Set Up To Delete The Home Part Of Housing
It’s Friday desk clearing time for this blogger. “With 15 years in the local market, Keller Williams Realtor Bruce Lynn can remember a day when people bought nice homes in North Texas for under $140,000. ‘You can’t find a $140,000 house anymore,’ he said. Actually, you can. They’re just not as plentiful. At that price point, we found about 2,000 local homes for sale on Zillow. But then we searched for homes in the $300,000 to $600,000 range and found almost three times as many properties available. Prices have gone way up. Lynn said he now has a lot of ‘wow’ days as he looks at recent sales. ‘Where you say, ‘Wow! That house sold that fast, for that price?’”
“Lynn has seen evidence of the increases in deals he’s done. He points to a townhome near downtown Dallas he’s handled in the past. In 2009, it sold for $200,000. The same property sold last summer for $304,000. ‘The second one down, same thing; they paid about $150,000 in 2009. Then in June (2015), it sold for $280,000,’ he said.”
“Developer Steven Witkoff is holding off on converting Manhattan’s Park Lane Hotel into luxury condominiums — for now. He led a group that acquired the property from the estate of Leona Helmsley for $660 million in 2013. Since then, the allure of building high-end homes has dimmed as new towers aimed at multimillionaire buyers crowd the market. ‘The fact of the matter is, the velocity is not what it was,’ said Witkoff.”
“Plans for the Park Lane, at 36 Central Park South, are taking shape as Manhattan’s luxury sales market shows signs of an oversupply after a post-recession construction surge. Prices of the most-expensive homes have been dropping since February. Witkoff and his partners have shelved an effort to raise cash from Chinese individuals through the EB-5 program, which grants green cards to foreigners who invest a minimum of $500,000 in projects that create jobs. The slowdown in the Chinese economy and unresolved EB-5 reform efforts in Congress are clouding the future of the program, Witkoff said.”
“Europe’s biggest lender HSBC will no longer provide mortgages to some Chinese nationals who buy real estate in the United States, a policy change that comes as Beijing is battling to stem a swelling crowd of citizens trying to get money out of China. An HSBC spokesman in New York told Reuters that the new policy went into effect last week, roughly a month after China suspended Standard Chartered and DBS Group Holdings Ltd from conducting some foreign exchange business and as authorities try to limit capital outflows.”
“In Vancouver, an HSBC spokeswoman said HSBC’s Canadian arm already had similar policies in place. The Royal Bank of Canada scrapped its C$1.25 million cap on mortgages to borrowers with no local credit history last year in a bid to tap into surging demand for financing from wealthy immigrant buyers.”
“China’s State Administration of Foreign Exchange said late last year it would soon launch a system to monitor foreign exchange businesses at banks and put people who tried to buy more foreign currency than is allowed on a watch list. Those found trying to purchase more than the maximum $50,000 in foreign currency a year would be placed on a watch list, it said.”
“B.C. led the country in economic growth last year and is poised to do the same in 2016. But some economists and politicians are questioning how rosy that picture is given the province’s reliance on real estate and the B.C. government’s stance on housing affordability. Compared to other Canadian cities, Vancouver’s housing market is uniquely unbalanced when home prices are compared to median incomes. Based on the trend that is happening in places like California, New York, Sydney and Hong Kong, in which wealthy people from emerging economies seek to stash money in real estate as a safe haven, British Columbia should be proactive about tracking and responding to the phenomenon, said Tom Davidoff, a professor of economics at UBC’s Sauder School of Business.”
“‘It doesn’t cost you much to not have a tenant because a house gives you a rate of return in two ways: it gives you a dividend and it gives you a capital gain,’ Davidoff said. ‘It’s sort of a new phenomenon globally, but when you think about it we’re ideally set up to delete the home part of housing.’”
“With Singapore housing prices continuing to fall and transaction volumes still low, fewer people are choosing to become property agents. Former estate agent Brendan Ng was one of those who did not renew his licence this year. Instead, he has been driving a taxi for the past few months because the income is more regular than that of an agent. Huttons agent Megan Chiew took on a new full-time job as an account executive with a trading company in 2014. Said Ms Chiew: ‘My income as an agent was too unpredictable. Some months, I could not close any deal.’”
“The four-storey flat in Kitengela, a suburb south of Nairobi, Kenya, stands imposingly, dwarfing all the other houses in its vicinity. Atop the flat and on the sides are huge signboards announcing that the two and three-bedroom houses are up for rent. About three months ago, the boards carried a different message for about a year. They announced that the houses were up for sale. Having found it hard to sell the houses, the property developer, who has other units in Nairobi, decided to rent them out. It is a path many house developers, especially those who have built apartments, in the East African nation’s capital are taking.”
“‘I must admit things are not really looking good in the property sector. The bubble people have been talking about seems to have burst because both selling prices and rent for apartments are falling,’ said Antony Kuyo, a real estate consultant with Avent Properties in Nairobi.”
“For the first time in nearly seven years, residential rents in some neighborhoods in Qatar are starting to go down as landlords struggle to fill housing vacated by laid-off expats, a local real estate firm has said. ‘We’re in a very different country now than we were 12 months ago,’ DTZ associate director Johnny Archer told Doha News. ‘Rents will drop. It’s inevitable. In fact, they’ve already started.’”
“DTZ estimates that up to 13 towers in Porto Arabia and Viva Bahriya are nearing completion and could increase the number of new units in the Pearl-Qatar hitting the market in 2016 by roughly one-third over last year. ‘This will add a huge amount of supply,’ increasing vacancy and putting downward pressure on rents, Archer said.”
“The Property Institute’s boss says reducing Auckland home values would be devastating for the economy. Ashley Church was responding to a survey which found Auckland now has the fifth least affordable houses in the world. Church said there was no quick fix to a trend that had been developing over decades, and a ‘knee-jerk’ response could do more harm than good. Around 65 per cent of Kiwis owned homes, many of whom used the equity to buy businesses or invest in other assets. ‘So reducing the value of their home could have a devastating effect on the economy and could bring the whole thing down like a house of cards.’”
“Labour’s housing spokesman Phil Twyford said the report confirmed Auckland’s status as ‘a housing basket case.’ The Government had been blaming the Resource Management Act for a decade, but a crackdown on property speculation and a state-backed housing programme was what was needed. ‘The truth is, they are paralysed with fear that the bubble will burst on their watch, so don’t want to tackle the causes of the crisis.’”
“Insufficient funding or poor management of state programs in seemingly disparate areas has allowed high levels of poverty to persist in New Jersey and stymied families’ efforts improve their lives, legislators and advocates said yesterday. ‘It’s incredible to think that the state of New Jersey has higher poverty than it has had in the last 50 years. It’s 40 percent greater than before the recession of 2008,’ said Assembly Speaker Vincent Prieto, who launched an anti-poverty policy initiative last week.”
“The high cost of housing was another focus of the day’s discussions. New Jersey is the fifth-most-expensive state in which to rent a two-bedroom apartment, at $1,309 a month, Housing and Community Network president Staci Berger told the Assembly housing committee. If housing is supposed to consume no more than 30 percent of income, that means a family must earn $52,347 a year to afford such an apartment — an impossible task for someone working at the minimum or even average wage, she said.”
