Investors Increasingly Face A Funding Gap
The Herald Sun reports from Australia. “One in five apartments in inner Melbourne resold at a loss in the first three months of the year — the highest proportion in over a decade. And experts expect the number to continue to grow, as the ‘huge amount’ of new units coming on to the market impacts the resale of existing apartments. The losses worn by home sellers in council area totalled $5.38 million in the three months to March, or about $39,000 per property. This was the highest total deficit recorded by a council area in metropolitan Melbourne in that period.”
“‘Obviously, this is because of the unit supply,’ said CoreLogic senior research analyst Cameron Kusher. ‘People are probably purchasing these properties off the plan and having to sell when they come up for settlement, and the property is worth less. The huge amount of new supply impacts on existing stock as well. I would expect that we are going to see the number of losses trend a bit higher.’”
The Morning Bulletin. “Central Queensland is the affordable housing hot spot for the state. Domain chief economist Dr Andrew Wilson said prices in towns like Moranbah had been driven up by property speculators in 2011 and 2012 before the coal slump caught out investors who had bought near the peak. ‘A lot of smaller investors were left high and dry,’ he said in the report. ‘(The Moranbah median price) was very high at one stage ($469,000 in 2011, $160,000 in 2016), the mining bust has certainly worked its way into the area.’”
From NT News. “Darwin real estate profits took a dive in the March quarter with one in four units reselling at a loss, according to Core Logic. The number of loss-making sales during the March quarter was up from 13.5 per cent in the previous quarter and nearly double the 11.1 per cent recorded the March 2015 quarter. Real Estate Institute NT chief executive Quentin Kilian said many of the homes that resold at loss in the March quarter were likely bought at the height of the market a few years ago. Mr Kilian said while the reduction in home prices wasn’t the best news for vendors, it was good for buyers.”
“‘It’s a great time for not only first homeowners to get into the market but for investors to buy as well,’ he said.”
From Domain News. “Almost one in four NSW investors have bought an investment property in Queensland, leaving them exposed to a potential oversupply and price drops, new data shows. Sydneysiders are the most active interstate investors in the Sunshine State, with its popularity surging as the harbour city’s four-year property boom wanes, figures provided by Australia’s biggest landlord insurer Terri Scheer show. The figures, which cover those who hold a policy with the insurer, includes about 20,000 NSW landlords in addition to those in other states. The most common location for their Queensland investment properties is likely to be the Brisbane area.”
“The Reserve Bank of Australia, credit ratings agency S&P Global Ratings and property researcher BIS Shrapnel are among those who have voiced concerns over the big pipeline of inner-Brisbane units. Between January 2015 and April 2016, more than 26,000 apartments were approved in Brisbane, Australian Bureau of Statistics data shows. This increased building activity, in conjunction with a sharp decline in net migration into the state, is exacerbating a mismatch between supply and demand, Domain Group chief economist Andrew Wilson says.”
“‘And the growth trend continues to accelerate with the latest data, for April, showing a remarkable 2500 apartment approvals, which is the highest monthly total ever recorded for Brisbane,’ he says.”
From Perth Now. “Squatters are taking advantage of Perth’s highest residential vacancy rate in 20 years by moving into empty rental homes and barricading themselves inside for weeks. Trespassers were also changing locks, breaking door handles and threatening landlords to squat in empty rental properties or vacant homes that were up for sale. EBM RentCover executive general manager Sharon Fox-Slater, whose company is one of Australia’s biggest providers of landlord insurance, said while she used to see a squatting related claim every few years, incidents were becoming commonplace in WA. There are more than 10,000 properties available for rent in Perth, up 35 per cent from this time last year.”
“Judy Luxton, who is based in the UK, had squatters evicted from her two-bedroom apartment in the Perth CBD this week. The property had been rented but the tenant illegally sublet the home. The subletters didn’t pay rent and barricaded themselves within the unit. The Sunday Times joined the property manager in an inspection of the building after the eviction this week which revealed the apartment had been trashed with food left to rot, furniture dissembled and carpets stained beyond repair.”
“It is believed about five people had been living in the unit. ‘I know people are people, but I don’t understand how someone can think it’s OK to do that to a half-a-million-dollar apartment,’ Ms Luxton said.”
