Buyers That Can Panic Alongside Everyone Else
A report from the Agence France-Presse. “Chinese nationals have become the largest foreign buyers of US property after pouring billions into the market in search of safe offshore assets, according to a study. A huge surge in Chinese buying of both residential and commercial real estate last year took their five-year investment total to more than $110bn, according to the study from the Asia Society and Rosen Consulting Group. And despite a slowdown due to Beijing’s subsequent clampdown on capital outflows, the figure for the second half of this decade is likely to double to $218bn, the study said. ‘What makes China different and noteworthy is the combination of the high volume of investment (and) the breadth of its participation across all real estate categories,’ including a ’somewhat unique entry into residential purchases,’ the study said.”
“The authors of the study said their numbers, based on public and real estate industry data, understate the total. They necessarily miss purchases made by front companies and trusts that do not identify the sources of the funds. Geographically, Chinese buyers are concentrated in the most expensive markets: New York, Los Angeles, San Francisco and Seattle. Property in Chicago, Miami and Las Vegas is also popular. That focus means they pay well above the average US home price: last year, Chinese buyers paid on average about $832,000 per home in the United States, compared with the average for all foreign purchases of $499,600.”
From Maclean’s in Canada. “The cash flowing out of China into assets around the world has hit tsunami proportions, driven by fears of a slowing economy and a declining currency. Estimates peg the amount Chinese investors and companies moved out of the country last year at nearly $1 trillion, up more than sevenfold from 2014. A survey of 150 agents in China by Investorist, an Australian company that markets international properties online, found the vast majority of would-be Chinese purchasers, nearly 90 per cent, have a budget between $500,000 and $1 million—not unlike many Canadians who are seeking to buy a home in Vancouver or Toronto these days.”
“‘The majority of Chinese buyers are families that can afford an investment property and possibly a second one,’ says Jon Ellis, the company’s founder. ‘These are mom-and-pop investors who might own a car dealership or a bakery.’ Moreover, the report found that most Chinese seeking to buy overseas ‘wish to use leverage where possible,’ which may also have something to do with the need to circumvent Beijing’s $50,000-per-year limit on foreign transactions.”
“It all points to a group of foreign buyers that, while large and motivated, remain financially mortal, and can therefore be expected to panic alongside everyone else if Canada’s housing market begins to falter. And, as foreign money continues to flood both Toronto and Vancouver, there’s plenty of evidence of ultra-sketchy, speculative behavior that’s not limited to offshore buyers.”
“‘If the flow starts in a clandestine way there is no way to regulate it at the other end,’ says David Mulroney, former Canadian ambassador to China, adding that every time he spoke to university students in China he was asked whether it was true Canada is a haven for Chinese fraudsters. ‘We have no idea where the money is coming from, how it was sourced—all of it contributes to an alarming lack of awareness in the local real estate markets,’ says Mulroney.”
From News Limited in Australia. “Is the golden age of Australia’s Chinese property boom coming to an end? The buying frenzy that has seen local residents priced out of the market by foreign investors appears to be slowing, as a toughened stance from the banks and regulators takes effect. RT Edgar Toorak director Jeremy Fox told news.com.au Chinese demand in the top end of the Melbourne market had ‘completely dropped off.’”
“He recently lost a deal on a $12 million six-bedroom mansion at 9 Whernside Ave, Toorak, after the would-be buyer was unable to tick all the required boxes. ‘We had an agreement on price subject to FIRB approval and getting their money out of China, and that’s been the stopping point,’ he said.”
“This time last year, Mr Fox said, one-third of the properties he sold went to Chinese nationals. This month, not a single sale needed FIRB approval. ‘We’ve sold 22 properties this month and only one’s been to Chinese — and that was local, not overseas,’ Mr Fox said. ‘It’s been a combination of everything: getting money out of China, banks cracking down, the FIRB rules and application fee, the stamp duty increase. The whole thing’s just come together in the perfect storm.’”
The Hampstead & Highgate Express in the UK. “A developer advertising price reductions on a luxury development in Maida Vale? No you haven’t entered a parallel universe, just the north London property market in 2016. ‘You can thank global economics, Brexit jitters, Panama, stamp duty hikes, market corrections and the rest – for making your dream home that much more affordable,’ reads the advert, an admission that is disarming in its rarity.”
“Billed as ‘the best value brand new houses in Inner London,’ the eight properties in a gated development have been reduced from around £1.4 million according to Philip Green at Goldschmidt & Howland, to £1.295 million. This developer’s declaration is refreshing but their struggles are par for the course. More than one third of properties in Hampstead sold in the first quarter of this year achieved a sale price that was more than 10 per cent lower than the initial asking price, despite a surge in transactions.”
“And yet the number of ‘luxury’ new builds in some stage of planning or construction in inner London has risen by more than 40 per cent in 18 months, according to figures from buying agency Property Vision. The research found there are 19,000 units currently under construction across prime London postcodes compared with 13,400 units when the same survey was carried out 18 months ago. It offered a conservative estimate of 26,133 new ‘prime’ London units coming to market over the next few years compared to only 4,870 units sold for £700,000 or more on the second hand market in 2015.”
“‘The gap between the pipeline of new stock and the annual second-hand market in the wider area is large – very large,’ said Charlie Ellingworth, director at Property Vision. ‘The word ‘Prime’ has become overused in recent years, alongside ‘iconic’. As the market adjusts their real meaning will become apparent and those who believed the developers’ hyperbole may wish they had taken more time – and advice.’”
The Real Deal. “The Chinese investors buying up swaths of U.S. real estate may not always know what they’re doing, according to some real estate experts. ‘I’ve been surprised by the lack of sophistication of some Chinese institutional investors,’ John Liang, Xinyuan Real Estate’s managing director of U.S. operations, said during a panel on Chinese real estate investment at the Asia Society. Some are even missing the ‘basic finance 101 concept of risk and reward,’ he said.”
“The reason? Real estate in China is basically ‘a manufacturing business,’ he said — one builds, sells, and makes a profit. ‘The U.S. is way past that,’ he said, referring to the complexity of the trade here, with its myriad of regulations and financial gymnastics. ‘It’s a little ahead of what the Chinese are used to.’”
“Liang’s statements come amid complaints by some local players that demand from Chinese investors have pushed New York prices to unrealistic levels. Some of Liang’s fellow panelists, who included Wendy Cai-Lee of East West Bank, Beth Fisher of Corcoran Sunshine, Kai-yan Lee of Vanke USA Holdings and Arthur Margon of Rosen Consulting Group, agreed with his assessment that there remains a lack of knowledge among even the most active Chinese investors.”
“‘You do wonder what the underwriting criteria is with some of these purchases,’ Fisher said. ‘As a broker, you assume that they see into the future in ways that we sometimes don’t see, but it is a tad concerning on the supply side.’”
From Bloomberg. “A custom-built home in the heart of California’s Silicon Valley had its price cut by $500,000 last week after sitting on the market since the end of March — a move that would’ve been almost unfathomable a year ago and a signal that frenzied demand has peaked. The six-bedroom, five-bath house in Palo Alto is now listed for $7.5 million. It joins a growing inventory of high-end homes in the area that are taking longer to sell.”
“It’s a departure from recent years, when newly minted millionaires from tech initial public offerings raced against buyers from China to scoop up anemic inventory. ‘The seemingly inexhaustible well of very high-end buyers has proven exhaustible after all,’ said Dean Wehrli, a senior vice president at John Burns. ‘The peak is behind us, and that’s becoming clearer and clearer to builders and buyers.’”
The Maclean’s article is in-depth and probably the best single account of the subject I’ve seen. Worth the read.
‘A 14,600-square foot mansion in Vancouver costing US$24 million ($31.3 million CAD) is majority-owned by a Chinese ‘student’, property records have revealed. Land title documents for the mansion list Tian Yu Zhou as having a 99 percent interest in the building. The remaining one percent belongs to a businesswoman identified as Cuie Feng.’
‘Tian’s occupation is listed as a “student”, according to the Vancouver Sun. The property is said to be valued at US$19.9 million when it was last assessed this year, making it one of the city’s most expensive homes.’
‘Both Zhou and Feng reportedly took out a mortgage of over US$7 million from the Canadian Imperial Bank of Commerce in late April, according to mortgage documents attached the the land title papers retrieved.’
‘David Eby, a housing critic from the New Democratic Party, expressed incredulity at the news, and said the fact that a student was able to buy one of the city’s most costly properties is at complete odds with the Canadian government’s insistence that the Vancouver real estate market is “under control”.
‘He told the Vancouver Sun: “It’s incredibly strange that a student would be able to afford such a luxurious and multi-million-dollar property.”
‘The local correspondent for the South China Morning Post is using some choice words to describe our housing market. “It is a world-class freak show. There’s something really strange going on here in Vancouver’s housing market. And you know, I hope that everyone appreciates that,” Ian Young tells Maclean’s Magazine in a recent article.’
“You know, people from outside Vancouver who see that find it very hard to believe. But for some reason, a lot of Vancouverites have very quickly accepted this is the reality, this is the norm, and this is what we’re stuck with.”
‘He says there’s an age gap when it comes to perception when it comes to the end of the affordability crisis. “There is this gap that is often depicted as a gap of race in terms of the understanding of this situation,” Young tells Maclean’s correspondent Nancy Macdonald.’
“But it’s not a gap of race at all. What it is, it’s a gap of age. People who are under their mid-forties perceive this situation very, very differently to people who are over their mid-forties, who will say ‘I’ve seen it before, I pulled myself up, I managed to get on the house-buying ladder, you can do the same’. It’s not the same. We’ve never seen an unaffordability crisis like we’re experiencing in this city. And God, I hope we never see it again.”
Why do I think this is structured to avoid paying RE transfer taxes…
All you do is sell your “interest” and not the property.
Land title documents for the mansion list Tian Yu Zhou as having a 99 percent interest in the building. The remaining one percent belongs to a businesswoman identified as Cuie Feng
Most transfer taxes have look through rules which define a transfer of beneficial ownership, i.e. > 50% beneficial interest transfer = change of ownership.
More likely the student is a straw man / placeholder for the 1% owner. The 1% owner holds back the 1% to prevent the straw man from transferring good title without the 1% cooperation. All the 1% owner has to disclose is the 1% minority ownership.
‘He told the Vancouver Sun: “It’s incredibly strange that a student would be able to afford such a luxurious and multi-million-dollar property.”
Someone’s a lion.
Seems legit….
Just tell me where to send my money.
Not if the student is selling…heroin!
Yeah, fine.
or the student’s dad is a Chinese official spending the stolen Yuan before the USA catches on.
From the MacLean’s article:
Last November, the 38-year-old lawyer and former head of the B.C. Civil Liberties Association helped Andy Yan, acting director of SFU’s City Program, with his headline-grabbing study on home buying in Eby’s West Side riding. In addition to the incendiary data involving Chinese names, the study revealed that 36 per cent of owners on homes worth an average of $3.05 million listed their occupations as housewives or students with little or no income. Fully 18 per cent of the 172 homes purchased were not mortgaged by banks. That means on Vancouver’s West Side alone over a six-month period last year, roughly $100 million in cash came pouring into Canada, almost all of it from China. Yet the homeowners would in all likelihood pay little or no income tax. The total value of all homes sold in the study period topped a half-billion dollars.
Predictably, when Yan’s study was published, a chorus of voices, including former developer Bob Ransford, jumped to criticize Yan: “The danger is intolerance, racism, singling out certain groups of people saying they’re to blame for this,” said Ransford. But such labels have failed to muffle the debate, particularly as more and more Chinese-Canadian voices have begun calling out white developers and academics for making the claim.”
