The Housing Bubble

Certainly takes time away from Tinder.

If you are skinning or hiking every weekend you have no time to keep a home tidy and maintained. Better to rent small and live large.

Then Came Bronson?

^^ TRUE THAT ^^

Marketwatch dot com
Why one economist says buying a home is overrated
By Maria LaMagna
Published: Feb 6, 2016 6:21 p.m. ET
Renting isn’t such a bad idea
Now you can diversify.

Is buying a house instead of renting really the best financial decision?

It’s a question that’s frequently debated, with traditional thinking being that renting is akin to throwing money out the window. But there are some good reasons to believe that buying a home instead of renting isn’t as great of an investment as Americans once thought.

“Housing is overrated as a financial investment,” according to economist Alex Tabarrok, an economics professor at George Mason University and a research fellow at the university’s Mercatus Center, which conducts research on financial markets. He addressed the question of what economists think about buying compared to renting on Marginal Revolution, a blog he runs with fellow economist and George Mason professor Tyler Cowen.

“First, it’s not good to have a significant share of your wealth locked into a single asset,” he wrote. “Diversification is better and it’s easier to diversify with stocks. Second, unless you are renting the basement, houses don’t pay dividends. Stocks do. You can hope that your house will accumulate in value but don’t count on it. Indeed, you should expect that as an investment your house will appreciate less than does the stock market.”

Owning a home makes it harder for many people to change locations for new job opportunities, leading to homeowners holding onto homes even while prices fall, Tabarrok said.
…

Marketwatch dot com
SocGen claims China is only months away from burning through its currency reserves
By Sue Chang
Published: Feb 4, 2016 1:47 p.m. ET

Beijing may be forced to float the yuan within six months
ChinaFotoPress via Getty Images
China’s reserves may not be sufficient if its chickens come home to roost.

China is burning through its foreign-currency reserves at such a blistering pace that the country will run down its cushion in a few months, forcing the government to wave the white flag and float the yuan, says Société Générale global strategist Albert Edwards.

“The market remains content that massive firepower remains to support the renminbi. It does not,” Edwards, a perma-bear with a propensity for doom-and gloom-prognoses, said in a report published Thursday.

Société Générale, using the International Monetary Fund’s rule of thumb on reserve adequacy, estimates that China’s foreign-currency reserves are at 118% of the recommended level. But that cushion is likely to evaporate soon on a combination of capital flight and the continuing effort by financial authorities to stem a dramatic drop in the currency.
…

It’s PBOC vs. the Yuan shorts (i.e. Soros & the Hedge Funds). Got popcorn?

http://www.zerohedge.com/news/2016-02-05/pboc-wins-battle-yuan-surges-highest-2016-currency-war-not-over

Marketwatch dot com
Opinion: Is the ‘Trump bubble’ bursting in New Hampshire?
By Brett Arends
Published: Feb 5, 2016 5:28 a.m. ET

You might just make money betting against the supposed front-runner

Donald Trump is supposed to have an unbeatable lead in the Feb. 9 New Hampshire primary.

Phooey.

The polls were taken before he chickened out of the Iowa debate.

The polls were taken before he lost the Iowa caucus to Ted Cruz.

And the polls were taken before he started whining on Twitter that Cruz “stole” the caucus and should be disqualified.

New Hampshire is a famously fickle primary.

The voters pay attention to these things, they are unimpressed by front-runners, and they are willing to change their minds.

Hillary Clinton stunned the conventional wisdom in 2008 by snatching it at the last minute from a surging Barack Obama. John McCain trounced George W. Bush there in 2000. My brother, who used to be active in these things, reminded me this week that Walter Mondale had a supposedly “unbeatable” lead in New Hampshire back in 1984 and then Gary Hart came from nowhere and cleaned his clock. And, of course, it was New Hampshire that derailed past front-runners like Sen. Ed Muskie in 1972 and sitting president Lyndon Johnson in 1968.

The last 10 days have taken plenty of shine off the Donald Trump limousine and it’s going to be fascinating to see how this plays out in the Granite State. The Trump bubble may be bursting.

And there may be money in this as the bookmakers, so far, are still reading last week’s polls.
…

Iowa does that to candidates. Trumpertantrums. Brought to you by Howard Dean Moments, Inc!

I will take Bernie over Hillary any day. I will also vote for Trump over any of the Neocon stooges.

Marketwatch dot com
Donald Trump leads another poll, but he won’t be bragging about this one
By Shawn Langlois
Published: Jan 31, 2016 10:39 p.m. ET

The latest poll numbers are in, and Donald Trump, once again, is the clear leader. But don’t expect the “You’re fired” mogul to be tweeting out these results anytime soon.

According to Gallup, most of Americans don’t like him. In fact, three out of every five people polled view the Donald unfavorably. That’s the worst tally since Gallup began tracking the data back in 1992. George H.W. Bush and his 57% can rest easy, having given up that dubious distinction.

Interestingly enough, while Trump does lead in the good kinds of polls, too, his unfavorable rating is by far the highest among all his Republican competition.

“The bottom line is that Trump now has a higher unfavorable rating than any candidate at any time during all of these previous election cycles,” Gallup’s Frank Newport said. “And that conclusion takes into account the fact that unfavorable ratings tend to rise in the heat of a general election campaign as the barbs, negative ads and heightened partisanship are taken to their highest levels.”

Trumps numbers are pretty dismal, even relative to presidents at their worst levels outside of election years. For some perspective, Bill Clinton reached a high of 59% unfavorable rating in March 2001, shortly after he left office, and George W. Bush hit 66% during his lame-duck year in office.