The Australian. “Rich-listers and wealthy private investors are setting up funds aimed at lending to foreign apartment buyers left stranded by the banks’ lending bans, in a move that will create a new tier of subprime lending. The apartment market faces the perfect storm of a wave of new development, banks pulling back lending to both apartment investors and developers, rising building costs and recently increased state taxes on foreign buyers.”
“Meanwhile, offshore and local investors are expected to increasingly face a funding gap as banks revalue off-the-plan units approaching settlement, leaving many below their purchase price. Bill Moss, former head of property for Macquarie Group, expects Asian banks, particularly from China and Malaysia, to enter the Australian market in a bid to bridge the funding gap. The loans were made against the value of the asset, not the borrowers capacity to repay the debt, he noted. ‘This is subprime lending,’ Mr Moss said. ‘It is no different to what happened 10 years ago on low-doc lending.’”
“Deloitte Real Estate partner Damian Winterburn said he was aware of two separate $100 million-$300m funds established in the past month by wealthy private investors to fill the funding gap, while a US-based fund was looking at entering the Australian market. These funds were targeting foreign buyers looking to borrow 60-70 per cent of the purchase price. They were charging between 8 and 12 per cent, he said. ‘I don’t want to name the funds as they are already being overwhelmed by demand from largely Chinese and other Asian investors,’ Mr Winterburn said.”
‘Stand-alone house sales in New South Wales, Australia’s most populous state, dropped the most since August 2010 in May, data from the Housing Industry Association show, another indication the property boom is losing momentum.’
From the Domain link:
‘Non-bank lender State Custodians has seen a big increase in mortgage loans for purchases of Queensland properties by interstate investors. “Prior to October 2015, almost all buyers of Queensland investment property lived in Queensland,” says Anouska Linz, manager of online sales at State Custodians. “Since then, the portion of interstate buyers has increased so that there are now almost as many interstate buyers of Queensland properties as Queensland borrowers.”
October 2015 was less than a year ago. These Australian speculators stampede here and there as bad as the Chinese.
‘A glut of units in Brisbane’s inner city are sitting empty as owners struggle to find tenants, Domain Group data revealed. The figures showed a continued upward trajectory of apartment vacancies at the centre of the inner-city building boom.’
‘Domain Group chief economist Andrew Wilson said it was a familiar trend for Brisbane.“Brisbane continues to be a favourable market for tenants,” Dr Wilson said. “We are seeing the building boom is pushing more units into the inner city, which is also driving down the price of apartments. Once vacancy rates move above 3 per cent, you really enter that over-supplied market where you find much more choice for rentals.”
‘While the Aussie construction boom just keeps on giving, its consequences aren’t all positive as the nation’s largest city is beginning to suffer the early stages of oversupply, and some suburbs are suffering more than others. According to Domain Group senior economist Andrew Wilson, Sydney’s apartment vacancy rate rose by 0.2% during May to 2.2%.’
‘Meanwhile, Parramatta, which had the highest total number of vacancies of any Sydney suburb at 156 empty apartments in May, meaning its vacancy rate jumped to 2.4% over the month.’
“It’s a big rise in the vacancy rate over just a month, but really it’s no surprise given the extraordinary level of development there,” Wilson said. “We’ve still got the bulk [of apartment completions] to come onto the market. Numbers are accelerating rather than decelerating with a lot left in the pipeline.”
‘A recent JLL report predicted that as many as 61,000 new units would be completed in 2015-17, a significant jump from the 44,500 units completed in 2012-14. In fact, some Sydney real estate agents expect that the vacancy rate will rice to 3.4-4.0% within the next few months as this oversupply issue exacerbates further.’
‘Parramatta-based Just Think Real Estate agent Edwin Almeida told Domain Group that the apartment oversupply is more widespread that just in Paramatta. He added that there could also be pain ahead for investors with properties in Homebush West, Campsie, Bexley and Hustville.’
“Rent is coming down slowly and landlords who don’t decrease their rent will stay on the market for longer,” he said.’
My landlord here in the North Shore of Mass., told me flatout she tried to raise the rent, but got absolutely no bites on Craigslist in Nov-Dec 2015. So I’m paying what the previous tenants paid. The justification would have been ease of access to the Route 129/I-95 tech beltway around Boston, or the ease of getting to a commuter rail station into Boston.
Meanwhile, my landlord raised the rent on my 2-bed in Arlington by $100 last year and is doing so again when I vacate my shitty apartment in August. If you’re near the city and not in a “luxury” apartment, rents are still rising. The spread between luxury apartments and typical 100-year old shitty apartments is narrowing at both ends. Good for retards who rent at $3K/mo for a 1-bed, bad for the middle class.