I’m beginning to wonder if public access to home purchase agreement info is about to go bye-bye.
‘An Australian backlash against Chinese property investors has driven some to look to the more open US real estate market, according to a new study. Chinese investors, described as relative newcomers to the US market, have rapidly increased purchases of US residential properties from $US11.2 billion ($A15.45 billion) in 2010 to $US28.6 billion in 2015, according to the Asia Society and Rosen Consulting Group report.’
‘The report examines how Chinese buying in Vancouver, Canada, and in Sydney and Melbourne has “caused intense public outcry” at what locals believe is “speculative real estate investment by wealthy Chinese that is contributing to bubble-like conditions of inflated home prices and pricing out many local residents”.
‘Making it more difficult for Chinese to obtain loans from Australian banks and new Australian regulations has resulted in some to switch to the US. “Consequently, the backlash to increased levels of investment, whether warranted or not, has driven some Chinese investors to invest in the United States,” according to the report.’
‘The report also predicts a slowing in China’s investment in overseas property. “We believe China’s economic turbulence will create a short-term speed bump for real estate investment overseas, including in the United States,” the report states. “In the near term, a six to 24-month temporary period of increased capital controls is likely - either formally via policy announcements or informally through administrative processing - until the Chinese currency can be re-aligned with that of global partners.”
Nothing like having a Fifth Column already in place when China embarks on its own Greater East Asia Co-Prosperity Sphere military adventurism in the Pacific. Those of you with Netflix can see Australia’s version of Red Dawn: the excellent “Tomorrow When the War Began.”
https://www.youtube.com/watch?v=9KaX0F8GojI
I don’t mind Chinese coming to the U.S. I do mind them driving up prices. Even third generation Asian Americans don’t like the locusts driving people out of the towns they grew up because of RE prices.
I can tolerate dim sum, had a Chinese girlfriend and those restaurants were all the places we ever ate at. But then you get tired of the same ol same ol and then go to In–N-Out.
California is getting its just desserts.
Not to worry. Californian locusts will continue to leave the state only to make numerous communities in Oregon, Idaho, Colorado, Texas unaffordable for the locals.
As they have for decades.
And change the political ideologies of those communities/cities
“And change the political ideologies of those communities/cities”
Heck we’ve been doing that for years.
I moved to Tucson from California in 1996 and helped promote the Libertarian Party there. Added to the number of gun owners also.
yep, survival of the fittest >
‘A former Agricultural Bank of China Ltd. compliance officer in New York alleges she was effectively forced out of the lender after telling the Federal Reserve of money-laundering risks from international trade-finance transactions.’
‘Natasha Taft, the bank’s former chief compliance officer in the city, is alleging in a lawsuit that she was punished by management for telling the Federal Reserve Bank of New York of her concerns in late 2014. Agricultural Bank, one of China’s biggest lenders, has denied the allegations.’
‘U.S. District Judge Paul Engelmayer denied a motion by the lender to dismiss a “whistle-blower” claim by Taft, who is also alleging that she faced gender discrimination while working as the only non-Chinese female manager at the branch.’
‘According to the judgment, Taft had suspected that about 30 percent of the lender’s transactions lacked the customer-identifying information that they should have had.’
‘In a memo to a Fed official, she had sought “guidance” over transactions related to clearing U.S. dollars for trade-related customers, where the customers hadn’t been identified on the payment messages, the judgment said. Taft said that trade finance “is a new frontier for money laundering.”
Boy, I’m sure the Fed was all over that information. But I don’t blame her for going in that direction, on a collective basis our regulators are about as aggressive as a golden retriever.
‘Bank of Melbourne has admitted making an error in tough new lending conditions for overseas borrowers of Australian apartments and houses. The bank, which is owned by Westpac Group, said that an announcement increasing the deposit overseas borrowers need to be eligible for a loan by up to 22 per cent was “an error in our broker communications”.
“The loan to value ratio for temporary visa residents remains 90 per cent not 70 per cent as previously stated,” a bank spokesperson said.’
‘Mortgage brokers, who negotiate best deals for lenders, believed it was part of a strategy to rapidly build market share in a sector that other lenders are growing increasingly nervous about, including other banks in the Westpac Group. They claim the bank took about nearly two weeks to amend the error, describing it in confidential communications to brokers as a “revised policy update”, creating speculation that it had backflipped the earlier policy change.’
‘But buyers are nervous about potential changes to negative gearing, a huge number of new apartments becoming available, which will compete with existing stock, and affordability of houses. Lenders are nervous about growing evidence that some overseas buyer applications, particularly from China, are using incomplete, inaccurate or fraudulent loan documents, or could be laundering money.’
‘Big Four banks have repeatedly tightened lending policies in recent weeks, including loan-to-value ratios and requiring more evidence of income and employment. Other lenders, such as Adelaide and Bendigo Bank, have frozen processing of all overseas’ borrower loans amid growing evidence of attempting money laundering and fraud.’
‘Citibank, which is a big player with Asia’s high net worths, has a blacklist of currencies it will not accept for overseas loans, including the Chinese yuan and Indian rupiah. Smaller lenders are also tightening terms and conditions because of a flood of loan applications from overseas borrowers after the larger lenders clamped down.’
‘In addition, The Australian Financial Review has revealed how forged employment and Bank of China income statements can be bought for $200 to make loan applications to Australian lenders.’
Isn’t it interesting how many of these “rich” Chinese are borrowing money to buy houses?
Precisely.
“That focus means they pay well above the average US home price: last year, Chinese buyers paid on average about $832,000 per home in the United States, compared with the average for all foreign purchases of $499,600.”
That’s what borrowed money does to a person. It makes them stupid.
“Chinese buyers paid on average about $832,000 per home in the United States, compared with the average for all foreign purchases of $499,600.”
It seems like they are setting up to become the bagholders in the next U.S. real estate bust, similar to Japan’s post-1990 experience.
Wait until China makes its military move in the South China Sea, and then TPTB might start to question the wisdom of letting the Chinese buy up America.
A good background article on the South China Sea dispute.
http://time.com/4310685/us-navy-john-stennis-south-china-sea-history/
The real mistake was buying gigatons of plastic crap from them at Everyday Low Prices.
The mistake is ongoing.
Prices going lower……… every day.
pebble beach part 2
“‘We have no idea where the money is coming from, how it was sourced—all of it contributes to an alarming lack of awareness in the local real estate markets,’ says Mulroney.”
No idea where the money comes from, eh? Well you seem to have a good idea where it goes and what it does to prices - everybody’s prices, everybody’s housing prices.
Equity, if creates equity - presto! - equity created right out of thin air.
“… all of it contributes to an alarming lack of awareness” (and an enormous pile of paper wealth) “in the local real estate markets”.
No idea where the money comes from but I’ll bet you’ll have a good idea where it goes when everything that is financial is shoved into reverse.
The next article down uses the term “financially mortal”; An excellent term to use, one worth stealing.
‘The Chinese investors buying up swaths of U.S. real estate may not always know what they’re doing, according to some real estate experts. ‘I’ve been surprised by the lack of sophistication of some Chinese institutional investors,’ John Liang said. Some are even missing the ‘basic finance 101 concept of risk and reward’
‘You do wonder what the underwriting criteria is with some of these purchases,’ Fisher said. ‘As a broker, you assume that they see into the future in ways that we sometimes don’t see, but it is a tad concerning on the supply side.’
See into the future in ways we sometimes don’t see? Are you a freaking idiot? Because these Chinese “investors” are, and they are gonna whine till the cows come home when they lose their ass.
Are these Chinese investors actually investing for profit, or is this just a high-end version of the “safe house?” Maybe they would be happy that they only lost half an ass and not all of it (along with their heads).
Read the Maclean’s article. One guy is worried because the Chinese government is seizing bank accounts. OK, poor babies, so we have to have this going on in our housing market? If the US wants to save these people, let them open bank accounts. One could say the root of the problem is instability in the Chinese system. We shouldn’t be trading with a country that throws people out of windows and confiscates bank accounts. Globalism has turned into a multi-faceted curse.
‘If the flow starts in a clandestine way there is no way to regulate it at the other end,’ says David Mulroney, former Canadian ambassador to China, adding that every time he spoke to university students in China he was asked whether it was true Canada is a haven for Chinese fraudsters.’
Every time.
From this past weekend:
“International financial and investment analysts have been keeping a close watch on China’s debt crisis. The majority of analysts predict that, once the bubble bursts, China’s economy will sink into a decline similar to Japan’s situation in the 1990s. Actually, from a technical perspective, China should have already experienced several rounds of financial debacles. However, due to fundamental differences between China and Japan, the playing out of China’s anticipated financial crisis will look quite different.”
“The Chinese economy is also driven by real estate. But asset allocation is impacted by China’s unique economic system and government intervention. Bad debt comes from several main sources: real estate, large state-owned enterprises, and local governments. China’s banking sector is owned by the government, and state-owned enterprises are known as ‘the eldest son of the Republic’—they will naturally be bailed out. With these inseparable ties of interests, the fate of China’s banking industry is destined to be different from that of Japanese banks.”
“We could say that China’s banking sector is in worse shape than Japan’s banking industry before its economic bubble burst. However, before jumping to the conclusion that China will have a financial crisis similar to Japan’s, we need to remember that there is a fundamental difference between China and Japan: in China, financial stability is tied to the stability of the Chinese Communist Party.”
“In other words, China’s state-owned financial system ‘lives and dies’ with the regime. In Japan, even if the Japanese Cabinet were to collapse, it would have no direct impact on banks. China’s financials crisis is the result of the government meddling in the economy and the regime tying its own stability to the county’s financial stability. Accordingly, the last protective measure for China’s financial sector will be the gun. Authoritarian and totalitarian regimes will use any violence necessary to maintain their power.”
“But abuse of power not only distorts the market, it also destroys it. China’s 2015 stock market crash serves as an example.”
Yeah, that statement was peculiar. “See into the future in ways we sometimes don’t see” sounds like a newspeak translation of P.T. Barnum.
“It’s a departure from recent years, when newly minted millionaires from tech initial public offerings raced against buyers from China to scoop up anemic inventory. ‘The seemingly inexhaustible well of very high-end buyers has proven exhaustible after all,’ said Dean Wehrli, a senior vice president at John Burns. ‘The peak is behind us, and that’s becoming clearer and clearer to builders and buyers.’”
“Seemingly inexhaustible” = financially mortal.
“A custom-built home in the heart of California’s Silicon Valley had its price cut by $500,000 last week after sitting on the market since the end of March — a move that would’ve been almost unfathomable a year ago and a signal that frenzied demand has peaked. The six-bedroom, five-bath house in Palo Alto is now listed for $7.5 million. It joins a growing inventory of high-end homes in the area that are taking longer to sell.”
Can anyone who paid attention to last year’s Chinese stock market collapse help but wonder whether a similar fate lies in store for high-end U.S. real estate markets whose recent price dynamics have been driven by Chinese buyers?
Bank of America and Morgan Stanley have already listed their reasons for why stocks are about to crater.
If Goldman Sachs goes massively short, then you can rest assured its creature Janet Yellen has been given her marching orders: a sudden hike to crash the market, slaughter the muppets, and allow the Vampire Squid to pick up distressed assets for a song.
Yep.
Bulletin Stocks open lower as investors brace for Fed minutes
Stock futures point to lower open ahead of Fed minutes
Published: May 18, 2016 9:16 a.m. ET
Target shares drop after weak earnings
Investors are bracing for fresh signals from Fed chief Janet Yellen and her colleagues.