“‘The housing affordability and foreclosure crisis is the albatross around the neck of our economic recovery,’ Berger said. ‘Our housing market is like a food market that only regularly offers filet mignon and caviar; we need Hamburger Helper and tuna fish, too.’”
“Europe’s biggest lender HSBC will no longer provide mortgages to some Chinese nationals who buy real estate in the United States, a policy change that comes as Beijing is battling to stem a swelling crowd of citizens trying to get money out of China. An HSBC spokesman in New York told Reuters that the new policy went into effect last week, roughly a month after China suspended Standard Chartered and DBS Group Holdings Ltd from conducting some foreign exchange business and as authorities try to limit capital outflows.”
Let me guess: These HSBC borrowers were the very same wealthy all-cash Chinese investors who until just now snapped up multiple multi-million dollar homes on North America’s West Coast like hot cakes?
An Asian buyer picked up a Sacramento office building in 2005 for $16,000,000. A recent appraisal put the value at $11,200,000.
$4,800,000 vanished into space in 10 years. 30% of the value. He would have done better paying negative interest rates on short term deposits in Japan!
HSBC (or any lender) would be concerned about loan repayment on a typical 10-yr call date for commercial financing.
80,000 SF at $200/SF was a pretty safe metric in the past. Not so much today.
$200/sqft for new light commercial is well over 2x the cost to build it…. with profit.
How are you not broke?
I make smart investments with great cash flow. When will you learn to read?
“An Asian buyer…..”
” $200/SF was a pretty safe”
Once again. You don’t know what anything is worth, thus you get taken for a ride.
I am simply offering observations based on facts. Buyers who paid $200/SF in 2005 have may have assets that are now worth 30% less.
Obviously, I DO know what things are worth and I like to share that information with the HBB readers.
You profess there are 25 million vacant foreclosed houses in the United States, but cannot cite a source other than your own hot air.
“until you know value, everything is worthless.”
Clearly you don’t understand the value of assets considering your mispricing and I will continue to make HBB readers aware of that fact.
The excess empty and defaulted housing inventory data has been posted and discussed ad infinitum. You just don’t like what the data says.
‘It’s sort of a new phenomenon globally, but when you think about it we’re ideally set up to delete the home part of housing.’
Shoeshine boy moment…
So housing is currency now. Why not just use big rocks like the Yap Islanders? Tangible, maintenance free, and nobody can run off with it easily.
‘So housing is currency now’
You’re spending too much time in the bits bucket. Housing is the perfect money-laundering tool, tax dodge, only goes up in value and can be financed, refinanced at super low interest rates.
‘Across the U.S., the story is much the same. The world’s economic woes — from China to Russia to South America — are damping sales in the high-end real estate market. In the Los Angeles suburb of Arcadia, where Zhang is struggling to sell the six-bedroom home, dozens of aging ranch houses were demolished to make way for 38 mansions built with Chinese buyers in mind. They have are priced as high as $12 million. Many of them sit empty’
http://thehousingbubbleblog.com/?p=9479
I’m sure my time in the bits bucket is costing me IQ points, but it gets me to giggling. Kind of like huffing paint. Combotechie was kind enough to translate and elaborate on my ShriekingTreeMonkese blurt.
Lai Stones would be ideal money laundering vehicles. The one they dropped in the water and kept using makes me think you don’t even have to worry about security. If somebody steals them all, you just keep on using them.
The next big thing is LaiCoin. You heard it here first.
The next big thing is LaiCoin. You heard it here first.
Too funny, I was writing up the same comparison below at the same exact moment you were.
The similarities are staggering!
Ha! Glad I kept it brief, or you would have poached my place in history.
“So housing is currency now. Why not just use big rocks like the Yap Islanders? Tangible, maintenance free, and nobody can run off with it easily.”
Wiki: “Rai stones”
“While the monetary system of Yap appears to use these giant stones as tokens, in fact it relies on an oral history of ownership. Being too large to move, buying an item with these stones is as easy as saying it no longer belongs to you. As long as the transaction is recorded in the oral history, it will now be owned by the person you passed it on to—no physical movement of the stone is required.”
Milton Friedman told of a case where the owner of a stone tried to move his stone from one island to another but due to an accident the stone ended up lying on the bottom of the sea. However, it was still recognized by everyone that the owner of the stone still in fact owned the stone and hence the owner retained and enjoyed all the wealth that the stone represented.
Here, from Wikipedia …
“The physical location of the stone may not matter—though the ownership of a particular stone changes, the stone itself is rarely moved due to its weight and risk of damage. The names of previous owners are passed down to the new one. In one instance, a large rai being transported by canoe and outrigger was accidentally dropped and sank to the sea floor. Although it was never seen again, everyone agreed that the rai must still be there, so it continued to be transacted as genuine currency. What is important is that ownership of the rai is clear to everyone, not that the rai is physically transferred or even physically accessible to either party in the transfer.”
What is important is that ownership of the rai is clear to everyone, not that the rai is physically transferred or even physically accessible to either party in the transfer.”
Know what this reminds me of?
Bitcoin.
Seriously, there is nothing physical to transfer, nothing physically accessible—the only thing that is important is that ownership of the Bitcoin is clear, and it is clear to all, because it is logged in a publicly-readable log, made up of cryptographically-signed, verifiably tamper-free log-blocks in the block-chain, and everyone moves on together to attempting to sign the next block.
The Yap Islanders invented the key concepts, if not the math!
It doesn’t even have to be bitcoin. Any American dollar (or other currency) that isn’t physical coin or bills is the same way. The only people who don’t receive Rai-Stone paychecks are concentrated at Home Depot and Sherwin Williams.
The marijuana industry is all cash too, by federal decree.
Any American dollar (or other currency) that isn’t physical coin or bills is the same way.
I think you missed the point. The Rai stone all have an oral history attached, something that’s reminiscent of the block-chain log. US Cash does not have anything like that characteristic. You have no idea where a dollar in your wallter came from, or where it has been.
‘It’s incredible to think that the state of New Jersey has higher poverty than it has had in the last 50 years. It’s 40 percent greater than before the recession of 2008,’
The incredible part is the incredibly high cost of living in NJ, the incredibly high property/income taxes, incredibly high cost of insurance and the incredibly high cost of corruption in state government to the average NJ citizen. Incredible part is that anyone would want to live there.
“The incredibly high cost of living in NJ, the incredibly high property/income taxes.”
New Jersey had an average to below average tax burden as a share of personal income for decades, and lots and lots of public services.
They did it by selling the future — underfunding pensions, underinvesting in infrastructure, and running up debts. Now the future has arrived and those who benefitted from that deal are running for the exits. New Jersey, and Connecticut, the two richest states in the country over the past 40 years or so, are broke, broke, broke.
https://larrylittlefield.wordpress.com/2016/01/25/the-suburban-generations-destroy-the-suburban-states-and-nation/
The same thing is happening in suburbs across the U.S., which repeated the same irresponsibility as older central cities at their peak in the 1950s. And what the suburban generations did to the suburbs, they also did the U.S. as a whole. Generation Greed has wrecked New Jersey, Connecticut — and the United States.