You can still find a good deal out there if you hit the pavement hard and get inside a seller’s head. I just bought a nice, big house in a nice town, close to the city, with good schools, at way under the average $/SF. My PITI is going to be $700 more than my rent would be in my current shitty apartment, which isn’t even half the size of my house. I’ll save $6K in taxes during my first year in this house.
Assclowns are paying more for attached townhouses in congested neighborhoods than I paid for my detached house with a decent piece of land.
If you can find the right place, buying still makes sense compared to renting a shitty century-old apartment that increases by $100/year.
I agree. I actually grew up in Hampton Rds Va, so I’m quite familiar with the two metro areas of Va’s housing markets.
I have plenty of friends who rave about Northern VA, despite it being one of the most expensive rental and purchase markets. People commute from Fredericksburg into Metro Dc, barf!!!!
Nah, man, I’m renting in Arlington MA, next door to Cambridge. But not for long. Managed to find a house worth buying. I’m saying that you can manage to do okay around Boston, but it’s rough. I spent 4 years trying to find a decent house and a reasonable price.
Oh ok, gotcha. Well either way, Boston markets, DC Metro haha, ridiculous much like the rest of the US.
It seems the reasonable parts are either western Mass or inland NH.
I am trying to convince my sig.other to move back to southern VA with me, where you can afford housing and such.
Western MA and Cow Hampshire are going to get slaughtered when the market corrects. It’s only the premier towns inside of 495 (and particular those inside of 128) that will survive with little or no price reduction.
Boston fell 30%+ in the early 90s and 20%+ in the 2006-2010 range and they were minor corrections.
Ask me because I was there during both.
Haha premier towns inside of 128…like the beautiful immigrant dumps of Lynn, Saugus, Revere, Chelsea, and Peabody
I am trying to convince my sig.other to move back to southern VA with me,
Does he/she have a career? If so, then don’t be a goon. Have the courtesy to offer rings and papers before they give up their own career just to follow you.
No, I followed her. She does not currently have a career worth putting up with the expensive New England life.
Another inside-128 dweller here. Been way too busy to post lately, but thanks, Dan, for your contributions, I’ve been enjoying both your Boston-area commentary and comparisons between different locations around the country.
I haven’t had time to dig into the data in a principled way, but as I drive around the inner suburbs around Boston in the last few months it seems like a lot of places with for sale signs out (including what feels like an unusual amount of commercial space) are sitting. I’ve also seen a number of for rent signs out this summer, something that I don’t remember seeing in the past. Any mom-and-pop wannabe landlords going through the summer with no tenants are going to be learning interesting lessons, and if they miss the big September rollover things will get more interesting.
Western Mass is in economic freefall, and yeah I expect a wipeout when the other shoe drops. What else happens, we’ll find out.
Strawman, greetings. Here’s an interesting anecdotal piece. In Danvers, I drove by a home close to my lady, and thought “oh wow, that a decent SFH for sale”, well 4 days later, Sale Pending for $420,000. This was just this week. I was sort of astonished that no price reduction or idle period took place. I thought the market was tapering off a bit. It could have been a special occurrence. Also two more SFHs near there officially sold after having sale pending signs. All 3 did not have price reductions, and all three sold for around $300k in the 06-08 time frame.
Yes, I still know people who are buying, one in Cambridge and one in Framingham just in the last month. But the narrowing spread homie_ cites is real, and there are a lot of new complexes opening up out there, and the economic rot as you get further away from Boston is very real. Things are moving, and something’s going to give. I don’t know when, of course. But I suspect it’s picking up steam.
Another anecdote that I didn’t post from a few weeks back: a friend of a friend used to work for the Harvard endowment up until just recently. A year or so ago they appointed a new head of the fund, someone from the upper ranks who was, apparently, a real piece of work; he brought a pretty aggressive style to the table, and in the subsequent 12 months they had their worst year in modern history. The guy resigned citing some kind of mental breakdown. I’ve met the friend of the friend in question and have every reason to believe that this is accurate information. So things may be getting wobbly down in Boston too, and that’s before we even start looking at the biotech house of cards.
Well…. not really when rental rates are half the monthly price of buying.
Did you account for losses to depreciation?
Rents are HIGHER than PITI by $500-$1,000 for the house that I bought.