By Victor Reklaitis
Markets writer
Joseph Adinolfi Markets reporter
U.S. stock futures moved lower on Wednesday, putting stocks on track to add to Tuesday’s drop, as investors avoided big bets ahead of a release that could hint at when the Federal Reserve’s next interest-rate hike might hit.
Minutes from the Fed’s last policy meeting are due at 2 p.m. Eastern Time. The stock market also could move on a weekly reading on U.S. oil supplies, which is expected at 10:30 a.m. Eastern.
…
I wonder if the Fed minutes will include the dramatic decreases in rail and sea traffic of goods? Or that Americans are saving more? Yep, definitely a solid economic recovery
Soros is already massively short… he’ll make enough to blanket the world in satellite mind control rays.
Speaking of Soros, this is funny:
http://gawker.com/george-soros-got-beat-up-by-his-ex-girlfriend-during-a-1521151559
99 problems and a gold-digging Brazilian soap opera drama queen IS one. Doesn’t quite roll off the tongue the way Jay Z’s does.
You’d think a man of his means could find prettier, more docile arm candy.
it worked
Here’s the house in Palo Alto. Would you pay $7.5M for this?
And it’s only on a quarter acre.
http://www.zillow.com/homes/for_sale/Palo-Alto-CA/house_type/2099162951_zpid/26374_rid/5-_baths/any_days/globalrelevanceex_sort/37.480852,-121.978455,37.282521,-122.292595_rect/11_zm/0_mmm/?3col=true
Hey donk.
My great aunt lived literally 0.5 miles away from this house…that she and her husband bought in 1946 for $26k (a very high price at the time, according to her).
Also 1/4 acre.
We all know the value is in the land…even if it cost $350 psf to build (high end finishes), a 4,500 square foot home would be only $1.5MM of the value…leaving the land for $6MM of the value.
My aunt was offered (years ago) $3MM for her home, so the neighbor could scrape the house and have a bigger yard.
I thought THAT was a crazy price.
$6MM for effectively the same piece of dirt is double-batsh*t crazy.
That’s a very pretty house, at least. Too bad it’s likely to be sold to someone who won’t even live there.
“Billed as ‘the best value brand new houses in Inner London,’ the eight properties in a gated development have been reduced from around £1.4 million according to Philip Green at Goldschmidt & Howland, to £1.295 million.
Well thank God the British middle class can get back in the London property market toute suite! I was beginning to think they’d been priced out forever until these bargain basement prices came up.
Opinion: The real problem with negative interest rates? They are a stealth tax
By Matthew Lynn
Published: May 18, 2016 2:31 a.m. ET
Someone has to pay for negative rates, either banks, borrowers or depositors
Walt Disney Pictures/courtesy Everett Collection
Negative interest rates have already produced a strange, Alice-in-Wonderland economics, where nothing is quite what it seems.
LONDON (MarketWatch) — Central banks have slashed interest rates to nothing. They have printed money on a vast scale. Where that has not quite worked, and if we are being honest that is most places, they now have a new tool. Negative interest rates. Across a third of the global economy, money you put in the bank does not only generate nothing in the way of a return. You actually get charged for keeping it there.
That is already producing strange, Alice-in-Wonderland economics, where nothing is quite what it seems. Governments want you to delay paying taxes as long as possible, the mortgage company pays you to stay in the house, and cash becomes so sought after there is even talk of abolishing it.
But the real problem with negative rates may be something quite different.
As a fascinating new paper from the St. Louis Fed argues, they are in fact a form of tax. They impose a levy on the banking system that has to be paid by someone — and that someone is probably us. That may explain why central banks and governments are so keen on them. Hugely indebted governments are always in the market for a new tax, especially one that their voters probably won’t notice. But it also explains why they don’t really work — because most of the economics in trouble, especially in Europe, are already suffocating under an impossible high tax burden.
…
I bet the US will institute a VAT, but not get rid of sales tax and property tax.
It’s crazy to see the bank rates offering a mere 1% interest on a “Jumbo” savings account ($100,000+)
Ally has 1% on a regular savings account.
Yep!
Zero to negative interest rates + massive debt = obamanomics
1. A tax on savers
2. Destruction of pension funds
3. Corporations just issue bonds and buy back stock instead of productive investments (which require a ROI).
4. Pull in of demand
5. Insane bubbles in housing and the stock market
6. Public debt that will never be paid back
It is going to implode spectacularly.
ZIRP/NIRP and QE are the most efficient means to effect the transfer of wealth from the 99% to the venal and corrupt .1% that controls our fiscal and monetary policies. 95% of ‘Muricans, docile and stupid, have sanctioned this rip-off with their votes for the crony capitalist status quo.
I was contemplating car shopping and I recalled there was a discussion here recently regarding risk retention in asset-backed securities, and the impact this might have on car prices. I’d noted QRM had been totally defanged - no risk retention at all. But for asset backed securities, in certain cases at least, some risk retention will be required. At least until some big trade group voices opposition ($$), and then the government and the Fed will ease the rules. And there isn’t buy-in by the regulators, as evidenced by the article below. So my best guess is there won’t be a significant effect on car prices as a result.
Anyhoo, I came across this interesting speech, given at the ABS Convention highlighted in The Big Short, by an SEC commissioner. Makes for informative reading. Something about foxes guarding henhouses and such. The remarks were given by one of the two current SEC commissioners.
Remarks at ABS Vegas 2016
Commissioner Michael S. Piwowar
Las Vegas, Nevada
March 1, 2016
Before I proceed further, I need to correct a few misperceptions about SEC participation at this conference that were perpetuated by the recent film, The Big Short. First, none of us have been lounging out by the pool. Second, none of us are seeking any jobs with investment banks. And, finally, because Las Vegas is full of security cameras watching our every move, I will not be literally walking through any revolving doors while I am here.
…
Bureaucratic self-preservation might also explain the decision to adopt as broad of an exemption for QRMs as possible, so as to minimize any political fallout from the real estate and housing industries. Few will disagree that residential mortgage-backed securities played an important role in the 2008 financial crisis. For those in the audience involved in RMBS offerings, you must be quite happy with the broad exemption from the risk retention rules. For those of you in the audience who are involved in other types of securitizations that had little, if any, part in causing the financial crisis, you are probably wondering why you were unfairly targeted. Unfortunately, unlike Las Vegas, what happens in Washington does not stay in Washington.
On the other hand, perhaps the scope of the QRM exemption will have little impact. Since 2008, the federal government has backed nearly all RMBS issuances.[10] The two government-sponsored enterprises (GSEs) that required the largest taxpayer-funded bailouts in history – the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) continue to play the dominant role in housing finance. They have a competitive advantage over private securitizations due to their lower funding costs as a result of a now explicit federal guarantee.[11] They have essentially crowded out the private sector with respect to housing finance. In fact, during the last two years, there has not been a single public RMBS offering registered with the SEC.
For the record, I voted against the credit risk retention rules. These rules require a securitizer to retain a minimum 5% credit risk of any securitization transaction and generally prohibit the sponsor from hedging its retained interest. I was particularly dismayed by the “one-size-fits-all” approach taken by the regulators to create a flat 5% risk retention requirement for all asset classes, except for securitizations involving so-called “qualified residential mortgages” (QRMs) for which the risk retention level is zero. These were arbitrary choices.
We must appropriately regulate securitization offerings, including rules that adequately align the incentives of investors and sponsors.
https://www.sec.gov/news/speech/speech-piwowar-03012016.html
Based on what I’ve seen, I agree that 5% risk retention on auto loans is probably inappropriate. It should be closer to 40%.
The horses have left the barn, the barn door is shut, and the barn has burned to the ground, and they are now talking about what color to paint the barn.
People seem to have lost sight of the fact that the only reasons RMBS were able to sell in the first place was that those holding the purse-strings of large investors relied largely on ratings provided by conflicted ratings agencies.
Nothing like basing your investment decision on a Moody’s AAA rating. No one will fire you if it goes bad based on that stamp of approval.
Until now.
If the Federal government did NOTHING with respect to risk retention, those investors would not be putting money into RMBS simply based on a AAA rating as before.
For a while at least.
Instead of codifying “too big to fail”, where now there will be similar problems–people investing based on an expectation that government regulations squeezed the risk out of these financial instruments, it would have been better in my opinion to codify “buyer beware”.
In other words, lay down some ground rules with respect to what constitutes meeting your fiduciary duty. I’m aware of some such rules that have been put into place (like different appraisal guidelines for lenders).
How about something simple, like, “to meet your fiduciary duty, you must disregard any ratings that have been established by agencies who have been paid by the issuer, or any issuer of similar securities in the prior 3 years, and instead rely on impartial, third party analysis.”
I can hear the objections already…But, but, but, the securities are too complicated for these folks to understand…we NEED the ratings agencies to make sense of them.
Great, the securities will become simpler so they can be analyzed. No more CDO-squareds. Hell, no more CDOs for that matter.
Too much reliance on government to reduce risk leads to complacency. Complacency leads to recklessness (intentional, or not). Recklessness leads to malinvestment, market distortions, and economic instability.
We have got to stop believing that regulations will reduce risk…they won’t.
The Big Short. First, none of us have been lounging out by the pool. Second, none of us are seeking any jobs with investment banks.”
uh huh
Opinion: Central banks shouldn’t rely on QE, negative interest rates, helicopter money
By Lee Jong-Wha
Published: May 18, 2016 2:29 a.m. ET
Monetary policy has limits, so baton should be passed to fiscal policy, structural reforms
Staff Sgt. Jim Varhegyi/U.S. Air Force/Getty Images
SEOUL, South Korea (Project Syndicate) — The central banks of major advanced economies have been navigating uncharted territory in recent years. While their use of a range of unconventional monetary-policy tools has had benefits, it has also generated significant uncertainty, without fully stabilizing the world economy. Now the time has come to head back toward more familiar policy terrain.
…
Even the Fed is finally realizing how powerless they really are. St Louis Fed Chair stated that maybe manipulating interest rates isn’t the way to go….
Market forces might as well be a law of physics. Cant fight it.
Since it’s clandestine 1913 inception the Federal Reserve, a private banking cartel despite its official-sounding name, has had one agenda: serving as the Oligopoly’s instrument of plunder against the 99%. They have succeeded brilliantly in this their only mandate. The jawboning of the various regional Fed bank heads is so much smoke and mirrors, as the Fed will ALWAYS do whatever it takes to enrich the already super-wealthy.
Read “The Creature from Jeykll Island” if you want to know more about the Fed and its true purpose.
Financial Times
Oil
Demand for oil storage soars amid supply glut
Surplus stocks have led to a boom in the number of US futures contracts
2 hours ago
by: Gregory Meyer in New York
With crude oil piled up around the world the space inside terminals is now a hot commodity.
The market for crude oil storage futures has been expanding since last year’s launch. Instead of giving buyers oil the futures contracts confer the right to store it — specifically, in caverns on the Gulf of Mexico coast.
Open interest, or the number of contracts outstanding, has increased to the equivalent of 23.5m barrels of capacity, more than doubling since the beginning of the year.
Oil companies, refiners and banks have been trading the contracts, said Bo Collins, co-founder of Matrix Markets, which helped develop them. “The only crowd that’s sort of missing from the mix is the HFT [high-frequency trading] crowd,” he said.
The contracts were introduced as a supply glut caused oil stocks around the world to swell, driving up demand for tanks.