There is, however, a silver lining for Trump. His potential rival for the White House, Hillary Clinton, really didn’t fare a whole lot better, with 52% feeling negative toward her.
…

BloombergBusiness
With Liftoff Done, the Fed Revisits a $4.5 Trillion Quandary
Craig Torres
January 15, 2016 — 2:16 PM PST Updated on January 16, 2016 — 11:15 AM PST
Stanley Fischer, vice chairman of the U.S. Federal Reserve.
Photographer: Andrew Harrer/Bloomberg
Fischer wants to use balance sheet to lean on long-term rates
Market turmoil may push back rate rises, balance-sheet plans

Federal Reserve officials who spent months debating their first interest-rate increase in almost a decade are turning next to the thorny question of what to do with a balance sheet equivalent to the size of Japan’s economy.

A month after liftoff, turmoil in global financial markets has pushed out expectations for more rate hikes and raised concern about what tools are available to fight the next downturn. Vice Chairman Stanley Fischerhas suggested the $4.5 trillion balance sheet could be maintained as a way to hold down longer-term Treasury yields while the short-term policy rate was lifted.

Fischer’s idea — discussed in a Jan. 3 speech partly on strategies for pulling the short-term rate away from zero — was taken up in more practical terms by New York Fed President William C. Dudley Friday. Reinvesting maturing bonds and putting off a reduction in the balance sheet until the federal funds rate is raised somewhat higher “makes sense,” Dudley said.

“Having more ‘dry powder’ in the form of higher short-term interest rates seems more desirable than less dry powder and a smaller balance sheet,” he said.

Fed Chair Janet Yellen made similar comments in her Dec. 16 press conference, meaning the three most senior officials still view the central bank’s vast holdings of debt as an active policy tool rather than a relic of the financial crisis that needs to be shrunk as soon as possible.

Safer Choice

“Dudley’s view is if we get to choose our tool” to tighten policy, “then we are going to choose interest rates,” said Michael Hanson, senior economist at Bank of America Corp. That’s the safer choice, Hanson said, because officials are highly uncertain what shrinking the balance sheet would do to financial markets.

The preference to maintain trillions in bond holdings for months to come, however, isn’t likely to be popular with all Federal Open Market Committee participants. Richmond Fed President Jeffrey Lacker favors an “expeditious” unwinding of the Fed’s bond holdings.
…

Top News
Mon Jan 18, 2016 | 2:00 AM EST
RPT-Rate rise calls evaporate as markets plunge, murmurs of Fed reversal

* 10-year Treasury yield below 2 pct

* Global economy, markets fragile

* Recent history shows policy can be reversed

By Jamie McGeever

LONDON, Jan 15 (Reuters) - The worst ever start to a year for financial markets has left traders and economists rethinking the global monetary policy outlook, with some predicting the Federal Reserve will quickly reverse last month’s historic rate rise.

The Fed lifted U.S. interest rates for the first time in nearly a decade on Dec. 16, signalling its faith that the economy had finally put the 2007-08 financial crisis behind it.

Ferocious volatility fuelled by worries about China’s currency and stock markets has since wiped trillions of dollars off world stocks, however, while a slowing China has exacerbated worries about the robustness of U.S. economic growth.

Interest rate futures traders are already paring back their expectations of when the Fed might tighten again while several big banks this week dovishly revised their 2016 outlooks for the Bank of England, European Central Bank and Bank of Canada.

“You shouldn’t underestimate that a change in where the market sees rates going could happen pretty quickly. Another month of what we’ve seen this year, and we could be there,” said Steve Barrow, head of G10 strategy at Standard Bank in London.

The Fed made clear when announcing “liftoff” that it broadly anticipated four further 25 basis point increases this year, a view echoed by Fed officials in recent speeches.

The latest Reuters poll of 120 economists points to the federal funds rate, currently 0.25-0.50 percent, reaching 1.00- 1.25 percent by the end of the year and rising more in 2017.

But U.S. interest rate futures markets show barely two rate hikes priced in for this year, while the 10-year Treasury yield has slumped below 2 percent. It was 2.30 percent when the Fed raised rates last month.

The timing of any volte face from the Fed isn’t yet reflected in market pricing, and examples from Sweden, Australia and the euro zone — where central banks were forced to reverse rate hike cycles — show it may not be until the last minute.

All those central banks raised interest rates after the 2008 crisis, but now have them at historic lows — below zero in the case of Sweden.

“The markets don’t believe the Fed. I said at the time of the December raise it was a mistake and gave a 50/50 chance that the next move would be a cut,” said David Blanchflower, professor of economics at Dartmouth College in New Hampshire and a former Bank of England policymaker.

“September may be the meeting when we see a cut, but maybe sooner if markets continue to collapse.”

Some $5.7 trillion has been wiped off the value of world stocks in the first nine days of the year, according to Bank of America Merrill Lynch.

UNDER PRESSURE

Joe Lavorgna, chief U.S. economist at Deutsche Bank in New York, says there have been 12 tightening cycles over the past 60 years, averaging 24 months during which the fed funds rate has risen 531 basis points.

But economies worldwide are still scarred by the financial crisis, which prompted the Fed to expand its balance sheet by $4 trillion and hold rates at zero for almost seven years.
…

Top News
Wed Feb 3, 2016 | 4:37 PM EST
Conservative investors get welcome boost from U.S. Treasury yields
By Trevor Hunnicutt

NEW YORK Feb 3 (Reuters) - The strong dollar, weak oil markets, a corporate-bond sell-off and stalling global economy are a toxic mess for most U.S. investors.

But these trends are delivering a welcome boost to the portfolios of conservative investors hunkered down in investments sensitive to U.S. Treasury yields.

Such investors have weathered years of predictions that the three-decade-long bull market in bonds was over, and that their positions were doomed should tighter monetary policy from the U.S. Federal Reserve lift rates.

The opposite has happened. Funds such as the $193 million Touchstone Total Return Bond, with stronger weighting to rate-sensitive U.S. agency debt and less exposure to corporate bonds, are winning.