‘The world must be “crazy” to give so much power to central bankers, famed bear Marc Faber told CNBC Friday, calling them “a bunch of professors” whose monetary policy programs have been a “complete failure.”
‘Faber added that he questioned central bank policymakers and the quantitative easing (QE) programs they launched in the U.S., euro zone, U.K. and Japan.’
“We all agree on one thing, that the market economy functions best because the opposite is socialism, communism and central planning, which has been a complete failure, but now democracies have implemented a system that is basically run by a bunch of professors and they target inflation, they target exchange rates, they target the quantity of money, I mean, is the world crazy to give them so much power?,” he told CNBC.’
‘Faber said that central bankers’ policies had been a “complete failure” and that pledges to extend stimulus measures would not work.’
“Their policies have been a complete failure over the last 20 years and now the same people are desperate because gradually their losing their prestige and credibility and they’re doubling up on medicine that hasn’t worked and it won’t work as long as the central bankers that we have now are in power the economies in the world will go down and not recover,” he said.’
‘It’s incredible to think that the state of New Jersey has higher poverty than it has had in the last 50 years. It’s 40 percent greater than before the recession of 2008′
I read once that Yellen was the most powerful woman in the world. Isn’t that strange?
She should wear a cape so it’s easier to tell.
A friend moved her parents from NJ to CA a few years ago. They rented a senior apartment.
NJ property taxes of 5.35% (6,000/yr) and Medicare supplemental insurance of $750/mon (2 people).
CA rent was $8,000/year and Medicare insurance dropped to $160/mon (2 people).
It is much cheaper to live in CA!!
But is it worth the effort to live in a welfare state with out of control crime?
Where they live was just named to be one of the top 10 safest small cities in California.
Once again, you just keep pulling hot air out of your pants and posting it here! HA!
Hot Air.
http://backgroundchecks.org/50-safest-cities-in-california-2016.html
You guys sound like a married couple.
don’t they? YEARS of bickering.
I usually just scroll down a bit when they start it up.
Mafia and her husband.
crushing.california.poverty.
People there don’t understand this, but as a share of income California taxes are not all THAT high. Where are taxes really high? In NY, where I live.
https://larrylittlefield.wordpress.com/2015/04/14/taxes-2012-census-of-governments-finance-data/
Cherry picking one expense doesn’t detract from the fact that California is the poorest state in the US.
Is NY tied with CA in the poverty category?
Let’s seem.
https://www.census.gov/hhes/www/cpstables/032015/pov/pov46_001_10050.htm
California is not the poorest state in the U.S. It’s poverty rate, however, is above average at 15.8%, compared with a U.S. average of 14.8%.
New York State is 14.0%, but New York City is around 21.0%.
The highest poverty rates may be found in Louisiana, Mississippi, Arizona, West Virginia, Kentucky, New Mexico, Arkansas, Alabama, Oklahoma, Tennesee, North Carolina, and Nevada, all over 17.0%.
Nope.
California Leads Nation In Rate Of Poverty
http://www.sandiegouniontribune.com/news/2015/nov/20/economy-is-up-and-so-is-poverty/
If you just look at the cost of food, California is not the worst. However, if you look at the cost of living (including housing) California has no peer aside from DC.
The highest poverty rates may be found in ??
HA does not take to facts very well Larry…He would rather spew BS….It fulfills him…
However, if you look at the cost of living (including housing) California has no peer aside from DC ??
Only if you isolate it to certain area’s Blue…California is a massive State…You could live comfortably in most of the state on a social security check…
‘The federal government hasn’t adopted the supplemental way of doing things … yet. This week’s report takes into account a little thing we like to call reality. In other words, this alternative way of crunching the numbers takes into account the cost of living, including our astronomical rents and housing prices, taxes, and benefits.’
‘Jonathan Buttle, a California Department of Finance research program specialist, tells L.A. Weekly that housing is one of the main factors that puts more of us in poverty: “One of the major adjustments is they use the geographic adjustment based on an average apartment. They look at various localities in California and other states and apply that adjustment. That is definitely a major factor in why the California poverty rate is much higher under this measure.”
‘With all that thrown in the mix, the Census Bureau says there are more like 8.9 million Californians living in poverty instead of the official number, 6.2 million. With a population of 38 million, that means that about one in four of us is officially in the poorhouse.’
‘We beat out Washington, D.C.’s, poverty rate of 22.7 percent poverty rate under the supplemental calculation.’
http://www.laweekly.com/news/california-is-americas-poorest-state-4177082
SCdave does not take to facts very well Ben…He would rather spew BS….It fulfills him…
It’s pretty harsh once you get over 130k or so. Ends up being 40-45% after everybody gets their taste.
You wouldn’t make something like this up, would you Jingle?
I am wondering what kind of shack they might have owned in NJ for $100K. Your friend told you the tax rate to the second decimal place? Medicare supplemental is a scam. $750/mo, lol, amazing.
Nothing made up Blue. I pulled the tax bill on their old address. 5.35%, and they had a small deduction of $400/year for being elderly or a vet. The Medicare supplement for him was $350, for her was $250 and together $160 for prescription coverage. They had not been to a doctor in years and by the time they moved to CA, they spent over $145,000 more than they would have in CA. It was money they did not have.
I find this kind of information amazing and like to share it because it is not common for people to run these kind of numbers. Their lifestyle went from hand-to-mouth depending on their childrens’ subsidies in NJ, to living a higher quality completely independent life in CA (not to mention they had an extra $125,000 in the bank from selling their home)!
I looked into that so called Medicare Supplemental Insurance and it is a huge mistake IMO to pay for such a thing. It only covers Medicare deductible as far as I could tell, so you’d be better off paying as you go always. Insurance scam I think.
BTW, there are all sorts of houses for sale in NJ for $100,000 to $150,000. One of the reasons prices are so low is that even if you own it free and clear, the government charges you 5.35% annually to live in it….forever….no amortized end to that hungry mouth!!
I had a $100,000+ house in Mount Olive 35 years ago that was nothing special, and a 90 minute commute one way to go with it. Those were brutal debt donkey days. The cheap stuff was in the inner ring of decay.
Sounds much like California today.
Encino, CA Housing Market Craters; Prices Plunge 13% YoY As Excess Housing Inventory Balloons
http://www.zillow.com/encino-los-angeles-ca/home-values/
‘As the nation begins the process of electing a new president, the roles of the Republican and Democratic parties are undergoing fundamental shifts that are threatening their impact on both elections and policy. Built in the 19th century, grown dominant in the 20th, they are largely out of date in this new age.’
‘The largest party in America now is no party — with the ranks of people calling themselves independents at the highest level in more than 75 years of polling. The parties do not control the message. People learn about politics from social media instead of traditional means such as mailings or campaign rallies. And the parties are no longer the sole banker of politics. Big-money interests now effectively create shadow parties with extensive networks of donors of their own.’