In the Gulf coast region that includes Loop, crude stocks have risen to records of more than 280m barrels, up by 15 per cent from the beginning of the year. Nationwide, oil stocks have approached their 1929 record…
So the right to store excess is driving up oil stocks?
I think oil stock prices should be a case study for horse$h!t in Econ classes…supply glut, falling demand, rising prices? Yep completely logical.
A blurb from an influential law firm discussing how litigation has blunted the risk retention requirements:
Credit risk retention rules are intended to promote an alignment of interests between sponsors and investors of securitizations by requiring sponsors to maintain “skin in the game” — that is, retain a certain percentage of the credit risk of the securitized assets. On December 24, 2016, the rules, mandated by the Dodd-Frank Act, will become effective for all classes of asset-backed securities. Former Congressman Barney Frank, who co-sponsored the act, told The New York Times this requirement is the “single most important part of the bill.” It is intended to be a fix for the flaws in the “originate-to-distribute” paradigm under which bad assets were originated and then sold into mortgage-backed securities transactions prior to the financial crisis. Yet the intended simple solution is a blunt instrument that is causing problems for certain types of asset-backed securities, including commercial mortgage-backed securities (CMBS) and collateralized loan obligations (CLOs), and some are mounting legal and legislative challenges to modify the rules.
For some asset classes where the special risk retention options or asset exemptions are not of any real benefit and the burdens of risk retention will be commercially significant, industry groups are either pursuing litigation against the regulators who promulgated the rules or seeking legislative modifications to the rules…. With respect to commercial real estate loans and CMBS, in March 2016, the House Financial Services Committee approved the Preserving Access to CRE Capital Act of 2016 to provide relief from risk retention requirements for CMBS transactions backed by a single commercial real estate loan or by a pool of qualified commercial real estate loans as redefined in the legislation.”
https://www.skadden.com/insights/despite-challenges-risk-retention-rules-set-to-impact-all-asset-backed-securities-by-end-of-2016
Remember the simpler times when it was all about producing a good that people wanted to buy? No tricky finance tricks, packaged debt, CLOs, MBS, CMBS, etc,etc…just workers, materials, volume, bottom lines.
“Remember the simpler times when it was all about producing a good that people wanted to buy?”
These goods are still produced, but they are not produced here.
Which, IMO, is the root of our problems.
“Remember the simpler times when it was all about producing a good that people wanted to buy?”
I manufacture and franchise great products and sell them at a cheap price. I have repeat customers for the past 30 Years. I also give easy credit and liberal terms to pay the invoices. My theory is to turn a quick nickel rather than a slow dime. Good customer service/friendship has made me wealthy.
I also treat my employees as family and I have insignificant employee turnover.
It’s simple as pie.
In business the turtle wins the race.
The funny thing is that the simplest form of MBS is a good thing. It allows a lender to diversify risk. If I want to lend $5,000,000 to commercial real estate, there was a real benefit to spreading that loan out among many properties. Any one crazy outlier event on one property would not sink your loan.
Banks “participate” their loans all the time for this reason…selling portions of loans that they originate–where for a commercial property, you might end up effectively having three lenders even though you only have one promissory note/loan agreement.
I was looking at how to establish returns for different tranches of MBS while getting my masters 20 years ago, and it wasn’t that complicated–you could see the underlying properties and loans.
And then the financial engineers started to get creative, and it took a relatively simple idea that did a good job of spreading risk, and instead ended up hiding risk through far more complicated structures.
Nice artice, Neuromance! May I just say that this entire passage is PURE PROPAGANDA from the private sector.
For example:
For some asset classes where the special risk retention options or asset exemptions are not of any real benefit
For any asset that might want a future bailout, *direct or indirect,* then that risk retention option has a benefit. However, the benefit is for the taxpayer, not the CEO. Poor babies. They only want regulations which benefit THEM.
And this:
The market has generally concluded that most of the other exemptions [other than QRM mortgages] for qualifying loans are not workable or sufficiently beneficial to be relied upon. For instance, the rules provide an exemption for qualifying automobile loans that may never be used because it requires loan characteristics, derived from the QRM definition, that are not common for auto loans.”
Those “loan characteristics that are not common for auto loans” include a credit history, LTV requirement, and 10% down of the total purchase price. In other words, DECENT UNDERWRITING — which of course is not common for auto loans and hasn’t been since loans went past 36 months.
Again, poor babies. They are complaining that the exemption may never be used. Good. I HOPE it’s never used. If the boyz want a $40,000 jimmy-jacker, let them pony up. Let Tacoma be a sign of actual wealth.
Friend of mine is trying to convince me to head to London for an MBA program. I couldn’t help but laugh, because the program itself is $28,000. Insert ourselves into one of the most expensive rental/housing markets in the city for the sake of a piece of paper? Ha. No thanks. London is nice to visit, but live? Hell no.
Might be a good idea if you want to study international bankruptcy and fraud.
I can study that for free here in the US though
Come and pay me a visit and possibly I can teach you a financial lesson or two that will stick in your memory … forever.
The first cup of coffee is on me (the price of cream and sugar is negotiable.)
London is the epicenter of global financial fraud. Banks like JP Morgan outsource their fraud to the City of London, i.e. the London Whale. The oligarchs there enjoy total impunity from actual criminal consequences, and they take full advantage.
I suppose it’s true that we never really gained independence from London. It was all a bankers/finance/profit scheme with the illusion of a new, free country.
I posted this the other day:
‘An unforgivable lapse in diplomacy was caused when David Cameron forgot his training, his many years experience and the entire rule book of modern politics and said something that was true. This alarming and completely uncharacteristic outburst occurred when he described the lack of probity and trustworthiness of Afghanistan and Nigeria.’
‘He said it in front of the Queen, which gave all the usual royal forelock tuggers a touch of the vapours, hankies were pressed to foreheads and they had to be resuscitated with a cup of tea and a biscuit.’
‘The occasion was the opening of an anti-corruption conference that for reasons of comedy was being held in what the anti-corruption organisation Transparency International called “the world’s prime destination for money laundering”: London.’
‘London is the place that the most crooked captains of industry and villains that run countries come to wash their lucre clean by buying housing, which is why property costs so much there.’
‘the usual royal forelock tuggers’
They’d make great realtors.
“London Is Falling(Don’t Worry, It’s Only The Property Prices”
http://www.telegraph.co.uk/property/commercial/house-prices-fall-almost-everywhere-as-property-market-takes-on/
The central bankers’ financial warfare against the 99% means young people in oligarch-looted economies have grim prospects for employment or meaningful lives in countries already blighted and bankrupted by decades of socalist/crony capitalist governments.
http://wolfstreet.com/2016/05/17/young-people-marginalized-eu-eurobarometer-greece-portugal-spain-cyprus/
Just wait until they find out how tender and delicious the flesh of the wealthy is.
Once again, Yellen’s flying monkeys are trying to jawbone up the possibility of a rate rise, knowing full well that any such rise would implode the Fed’s Ponzi markets and asset bubbles.
http://www.marketwatch.com/story/fed-officials-stress-that-june-meeting-is-live-2016-05-17
Embrace diversity.
———
“No More Blue Eyes And Light Hair!” Muslim Brags About Committing Genocide Of German People
Freedom Outpost | 5/17/2016 | Walid Shoebat
A major Islamic researcher, highly respected in her field, has said outright ‘we are going to destroy you completely from your culture down to your biological makeup’ on a taxpayer-funded television station–a German equivalent of PBS or C-SPAN. “No more blue eyes.” “No more light hair.”
What a cautionary tale for what happens when the takers use their majority to vote in a criminal “socialist” regime that steals the country blind until it runs out of other people’s money and maladministers the place into the ground. Watch and learn, ‘Muricans. Once the collectivist comrades of the DNC have their unassailable Permanent Democrat Supermajority of dependency voters, we are going down the same road.
http://www.businessinsider.com/venezuela-is-falling-apart-and-its-military-is-terrifying-people-2016-5
Are all these Chinese buyers owners of the factories that pay their workers $2/day? How is it a country with such a controlled economy, cheap labor, cheap currency, can be averaging $500k in foreign real estate in cash? Are their elites in the FIRE economy like over here? Shuffling paper around for millions in profit?
My landlord’s foreign exchange student’s parents just bought a pad in Seattle in all cash. They also pay $40,000 a year to send their son to a private academy up here in Mass. Craziness.
All sellers are paid with cash. Buyers borrow. All these rapidly depreciating shacks are mortgage 100%+.
All sellers are paid with cash. Buyers borrow.
Hence the price pressure is upward.
The pleasure of receiving a high and rising price as a seller needs to be offset by the pain of paying this high and rising price by the buyer. This does not happen because, while the seller gets his price in total and in cash, the buyer neither has to pay the price in total or in cash; What the buyer does is to PROMISE to pay the price in total (and then some).
If these buyers who bid up prices actually had to pay the prices that they bid up then they couldn’t do it. If they couldn’t do it then the prices could never become bid up as high as they are.
Since there seems to be no shortage of foolish buyers willing to commit themselves to paying any price for any thing the only way to dampen a price rise is to cut these fools off from the ability for them to make their foolish commitments.
Or, another way to look at it: If you want prices to rise up to foolish levels then allow fools the ability to push them there.
Allowing fools to push real estate price to lofty levels is seen by many, probably by most, as being a wonderful thing to occur because these lofty prices translate into wealth, equity wealth, equity wealth for everyone who just happens to live in the same neighborhood.
And the most wonderful thing about this phenom is very little money needs to be involved in creating all this equity wealth that many, many strangers who happen to live nearby, get to enjoy.
A true miracle. Truly we need more of this to take place.
(sarc)
If these buyers who bid up prices actually had to pay the prices that they bid up then they couldn’t do it.
Yes, that would be fully amortized PITI kicking in. Where prices bid up to ~3x median household income for that area, and then hit a ceiling. Good gosh, haven’t we been reading about this?
What makes China different and noteworthy is the combination of the high volume of investment (and) the breadth of its participation across all real estate categories,’ including a ’somewhat unique entry into residential purchases,’ the study said.”
So much for all real estate being local…
Marxist economy finally arrives - as all Marxist economies must - at the end of the road.
Meanwhile, obama and his heir-apparent, Hillary, hope for the same fate for the US - and work aggressively toward that end.
It’s an object lesson in simple reality which Americans ignore at their peril.
————
Venezuela opposition leader Capriles says army must choose
BBC News | 5/17/2016 | BBC
Venezuelan opposition leader Henrique Capriles has urged the army to choose whether it is ‘with the constitution or with (President Nicolas) Maduro”, after a state of emergency was declared.
President Maduro has announced a 60-day emergency, giving soldiers and police wider powers to deal with the country’s sprialling economic crisis.
Mr. Capriles said the decree gave the president unconstitutional powers.
He called on Veneuelans to ignore it and take to the streets on Wednesday.
“We Venezuelans, will not accept this decree. This is Maduro putting himself above the constitution,” Mr. Capriles told journalists.
“To impose this, he’d better start preparing to deploy the war tanks and military jets,” he added.
“And I tell the armed forces: The hour of truth is coming, to decide whether you are with the constitution or with Maduro,” he said.
‘
My prediction is that a military junta is imminent. It won’t necessarily favor Mr. Capriles. I believe Brazil will have a military government soon too, but not until after the Olympics.
Coming next from the next democrat dictator.
Obamacare must be accepted from all doctors.