“There are some structural forces out there that are keeping interest rates down and people are finally coming to realize it,” said Crit Thomas, a senior strategist for Touchstone Investments. The fund’s institutional shares returned 1.56 percent this year through Tuesday, according to Morningstar Inc, ahead of 90 percent of its competitors.

“It’s just taken a long time to get there,” Thomas said.

Yields on benchmark 10-year Treasury debt sank from nearly 2.28 percent at the year’s close to 1.88 on Wednesday afternoon, a 17 percent slide. Bond yields move inversely to their prices.
…

Morgan Stanley sees big plunge in Treasury yields
Jeff Cox
Mon, 25 Jan ‘16 | 2:25 PM ETCNBC.com
‘Boring, but beautiful’ stock picks

If early returns hold, 2016 is shaping up as another year where the bond market’s demise has been greatly exaggerated.

Numerous forecasts around Wall Street warned investors away from fixed income, particularly longer duration U.S. government issues. The thinking was that the Fed’s rate-hiking trajectory would push up Treasury yields, eroding prices and sending investors to bond-like equities.

That theory has pretty much blown up in January.

Wobbly economic growth coupled with slumping oil prices and contagion fears from a hard landing in China substantially lowered expectations for rate hikes. With stock market indexes tumbling, investors have flocked to bonds as a safe haven. Funds that track long-dated Treasurys have crushed the stock market and lured in strong investor cash flows.

While many of their colleagues on the Street warned investors to avoid long-dated bonds, Morgan Stanley strategists believe government fixed income both in the U.S. and a number of other countries represent great value.
…

“Is the dollar toast, given that liftoff is once more on indefinite hold?”

The USD one-year chart …

http://finviz.com/futures_charts.ashx?p=d1&t=DX

ft dot com
Last updated: February 5, 2016 1:39 pm
Government bond yields send recession signal
Elaine Moore in London, Robin Wigglesworth in New York and Leo Lewis in Tokyo
Universe of negative yielding debt grows beyond $5tn as central banks indicate further easing

If major government bond markets are right, the global economy is sliding towards recession and central bank easing policies will pull borrowing rates deeper into negative territory.

In Germany, the average yield on all government debt is now negative, while Japan is on course to become the first major bond market with a 10 year bond that yields nothing. In Europe and Japan, government bonds worth nearly $6tn now trade at such highs that buyers will make a loss if they hold the paper to maturity.

Across the Atlantic, talk of recession risk has grown louder in recent weeks among investors, with the 10-year Treasury yield, touching a nine-month low of 1.80 per cent this week.

“At these levels the bond market is forecasting recession,” says Marcus Brookes, a fund manager at Schroders. “The Janet and John way to explain it is that for the next 10 years you have to think inflation will be much, much lower than 2 per cent to want to buy these bonds. Otherwise you’d be locking in a loss.”

Many investors began 2016, expecting firmer growth, led by the US and from consumer spending buoyed by cheap energy. In a few weeks, the outlook has deteriorated. Global equity and corporate bond markets have been hit, with investors heading for the exit, alarmed by China’s slowdown dragging on global trade.

At such moments, demand for government debt that pays out a fixed income accelerates but has the current rally in sovereign bond prices already run too far?
…

Markets | Fri Feb 5, 2016 9:26am EST
Yield curve moves flash global recession warning signs
LONDON | By Jamie McGeever

If the bond market is to be believed, the world is heading for recession.

The turmoil sweeping through financial markets this year, principally driven by the plunge in oil prices and fears over China’s economy, has lowered government bond yields and flattened yield curves across the developed world.

The question is whether the “yield curve” retains its historical predictive power of indicating slowing growth or even recession in a world of zero - even negative - interest rates, negative yields and trillions of dollars of central bank stimulus coursing through the financial system, if not the real economy.

Longer-dated yields on a country’s bonds should normally be higher than short-dated ones because investors demand a higher rate of compensation for the increased credit and inflation risks they assume in lending over a longer timeframe.

This is a “positive” yield curve, “steepening” from left to right. But curves are flattening - short-term yields are anchored by expectations policy rates are going nowhere fast and falling growth and inflation expectations are depressing longer-term yields.

“It’s a little more complicated than it used to be. The shape of the yield curve today is very much a function of global central bank activity – negative rates and quantitative easing. This changes the mechanics of the yield curve with respect to pure growth and inflation signals,” said Lena Komileva, managing director at G+ Economics in London.

“But it does suggest a capitulation in investor confidence in the ability of central banks to reflate global growth or prevent another downturn. And that’s not a good confidence signal,” she said.

The U.S. two-year/10-year yield curve, the difference between two-year and 10-year borrowing costs, this week fell to 110 basis points, the flattest in eight years.

The 10-year yield fell below 1.90 percent and is down more than 40 basis points since the Federal Reserve’s historic interest rates “liftoff” in December.

A flattening yield curve has in the past been a reasonably accurate portent of slowing growth and an inverted curve, when the long-dated yield falls below the short-dated yield, an even more accurate guide to looming recession.
…

You may get a whiff of libertarianism, but like a fart in the wind it is soon eclipsed by the rotting corpse aroma of neocon ideology.

That pretty much describes the GOP, doesn’t it? How long can libertarians stay in the neocon war party? What are they even doing there? Are they really libertarians?

There is nothing libertarian about the GOP.

“Islam has always been a part of America.”

“Oceania has always been at war with Eastasia”

“the refugee toilet is ideal for the globalised defecation.”

we are dominated by the relatively small number of persons…who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.”

It is they who know…The Secret!

Thank You for that public service announcement, Mr. Banker. It has an Outer Limits quality to it. The Power Elite, It is they who pull the wires which control the public mind. It’s proving to be quite impossible to disconnect that wire from the minds of others. It’s like people are immune or allergic to reason, logic and facts. That’s, DreamTime, the stuff which makes bubbles resilient and grow. I should try harder to take the advise of others and just, ‘Tend Your Own Garden’. That’s all there is.