‘The result: People are tuning out and turning away. In 2012, average voter turnout for statewide primaries for president, governor and U.S. Senate plunged to its lowest level since the modern primary system became popular in 1972.’
“No one likes political parties anymore,” said Jan Leighley, who studies voter behavior at American University, where she is a professor of government.’
‘They gerrymander congressional districts to maximize their chances so that election after election only a handful of House of Representatives races are true contests. Of the House’s 435 seats, 402 incumbents are considered safe bets for re-election this year, said the nonpartisan Rothenberg & Gonzales Political Report. Those safely partisan seats help keep Washington gridlocked — and turn off more Americans.’
“Both parties get so concrete in their values they don’t see any other perspective,” said Bill Corbett, studying to be an auto body technician at Central Pennsylvania Institute of Science and Technology.’
‘It’s a far cry from freedom from party or faction that the Founding Fathers envisioned. “This two-party system quashes independent thought and the courage to take a stance on positions and kills the free market of ideas our country was supposed to be founded on,” said Ellen Read, a political activist in New Hampshire.’
‘While independents are gaining clout, so are the big-money groups that now operate as virtual political parties. In that world, everyday voters ask, how can they ever be heard? Not through the Republican or Democrats parties, say increasing numbers of voters.’
‘As Peter White, a cabin manager in Nottingham, New Hampshire, put it, “You feel the two parties both work for Wall Street and don’t care who wins.”
‘Despite the state media’s attempts to calm sentiments, pessimism remains visible among Chinese netizens, many of whom believe the media’s attempts were evidence that the economy is in trouble.’
‘Media distrust’
‘@gerry_guochen: All the words by state media should be understood in the opposite way.’
‘@yangguo1979320: They are so anxious to disprove the prediction that it seems that it is now a fact.’
‘@shaobeilideshuizhu: Are they trying to present a false appearance of prosperity? The harder they are trying to do this, the more it indicates that we are having problems.’
‘@chunfencuiacuicuichudapaopao: Please prepare yourself. The vigorous clarification by the government has indicated the severity.’
‘Many referred to incidents, such as stock market tumbles and factory closures, as proof that the country’s economic slowdown is worrisome.’
‘@hebichaoyuediannao: China’s economy is really in a dangerous place. Lots of brick-and-mortar enterprises have been shut down, companies are having low margins, and local finance are enduring extreme difficulties. The key is whether we can get out of the predicaments this year and make breakthroughs in economy transformation.’
‘@stanley988: China’s stock market has slumped to what it was before the country was liberated, and lots of factories have closed.’
‘@wangyou431722478: Now lots of small- and medium-sized private companies are bankrupt, and migrant workers are losing their jobs. It is really difficult. Just stop only reporting the positive sides. These kind of reports will starve people like the Great Leap Forward.’
‘@007xiongge: Which country’s economy is backed by selling land and houses? And the bubble is still growing.’
‘@yilichenfei: These policymakers are masters at politics and power tactics. But they are not fit for economy management and the result would be an excessive political storm which leads to a downward economy.’
Republicans: more for Generation Greed and the rich now, less for the generations born after the late 1950s forever.
Democrats: more for Generation Greed and unionized public employees now, and everything will be fine later — trust us.
Well it WAS fine… until the unborn generations that were sold out back then actually came on the scene.
They gerrymander congressional districts to maximize their chances so that election after election only a handful of House of Representatives races are true contests ??
There it is right there….Excellent post Ben….
‘Google, according to Rupert Murdoch, has overawed the “posh boys in Downing Street” and elsewhere. The News Corp. chairman was responding last week to news that the U.S.-based Internet giant would pay Britain the measly sum of $185 million in underpaid taxes. Murdoch continued, “Google has cleverly planted dozens of their people in White House, Downing St, other governments. Most brilliant new lobbying effort yet.”
‘While Murdoch sounded like Noam Chomsky, Donald Trump’s recent screeds against hedge fund managers have seemed to invoke his inner Bernie Sanders. Multibillionaires are just the latest individuals to add their voices to a worldwide chorus condemning hyper-connected posh boys. They confirm that the hoary distinction between the left and the right needs to be updated.’
‘It’s now clear that the bonanza of globalization has been divided grossly unequally. Whatever the reasons for this — technological innovation or financial liberalization — a small number of networked people have grown disproportionately rich in many democracies.’
‘Consequently, anger, distrust and hostility reign in the broader public sphere against the Davos Men and their apparent accomplices in politics and media. The Edelman Trust Barometer, which annually appraises reputations of businesses, government and other institutions, reveals a widening gap between elite and mass perceptions in the U.S., the U.K., France, India and Australia.’
‘Perhaps it’s time now to stop mapping political differences along the left-right dichotomy. The great political, intellectual and emotional chasm of our world runs between transnational elites with access to diverse forms of social, economic and cultural power, and masses who feel left out from the global party and who express their fury and resentment through social media and xenophobic movements.’
‘We have entered a perilous new era in politics, where a whirlwind of raw emotions is blowing away all the verities of the past. The global elites, whose competence and moral legitimacy are questioned like never before, need, as Martin Wolf wrote in the Financial Times last week, “to work out intelligent responses.” Until then, progressively more and more intemperate outbursts against posh boys will define political life.’
‘‘It’s now clear that the bonanza of globalization has been divided grossly unequally…The global elites, whose competence and moral legitimacy are questioned like never before, need, as Martin Wolf wrote in the Financial Times last week, “to work out intelligent responses.”
And the posh boys whisper to each other.
This is where I think so many have not understood the Trump phenomenon. He simply stands for a rejection of the world order that isn’t working for us any more. Globalization “clearly” has screwed us. What do the political parties offer us? More globalization. The two party system has been abandoned by most for years, yet we are hostage to it.
I’m not one of those who thinks everybody in this country is stupid. I believe they are acting rationally, even if a bit unsteady. Recall that the occupy movement initially had 90% support. Who broke it up? The DHS, coordinated with mayors in the cities. The tea party was initially an outburst against TARP. The system that benefited from TARP devoured it. The average person knows we are being had. We just don’t know what to do about it.
The television will entertain us with phony house flippers and tell us our future is driving cabs until a robot replaces us. American Dream? We can barely afford the rent.
Another +1. You are really rocking today.
The problem with the elite’s “intelligent responses” are that they are a transparent attempt to prop up the despised status quo. The entire response to the Great Recession has been to try to restore the state of affairs that brought about the Great Recession. Fail.
Ben Jones: ‘‘It’s now clear that the bonanza of globalization has been divided grossly unequally…The global elites, whose competence and moral legitimacy are questioned like never before, need, as Martin Wolf wrote in the Financial Times last week, “to work out intelligent responses.”
“An even starker figure was the charity’s finding that just 62 people — 53 of them men — own as much wealth as half the world’s population. This figure has fallen from 388 five years ago.”
https://news.vice.com/article/sixty-two-people-now-have-a-greater-net-worth-than-half-the-worlds-population
I’m sure it’s because these 62 people generate so much value.
However, the other explanation is that they are just very, very good at diverting resources to themselves.