Yep, I did account for depreciation of the structure and for appreciation of the land. And for taxes, and for rent increases, and for maintenance costs. I have a huge-ass spreadsheet that I used to do a shit-ton of calcs before making this decision. The math works in my favor.
You can’t be blinded by dogma. Sometimes buying makes sense.
Not sure why my reply didn’t post, but here’s a summary: yes, I accounted for deprecation of the structure and appreciation of the land, and I still come out WAY ahead of renting. I did my own calculations on this, but FWIW, the NYT rent vs buy calculator agrees with me. It tells me that renting is better if I can get a similar place at $1,766/mo, which is an absurdly low rent. At that price, you *might* be able to find a shitty 2 bed in the town where I bought my house. The shitty 2-bed I rent now is $1,900, and going up to $2K.
Just wondering: what town did you buy in? I’m also in the Boston area, renting.
Let’s just say that I bought in one of the towns with a top school district inside of 128. I am loathe to reveal more than that because it wouldn’t be too hard to narrow down my identity to one of only a handful of people.
Dandroidz, there are certainly ghettos inside of 128, which is why I wrote “premier”. I’m talking about Newton, Belmont, Lexington, Winchester, Arlington, Brookline, Needham, and nearby premier towns like Weston, Wellesley, Concord, Bedford, etc. If you don’t go batshit and bid reasonably in those towns, you can win big time. But you have to be able to take advantage of odd situations. In my case, I made an offer above ask, with a deadline before the first open house, and catered to the seller’s difficult timeline. I was able to get information from the seller’s agent that he shouldn’t have shared with me. I knew about certain time pressures the seller was experiencing. Once the seller showed interest, I threatened to pull the offer if they didn’t give me an answer in 12 hours. It worked.
As they say in Brooklyn, it’s not my funeral.
‘it wouldn’t be too hard to narrow down my identity to one of only a handful of people’
Petticoat Junction?
Homie, yes I have heard and seen great wealth in the towns of Newton, Wellesley, and Needham. The old money survives these downturns and the houses remain expensive.
Which doesn’t mean prices aren’t falling.
If you compare everything to a horrible . overpriced 1 bdrm apt in a rat cage or a poke in the eye, it all sounds great!
About F-ded landlords:
‘San Francisco Landlords Gird for Slowdown as Startup Frenzy Ebbs’
‘Office landlords are bracing for a cooling of San Francisco’s red-hot market as weaker startup valuations and lower venture-capital funding temper years of runaway growth in the technology-industry hub.’
‘The city’s office-vacancy rate jumped in the second quarter by the most since the last recession, while the amount of space available for sublease almost doubled, according to a report to be released this week by brokerage Cushman & Wakefield Inc. New lease deals have tumbled so far this year.’
“We may not be in a free fall, but it’s a sign of things to come,” Lumpkin said. “Those who are smart know it’s time to get aggressive and lock in credit tenants that you want for the next five, seven, 10 years in new leases and do whatever it takes.”
It’s funny how this always surprises:
‘years of runaway growth’
And Mike was reminding us Australia hadn’t had a stop to their “runaway growth” for over 25 years. Imagine how surprised they are about now?
Darn they must be all tapped on food delivery apps and photo sharing. Is there no rival to Uber/Lyft/Sidecar in the works?
I heard a unicorn start up is close to unveiling a game app. they just secured $15 million in VC. Its on a checkered board, one player has red pieces, the other black, you can only move diagonal. Wait a minute…
‘I don’t want to name the funds as they are already being overwhelmed by demand from largely Chinese and other Asian investors,’
Why the hush-hush approach to what are clearly sound and lucrative investments?
ZING!!!
“Prices so low, we can’t say them on the radio!”
Sad fact: The only married couples among either my wife’s or my siblings to get divorced were her and my sisters who coincidentally went all in to the Real Estate Bubble, buying, selling or defaulting on six or more different houses between their two households within the span of a decade on the path to family collapse and divorce.
Why is this surprising?
Monetary discord will inevitably lead to marital discord.
Just as it did for the UK and EU.
Not at all surprising…just sad. Financial and marital ruin are natural companions.
Were there any cash out refi boob jobs in these six or more different houses?
No boob jobs. But plenty of magical thinking about how buying bigger and bigger houses over time would lead to untold riches.
A mortgage is like a marriage. Magical thinking alone doesn’t make it work.