95% of ‘Muricans find ignorance a rather blissful state, and shun knowledge and wisdom like the plague.

Interesting coincidence how Bernays published his book just before the rise of Hitler.

I have a vague recollection that he was Sigmund Freud’s close relative…

lol@BarneySanders

people are forced to do is go to payday lenders who charge outrageously high interest rates. You go to check-cashing places, which rip you off.

But ripping off poor people is the American Way. This guy is a commie, he wants to help the poor.

This idea isn’t new. When I was kid (in the Fifties) there was such a thing as “postal savings” and I knew some people who had their savings deposited there - deposited there in the post office. Apparently there still exists this postal savings idea …

Wiki:

“Many nations’ post offices operated or continue to operate postal savings systems to provide depositors who do not have access to banks a safe, convenient method to save money and to promote saving among the poor.”

Is it really “very difficult”? There is a Bank of America about a mile from Florence and Normandie where Reginald Denny was dragged from his truck, beaten, hit in the head with a brick and almost killed.

and he’s neck n neck w the other socialist that most here will vote for
webb vs Rand may have been educational

Oh man my experience with the postal service has mostly been laughably bad?

Yeah, because we don’t have enough banks.

I walked 5 minutes to grab my lunch, and walked past 2 banks. If I changed my vector to a different lunch spot, I would have walked past a different 2 banks plus a credit union.

How about closing up smaller traditional post offices, and opening more smaller locations within grocery stores? Maybe instead of losing money, the USPS can start making it?

What they really need to do is allow more creative things in banking like “prize-linked” savings accounts.

People don’t need access to more banks, they need to save more money in the banks we have.

Rather than entice people to save money by offering them $0.10 of interest on $100 in savings for a year, they pool all the dimes, and give the person who has that same $100 a 1 in a 10,000 chance at hitting a $1,000 jackpot.

It has proven to increase the number of people who save money.

“The business model of Wall Street is fraud.” -Bernie Sanders, 2/4/2016 (who lives rent free simultaneously in both phony and HA’s heads, surprisingly, since he won’t even be the Dem primary winner)

Are you sure?

“The country’s labor force participation rate – which measures the share of Americans at least 16 years old who are either employed or actively looking for work – dipped last month to a 38-year low”

http://data.bls.gov/timeseries/LNS11300000

Food Stamps Still Feed One in Seven Americans Despite Recovery

Alan Bjerga
February 3, 2016 — 5:00 AM EST

That’s super anemic. The graph of jobs added shows, up, down, up down up down for at least the last year.

It looks like a Wiz Khalifa refrain, up down up down up down. All I do is win, win, win.

“51 percent of all American workers make less than $30,000 a year”

Forward!

The zombies don’t have jobs, they are the ones on the dole. The ones getting the new low wage jobs are the other characters from The Walking Dead, Rick, Michonne, Daryl, etc. just eaking out an existence.

The big story yesterday from someone was about Walmart shutting hundreds of stores, presumably eliminating thousands of retail jobs.

Analysis / Freight / New lows hit by Baltic Dry Index
New lows hit by Baltic Dry Index
The cost of shipping dry goods across the ocean continues to explore uncharted waters, with the Baltic Dry Index now below 300 points for the first time ever.
By Phil Franz-Warkentin
Published: 05 February 2016 11:42 AM

The Baltic Dry Index (BDI) was quoted at 298 points on Thursday (February 4), marking a new low since records beganin 1985. The index was trading above 1,200 as recently as the beginning of August, 2015, but has struggled ever since with “new record lows”
…

Baltic Dry Index Headed for the 200’s
February 3, 2016 by Reuters

Feb 3 (Reuters) – The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying industrial commodities, tumbled to another fresh low on Wednesday on worries about vessel oversupply and slowing global demand.

The overall index, which gauges the cost of shipping dry bulk including iron ore, cement, grain, coal and fertiliser, fell seven points or 2.26 percent to 303 points.

The index has yet to register a single session of gains this year, recording new lows in 21 of the 23 sessions.

A slowdown in the Chinese economy, which grew at its slowest pace in a quarter of a century in 2015, and a huge over-capacity in vessels has hit the index hard.
…

Baltic Dry Index falls to 297, down 1 points.
in Dry Bulk Market 05/02/2016

Today, Friday, February 05 2016, the Baltic Dry Index decreased by 1 points, reaching 297 points.

Baltic Dry Index is compiled by the London-based Baltic Exchange and covers prices for transported cargo such as coal, grain and iron ore. The index is based on a daily survey of agents all over the world. Baltic Dry hit a temporary peak on May 20, 2008, when the index hit 11,793. The lowest level ever reached was on Friday, February 05 2016, when the index dropped to 297 points.

Source: Hellenic Shipping News Worldwide

THE WALL STREET JOURNAL
Business
Dry-Bulk Shipping Firms Face Unprecedented Crisis
Companies selling vessels to survive
By Costas Paris
Updated Jan. 20, 2016 1:13 p.m. ET

LONDON—Falling demand from China is wreaking havoc among the world’s biggest shipping companies, forcing some to offload vessels at a discount to survive one of the industry’s deepest crisis.

“Things have just stopped in China,” said George Logothetis, chairman and chief executive of the Libra Group, an international shipping firm.
…

NIKKEI ASIAN REVIEW
February 5, 2016 2:30 pm JST
Commodities Eye
Dry-bulk shipping under water as bankruptcies rise
Michael Sainsbury, Asia Regional Correspondent
A container ship at a port in Tokyo © Reuters

BANGKOK — The global commodities bust has rocked the dry-bulk shipping industry, with a wave of bankruptcies washing across the sector and major players forced to restructure, divest or scrap assets.