‘The wealth of the poorest half of the world’s population — more than 3.6 billion people — has fallen by a trillion dollars (41 percent) since 2010. But while such anecdotes were eye-catching and made sense on an individual level, “at a macro level they are not relevant, they are not powerful,” Deborah Hardoon, a lead author of the report, told VICE News. “They do not affect the trend we are highlighting which is the fact that the vast majority of wealth goes straight to the top.”
‘Having a lot of debt could seriously impact an individual’s well-being, Hardoon added. “It’s necessary to have a certain degree of security if you’re faced with a shock such as a medical bill, or a poor harvest,” she said. “if you have zero or negative wealth then your ability and robustness to respond is very poor.”
‘The really major issue was what is being done with all wealth at the top, said Hardoon. “You only have to look at the money in lobbying and financing to know that extreme wealth and extreme influence go hand in hand. The extremely wealthy have power to influence policies, economic systems, and environmental policy that affect all of us.”
Ben Jones: ‘It’s a far cry from freedom from party or faction that the Founding Fathers envisioned. “This two-party system quashes independent thought and the courage to take a stance on positions and kills the free market of ideas our country was supposed to be founded on,” said Ellen Read, a political activist in New Hampshire.’
There are 1500+ candidates for president in 2016: http://www.fec.gov/press/resources/2016presidential_form2nm.shtml (granted maybe about a third are lulz entries).
In that list may well be a smart statesman patriot. But unless the media picks up on it, there’s little chance of that individual getting much publicity. Interesting to consider how and why a candidate gets national attention.
‘African cities these days are bearing an intriguing resemblance to those of China, thanks to a myriad of Chinese builders and developers working across the continent. Journalist Michael Hulshof and Shanghai’s own Daan Roggeveen recently published a project researching Chinese urbanism in Africa, dating back to 2013.’
Take a look at the photos. Empty cities anyone?
‘Rent in Nairobi fell marginally in the last quarter of 2015, indicating a rare reprieve for residents, a report by HassConsult indicates. Residents seeking to buy homes for their families or letting, however, continued to pay more in the last quarter of 2015 after asking prices rose by 3.6 per cent quarter-on-quarter. The sales prices for residential property has been rising steadily since the last quarter of 2013.’
‘According to the report, apartments made up 59.6 per cent of rental market in December – five times more than maisonettes and town houses combined. HassConsult linked the oversupply of apartments to scarcity and increases in land prices that have forced developers to build high-density units to maximise land use.’
“Most of the apartments built two years ago are now reaching the market as complete property ready for rental since they are usually sold off-plan,” HassConsult research and marketing chief Sakina Hassanali said. “So whatever was built two years ago was being oversupplied (in the last quarter of 2015).”
Got distorted markets?
‘linked the oversupply of apartments to scarcity and increases in land prices that have forced developers to…’
“[T]he areas of interest were: In Nairobi, mass housing, in Addis Ababa, infrastructure and Special Economic Zones, in Lagos, the Special Economic Zone, in Kigali, the idea of Rwanda as the ‘Singapore of Africa.’”
___________________________/
I’ve often thought that the Chinese, having ruined their own physical environment, would move on to ruin someone else’s physical environment. Kigali, the “Singapore of Africa.” LOL. We’re only about twenty years removed from the mass murder of 800,000 people with clubs and machetes.
The picture of the apartment mega-development in Luanda, Angola says it all. And here we go:
“[T]he Nova Cidade de Kilamba (New City of Kilamba), designed for several hundred thousand people, is home to barely a tenth of that number, earning it the moniker of “ghost town”.
…
Since the first batch of 20 000 apartments went on the market more than a year ago barely more than 4000 have been sold, of which fewer than 600 have actually been paid for – 465 outright and 96 with a mortgage.
Of the flats that have been sold few are occupied, leaving row after row of the newly paved streets empty and much of the 54km2 development bathed in an eerie silence.
The slow take-up of properties is blamed on their high cost – between $120000 and $200 000 each – well out of the reach of the average Angolan, an estimated half of whom live on less than $2 a day.”
http://tinyurl.com/hn3luf8
“Vanessa Watson, an urban planning expert at the University of Cape Town, has written extensively about this dynamic as it plays out in Africa. In Watson’s telling, a long litany of private-sector new city initiatives now spangles the African continent, from the planned Nairobi developments of Konza Techno City and Tatu City, to Ghana’s Appolonia and Hope City, to the Eko Atlantic project in Lagos (“the best prime real estate in West Africa”). Each represents an effort to gussy up the raw economics of land development with the comforting, familiar tropes of the knowledge economy. Each is dashed with the most superficial gloss of technological contemporaneity, right down to the inevitable “Silicon” prefix. And each is more placeless than the last, predicated on a generic model of development that could not possibly have less to do with the actual political, economic or material conditions obtaining in any African society.
…
There we have the new cities of the twenty-first century: buildings without people, people without buildings. Even if the injustice of the situation doesn’t abrade your soul, perhaps the sheer irrational waste of it will.”
http://tinyurl.com/glv8gz7
When this building of empty cities rolls over, the price of oil, steel, cement, coal and copper are going to collapse!
Dry bulk shipping might see some hard times too…
Happy Friday!
keeeeeeeeeeeeeeerank it up to 11, sit back and count your pile o’ cash.
https://youtu.be/sXmrMMYpQL4
Here’s one for you Lolas and Liberaces.
https://youtu.be/bolBQL_ztZo
ok lolas…..lola l-o l-o lola…
https://www.youtube.com/watch?v=rNWQv_DTx_o
I love the smell of Testors Gold Spray Paint in the morning… smells like the Bits Bucket.
“Another homes site fails to fire bidders” in Hong Kong.
The most expensive housing in the world, BTW.
‘Australia’s residential property market could soon be in oversupply with construction at record levels despite falling new home sales. Already, industry observers are calling the boom over, saying prices are flat or falling in all major markets except Sydney which is expected to also weaken soon.’
‘New data from the Housing Industry Association shows new home sales slumped for a third straight month in November, driven by a sharp decline in apartment sales.’
‘Dr Hawtrey said the strong pipeline of activity in construction would continue to support the housing market well into 2016. “Housing prices are now flatlining, or falling, and there is a real sense that the steam is going out of the market,” he said. “Sydney will be the last market to lose that steam, but it is certainly already happening in Melbourne, Brisbane, Perth and other markets.”
‘Sydney will be the last market to lose that steam’
‘The Sydney property boom of the past three years is over, with the harbour city now reporting a sharp decline in house prices over the last quarter. All other Australian capital cities have reported moderate to strong house price growth, except Perth and Darwin which both experienced weakening market activity, according to a recent Domain report.’
“The higher mortgage interest rates initiated mid-year by financial regulators for both investors and owner-occupiers have demolished the previous booming markets of Sydney and Melbourne, whilst house prices continued to fall in Perth and Darwin as a consequence of the slowdown in the mining sector,” Domain senior economist Andrew Wilson said.’
The Australian reporting I’m reading reveals what a stupid casino the housing market has become. “Oh Sydney is dead, but invest in Brisbane!”, like running from one slot-machine to another.