And then we will wonder where all the doctors went…
——————–
Sorry, we don’t take Obamacare
Atlanta Journal-Constitution | May 17, 2016 | By Elisabeth Rosenthal - The New York Times
Amy Moses and her circle of self-employed small-business owners were supporters of President Barack Obama and the Affordable Care Act. They bought policies on the newly created NY state exchange. But when they called doctors and hospitals in Manhattan to schedule appointments, they were dismayed to be turned away again and again with a common refrain: “We don’t take Obamacare,” the umbrella epithet for the hundreds of plans offered through the president’s signature health legislation.
Though their insurance cards look the same as everyone else’s the plans are often very different from those provided to most Americans by their employers. Many say they feel as if they have become second-class patients.
“I will sign a universal health care bill into law by the end of my first term as president that will cover every American and cut the cost of a typical family’s premium by up to $2,500 a year.”
— obama (D), June 23, 2007
““But we have to pass the [health care] bill so that you can find out what’s in it….”
— Nancy Pelosi (D), Speaker of the House, March 2010
“The stupidity of the American voter would have killed the law if more people knew what was in it.”
— Jonathan Gruber, “architect” of Obamacare
———–
obamacare went on to pass without s SINGLE republican vote in the House or Senate.
Yet we have a democrat favored to win in the next presidential election.
Why are these people not shamed into exile? Why are they not in jail? Why are they not publicly humiliated and laughed at?
The Free Sh*t Army votes.
And yet people still associate our current state of problems with Bush. It’s madness. Obama added $9T in debt, but that was to “fix Bush’s economy”. Obama has added to our warfare/conflict list, but “its Bush’s wars”. Insurance premiums after ACA has spiked and will continue to do so, but “everyone has insurance now, praise be to Obama”. This guy and his associates can literally do no wrong, and all people have in their minds now is that the Republicans and conservatives are trying to ruin America by refusing to pass his budgets and regulations.
Insurance premiums would have spiked anyways, don’t kid yourself. In medical they just bill whatever they want and it never gets cheaper even though the technology behind it has advanced and is much cheaper.
Funny how medical procedures NOT covered by insurance, obamacare or government (cosmetic, lasik, etc.) goes down in cost year after year…even as the technology gets better and better.
There is a lesson in there somewhere…
Oooooph…
How’s that hope ‘n change working out for you, Amy?
And pay a massive premium for that luxury. VA and Oregon announcement rate hikes on premiums of 25% and 29% respectively for the coming year. This will happen nationwide.
The piercing squeals of the middle class Obama Zombies as the bill comes due for hope ‘n change is music to my ears.
Some of us opposed the ACA from the start, as a concept birthed by the Heritage Foundation and turned into policy by Mitt Romney as Massachusetts governor. This administration liked it, because it naively thought a right-wing plan promoted by a Democratic President and Congress could be sold to the public as true bipartisan governance. Fail.
“And then we will wonder where all the doctors went…”
Where will they go? ALL other industrialized nations already have socialized healthcare and pay their doctors a LOT LESS than they’re paid here. Plus you’ll need a work visa and be re-certified in the new country.
They’re gonna have to do what the rest of us have been doing: getting by on less pay.
Which means that a lot of our new medical professionals will be from third-world countries.
Forward!
Or they could come from other first world countries. The difference in pay between US doctors and their counterparts in other first world countries is staggering.
Trainee doctors currently have a starting salary of £22,636 - at Foundation Year 1 (F1) - rising with experience to reach £30,000 within four years. Doctors in specialist training (ST) receive a salary of between £30,002 and £47,175, while those who make the grade can earn up to £69,325.,/em>
http://www.telegraph.co.uk/news/2016/03/16/how-much-are-junior-doctors-paid-and-why-are-they-threatening-to/
We must import millions more Democrat-on-Arrival voters to further strain our natural resources and open spaces to the limit.
http://www.mercurynews.com/california/ci_29902724/americas-vanishing-west-california-losing-most-land-development
The insanity of the left.
I used to be a member of the Sierra Club and a few other environmental groups.
They all pushed for the most left wing democrat candidates and they were all for massive immigration into America.
I wrote the president of the Sierra Club (and letters to the editor of their magazine) stating that without immigration America basically had a replacement fertility rate. Meaning (theoretically) that not one new house, subdivision or shopping mall would needed to be built - ever!
Why don’t you support this position considering your mission is to preserve the environment?
I never got an answer or letter published. Because saving the environment is not even on their 10 ten things to do.
Yes indeed. It would be tragic if we utilized our existing stock of decrepit shopping malls/plazas, and 25 million + empty homes.
But we need immigrants to replace the middle class and their lower birth rates.
“Another potential factor to the group’s pro-immigration leanings is the donor: David Gelbaum’s large donation of money to Carl Pope, the former Executive Director.[47] Allegedly, Galbaum threatened to stop funding if “they ever came out anti-immigration”.”
-Wikipedia
“Carl Pope, the chairman of the Sierra Club, said his organization now had one population officer on staff who was working on international reproductive health services. In this country, Mr. Pope said, there are reasons for keeping a low profile on the issue.
“Look at Planned Parenthood,” he said, recalling the group’s bruising battle with Republican lawmakers over federal financing last spring. “There’s a huge atmosphere of intimidation. The moment you say ‘family planning,’ immediately somebody pulls out abortion.””
-New York Times
They sold out for big bucks of a far leftist/progressive donor?
So now we have an environmental group that wants unfettered immigration.
Corrupted to the bone.
The Sierra Club is great at extracting money from developers to support the Sierra Club.
This won’t end well. With tens of millions of Chinese bagholders enraged at the government that tacitly encouraged “investing” in asset bubbles, the corrupt clique running the country will naturally turn to neocon-style foreign military adventurism to rally the sheeple behind its “leadership.”
http://www.zerohedge.com/news/2016-05-18/chinas-tier-1-housing-bubble-so-big-goldman-will-need-bigger-chart
B…b…but I thought retail was booming! Our Soviet-style official statistics said so!
http://www.businessinsider.com/target-earnings-2016-5
Lone Tree(Denver), CO Housing Affordability Improves As Prices Plunge 7% YoY
http://www.zillow.com/lone-tree-co/home-values/
So what you are saying is house prices in Denver are going down like a Big Gulp in the hands of Triggly Puff while she is raging against free speech in a safe space.
This is What a Social Justice Warrior Looks Like - YouTube
http://www.youtube.com/watch?v=oFrZsGbO6N0 - 389k -
Looks like the dream date of the FAOM.
Indeed she is my friend. Indeed she is.
The UK elites and their captured Establishment politicians are warning of catastrophe if UK voters, who have been shafted by globalism, vote for Brexit. How is the uncertainty leading up to the vote - and the real possibiity of a win for the anti-EU forces - going to affect the UK’s overheated housing and stock markets?
http://www.marketwatch.com/story/blame-brexit-fears-uk-stocks-most-unpopular-since-2008-2016-05-17
How is China going to export its surplus capacity if the western nations start slapping on anti-dumping tariffs? Cue trade war in 3-2-1….
http://www.telegraph.co.uk/business/2016/05/18/america-slaps-522pc-trade-duty-on-imports-of-subsidised-chinese/
And the dumping of US Treasuries would begin, well, it already has, they would just accelerate
Germans voted for the globalist Merkel and her Quislings. Now they are getting exactly what they voted for. I have no sympathy.
http://www.breitbart.com/london/2016/05/18/migrant-gang-crime-soars/
The beauty of the 2nd Amendment and wisdom of our Founding Fathers amazes me every day.
They were so wise. It’s amazing seeing the applicability of their quotes in various writings and speeches to today’s tyranny. History repeats.
Too bad Massachusetts where I currently reside has restricted the 2nd amendment to the point of being useless. 8+ weeks for processing of Firearm IDs (shall issue - grants shotgun/long rifle), or “License to Carry” - LTC, which is required to even own handgun ammo. The local police chiefs can deny you on any grounds they feel like - hair, demeanor, age, etc.
It’s worse here in Seattle.
Didn’t Seattle offer up Amazon gift cards to people to turn in their guns like a year or so ago?
Something like that. When I was living in DC people voluntarily gave up their iron.
Malls are circling the drain.
http://wolfstreet.com/2016/05/17/mall-owners-reit-feel-pain-of-brick-mortar-retailers/
This is going to hit city budgets hard, as most of them heavily depend upon local sales taxes from these large retail establishments.
If they get replacement sales tax revenue from the online retailers, they’ll be OK.
Otherwise, they can just increase the impact fees they charge. No problem.
They’ll find a way to extract money for their pensions one way or another.
We must stop impugning Democrat voting blocs and Hillary supporters by calling them violent criminals. Let the Orwellian newspeak begin….
http://www.breitbart.com/big-government/2016/05/17/sentencing-reform-cory-booker/
Venezuela: a preview of coming attractions in our coming Permanent Democrat Supermajority.
http://www.shtfplan.com/headline-news/venezuela-a-preppers-nightmare-come-to-life-pay-close-attention-to-what-happens-next_05172016
…a supermajority republicans built by becoming the party of Shotgun Jesus.
The Democrat Convention in Philly is going to be a lot of fun!
She is such a weak and corrupt candidate.
————-
KENTUCKY FREEFALL: Hillary Loses Quarter of a Million Votes from Her 2008 Primary Win
Gateway Pundit | 05/17/2016 | Jim Hoft
It was another disastrous night for Hillary Clinton. Hillary Clinton lost nearly a quarter of a million votes tonight in Kentucky compared to her 2008 victory.
Hillary won the Kentucky primary in 2008 with 459,511 votes.
On Tuesday night Hillary pulled ahead of Bernie Sanders in Kentucky in the final minutes. With 99% of precincts reporting— Hillary has 212,549 votes to Bernie’s 210,626 votes.
Lots of inbred Jeds and dependency voters in KY. Hillary’s got the lock on the stupid parasite vote.
Voting in criminal socialist regimes is a lot easier than getting rid of them.
https://www.yahoo.com/news/venezuela-must-defy-state-emergency-opposition-012533376.html?nhp=1
Maybe its part of a Govt sanctioned plan to ruin America? Hand out free money to ‘elites’, turn a blind eye as they escape ‘capital controls’, purchase US assets to create a bubble, making it more and more difficult for Americans to get ahead, allow the RE market to implode with their funny money? Also they could start to dump US treasury bills. Are they economic amateurs, communists, or geniuses?
Cheer up my friend. This ballooning mess on the horizon is a rare opportunity and remember……Liquidate and get rid of any debt and depreciating assets and hold onto every dollar you’ve got. You’ll thank us later.
“Are they economic amateurs, communists, or geniuses?”
Connected, they are connected. It’s a private club and we are not members.
George Carlin nailed it.
IMO there two things that can produce a financial genius:
1. A bull market.
2. Connections.
‘In a note to clients, Intermarket Strategy Ltd. Chief Executive and Strategist Ashraf Laidi points out that the S&P 500’s 50-week moving average is falling below its 100-week moving average.’
‘This “statistically significant” death cross has only happened twice is the past two decades, Laidi points out. The first took place in 2001 and was followed by a 37 percent decline in the index, while the second pattern occurred in 2008 and preceded a 48 percent drop.’
‘The six-bedroom, five-bath house in Palo Alto is now listed for $7.5 million. It joins a growing inventory of high-end homes in the area that are taking longer to sell. It’s a departure from recent years, when newly minted millionaires from tech initial public offerings raced against buyers from China to scoop up anemic inventory.’