On Jan. 5, the Shanghai International Shipping Institute issued a striking report after polling about 50 of the nation’s largest bulk shippers. The survey concluded that more than 60% of the firms it polled were struggling with long-term losses and about 40% faced liquidity problems.

“The market is extremely depressed and these conditions are likely to continue in 2016, exacerbating dry bulk firms’ losses, increasing costs and creating obstacles to obtaining financing. This will kick-start a wave of bankruptcies,” government-run SISI said in the report.

Already so far, more than half a dozen shipping companies from countries including Hong Kong, China, South Korea, Japan and the U.S. have filed for bankruptcy in the past two years. In 2015, bankruptcies gathered pace as orders dried up while new ships continued to enter the market.

Japan’s fifth largest dry-bulk shipping company Daiichi Chuo Kisen and its wholly owned subsidiary Star Bulk Carriers Co. filed for bankruptcy in September. Prior to that, in the first quarter of 2015, privately owned Danish company Copenship, South Korea’s Daebo International Shipping Co., China’s Winland Ocean Shipping Corp. and Hong Kong-based Shagang Shipping filed for bankruptcy proceedings.

The bad news rolled on into 2016. Japan’s “Big Three” shipping companies — Mitsui O.S.K Lines, Nippon Yusen and Kawasaki Kisen (K Line) — all slashed their earnings outlooks drastically in January.

Mitsui said that for the year ended March 2016, it expected to now report a consolidated net loss of 175 billion yen ($1.47 billion) from a previously projected profit of 17 billion yen. It will book 180 billion yen in extraordinary losses due to the retirement of vessels and other restructuring expenses.

Executive Officer Hideo Horiguchi told reporters the company had to streamline operations “because shipping fees of container and bulk vessels are unlikely to recover due to the Chinese economy’s slowdown and the deteriorating economies of Russia, Brazil and other natural resource [producing] countries.”
…

MarineLink dot com
Dry-Bulk Shipping: Hitting the Bottom
By Aiswarya Lakshmi
Friday, February 05, 2016
File Photo: China COSCO Bulk Shipping (Group) Co

Dry bulk shipping companies being hit the hardest on account of the deteriorating business climate are likely to be swept by a new wave of bankruptcies, reports Nikkei.

The global commodities bust has rocked the dry-bulk shipping industry, with a wave of bankruptcies washing across the sector and major players forced to restructure, divest or scrap assets.

Many in the industry had hoped it would start to recover this year. But there is not much sign of that—and it looks as if more pain is still in store for shipowners.

On Jan. 5, the Shanghai International Shipping Institute issued a striking report after polling about 50 of the nation’s largest bulk shippers. The survey concluded that 60% of the firms it polled were struggling with long-term losses and about 40% faced liquidity problems.

“The market is extremely depressed and these conditions are likely to continue in 2016, exacerbating dry bulk firms’ losses, increasing costs and creating obstacles to obtaining financing. This will kick-start a wave of bankruptcies,” government-run SISI said in the report.

Small dry bulk shippers have already started filing for bankruptcy. Japanese bulk carrier Daiichi Chuo Kisen Kaisha filed for protection from creditors on September 29, and Global Maritime Investments Cyprus Ltd. filed for Chapter 11 bankruptcy protection in the United States on September 15.

According to Freight Investor Services, “The world’s fleet of dry bulk carriers has grown 84% since 2013 while bulk cargo demand has grown by only 33% in the same period and is set to grow by 1–2% for the next several years.”

According to the Chinese shipping sentiment survey, more than 60% of the 50 dry bulk shipping companies surveyed were coping with long-term losses and nearly forty percent of the companies were facing long-term liquidity problems.

What is more, a considerable number of dry bulk shipping companies are stretched to the edge of bankruptcy.
…

A warning for commodity markets
in Commodity News 05/02/2016

The plummeting Baltic Dry Index, a daily indicator which tracks the shipping rates for dry bulk goods such as coal and iron ore, does not necessarily mean trade in commodities is collapsing.

The index, considered a bellwether for the global economy, hit an all-time low of 310 points this week and has yet to register a single session of gains this year. After hitting a peak of 11 793 points in May 2008, it has come under pressure from the financial crisis and slowing economic growth in China.

According to Peter Sand, Chief Shipping Analyst at BIMCO, the index’s current lows are a reflection of the overall state of the dry bulk shipping market. Shipbuilding, ramped up to service the commodities boom, has led to a high imbalance between supply and demand. In 2015, dry bulk shipping capacity of 50m deadweight tonnes (DWT) was added, while only 30m DWT was removed. BIMCO expects continued growth in capacity this year. “Unless the supply side adjusts accordingly, freight rates will continue to come under pressure,” said Sand.

He further said that freight rates are likely to recover by year end: “The first quarter is traditionally the weakest in terms of demand and the fourth quarter is the strongest.”

But the slump in bulk commodity prices hasn’t translated into increased trade. Data, from shipping services company Clarksons, shows world trade in dry bulk fell 0.3% year-on-year to 4.7bn tonnes in 2015. The weighted average earnings for a range of bulk carriers decreased 27.9% to $7 123 per day over the same period.

Freight in iron ore and coal, comprising a third and a quarter of dry bulk trade respectively, slowed the most in 2015 (see chart below).
…

Breed children that you can’t afford and this is what you get.

P.S. Bill in Los Angeles = WIN.

“$30,000 a year, and poverty…”

“…midsize homes (by U.S. standards, 1,480 square feet); electricity and high-speed Internet; cars and enough money for gasoline; food for a family of four; and enough disposable income to periodically dine out and attend movies or other events.”

“U.S. workers would need hundreds of dollars in additional income”

We’ve been so spoiled by a generation long credit binge.

