots firmly pressed on the accelerator, the variety of new aggressive monetary policies, it’s not clear that we’ve really benefited tremendously,” Rajan said.’
You know Ragh, (can I call you Ragh?) I’ve been saying the same thing. For years!
“To some extent we may have reduced the room for other policies or reduced the incentives for other policies. We’re not quite sure what the fundamental value of any asset is. And I would suspect that this is probably what is going on today, that as there is some anticipation that central banks will start reducing the accommodation, asset prices are trying to find the appropriate level.”
Now you’re speaking my language Ragh! Ever notice it’s only called volatility on the way down?
Azdude must be inconsolable.
Bow wow wow it’s the cratering Dow.
Dow Jones Craters 500+ Points; New 52 Week Low Within 80 Points
http://www.marketwatch.com/investing/index/DJIA
Vienna, VA Housing Prices Plummet 16% YoY On Excess Housing Inventory
http://www.zillow.com/vienna-va-22181/home-values/
From the 15th:
‘Bill Gross says to “stay out of the bathroom” as stock markets enter bear territory. “Markets are recognizing the limited tools they now have to prop up assets AND real economies,” Gross, who manages the $1.3 billion Janus Global Unconstrained Bond Fund, said in an e-mail.’
“Wealth effect constructed with paper - sometimes corrugated/strong, sometimes toilet/flimsy,” Gross said in a Tweet on Friday from the Janus Capital Group Inc. account. “Stay out of the bathroom.”
‘Gross warned in December that markets were headed for a fall and urged investors to de-risk their portfolios or “look around like Wile E. Coyote wondering how far is down,” a reference to the cartoon character whose schemes to catch the bird Road Runner always backfire, often with a plunge over a cliff.’
‘In his e-mail, Gross said that zero-percent interest rates and quantitative easing created leverage that fueled a wealth effect and propped up markets in a way that now seems unsustainable. The wealth effect is “created by leverage based on QE’s and 0 % rates,” he wrote.’
http://www.bloomberg.com/news/articles/2016-01-15/gross-says-markets-can-t-prop-up-wealth-flimsy-as-toilet-paper?cmpid=yhoo.headline
You know, I mentioned when Bernanke the Courageous put his book out that the story hadn’t ended yet.
https://encrypted-tbn3.gstatic.com/images?q=tbn:ANd9GcSayRSJrbvguNyIpek8zcneGi8QkRunjKXxl-zKLHsgC2YGg9o1
“Deutsche Bank Reports Titanic $7 Billion Annual Loss”
http://www.zerohedge.com/news/2016-01-21/these-are-extremely-poor-results-deutsche-bank-reports-titanic-7-billion-annual-loss
crater