From Monday:
‘KGH in Oregon. “In a new report from Christie’s International Real Estate, Portland comes in at number 8 on a list of the world’s hottest luxury housing markets. There are a number of multi-million dollar homes on the market, but they may not stay available for long. So who’s buying? Terry Sprague, the Founder of Luxe Platinum Properties, said in the last few months, he’s already done $10-15 million in sales. International buyers made up about 70 percent of that. ‘They’re actually specifically advertising our properties to their billionaires in China right now,’ he said.”
“Overseas buyers are buying homes for all sorts of reasons. Some want to live Oregon, others want to have a vacation home, and still others want an investment they think will go up in value. ‘Real estate is becoming a new currency,’ Sprague said. The rest of the luxury home buyers are often younger, successful people who many times have a well-paying tech job. The report points out that Portland is attracting entrepreneurs and highly paid workers from Silicon Valley. ‘Most recently I had two-million dollar, three-million dollar properties that have sold to 25, 30 years olds,’ he said.”
http://thehousingbubbleblog.com/?p=9636
I’m guessing there is a chinese version of the rocket mortgage app.
Voting yourselves benefits that other people have to pay for has an inevitable end game once the takers overwhelm the makers. This is exactly how our Permanent Democrat Supermajority kleptocracy is going to play out in a few more years. Watch and learn, ‘Muricans.
http://www.theguardian.com/global/2016/may/18/venezuelans-on-food-shortages-economic-crisis-blighting-daily-lives-maduro
Goldman Sachs has a long and inglorious history of telling the muppets one thing, while secretly betting against them. The “former” Goldmanites running the Fed, ECB, and BoE have since 2008 printed countless trillions to prop up our rigged, broken, manipulated markets and enrich their “former” employer and the entire oligopoly financial sector beyond measure - but what if this time, GS knows what’s coming (odd, that) and is positioning themselves for a crash?
http://www.businessinsider.com/goldman-downgrades-stocks-to-neutral-2016-5
The MSM assures us with a straight face that the Fed is “serious” about tightening its ultra-easy credit and ZIRP this year. Sure they are. And Jennifer Lawrence is upstairs sleeping in my bed right now after our night of passion…yeah that’s it, that’s the ticket….
http://www.marketwatch.com/story/wall-street-stocks-in-holding-pattern-ahead-of-fed-minutes-2016-05-18
The insanity of the left and the obama administration.
And you leftists think they could run health care?
Let’s see:
$2 million divided by 400 muslim refugees = $5,000 per muslim refugee to HELP them find a summer job in upstate NY…
—————
Obama spending millions to find summer jobs — for refugees
theamericanmirror | May 17 2016 | VICTOR SKINNER
The Obama administration wants to make sure Utica, New York’s young refugees aren’t without a job, so he’s spending millions to make sure it doesn’t happen.
“Access to a job in the summer and beyond can make all the difference to a young person – especially those who don’t have access to many resources and opportunities,” President Obama said of his new Summer Opportunity Project.
The project spends a total of $21 million on a variety of programs in 11 communities nationwide with the focus of helping young people find summer work, and permanent part-time jobs, the White House and U.S. Department of Labor announced Monday.
At least $2 million of the total will be set aside to help 400 refugee students in Utica, New York get to work through the New Americans Career Pathways Project, the Utica Observer-Dispatch reports.
How’s that tranny bathroom policy working out for your stockholders, Target?
http://www.marketwatch.com/investing/stock/tgt
Gotta love distractions. They just get more absurd as time goes on. Black Lives Matters to Tranny bathrooms? The White House and Govt is getting involved now. At least with Bruce Jenner you could change the channel and ignore, now its being burned into our skulls.
The trannies are coming to leer at your naughty bits! It’s ARMAGEDDON!
A few years ago when I witnessed undocumented gentlemen who were at the time allowed to stand in front of Walmart in Jupiter Fl. and make comments in Spanish, laugh and stare at girls as young as 11 or 12 as they walked by I could have told you that allowing someone to choose the bathroom they wanted based on how they felt about their sexuality that day was a bad idea.
Ages of consent in North America
From Wikipedia
The ages of consent in North America for sexual activity vary by jurisdiction.
The age of consent in Canada is 16. All U.S. states set their limits between 16 and 18.
The age of consent in Mexico is complex. Typically, Mexican states have a “primary” age of consent (which may be as low as 12), and sexual conduct with persons below that age is always illegal.
There Are 747,000 Registered Sex Offenders In The United States
By Michael Snyder, on July 15th, 2013
America has just about reached a new milestone – we currently have close to three quarters of a million registered sex offenders in this country. According to the National Center for Missing & Exploited Children, there are 747,408 registered sex offenders in the United States right now. And those are just the ones that have been caught and convicted. How many more sickos are running around out there that we don’t even know about? This isn’t just a problem – this is a national epidemic of unprecedented proportions.
Any executive orders in the pipeline to protect kids like this?
1 - 10 of about 748,000 results
Web results
Shock Crime: Illegal Alien Arrested for Binding Child with Duct Tape …
http://www.breitbart.com/…/ - 136k - Cached - Similar pages
Jan 21, 2016 … An illegal immigrant has been arrested and charged in a case of child abuse that police say “shocks the soul.” According to reports, Francisco …
Illegal Immigrant Arrested for Raping, Impregnating 12-Year-Old in TX
http://www.breitbart.com/…/ - 130k - Cached - Similar pages
Mar 28, 2016 … An illegal immigrant has been arrested and charged with raping and … The child also said Najarro pursued her for months after their first …
Two Illegals Charged With Kidnapping, Raping a 12-Year-Old Girl …
http://www.breitbart.com/…/ - 134k - Cached - Similar pages
Apr 10, 2016 … Two Illegals Charged With Kidnapping, Raping a 12-Year-Old Girl. … her to his home in Maryland where both illegals raped the child again.
Illegal alien arrested for raping Arkansas 5-year-old - The American …
theamericanmirror.com/cops-illegal-alien-raped-5-year-old-attempted-flee/ - 165k - Cached - Similar pages
5 days ago … Alexander, Arkansas police believe Mexican
illegal immigrant Jose-Manuel Garcia Gonzalez raped a 5-year-old child before attempting to flee …
Illegal Aliens Committed 500 Child Sexual Assaults in North …
universalfreepress.com/…/ - 170k - Cached - Similar pages
During the month of December 2014, there were 94 illegal aliens charged with 518 various counts of sexual assault against North Carolina’s children, according …
ILLEGAL ALIEN Arrested For Rape Of 3-Year Old Child…You Won’t …
100percentfedup.com/…/ - 206k - Cached - Similar pages
Apr 11, 2016 … Here’s evidence that illegals have more rights than legal US citizens! The answer to where this animal can be located is that THE POLICE …
Children – Page 2 – United States Illegal Alien Crime Report
http://www.illegalaliencrimereport.com/category/crimes-against-children/page/2/ - 82k - Cached - Similar pages
Illegal Alien Arrested On Child Pornography Charges In Pennsylvania … deported illegal alien who was arrested while entering the country illegally has pleaded …
Illegal Immigration Stories | Congressman Steve King
steveking.house.gov/illegal-immigration-stories - 132k - Cached - Similar pages
An illegal alien has been arrested after driving on the wrong side of the road, crashing into a car with a mother and two young children, and fleeing the scene.
New Nation News - Illegal Alien Invasion
http://www.newnation.org/NNN-news-invasion.html - 162k - Cached - Similar pages
Those last 2 links are a trip.
Stop being such a buzzkill.
When Jerry Sandusky was initially confronted by the other Penn State coaches about his shower shenanigans he told them he was just “horsing around.”
Did he get deported?
Mexican Child Molester Caught Re-Entering U.S. Illegally…Again
December 29, 2015
gilberto-izquierdo-ramirez
U.S. Customs and Border Protection Press Release… SANTA TERESA, New Mexico- Border Patrol Agents intercepted another wanted sex offender trying to sneak back into the United States on Monday
So you’re saying transexuals are illegal aliens, and illegal aliens are child molesters, therefore transexuals are child molesters who can’t drive?
Well it’s not true. They are in truth all robots that have come to steal you medicine and give you secret breast enlargement surgery as you sleep.
At least Sandusky was an American citizen. His victims suffered less because of that.
“So you’re saying transexuals are illegal aliens,”
I’m saying the SJW Tranny bathroom BS opens a door for sexual predators that shouldn’t be open.
And the whiteness of his skin was a great comfort.
That’s all we need is all the lolas lurking and leering in public bathrooms.
Get ready for an escalation in the Fed’s swindles against you, savers and retirees.
http://www.marketwatch.com/story/the-real-problem-with-negative-interest-rates-they-are-a-stealth-tax-2016-05-18
It is amazing how the media paints outright theft as doing us all a favor and saving us. It’s kinda like OPEC. Notice how they hang on every word of some corrupt, dictator/billionaire; “oh please, manipulate our oil supply, take our money, please!”
No, Ben, what’s amazing is how 95% of the sheeple bend over for these thieves and grifters on demand, by voting in their water carriers and errand boys election after election.
Like this:
‘China said it would persist with controversial tax rebates to steel exporters to support the sector’s painful restructuring, defying a United States move to impose punitive import duties on Chinese steel products.’
‘A worldwide steel glut has become a major trade irritant, with China under fire from global rivals who say it is dumping cheap exports after a slowdown in demand at home.’
‘China’s Ministry of Finance said it would “continue to implement a tax rebate policy on steel exports” as it tries to finance a costly capacity closure plan. By far the world’s largest steel producer, China plans to eliminate 100-150 million tonnes of annual production - more than the U.S. produces per year - over the next five years.’
Everybody stand back while the WTO swoops in to stop this.
People with mortgages do not get to spend a Wednesday morning snowshoeing in Rocky Mountain National Park:
http://www.picpaste.com/20160518_060904.jpg
Region VIII
I couldn’t stand it any longer, it’s been two days since I pulled a Zillow report for my house and I couldn’t hold off any longer. I just gotta know!
And so, here it is:
Zillow say that my Miracle House has increase in value by $5,927 over the past thirty days. That’s a rate of increase of almost $200 per day. Now just how amazing is that?
Zillow suggests to me (and who am I to argue?) that I must be either:
1. A financial genius, or
2. Surrounded by fools who for whatever reason have access to money.
I like to think it is number 1 but deep down I know it is really number 2.
Leverage and liberate that equity NOW - you fool!
I currently have David Lereah’s home phone number on speed dial. All I have to do is push one button and - presto! - the cash-out miracle will begin to unfold and I will begin to swim in undreamed of equity-generated riches!
I am waiting for the right moment - just the exact moment - when my home equity will peak out and then THE SPEED DIAL BUTTON GETS PUSHED! An equity cash-out will ensue to be replace by a monthly-repayment-plan, something that I will need to attend to when I retire from my job - but, hey, that’s later; I’ll worry about it then.
BTW the two Imports from Mexico I enjoy most are concepts, and these are:
1. Manana, and
2. Siesta.
permits up ?
que’?
discuss
what percentage have cashed out equity since rebound of 2012?
I’m guessing the percent sucked out is as high as 04/05
New car sales are near historic highs.
http://finance.yahoo.com/news/us-auto-sales-show-spark-055547327.html
The industry now seems to be all set to break last year’s record
I wonder how buyers paid for them …
84 month loans for the Lucky Ducks, and cash out refis for the loanowners.
Subprime auto. Where the wheels fall off and fenders flap 4 years before it’s paid off.
Sign and drive isn’t “paying”. The car is fun to drive until the second months lease/loan payment is due!
We are no where close to what was happening during the bubble years.