In the 1950s my solidly middle class family of four lived comfortably in less than 1000 ft2 house. We had a car and a phone and actually a B/W TV. Long distance calls were made with an egg timer running. Eating out was Sunday dinner at Grandma’s. Saturday there was free music in the village park and we usually walked to do our shopping. There was no debt. There were no school busses.

What we now call poverty is a higher standard of living than what was middle class then.

Listen to your betters:

http://www.infowars.com/feinstein-youre-not-a-real-journalist-unless-you-draw-a-salary/

remember the Loindon olympics
NHS parade
” no worse tyrany than being forced to pay for the speech of others”

PSA

No we know who the betters are. Why they don’t want their kids to call them Daddy remains a mystery.

Ray K …
this….

http://www.zerohedge.com/news/2016-02-05/70-jobs-added-january-were-minimum-wage-waiters-and-retail-workers

And our illustrious leader of unicorns and lollipops was cheerleading a bit ago today about how the pom pom squad is doing - 4.9% U3 and increasing hourly wages. I guess in obama world a wage increase of 8.25 an hour from nothing is indeed an increase. Sheesh!!!

http://wwwtheworldandeverythinginit.blogspot.com/2016/02/president-obama-delivers-statement-on.html

11k baby boomers turn 65 each day for the next 15 yrs.

who are these 94 mill? We have help wanted signs up all over the place. Some people refuse to work. others are toothless zombies with no skills.

You ain’t seen nothing yet.

LinkedIn and others.

I still don’t get why these electronic bulletin boards are “tech”. And how does LinkedIn make money anyway? By placing ads on their webpage?

It ain’t a’kraterin’ until DOW passes 10,000…

Time shares are horrible “investments.” I go to the sales pitches and get free crap and stays, never ever buy!!

IIRC, that number was approaching 50 million at one point a few years ago.

I like food stamps. Only $160 a mo, spent locally on food, keeps the zombies out of jail at $50k a yr.

but I am a fiscal conservative.

This has nothing to do with “our strength”. Your understanding of diversity is also strange.

Wake up, sheeple!

It allows people to think that they’re in that elite 5%. That makes them feel good about themselves, which is a great feeling.

Of course, if you buy into that bell curve theory, most people are pretty close to average.

Because there is a .95 probability they are stupid, stupid!

How can everyone think that 95% of America is stupid?

If you are a member of the 99% and you voted for Oligopoly water carriers Obama, MCain, or Romney, that is prima facie evidence of stupidity.

I don’t. I think 95% of American voters are stupid. Most people don’t vote. The no voters are the most intelligent Americans.

It gets more expensive each year.

Dwight Eisenhower played almost 800 rounds during his eight-year presidency, according to a study of his daily itinerary cited in Golf Digest — many times what Obama has played.

And Eisenhower is not even the No. 1 golf-playing president. Woodrow Wilson played nearly 1,200 rounds during his two terms. Wilson “played more rounds of golf than any president in history,” said Wilson’s biographer, A. Scott Berg.

He would’ve cost us far more than that had he been sitting in the Oval Office coming up with bright ideas for more hope ‘n change.

Has Infowars ever added up how much a white president spent on vacations?

“I used to do drugs. I still do, but I used to, too”
- Mitch Hedberg

If you read up about it, it looks like it was a project of the state gov, under a GOP governor. We’ll find out, this sucker is going to the courts.

until the election for sure. if clinton wins it will be the same old.

No president will end private gun ownership. Lead in my skull or torso will end my private gun ownership.

Politics
July 31, 2015
Journalist Details Donald Trump’s ‘Extensive’ Mob Ties
Mike Bessler

At virtually every turn in the early months of the presidential primary season, Donald Trump has looked and functioned like some sort of Teflon-coated candidate.

Despite ruffling feathers with comments about veterans and Mexicans, as well as a spate of controversies over dated allegations of misogyny and marital rape, Trump’s poll numbers continue to rise week after week. Now, an investigative journalist is raising questions regarding the real estate mogul’s business ties to organized crime with a report that could ultimately affect Trump’s appeal to voters.

Wayne Barrett, a New York journalist who wrote a 1992 unauthorized biography of Donald Trump, recently spoke to CNN, sharing his findings regarding the presidential candidate’s past business relationships with gangsters. In presenting Barrett’s findings, CNN noted that Trump’s ties to organized crime allegedly involve documented endeavors with mob-controlled construction companies in New York and Philadelphia during the 1980s and 1990s.

“There was a certain amount of mob association during which the father and he were building, which was very difficult to avoid in the New York construction world,” Barrett told CNN, “He went out of his way not to avoid them, but to increase them.”

The Federalist also took an in-depth look at the possibility that Trump may have dealt with some unseemly characters and entities over the course of his storied career. Once again drawing on the work of Wayne Barrett, reported David Marcus traces The Donald’s earliest entanglements with the mob to a real estate purchase from notorious Philly mobster Salvatore Testa. He also details Trump’s apparent connections to Philly crime boss Nicodemo “Little Nicky” Scarfo and convicted murderer Phillip “Crazy Phil” Leonetti, who were apparently involved in the construction of Trump Plaza in Atlantic City.
…

News Nation & World
Trump swam in mob-infested waters in early years as an NYC developer
Throughout his early career, Donald Trump routinely worked with mob-controlled companies and unions on his projects.
(Seth Wenig / AP)
Robert O’Harrow Jr.The Washington Post

As billionaire developer Donald Trump became the toast of New York in the 1980s, he often attributed his rise to salesmanship and verve. “Deals are my art form,” he wrote.

But there is another aspect to his success that he doesn’t often discuss. Throughout his early career, Trump routinely gave large campaign contributions to politicians who held sway over his projects and he worked with mob-controlled companies and unions to build them.

Americans have rarely contemplated a candidate quite like Trump, 69, who has become the unlikely leader among Republican Party contenders for the White House. He’s a brash Queens-born scion who navigated through one of the most corrupt construction industries in the country to become a brand-name business mogul.