Amazing how hijacking half a mans net worth can net you some new houses.
There’s a joke about that: If want to know what it’s like to be married, find a woman you hate and buy her a house.
I haven’t seen any jokes about what happens when it’s the woman with the good job and the house in her name.
Hey Donk.
Watch Divorce Corps on Netflix. The women still make out in that scenario, well the divorce lawyers first and foremost.
Exactly, the judge lets her keep the house and the kids and her ex still has to pay child support, even though she makes more than he does.
About 15 years ago now, there was a judge in Tennessee (wish I knew who…have never been able to get an answer) who upon the divorce of the parents, gave the house to the kids. In deed.
Neither parent had any legal right to the house or its possessions. Neither could live there full time. The judge required each parent to live in the house in alternating weeks.
The kids got to stay in the familiar, keep their neighbors and friends, and continue to go to the same school.
A brilliant act by that judge!
MacBeth, now that is awesome.
+1 to that judge, and it’s too bad it didn’t catch on.
It is unlikely that a judge exists who would violate the law so flagrantly, and also to have such a ruling stand.
that line was in “Nice Guys” movie
The prettiest ladies in our town are all Mormon. Going to church must be like visiting an All You Can Eat restaurant.
But the cover charge is 10% of your gross income.
And having to provide for 6 kids….
My wife doesn’t make me pay tithes. She only tithes out of her own income.
People are probably purchasing these properties off the plan and having to sell when they come up for settlement.
Prices only go up!
This is is close to madness.
Rich-listers and wealthy private investors are setting up funds aimed at lending to foreign apartment buyers left stranded by the banks’ lending bans.
The chase for yield continues. Such a bad idea.
So many greater fools who want to get crushed when yields normalize…
Except for one thing: Perhaps they realize that they have become too big to fail in the eyes of the Fed. Liftoff would crush them and so many others. Hence liftoff is a mere hobgoblin for discussion, never to be implemented.
Japan:
I am nineteen going on twenty
I know that I’m naive
The BOJ I meet may tell me I’m sweet
And willingly I’ll believe.
Totally unprepared am I
To face a world of rates
Timid and shy and scared am I
Of things beyond my ken.
“So many greater fools who want to get crushed when yields normalize…”
The greatest of these greater fools are the fools who have the choice of going to cash and are choosing not to. These fools are playing the same desperate game that money managers are playing …
(money managers = people who do not have the choice of going to cash)
… and hence are taking the same extraordinary risks with their own money that money managers are taking with money that belongs to somebody else.
Assuming yields normalize. Big assumption. Just look at Japan.
Yes, I’m looking at how Japanese asset prices cratered despite their yields never normalizing.
Hey at least the Fed approved of 31/33 big banks capital plans, dividends and buybacks proceed!!
have all the brexit losses been recovered yet? lmfao what a scam
The US and Europe absolutely look to Japan as the model. The perception is their social welfare indicators are good, they don’t have the reserve currency and it’s still sound, and their government debt is [quick google]… 227% of GDP.
Bloomberg talks a bit about the endgame. Perpetual zero-interest government bonds. “At some point Japan will basically buy up all its debt and the central bank will forgive the Treasury and try to move forward with that,” Gross said in an interview with Bloomberg’s Erik Schatzker. “I see no other way out for Japan.”
Any blowback from that? They’ll find out.
“The chase for yield continues. Such a bad idea.”
For some there is no other choice.
If you earn your living by handling other people’s money then you will need to earn a return for them and also you will need to earn a return for yourself. Two returns. One return is tough enough to get in this low yield environment and as for two returns? Good luck.
Chasing yields is where it’s at.
“Such a bad idea.” Especially bad if the money belongs to you, not as bad if the money belongs to somebody else.
Mutual fund managers crying in NJ
“Garcia Padilla previously said the commonwealth couldn’t raise enough to cover what’s owed to bondholders even if he shut down the government. The island has about $2 billion in principal and interest payments due Friday.
“All the efforts up until now have already damaged relations with investors,” said Daniel Solender, who oversees $19 billion, including Puerto Rico securities, as head of municipals at Lord Abbett & Co. in Jersey City, New Jersey.”
Comment by dandroidz
2016-06-29 12:03:38
“People are earning the same as they did in 2000. Yet the DOW and NASDAQ have gone berserk since then…weird…:
Not so fast, dandroidz…
In the 16 years since their closing highs in the year 2000, all three major market indices have fared quite poorly. There hasn’t been some massive run-up in the stock market since the dawn of the new century. Such statements are wrong.