Pahrump is dead, invest in Bend!
rumppump,nv
why do folks object to OOT buyers
no kids in school
not adding to traffic
buy here please
‘Calgary real estate market now has ’strong’ evidence of problems: CMHC
Overbuilding and overvaluation cited as reasons for upgrading assessment from ‘weak’ just 3 months earlier’
Look at the end of the article:
‘Clarifications’
‘An earlier version of this story used the word “collapse” in reference to the potential impacts of the problematic conditions described by CMHC on housing prices. CBC News decided afterward the word “correction” was a more accurate representation of the report.’
Jan 27, 2016
^Censorship like this crushes what life there is left in the economy.
How about the phrase “soft landing”? No one will panic then.
What do grossly inflated prices do to an economy? They collapse demand.
“Peddling Fiction” - US Economy Grew A Paltry 0.69% In The Fourth Quarter, Missing Expectations
http://www.zerohedge.com/news/2016-01-29/peddling-fiction-us-economy-grew-paltry-069-fourth-quarter-missing-expectations
‘In the wake of Amazon.com Inc’s disappointing financial results that sent shares plunging Thursday, analysts blamed rising costs to deliver goods, which increased to $4.5 billion in the quarter, up 24.4 percent from the same quarter last year.’
‘And they sharply questioned the company’s plans to continue to make heavy investments in logistics, even at the expense of profits. They wondered why it was planning to buy more assets like trucks, and reportedly to lease jets, and worried it planned to spend the money to take on shippers like United Parcel Service Inc.’
“The so-called (earnings) miss was half fulfillment and half marketing,” said Michael Pachter, a managing director of equity research at Wedbush Securities.’
“Those carriers are just not able to handle all of the capacity that we need at peak,” Amazon Chief Financial Officer Brian Olsavsky said. “We’ve had to add more of our own logistics to supplement our partners, not to replace them.”
‘But he stopped short of ruling out the possibility of offering shipping to third parties, and did not address an analyst’s question about building its logistics arm into a separate business.’
‘rising costs to deliver goods, which increased to $4.5 billion in the quarter, up 24.4 percent’
Like delivering food via an app, this is more solving a problem that doesn’t exist. Unless one is house bound, why not stop at one of the many redundant retail establishments in your uber cab and pick up that can of almonds? Oh no, it must be delivered on Sunday, one hour after I get a hankering for almonds. Billions will be lavished on this unnecessary hurry and scurry.
Amazon is a symptom of too much money and low yields (QE = deflation). Otherwise “investors” would expect more. The too much money has created a housing bubble increase in stock prices of earning-less companies like uber and the other deca-corns (a term that will burn in peoples memories someday). It’s no different than “safe deposit boxes in the sky”. They aren’t.
Trucks and ads aren’t tech. Renting out your house to strangers isn’t tech. Driving people around in your own car for nickles isn’t tech. Silicon Valley isn’t a leading innovator of squat.
+1
+1+1….
Except for this;
Silicon Valley isn’t a leading innovator of squat ??
I respectfully disagree Ben…
They might be the leading innovator of taking peoples money. With wall streets help of course.
There’s a lot of electronic naval gazing in development there now, but this magical machine and the network we communicate on came out of that valley. There are a few useful things going on there to this day.
The problem with the people’s money is it funds things indiscriminately. People have only the most tangential understanding of the things they are funding. They water the weeds as much as the lettuce. There were a bunch of Chinese backed startups down there over the past year too, many of them so poorly conceived as to not make a ripple in the media, but all competing for talent and driving wages up, increasing the demand for stupid money.
It’s pure, primordial market forces at work, and it ain’t pretty.
Uber and cheap chinese cell phones aren’t “useful” by any definition.
Fact is SV is a fraud driven fantasyland funded with borrowed money. There is nothing useful there. There are no market forces at work in an environment like that.
And Detroit played a big role in automobiles. Do you remember how we were told about Ford paying his workers more so they could afford his cars? They told us that as children because we could understand it even as children. It was simple, holistic. Where does Apple make their phones? Where does Google pay its taxes? I’d say a few things like Musk’s tube transport thing is interesting. It could save us all a bunch of money and time. But take this smartphone I’ve got; I call it a time-waster. It can do sooo many things! So many that I don’t use 99% of them. I see people walking around like Homer Simpson looking down at their little walkie talkies, and I get out of their way because otherwise we’d knock each other down. I found out I’d have to pay 5 bucks a month to put my work email on it. Something I got free with my old smartphone. I ain’t gonna do it. And when this thing craps out I’m going to get a flip phone on one of those pay as you go deals. I don’t need to watch videos at the car shop, they’ve got magazines. I have been whittling down my “plan” and I’ll go data-less eventually. It’s not progress, it’s a waste of time.
Like I said, this “problem” of not having a can of almonds delivered in an hour isn’t really a problem at all. I can walk to a store two blocks away. And that store had olive oil I needed for cooking on Christmas day. I kinda appreciate that little store.
I was just reading an article about a space-start up that was turning away billions because it had too much. It’s just a hunch, but I don’t think I’m going to be doing any space tourism.
“Amazon is a symptom of too much money and low yields (QE = deflation). Otherwise “investors” would expect more. The too much money has created a housing bubble increase in stock prices of earning-less companies”
While I agree with your thesis as it applies to most every company in the universe, this sentiment just doesn’t apply to Amazon. What is the “more” that investors should expect? Is it profits? Because Amazon doesn’t really concern itself with those. It makes plenty of them. But then they are reinvested.
Is Amazon’s stock overvalued? Considering every stock out there is, I’d venture to say yes. But what do stocks derive their price from? It is the net present value of discounted cash flows, right? Who knows what their future cash flows will look like. But what we do know is that Amazon uses today’s cash flows to sell items at a lower price than their peers, and to build itself on a scale that will make all other retailers obsolete.
Your vitriol should not be directed at a company just because it has a sky high stock price. Your anger should be with financial engineering, with reckless borrowing, with careless disregard for the future. Well, Amazon rarely partakes in stock buybacks, and does so on a very limited scale. They rarely borrow, having tapped the debt markets TWICE in their 20+ year history. And their business model is predicated not on a careless disregard for the future, but rather with an obsessive focus on the future at the expense of today’s bottom line.
And finally, as far as it not being a “tech” company, go visit an Amazon Fulfillment Center. I believe there’s one in Phoenix. Your mind will be absolutely blown.
‘Amazon doesn’t really concern itself with those’
I say this as a person who was a controller for a dot-com; the idea that a company doesn’t need to make money is a disease. It should be flogged out of the business world as the snake oil that it is. It destroys companies and their workers, leaving unpaid bills in its wake. I’ve worked for a few; in construction, insurance, media. Every one of them was a disaster that would be bad enough if they only ruined their owners, but instead also gouged financial holes in every company that supplied them. Business only exists to profit. Profit will demand the best of those who seek it. A profitable company will pay its workers well or they will go to the competitor. The concept of profit is the very basis of capitalism, which has given us everything we have. Disregard profit at your peril, and keep your hand on your wallet when someone tells you they don’t need it.