Much has been written about his early career, but many details have been obscured by the passage of time and overshadowed by Trump’s success and celebrity.

A Washington Post review of court records, testimony by Trump and other accounts that have been out of the public eye for decades offer insights into his rise. He was never accused of illegality, and observers of the time say that working with the mob-related figures and politicos came with the territory. Trump declined repeated requests to comment.

One state examination in the late 1980s of the New York City construction industry concluded that “official corruption is part of an environment in which developers and contractors cultivate and seek favors from public officials at all levels.”

Trump gave so generously to political campaigns that he sometimes lost track of the amounts, documents show. In 1985 alone, he contributed about $150,000 to local candidates, the equivalent of $330,000 today.

Officials with the New York State Organized Crime Task Force later said that Trump, while not breaking any laws, “circumvented” state limits on individual and corporate contributions “by spreading his payments among eighteen subsidiary companies.”

Trump alluded to his history of political giving in August this year, at the first Republican debate, bragging that he gave money with the confidence that he would get something in return.

“I was a businessman. I give to everybody. When they call, I give. And you know what? When I need something from them, two years later, three years later, I call them. They are there for me,” he said. “And that’s a broken system.”

As he fed the political machine, he also had to work with unions and companies known to be controlled by New York’s ruling mafia families, which had infiltrated the construction industry, according to court records, federal task force reports and newspaper accounts. No serious presidential candidate has ever had his depth of business relationships with the mob-controlled entities.
…

January 24, 2016, 11:10 am
Trump defends shooting comments
By Keith Laing

Republican presidential front-runner Donald Trump on Sunday defended his comments about being able to shoot someone and retain support from GOP voters.

Asked during an appearance on CBS’s “Face The Nation” about his declaration that “I could stand in the middle of 5th Avenue and shoot somebody and I wouldn’t lose voters,” Trump said the comments were intended to demonstrate the durability of his polling advantage ahead of early voting in states like Iowa and New Hampshire.

“Well, I have a very great group of people … I have people that are so loyal and it’s been so reported and even in your poll, but in a lot of the polls they do that, the loyalty factor,” he said.

“And my factor’s up. When you add it all up, it’s pretty much close to 90 percent,” Trump continued. “These are people that just won’t leave, they will not leave. I love my people. And it’s a great thing. I mean, it’s a great thing. Far greater loyalty than any other candidate by double, triple, quadruple, and I love my people.”
…

This sort of post smacks of you serving as a self-appointed anti-Trump troll. I don’t think spreading rumors and jawbones is going to make Trump go away.

I won’t even listen. She is a zero. Like all presidents. All zeros.

Why do you hate women?

“Does Hillary take testosterone treatments to make her voice seem more manly?”

Cankleist

Testosterone doesn’t produce whiney nasally sounds, it brings the base.

In other news, this real professor has been forecasting a San Diego slowdown since August. Any firesales yet?

http://patch.com/california/ranchobernardo-4sranch/professor-san-diego-area-economic-rally-over

Yeah, it gave me a good chuckle as well. Jebi calls mommy to help him, and defend him against that big bad wolf. Trump is a meanie and Jeb is a yutz.

Granted, Trump might not be the most polished candidate, and an egomaniac, but he speaks his mind. The US is FUBAR (reason) and we all know it.

“Ted Cruz has an uncanny talent to twist and turn every single thought his clever brain has, then instantly converts these thoughts into a perfect piece of fabricated propaganda
by the time he is called on to respond to any questions asked of him. Cruz doesn’t reside in an alternate universe, but manages to make his “followers” believe they should.
Cruz is the King of Deranged and Misinformed”
A smart observer said this and I agree. He gives me the willies.

jebs biggest moron idea was to drug test welfare recipients…..and he was part owner of the drug lab

just force welfare recipients to sit in class everyday and learn English for their ebt card no need for abusing them, let ‘em smoke that stinky weed they will fail soon enough.

Barbara Bush: I’m ‘sick’ of Donald Trump

“I’m sick of him… that’s very strong”

Infowars.com - February 6, 2016 289 Comments

In an interview with CNN, former First Lady Barbara Bush, mother to presidential candidate “Jeb” Bush, reveals she doesn’t think much of her son’s opponent, billionaire Donald Trump.

“Mrs. Bush, what do you think about Donald Trump?,” a CNN reporter asks. “You are known for being blunt and plain spoken.”

“I don’t think about him at all,” replies Mrs. Bush.

In classic fashion, Trump shot back this morning quipping Jeb brought in “mommy” to slap him.

Donald J. Trump
✔
@realDonaldTrump

Wow, Jeb Bush, whose campaign is a total disaster, had to bring in mommy to take a slap at me. Not nice!
9:37 AM - 6 Feb 2016

4,104 4,104 Retweets
10,961

Marketwatch dot com
Oil futures lose more than 8% for the week
By Myra P. Saefong, Nicole Friedman, and Biman Mukherji
Published: Feb 5, 2016 3:13 p.m. ET
Gasoline futures end under $1 for first time since late 2008
Bloomberg

Oil futures posted a weekly loss of more than 8% on Friday, pressured by ongoing worries about a global glut of supplies, a lack of significant production cuts and some strength in the U.S. dollar on the heels of the U.S. jobs report.