Here is the data:
http://www.freddiemac.com/finance/refi_archives.html
See the first link…it links to an Excel spreadsheet that shows some cash-out data going back to 1994.
If you go to the fourth tab “Cash-Out Vol Qtrly”, you can see volume of money coming out as refinance proceeds.
This is for PRIME Conventional Loans:
From 1994 through 2000, an average of about $12B per quarter was pulled out through cash out refinances, or HELOCs
Then the numbers go up.
From 2001 through 2007, the average ballooned to $58.5B per quarter pulled out through cash out refi or HELOC.
Peak madness was 2006, when the average was almost $90B per quarter getting pulled out of housing.
2008 and 2009 were in full cash-out decline, only averaging $28B per quarter.
From 2010 through 2015, the average was about $15B per quarter, with 2015 averaging $17B per quarter.
—————-
If you look at the first tab, it looks like a lot more people are pulling out money, 43% of loans going into a 5% higher loan amount. This is a far cry from the 90% peak in 2006, and closer to the average from 1994-2000, but certainly well off of the trough of about 15% in 2012.
—————-
Wow, if you look at the annual data, that’s eye-popping.
$1.1 Trillion pulled out (and presumably spent in the economy) from 2004 to 2007 (4 years) - $275B per year.
$575 Billion since (8 years) - $75B per year.
Before that, the average was $85B per year, with the numbers a lot higher 2001 onward.
I just looked at another table from the Excel spreadsheet I just linked.
It shows the refinance transition from one type of loan to another…for instance, Q3 2006:
People who were refinancing a 30-year fixed rate mortgage:
80% went right back into a 30-year
7% went to a 20-year
6% went to a 15-year
8% went into an ARM
I recognize that was peak madness, but to compare to Q4 2015, people who were refinancing a 30-year fixed rate mortgage:
58% went back into a 30-year
11% went to a 20-year
30% went to a 15-year
1% went to an ARM
‘We are no where close to what was happening during the bubble years’
We are in price, higher in some cases. A few much higher.
I think we can all agree the year is 2016. I know the bubble deniers are all hung up on 2005 or 2007 or whatever. The bubble is in the price. We have a serious recession ahead. A credit crunch too, when these developers start dropping and people get laid off. Maybe even a tech stock crash. Oh and the junk bond bubble, I almost forgot. China is staggering around like a drunk camel on a hockey rink. We’ll see who is swimming naked soon enough.
Prices in 2004-2007 were driven by availability of debt and people aggressively obtaining that debt. Lenders and borrowers were being the exact opposite of conservative.
I can’t deny your comment about prices, because it’s true. Lots of markets are above peak, but nationally, we are not (ie. there are lots of places that are still well below the peak–but don’t get a lot of press).
As evidenced by the type of financing people are getting, FICO scores for new loans, and default rates for recent vintages, attitudes toward debt are more conservative from both lender’s and borrower’s perspective. Prices are being driven by something different this time.
I think it’s supply constraints. Adding supply will take the wind out of the sails of the housing market, but generally because of the generally conservative lending/borrowing, it won’t result in mass defaults for existing homeowners.
How would you propose we make housing more affordable in this country? And you can’t just say “make land prices lower”, because we have property rights in this country and we have plenty of land (and ability to “make land” through creation of condos, etc.). It isn’t the supply of dirt.
Prices are driven by fraud. It’s that simple.
Wrong-O my friend. Current conditions are unprecedented. Record numbers of subprime mortgages on the books, record levels of fraud, record levels of cash out refi’s, record levels of housing inventory, record low population growth, record low household formation.
Vienna, VA Housing Affordability Surges As Prices Plummet 7% YoY
http://www.zillow.com/vienna-va/home-values/
Vienna waits for you - YouTube
http://www.youtube.com/watch?v=TivZakvhDQI - 240k -
Having driven through northern IN to/from Rummy’s socialist paradise known as Chicago, several times the last decade or so - kids went to school in OH - this article does not even scratch the surface of what is going on in eastern IN - from Richfield (near Cincy) up to Ft. Wayne and beyond over to Toledo, OH. The rot along US 6 / US 30 is just depressing. Infrastructure / Housing stock / farms / you name it on main street - all just dog eared and failing. I feel deeply for these folks - they have literally had the rug pulled out from under them. In a word this is amoral.
Well worth a quick read.
http://www.theburningplatform.com/2016/05/18/middle-class-destitution-a-devastating-tale-from-americas-heartland/#more-122550
Indiana’s not that bad.
Cheer up, do a bong hit, and listen to some John Cougar Mellencamp.
“Indiana’s not that bad.”
I heard everyone in Indiana gets a little pink house.
Have you been to Gary or East Chicago?
‘Brokerage industry regulators have fined Raymond James $17 million, accusing the financial services firm of widespread failures in its controls against money laundering’
‘The Financial Industry Regulatory Authority said Wednesday that Raymond James failed over several years to detect suspicious activity in client investment accounts and to report it to government authorities. FINRA said the firm’s failure was especially serious because it already had been censured and fined in March 2012 for the same problems.’
Stock is up 2.9%.
“A custom-built home in the heart of California’s Silicon Valley had its price cut by $500,000 last week after sitting on the market since the end of March — a move that would’ve been almost unfathomable a year ago and a signal that frenzied demand has peaked.”
I’m observing a definite reduction in the housing price spread in Los Angeles: meaning high priced properties are coming down and low priced properties are continuing to go up. Stucco shacks are going for 500k–but for just 350k more you can get a turnkey bungalow in the low hills. I know these are CA numbers that just seem crazy elsewhere, but there is something that strikes me as quite wrong about the values. The ghetto seems overpriced while the tony hoods are a relative bargain. Not sure what it means…
It means the lower end is gonna get crushed.
It means we aren’t building enough affordable homes.
There’s plenty of empty houses. 25 million of them.
The knowledge economy is a myth. We don’t need more universities to feed it
Andre Spicer
Most new jobs now do not require degree-level qualifications. Encouraging more young people to graduate will create only debt and disappointment
Governments around the world believe that to remain competitive in a global economy they must become smarter. In an attempt to boost its knowledge intensiveness, the UK government has just launched a plan to overhaul the university sector. It aims to transform universities by creating many more of them. The hope is that this will increase the number of people with degrees, and the UK will be a more competitive economy.
The idea of the knowledge economy is appealing. The only problem is it is largely a myth. Developed western economies such as the UK and the US are not brimming with jobs that require degree-level qualifications. For every job as a skilled computer programmer, there are three jobs flipping burgers. The fastest-growing jobs are low-skilled repetitive ones in the service sector. One-third of the US labour market is made up of three types of work: office and administrative support, sales and food preparation.
The majority of jobs being created today do not require degree-level qualifications. In the US in 2010, 20% of jobs required a bachelor’s degree, 43% required a high-school education, and 26% did not even require that. Meanwhile, 40% of young people study for degrees. This means over half the people gaining degrees today will find themselves working in jobs that don’t require one.
This bleak picture could get worse. There has been a decline in demand for knowledge-intensive workers requiring a degree since 2000. Over 47% of existing jobs are under threat of being automated. The occupations most likely to be automated out of existence are knowledge-intensive ones such as auditor, insurance underwriter and credit analyst. Those least at risk of automation are hands-on jobs such as masseuse and fire fighter.
The stark mismatch between the number of people with degrees and the number of jobs requiring degrees has created a generation of bored employees who feel like they are working “bullshit jobs”. It’s no surprise 37% of UK employees think their jobs make no meaningful contribution to the world at all.
As people with degree-level education take lower-skilled jobs, the less educated are pushed further down the labour market. In some cases they are pushed out altogether. Often their only route back in is an expensive degree that will enable them to get a job that actually only requires a high-school level education to do. We might think that as the cost of higher education goes up, people will be put off studying. Not the case. Higher education is a luxury good: as the price goes up, demand does not decline. Two US economists found that as prices went up for university degrees, there was only a very small fall in demand. According to some calculations, the cost of a degree in the US has gone up 500% since 1985. Over the same timeframe, demand has continued to rise rapidly.
http://www.theguardian.com/commentisfree/2016/may/18/knowledge-economy-myth-more-universities-degree
This myth feeds the educational-industrial complex and keeps tenured professors employed, not to mention maintaining a steady supply of desperate-to-be-hired technical talent for the employers.
While in engineering college in the 1980s getting my EE degree, I was a member of the IEEE and received their magazine as well as several of the free industry trade rags (EDN, EE Times, etc.).
There was ALWAYS a projected shortage of a few hundred thousand EEs, 5-7 years out. ‘Great,’ I thought - this will make it really easy to get a job. WRONG!!!
There were a few times that I found myself looking for work during these supposed periods of massive engineer shortages. The only problem? There weren’t that many job openings.
After a few cycles of this, I finally figured out that it was industry-generated propaganda to flood the market with engineers to keep wages suppressed.
And then in the late 1990s Bill Gates, using his daddy’s law firm who then hired Jack Abramoff, broke open the H1B floodgates.
Ain’t globalism grand?
Yeah, there’s a desperate shortage of PhD’s to fill research jobs O_o
HA will be pissed
http://www.latimes.com/business/la-fi-0517-socal-prices-april-20160517-snap-story.html
Dear Homeowner: If You’re Paying $260,000 in Property Taxes Over 20 Years, What Exactly Do You “Own”?, I questioned the consequences of high property taxes.
http://www.zerohedge.com/news/2016-05-18/are-property-taxes-wealth-tax-mostly-non-wealthy
B-b-but you can paint the walls any color you want!
Sigh, loosers.
$260K!?
Someone needs TABOR, stat!
“Note that applies to areas with high property taxes–in excess of $10,000 annually, not locales with annual property taxes of $2,000.”
“including his $431,042 in annual property taxes.”
Is Tiger Woods running out of money?
by Daniel Roberts
July 15, 2011, 1:18 PM EDT
As Tiger’s revenues have declined, his expenses have only climbed. To begin with, there’s the reported $100 million divorce settlement. And last August, Woods took out a $54.5 million mortgage on his home in Jupiter Island, Florida. According to the public document, Woods is required to pay off the mortgage in full by January of 2016, giving him a mere five and a half years to shed the debt. He’s therefore paying more than $10 million each year, including his $431,042 in annual property taxes.
fortune.com/2011/07/15/is-tiger-woods-running-out-of-money/ - 161k - Cached - Similar pages
good work O.
today-
The US has raised its import duties on Chinese steelmakers by more than fivefold after accusing them of selling their products below market prices.
The taxes of 522% specifically apply to Chinese-made cold-rolled flat steel, which is used in car manufacturing, shipping containers and construction.
It’s all a ruse to distract us from his transsexual agenda. Don’t be fooled!
transsexual agenda
is for facebook users and Fox news to get worked up over, not the real world.
Russ has trouble when he steps out of the SJW box like Obama has trouble when he steps into the economy box.
I am happy with the results:
Corporate Profits Have Grown By 171 Percent Under Obama — Highest Rate Since 1900
http://www.alternet.org/comments/news-amp-politics/corporate-profits-have-grown-171-percent-under-obama-highest-rate-1900
“I am happy with the results:”
A ThinkProgress article brought to you by alternet?
LMAO
ThinkProgress
From Wikipedia
ThinkProgress is an American political news blog. It is a project of the Center for American Progress, a progressive public policy research and advocacy organization. The blog is edited by Judd Legum, who founded it in 2005. Since a 2011 re-design, the blog operates a number of sections, including climate, economy, health, justice, LGBT, security and culture.