The Dow has increased just 53% in those 16 years as of June 6 2016. At this rate, it will take the Dow roughly 29 years to double. Using the rule of 72, the annualized return of the Dow from 2000-2028 will be 2.48%. That’s a horrific number.
The S&P 500 and Nasdaq are even worse, with the former up 38% since 2000, and the Nasdaq LOSING 1.6% total since it’s high in the year 2000.
A good, illustrative source:
http://www.advisorperspectives.com/dshort/updates/SPX-Dow-Nasdaq-Since-Their-2000-Highs
After you factor in inflation, the results are even worse.
Additionally, there’s been very little interest returns on fixed investments over that same 16 years.
Housing has been the big winner. Sure, the Fed’s printing press has propped up the stock market, but the real winner has been real estate.
We subbed out an investment bubble with a housing bubble. The latter, too, will end as it must. Problem is, nobody knows when.
Notably, it’s not at all unexpected that few people today have much in the way of retirement account balances. How could they, considering the above, unless they had very large incomes?
It’ time to once again trot out the S&P 500 P/E chart:
http://www.multpl.com/
I think the chart should be in logarithmic form for a better illustration of the swings but, hey.
There are big name companies with low P/Es such as AAL. You can find some big companies priced below book value too.
Thanks for the post, yes I posted a quick generalization. I really wish I could have lived in the times of simple savings accounts yielding 4-5%. Inseatd I’m excited I have a MMSA that yields 0.5% APY…
It really is curious as to how long this market can last. Now with Brexit, will QE4 begin? When the bubble pops, will builders run and hide? When will real SFH construction ever resume?
Given the massive excess inventory of housing units, why erect more of them?
Well for one more supply = lower prices which you, and everyone else, would really like right? Plus a bunch of these excess inventories could be 100+ yr old shacks nowadays
Building more will have zero effect. Price is the issue and it’s because of price that housing demand is at 20 year lows…… and falling.
I really wish I could have lived in the times of simple savings accounts …
If my grandma had danglers, she’d be my grandpa …
“I really wish I could have…”
Perhaps better than unrealistic wishing you could adopt a strategy for the situation you are actually in.
Sit on cash and pray the crash comes before you’re too old to do anything about it?
Sarasota, FL Affordability Surges As Housing Prices Nosedive 16%YoY
http://www.movoto.com/sarasota-fl/market-trends/
Meanwhile, the systemic global financial crisis that has reached massive new proportions due to the incompetence of the Fed and central banks is reasserting itself.
http://www.zerohedge.com/news/2016-06-30/worlds-most-systemically-dangerous-bank-crashes-back-record-lows
How could Hillary Clinton be expected to cut her shady neocon backroom deals and conduct her influence-peddling with dodgy governments and deep state figures without her own private, non-secure server?
http://www.marketwatch.com/story/aide-huma-abedin-clinton-couldnt-do-her-job-right-at-state-department-without-private-server-2016-06-30?link=MW_latest_news
The title of the article is inconsistent with the body.
The title implies that having the private server was vital to HRC doing her job.
The body explicitly notes a situation where HRC missed a call because of a communication problem with her private server.
Sounds like her private server caused problems, didn’t solve them.
She had a private server for a reason: to enable ex officio influence peddling and back-channel communications.
Ponces - what a perfect way to describe the brainwashed, brain-dead precious snowflakes who opposed BREXIT.
http://blogs.spectator.co.uk/2016/06/brexit-divide-wasnt-young-old-ponces-non-ponces/
Its really interesting the way the MSM is portraying the age divide on the Brexit vote. Oh the old timer “get off my lawn” white supremacists only voted because they dislike muslims. Really?
Its insane to think that people have such short term memories regarding an independent Britain (>40 yrs). Heck if the EU was so great, why did they not adopt the Euro in the 90s?
Ever since Friday’s Glorious Victory, one of the chief recreation activities of we Brexiters of a childish bent has been the Taunting Of The Remnants, mostly online. ‘How are you comforting yourself?’ one Facebook post asked. ‘In the usual way – with the tears of the vanquished,’ I replied. ONLY ONE LIKE!