What Amazon is selling is stock. That’s their “profit”, but stock is supposed to be equity. Starts to look kinda ponzi-ish to me.
I have a “smart phone” from work. That silly thing doesn’t even fit in my pocket. It sits on the charger in my office forwarding any calls to my simple flip phone, which does fit in my pocket.
Totally OT but I look at $5 dollar decisions closely sometimes. I look at them in terms of the next 20 years. I figure I can spend 4% of whatever I have saved and my savings will last 20 years. By this reasoning, anything that costs me $5/mo requires $1,500 in savings. Imagine what that would be for you guys with 40 or more years ahead!
Next month I will cancel my curbside trash pickup because of this reasoning. It is convenient and I filled that trolley every week while I was renovating. Now it is one little bag a week and occasionally a load of wood shavings from the hobby. I am not even here half the time. The best option the trash company will offer is a 10% geezer’s discount, which I accepted. The next month they raised rates 10% (back to $35/mo). They are still charging a “Fuel Surcharge”!
There is a transfer station just up the road from me. On inquiry I find that they will take one large bag of trash for $4. That will do me for once or twice a month, and it is on my way to various regular stops. The recycle they take for free. The landscaper on the way will gladly take all my shavings and sawdust for their compost pile.
I have just freed up $8,000 of savings. No idea what I will do with it.
“the idea that a company doesn’t need to make money is a disease. It should be flogged out of the business world as the snake oil that it is”
And I work as an actuary, pricing future risk in today’s dollars. Amazon does not, in any way, think it doesn’t need to make money. It does make money. Billions upon billions. But it immediately reinvests this money, so that the profits it makes in the future are far greater than the profits it could be realizing today.
You see, it’s all about capturing the future to them. It’s not about pleasing the present. And that’s why, in many ways, they are the anti-decacorns you speak of. Those guys are incapable of making a dollar today…and they thus sell you on the notion of their ability to make money down the road. Amazon, on the other hand, makes billions. But they don’t return that money to shareholders and just try to sell you on the future, they take their profits and make the future a reality.
All the bad guys care about the investor and selling snake oil to them. Don’t lump Amazon with those guys. They truly, genuinely care about the customer, and care only to make sure they’ve got every last one in America.
“I have just freed up $8,000 of savings. No idea what I will do with it.”
Buy $6k worth of puts in Tesla and use the other $2k to buy physical gold.
‘it immediately reinvests this money, so that the profits it makes in the future are far greater than the profits it could be realizing today…they don’t return that money to shareholders’
It’s a rolling dry cleaner effect financed on wall street. They destroy profits in one sector of the economy and move on to do it again. They have to keep going because if they ever stopped, the illusion of always growing revenue would vanish and the stock would plummet. Hello Ponzi!
Problem is, it will end somewhere. But only after they ruin countless business that were doing the right things; returning profits to shareholders, providing good paying jobs. This isn’t new; the Japanese were dumping goods at a loss in the 80’s. Congress let them drive a few thousand factories under.
Like globalism, it’s a race to the bottom. There will be no pensions funded. There will be no job security. The margins are so thin at all times the elites shiver every time Christmas sales are a bit down. There’s no buffer when you race to the bottom.
“There will be no pensions funded.”
This is the business I work in. Funding pensions is a very difficult thing these days. Why? Because we have a lot more old people retiring or near retirement age than young working people. Throw in ever lower mortality assumptions, and you have yourself in quite a pickle. Thus most all pensions are far more dependent upon asset returns than they are on contributions from today’s workers. But that’s another discussion for another day.
Amazon is not necessarily a job destroyer. They are putting minimum wage store clerks out of work to be replaced often by far better paying distribution jobs. Amazon has single-handedly given life to the U.S. Postal Service. Single handedly revived the whole darn thing.
I sometimes wonder what it is you guys are after. Is it lower prices? Self-sustaining businesses? Economic growth? So many of your wants are diametrically opposed to the reality you desire. In the case of Amazon, it is putting the inefficient out of business and bringing lower prices to the consumer. This, in turn, will lead to future innovation.
Amazon makes money in its cloud services.
It is spinning its wheels on its consumer sales - it’s trying to become the biggest monopoly but when it gets to the point where it is a true monopoly and can start raising prices, the already present antitrust laws on the books will be a tool to break it up if we choose to use it.
If they didn’t bust Walley World, why would they bust Amazon?
“Amazon makes money in its cloud services…It is spinning its wheels on its consumer sales”
That just isn’t true. It’s earnings GROWTH in Amazon Web Services has indeed been far greater simply because the cloud space does not require the re-investment and scale build out anywhere near that which is required by its fulfillment network. But a vast percentage of these fulfillment costs are being replaced by fees that will be charged to its third party vendors…the company is now warehousing and shipping goods for its vendors. The cost to initiate this initially fell on Amazon…but it will not moving forward.
Your concern about anti-trust issues is a real one. But I’d far rather be concerned about too much market share than not enough. Wouldn’t you?
‘Amazon has single-handedly given life to the U.S. Postal Service’
Why don’t we turn those money losing blue coats over to them entirely then? I remember when the post office had good jobs at good terms. Now they work on Sunday. Progress!
‘I sometimes wonder what it is you guys are after’
Let the markets work. No more easy money. No more bail-outs or too big to jail. Let markets decide the most important price of all, the price of money. That would re-balance the risk-reward problem in the economy. Get the government out of the housing business. The rest will take care of itself. I don’t see why it’s so unreasonable to want a state of affairs that existed just a few years ago. When I started this blog, short term CD’s were in the 4’s, IIRC.
“Let the markets work. No more easy money. No more bail-outs or too big to jail. Let markets decide the most important price of all, the price of money. That would re-balance the risk-reward problem in the economy. Get the government out of the housing business. The rest will take care of itself. I don’t see why it’s so unreasonable to want a state of affairs that existed just a few years ago. When I started this blog, short term CD’s were in the 4’s, IIRC.”
Amen, brotha.
But now we have to figure out how to make something useful out of the millions upon millions of folks employed in the alchemy industries…be it bankers, lawyers or real estate professionals.
“Renting out your house to strangers isn’t tech. Driving people around in your own car for nickles isn’t tech.”
Scanning your own groceries. Allowing workers to be in the office from 6 am to 3 pm so they can commute during times when highways are emptier. Giving up a bedroom in your house in order to “work at home” .
All examples of utilizing unused capacity. That’s all it is.
That said, Amazon is great for finding things that aren’t at the stores.
Exactly. All these things are results of a market economy seeking efficiency and driving down prices.
Amazon stuff is cheap, they have EVERYTHING, and can ship most of it to you free in two days. Is the stock a good investment? I have no idea. Nobody held a gun to my head and made me buy any. I’m happy to let others subsidize my cheap stuff if that’s what’s going on, and happy to see them turn a profit if it falls out that way.
Uber rides are usually cheap, and the service is very good. People driving for them are probably not making much at all after you factor in wear on the car, but nobody held a gun to their heads… except maybe the mythical ‘job creators’ who have been frequent absent ever since the whole trickle down thing started. Is the stock a good investment? I don’t know. Again, I’m happy for the subsidized rides, and hope it works out for the stockholders.