History
ThinkProgress was founded in 2005 by editor Judd Legum, a lawyer.[2] It was edited by Faiz Shakir from 2007 to 2012, when he became Nancy Pelosi’s Director of New Media,[3] and Legum returned.[2] It included a daily newsletter that contained a recap and analysis of major political news and the blog Wonk Room, which was published until 2011. In that year, the site was redesigned to offer separate blog sections, organized by subject matter,[4] and consolidated other CAP blogs, including ClimateProgress, founded by Joseph J. Romm.[5] The blog’s sections after the redisgn include climate, economy, health, justice, LGBT, security and culture.[5]
AlterNet
From Wikipedia
AlterNet is an activist news service and a project of the non-profit Independent Media Institute.[2] Launched in 1998, AlterNet claims a readership of over 5.9 million visitors per month,[3] though the web ratings service Quantcast estimates that it receives 1.3 million.[4]
AlterNet publishes original content as well as journalism from a wide variety of other sources. AlterNet states that its mission is to “inspire citizen action and advocacy on the environment, human rights and civil liberties, social justice, media, and health care issues”.[3] AlterNet’s tagline is “The Mix is the Message.”
so you have other facts to dispute it???
Irrelevant.
“so you have other facts to dispute it???”
Just what they left out.
“Corporate Profits Have Grown By 171 Percent Under Obama”
“So, corporate profits are their highest ever and wage growth is near its lowest in half a century.”
Why are US corporate profits so high? Because wages are so low
By Jamie McGeever
January 24, 2014
U.S. businesses have never had it so good.
Corporate cash piles have never been bigger, either in dollar terms or as a share of the economy.
The labor market, meanwhile, is still millions of jobs short of where it was before the global financial crisis first erupted over six years ago.
So, corporate profits are their highest ever and wage growth is near its lowest in half a century. But don’t expect the transfer of that cash from businesses to workers to start any time soon, says Hatzius:
“The bottom line is that the favorable environment for corporate profits should persist for some time yet, and the case for an acceleration in the near term is strong. Hourly labor costs would need to grow more than 4% to eat into margins on a systematic basis. Such a strong acceleration still seems to be at least a couple of years off.”
blogs.reuters.com/…/why-are-us-corporate-profits-so-high-because-wages-are-so-low/ - 78k -
Corporate Profits Are Soaring, But You’re Not Feeling It
10/01/2013 02:07 pm ET
Corporations may be raking in record profits, but workers aren’t getting any richer, new data illustrates.
In fact, real wages have declined by nearly seven percent in the past seven years, according to data collected by the compensation research company Payscale. In other words, U.S. workers have less buying power now than they did before the financial crisis.
Meanwhile, corporate profits have increased by 18.6 percent over the past year, according to Payscale. In fact, corporate earnings now represent a larger share of GDP than during any other period in history.
Payscale’s findings are just the latest in a slew of research that indicates the sluggish economic recovery has not been beneficial for most of us. Income inequality in the U.S. is at a new high as skyrocketing income gains for the top one percent are met by stagnating wages for practically everyone else. In 2012, an average CEO of one of the nation’s largest companies was paid 273 times more than his or her workers, according to a study by the Economic Policy Institute, a left-leaning think tank.
http://www.huffingtonpost.com/2013/10/01/real-wages-down_n_4023869.html - 244k -
“Corporate Profits Have Grown By 171 Percent Under Obama”
Record Average of 93,671,000 Americans Not in Labor Force in 2015
Average participation rate lowest since 1977
BY: Ali Meyer
January 8, 2016 9:29 am
A record average of 93,671,000 Americans 16 or older did not participate in the nation’s labor force in calendar year 2015, and the average labor force participation rate was 62.7 percent, a 38-year low, according to data released Friday from the Bureau of Labor Statistics (BLS).
The 93,671,000 Americans not in the labor force in 2015 are those individuals who did not have a job and did not actively seek one. There were 1,646,000 more individuals not in the labor force in 2015 than there was in the year prior.
The participation rate, the percent of the population who participated in the labor force by either having a job or actively seeking one, averaged at 62.7 percent in 2015 which has not been this low since 1977—a span of 38 years.
The average unemployment rate in 2015 was 5.3 percent which declined from 2014’s average of 6.2 percent. This measure does not account for those individuals who have dropped out of the labor force. The unemployment rate simply measures the percent of those who did not have a job, but actively sought one over the month.
The “real” unemployment rate average for 2015, or the U-6 measure, was 10.4 percent, which dropped from the 12 percent it was in 2014. Some democrats such as Sen. Bernie Sanders (I., Vt.) and Federal Reserve Chair Janet Yellen have said that this measure is more representative of the labor market because it accounts for discouraged workers and those working part time instead of full time for economic reasons.
“Corporate Profits Have Grown By 171 Percent Under Obama”
Food Stamp Use At All Time High Despite Eight Year Low Unemployment Rate
by Alex Swoyer2 Mar 2016
Washington, DC
Despite the nation’s lowest unemployment rate in eight years, the number of Americans on the Supplemental Nutrition Assistance Program – also known as food stamps – is at an all time high.
The official 4.9 percent unemployment rate is at an eight-year low, but the number of people on food stamps (47,636,000 in 2013) remains high, according to the Media Research Center.
MRC’s Nick Kangadis reports the discrepancy is because the unemployment rate doesn’t account for Americans that have dropped out of the work force.
As of January 2016, 94 million Americans weren’t participating in the labor force. “But the Supplemental Nutrition Assistance Program (SNAP) has been hovering around 46 million participants since 2011. The current figure, as of February 2016, stands at 45.8 million Americans receiving food stamps,” notes Kangadis.
According to Bloomberg Business, the last time the unemployment rate was under five percent, which was in 2008, 28 million Americans were on food stamps. That means roughly 19 million more people are using food stamps since 2008.
Damn that Obama and his conservative agenda…
Glad you agree corp profits are at record highs. Did you want the gov to step in and make them share? Who sold us on Trickle Down Economics? Know your party.
do you want less gov or more?
Here’s a novel idea. How about going out and making your own pile instead of expecting a handout.
“Glad you agree corp profits are at record highs.”
Where did their record profits come from?
U.S. National Debt Clock : Real Time
http://www.usdebtclock.org/ - 264k -
“Damn that Obama and his conservative agenda…”
You mean…
Damn that Obama and his Crony agenda.
Do I have to link the picture with Shrub holding hands and playing kissyface with that fat Saudi royal again?
“The taxes of 522% specifically apply to Chinese-made cold-rolled flat steel, which is used in car manufacturing, shipping containers and construction.”
Yup, it’s used to make metal track, studs etc.
Notified by my material supplier this week that metal prices would be going up as follows.
15% June 1
15% July 1
5% August 1
Inconceivable! The CPI assures us there is no inflation. You must be mistaken….
Henderson, NV Housing Affordability Improves As Prices Plunge 7% YoY
http://www.zillow.com/henderson-nv/home-values/
My broken molar is out!!!!! hallelujahayaya!
Time to go rent Deadpool.
El Cajon, CA Housing Affordability Improves As Prices Crater 11% YoY
http://www.zillow.com/el-cajon-ca-92020/home-values/
Fighting my insurance co to pay for my totalled car. of course they are low balling me. got this brilliant response on a local comp I sent them:
we are unable to use a purchase agreement. We look at advertisements.
Housing my friend.
Ponte Vedra Beach, FL Housing Prices Crater 8% YoY
http://www.zillow.com/ponte-vedra-beach-fl/home-values/
“Fighting my insurance co to pay for my totalled car. of course they are low balling me.”
They are just working on those record “Corporate Profits” under Obama.
“Corporate Profits Have Grown By 171 Percent Under Obama — Highest Rate Since 1900″
Yep, and I will give them a good fight. Sometime opportunities are disguised as problems.
I pd $8k for the car 5 yrs ago. They offered $6900, I want $7500.
some win, some lose.
I dont want the gov involved.
“I dont want the gov involved.”
In what?
‘Sanders responded with a statement saying that Democratic leaders must “understand that the political world is changing and that millions of Americans are outraged” at the political and economic establishment.’
‘Later, at his rally in California, Sanders suggested there would be consequences for Democratic Party leaders if they don’t change its rules to expand participation for independents and newcomers. “Open the doors; let the people in,” Sanders said, after supporters booed the mention of the Democratic Party.’
http://www.bloomberg.com/politics/articles/2016-05-18/clinton-democrats-confronting-dangerous-divisions-within-party
Booed the clown car?
Venezuela’s Free Sh*t Army voted for socialism. They got socialism. Now they’re hungry and destitute. They’re getting exactly what they deserve.
http://www.globalpost.com/article/6770236/2016/05/18/we-want-food-venezuela-crisis-deepens
Majority in U.S. Support Idea of Fed-Funded Healthcare System
by Frank Newport
STORY HIGHLIGHTS
58% favor replacing the ACA with federally funded healthcare system
About half would also be OK with keeping the ACA as is
Separate question shows that just over half would favor repealing the ACA
PRINCETON, N.J. — Presented with three separate scenarios for the future of the Affordable Care Act (ACA), 58% of U.S. adults favor the idea of replacing the law with a federally funded healthcare system that provides insurance for all Americans. At the same time, Americans are split on the idea of maintaining the ACA as it is, with 48% in favor and 49% opposed. The slight majority, 51%, favor repealing the act.
http://www.gallup.com/poll/191504/majority-support-idea-fed-funded-healthcare-system.aspx?g_source=Politics&g_medium=newsfeed&g_campaign=tiles
Forward, Free Sh*t Army!
Learn something, Mikey. Here’s the end-game for your socialist utopia.
http://www.dailymail.co.uk/news/article-3595946/No-electricity-no-antibiotics-no-beds-no-soap-devastating-look-inside-Venezuela-s-crisis-struck-hospitals-7-babies-die-day-bleeding-patients-lie-strewn-floor-doctors-try-operate-without-tools.html
Read it again. It’s not my utopia. It’s what the majority of the population wants. Health care is guaranteed and much cheaper in every other developed nation on the planet. Only in America would an idea such as “Medicare for all” conjure up notions of Venezuelan poverty in the minds of more than a very small portion of the population. This is because many Americans have been indoctrinated to support policies which benefit the wealthy and large corporations.
Irrelevant
http://www.theguardian.com/world/2016/may/18/chinese-couple-wedding-night-copying-communist-party-constitution?CMP=fb_gu
This will fix everything in China…
The same Democrats who gloated when Soros rent-a-mobs menaced and assualted Trump supporters and tried to forcibly break up his rallies are now whining about those violent Sanders supporters. Oh, the irony….
http://www.politico.com/story/2016/05/bernie-sanders-debbie-wasserman-schultz-criticism-223318
Democracy by mob combat is the wave of the future.
Isn’t collectivism grand? A preview of coming attractions in our Permanent Democrat Supermajority kleptocracy.
http://www.breitbart.com/national-security/2016/05/17/crisis-venezuela-hitting-apocalyptic-levels/
I’ve been hearing about this one party rule for years. I don’t think it’s going to happen. Our system is set up to naturally support two parties, like the two party system or not. Sometimes we have a big shift. The Whigs disappear, someone else emerges. I think what we are seeing now is such a shift. States are looking like they will break patterns that have held since Reagan. It appears people are actually wanting change. This is unusually because deep down they resist change. It’s interesting that both parties and a bunch of independents have vigorously rallied against the status quo. It’s the biggest shift I can remember in national politics.
We can hope that the libertarians will fill the void left by the republican implosion quickly… the democrats look like they might hang on for a few more years.