Meanwhile, futures prices for gasoline finished under $1 a gallon for the first time since late 2008. Analysts attributed the drop to a purge of winter blends of the fuel.
…

time to raise the gas tax…..oops ohbahma wants a $10 per barrel tax on all oil…

ft dot com/global economy
February 5, 2016 6:30 pm
Lending to emerging markets comes to halt
Jonathan Wheatley
U.S. one-hundred dollar bills are arranged for a photograph in Hong Kong, China, on Monday, July 20, 2015. The yuan has proven to be among the more resilient emerging-market currencies this year, having fallen less than 0.1 percent versus the dollar as China cut interest rates and the U.S. prepared to raise.
Photographer: Xaume Olleros/Bloomberg
©Bloomberg

The surge in lending to emerging markets that helped fuel their own — and much of the world’s — growth over the past 15 years has come to a halt, and may now give way to a “vicious circle” of deleveraging, financial market turmoil and a global economic downturn, the Bank for International Settlements has warned.

“In the risk-on phase [of the global economic cycle], lending sets off a virtuous circle in financial conditions in which things can look better than they really are,” said Hyun Song Shin, head of research at the BIS, known as the central bank of central banks. “But flows can quickly go into reverse and then it becomes a vicious circle, especially if there is leverage,” he told the FT.

That reversal has already taken place, according to BIS data released on Friday.

The total stock of dollar-denominated credit in bonds and bank loans to emerging markets — including that to governments, companies and households but excluding that to banks — was $3.33tn at the end of September 2015, down from $3.36tn at the end of June.

It marks the first decline in such lending since the first quarter of 2009, during the global financial crisis, according to the BIS.

The BIS data add to a growing pile of evidence pointing to tightening credit conditions in emerging markets and a sharp reversal of international capital flows. On Thursday, Christine Lagarde, managing director of the International Monetary Fund, warned of the threat to global growth of an impending crisis in emerging markets.

The Institute of International Finance, an industry body, said last month that emerging markets had seen net capital outflows of an estimated $735bn during 2015, the first year of net outflows since 1988.
…

Don’t be fooled by market calmness, warns Bank for International Settlements
6 December 2015 12:52pm
by Chris Papadopoullos

Financial markets still face a high level of vulnerability despite calming over recent months, the Bank for International Settlements (BIS) warned today.

The central bank watchdog said bank credit ratings have deteriorated further since 2010 in major advanced economies. BIS chief economist Claudio Borio said the fact bank shares traded at a discount to book values were a clear sign of “mistrust and scepticism”.

In the Eurozone especially, banks still have a high number of bad loans and balance sheet repair needs to pursued, he said.

Borio also pointed to low interest rates on government as a sign markets were not expecting central bank policy rates to policy rates to rise quickly in the US. He also said a third of government debt in the Eurozone had a negative interest rate – a new peak.

“Under such extraordinary conditions, it is not surprising that markets remain unusually sensitive to central banks’ every word and deed. Just think of the market gyrations following the ECB’s [European Central Bank] decision to ease even further, but to an extent that fell short of market expectations,” Borio said in his introductory remarks to the BIS quarterly review.

“Against this backdrop, it is hard to imagine how the calm could be anything but uneasy.”

“There is a clear tension between the markets’ behaviour and underlying economic conditions. At some point, it will have to be resolved. Markets can remain calm for much longer than we think. Until they no longer can.”
…

Oil market spiral threatens to prick global debt bubble, warns BIS
An ‘illusion of sustainability’ has blinded borrowers and debtors, lulling them into a false of security. The BIS says liquidity is now drying up
Jaime Caruana, General Manager of the Bank for International Settlements, addresses the participants of the XXIII International Banking Congress in St. Petersburg
Photo: EPA
By Ambrose Evans-Pritchard
6:33PM GMT 05 Feb 2016

The global oil industry is caught in a self-feeding downward spiral as falling prices cause producers to boost output even further in a scramble to service $3 trillion of dollar debt, the world’s top watchdog has warned.

The Bank for International Settlements fears that a perverse dynamic is at work where energy companies in Brazil, Russia, China and parts of the US shale belt are increasing production in defiance of normal market logic, leading to a bad “feedback-loop” that is sucking the whole sector into a destructive vortex.

“Lower prices have not removed excess capacity from the market, but instead may have exacerbated it. Production has been ramped up, rather than curtailed,” said Jaime Caruana, the general manager of the Swiss-based club for central bankers.

The findings raise serious questions about the strategy of Saudi Arabia and the core Opec states as they flood the global crude market to knock out rivals in a cut-throat battle for export share. The process of attrition may take far longer and do more damage than originally supposed.

Oil exporters are embracing austerity and slashing government spending, leading to a form of fiscal tightening that is slowing the global economy.

Speaking at the London School of Economics, Mr Caruana said the sheer scale of leverage in the oil and gas industry is amplifying the downturn since companies are attempting to eke out extra production to stay afloat. The risk spreads on high-yield energy bonds have jumped from 330 basis points to 1,600 over the past 18 months, amplifying the effects of the oil price crash itself.

The industry has issued $1.4 trillion of bonds and taken out a further $1.6 trillion in syndicated loans, driving up the combined energy debt threefold to $3 trillion in less than a decade.

While US shale frackers hog the limelight in the Anglo-Saxon press, many of these energy groups are giant “parastatals”, such as Rosneft, Petrobras or China National Offshore Oil Corporation (CNOOC).

The BIS said state-owned oil companies increased debt at annual rate of 13pc in Russia, 25pc in Brazil and 31pc in China between 2006 and 2014, much it in the form of dollar debt through offshore subsidiaries. These oil companies do not respond to pure market pressures since they are cash cows for government budgets.

The nexus of oil and gas debt is just one part of an over-stretched financial system, increasingly exposed to the dangers of a “maturing financial cycle” and to punishing moves in the global currency markets.

Mr Caruana said an “illusion of sustainability” has blinded borrowers and debtors, lulling them into a false of security when credit was easy and asset prices were rising. This illusion can die in the blink of an eye. “The turning of the financial cycle can be quite abrupt,” he said.

The BIS calculates that debt in US dollars outside the United States has surged to $9.8 trillion, a fivefold rise since 2000 and an unprecedented level for the global monetary system as a whole.
…