AirBNB is cheaper than a hotel… etc etc…
Without the smart phone, network infrastructure, and code to make this all happen, the cars and rooms would be sitting idle, and I would have to plow through the Computer Shopper like I did in the 90’s when I needed some gadget or other, sit on hold for 10 minutes, make mouth noises at a salesman for 10 minutes, and then wait a week for my prize.
All of those things are designed in the valley, by people that get paid a LOT of money and who pay a LOT of taxes. The manufacturing is in China, because no matter how much they make, people are going to rationally chase the lowest price. Ford’s paying his workers more so they can buy makes sense, but the free market could care less about what makes sense. Consumers seek the lowest cost, which drives producers to cut their costs, which gives workers less money, which makes them more motivated to seek lower costs.
In that context, I can kind of see why the central banks set an inflation target. The free market is deflationary by nature, and human nature dislikes the idea of getting ‘less’ money, even if it buys the same stuff.
‘Ford’s paying his workers more so they can buy makes sense, but the free market could care less about what makes sense’
Globalism is not your friend. Combined with the Empire project they are running in DC, it’ll make us bankrupt eventually. And the globalists don’t give a damn.
The free market IS globalism. The only way to fight globalism is to put up artificial barriers to trade and immigration. I agree the barriers are in the interest of Americans… but those barriers are going to cause distortions in the market.
The only entity that can enforce those barriers is the government, so by necessity you have government interference in the global market, which is frowned upon hereabouts.
How would you have this work?
‘The only way to fight globalism is to put up artificial barriers to trade and immigration’
The only thing artificial here is the WTO and NAFTA. Free trade is globalism is a song and dance the globalists invented. We never used to trade with countries that had crappy labor laws, low pay and polluted like crazy. It’s nuts to have gotten into this and it should end. I can remember the promises; Mexico will develop a middle class and buy our stuff. Same with China.
Oh, and we used to have sunsets on all trade deals to make sure it was working for us. Why is there no such thing for the WTO?
Congress should be voting on trade deals country by country. If I were a trade negotiator, I would tell Apple (a multi-national, not US company BTW) if you want to sell in the US, what are you going to give us? Factories? Come on, you aren’t getting all this business for nothing.
Don’t act like this is some big new thing; we did it this way for over a century and it worked.
” We never used to trade with countries that had crappy labor laws, low pay and polluted like crazy.”
I don’t think that’s true. We used to BE one of those countries, and at that time most other countries were like that too. We traded with them.
Even so, if you rule them out, you’ve applied a restriction to trade, have you not? Who will enforce this? Mr. Market knows nothing of morality or long term benefit at the expense of short term gain. If there is nobody to stop them, the rational players will play with the people with crappy labor laws.
“Scanning your own groceries”
Ironically, we do this at the local farm stand, without the use of phones or computers, and add up the total in our head.
AirheadBNB, Uber, Amazon are all failed money losing ventures. Once the borrowing hits the wall it’s game over for these phony outfits.
Silicon Valley isn’t a leading innovator of squat.
Actually, there is innovation in Silly Valley. It just doesn’t get anywhere nearly rewarded as well as Uber, AirBnB, et al., nor does it get the attention of the press. No one cares about a faster CPU or improvements to virtualization.
Portland, OR Housing Prices Crater 5% YoY
http://www.zillow.com/portland-or-97210/home-values/
From the Vancouver link: ‘In 2014, real estate and construction combined made up 25% of B.C.’s GDP (real estate was 18% and construction was 7%). “I worry about … the government’s reliance on real estate, as a means of keeping our economy strong,” said Carole James, NDP MLA for Victoria-Beacon Hill. “That’s not a long term plan.”
“The government’s preferred response so far, a tax credit for first-time homebuyers for homes up to $500,000, is the opposite of what’s currently needed, Davidoff said. In an active market with a lot of demand and limited supply, that policy will drive up prices further.’
“It’s fine to want to support home owners in B.C., but that’s not an affordability program,” he said. “Adding to demand helps home owners and, because it’s targeted, it helps some people looking for a house, but only people looking to buy. If you’re priced out of ownership and seeing rising rents, they’re actually taking money from you.”
‘The homebuyers’ credit has another risk: it encourages people who might not otherwise be able to afford a home to buy, and that could backfire. “It’s a possibility that prices will continue to rise forever, that might happen, but there’s another scenario where prices fall 20/30/40% from where they are today,” he said. “Then 1000% of your net worth is in a single asset.”
‘He points to a townhome near downtown Dallas he’s handled in the past. In 2009, it sold for $200,000. The same property sold last summer for $304,000. ‘The second one down, same thing’
And this is a mild example of the bubble in the Dallas area.
‘If there were any suggestion that the fears that have gripped stock markets since the start of 2016 were the isolated stuff of paranoid financial investors, that evaporated with Friday’s shocking meeting of the Bank of Japan.’
‘Before the European Central Bank’s own January meeting a week ago, the assumption of many watchers was that the world’s big central banks would try their best to reestablish calm by doing little to tweak their current stances.’
‘Instead, first the ECB’s Mario Draghi and now the BoJ’s Haruhiko Kuroda, stunning economists by cutting interest rates into negative territory on Friday, have sent the clearest of signals that the global economy is again nearing the brink. Three of the big U.S. banks - Morgan Stanley, Bank of America and Citi - all warned this week that the risks of a global recession before the end of 2016 were rising.’
“We’re only one month into the year and two of the major central banks have already surprised markets,” said Nick Gartside from J.P. Morgan’s Asset Management arm. “Both banks are reacting to economic reality. Growth and inflation are meaningfully undershooting targets and more stimulus is needed to get both higher.”
“Our impression is that, rather than dismissing recent developments as transitory, authorities seem rattled and uncertain,” economists from France’s BNP Paribas said in a weekly briefing note.’
The title
Who’s afraid of the big bad recession? We all are
Econ 101: recessions happen every 5 years or so and are necessary for a functioning economy.
“Econ 101: recessions happen every 5 years or so and are necessary for a functioning economy.”
Two problems.
1. The next recession, because it has been kicked so far down the road, will obliterate the world of finance and all the people that work in it. Given these central bankers work for fellow banking scum, not a surprise who they are defending.
2. Though they work for fellow banking scum, central bankers are nominated and appointed by Presidents and Prime Ministers. Recessions don’t keep these politicos in power.
It’s not the next 5 year recession that is coming Flip, it is a generational reckoning.
Indeed. Paging Tom Joad.
Janet Joad Yellen would be suitable.
All this talk of the Joads has me thinking of trying to live off the land…which in turn makes me think of this tune.
http://m.youtube.com/watch?v=8JDhRvdNk_o
The track is taken from Waters’ solo album, The Pros and Cons of Hitchiking, released in 1984. His work on the album dated back to the mid 70’s, and an interesting tidbit…Waters played demos of this work alongside demos of what would become The Wall for his bandmates, and after a lengthy discussion and much disagreement, the band opted to move forward with The Wall.
Listen for Eric Clapton on lead guitar. 6:21 is unmistakable Clapton.