For self-proclaimed ‘progressives’, what a bunch of doom-mongering, curtain-twitching, tut-tutting stick-in-the-muds they’ve proved to be! For this Remnant Zombie Army, out to do in our brains with their bed-wetting ways and bleats for more referenda until they get the result they want, everything that goes wrong over the next few months – the weather, the football – will be Brexit’s fault. And yes, it will be irksome at a time when this country needs to put its best foot forward and proceed with the merry dance of freedom. But I’m not worried that they’ll do us much harm in the long run – because, basically, they’re such a bunch of ponces.
We have been told that the vote – and the nation – is divided between rich and poor and young and old but frankly I believe that the biggest divide was between Ponces (Remain) and Non-Ponces (Leave). When I use the word ‘ponce’ I refer not to the gayers (bless ‘em) but to people who really believe that they are inherently better than others. I found this pleasing definition online:
1
ponce about/around
British informal. Behave in an affected or ineffectual way:
‘I ponced around in front of the mirror’
2
ponce something up
British informal. Make overly elaborate and unnecessary changes to something in an attempt to improve it:
‘They would not let the food alone, they had to ponce it up in some way or other.’
“When I use the word ‘ponce’ I refer not to the gayers (bless ‘em) but to people who really believe that they are inherently better than others.”
Pineapples, weren’t these people called pineapples not so long ago on this message board?
Ponces = pineapples? Pineapples = ponces?
Pineapples = ponces, indeed.
Here, let me use it in a sentence: Mikey’s attempts to ponce into the HBB spreading fairy dust and DNC talking points came to a bad end when Goon and RKH rampaged through his liberal la-la land and turned his progressive sacred cows into hamburger.
Not to be confused with the more offensive term “nonce.”
British satirist Will Self wrote a short story called “The Nonce Prize” and it’s rather good.
Have you seen the youtube video of Nigel Farage, UKIP leader, addressing the EU? Its fantastic. He slams the unelected bureaucrats who mocked him years ago. They Boo him. Grown men/women, “diplomats”, booing someone who’s movement won in a popular vote.
I saw it. I’ve been watching him give them heck for years. The ultimate comeuppance for the EU people.
Well now, the Brexit is Hitler movement has truly failed. One of the common lines was “2 trillion pesos evaporated!” It’s Thursday and they’re back. Funny how these same people don’t mention that China devalued their currency this week. And that it was a Chinese currency devaluation last summer that set off a global stock crash that evaporated a lot more than 2 trillion pesos permanently.
…and an immediate ramp up in Chinese purchasing real estate in London, or offshoring capital. These youngins complain they cant afford London, or anywhere near London, yet are angry when the “oldies” vote to “make Britain great again”.
‘complain they cant afford London, or anywhere near London, yet are angry’
These are media creations. “Oh, Adolph Hitler/Brexit is going to make house prices fall!”
Uh, didn’t London just elect a mayor who ran on making house prices fall? What about the stamp duty, registering foreign buyers, changes to the tax treatment to run off speculators? All of of these things were done before the vote. And London prices have been falling for 6 months or more anyway.
The globalists pulled out all the stops on this one. As I said last week, you know something’s BS when the powers that be start screaming the sky is falling.
…and Obama writes an Op-ed pleading to remain. Wtf? He cant even lead US politics.
There needs to be some serious study of how the generation population anywhere can be so easily manipulated with social media. The convenience of social media plays a big role, as does the soundbite aspect of it all.
What is very interesting is how easy it is to rile people up despite a lack of facts. We know society is woefully bad at critical thought, but this is something else.
How about a math whiz here on HBB come up with a co-efficient depicting the mass communication / mass frenzy potential of social media given individual variables and a set of constants?
I have believed for many years that the use of social media would be a net negative, perhaps a rather large one.
It’s not the technology, it’s that society isn’t ready for it. People are still too thick-headed and foolhardy.
In any event, the sociology of it all is fascinating - and the power of it all cannot be underestimated, as we are witnessing. Not even by STEM workers.
“The globalists pulled out all the stops on this one. As I said last week, you know something’s BS when the powers that be start screaming the sky is falling.”
I wonder if it’s giving pause to those that believe government is good? What we are witnessing is the tyrannical nature of Big Government.
All you Big Government types reading this: it’s time to wizen up. Big Government can very possibly affect you and yours very negatively. Eating its own is commonplace among government employees as institutions and parties begin to fail. And that’s what you’re seeing now.
You think you’re safe….until suddenly, you’re not.
Big Government is not a sustainable construct and it never will be. The law of nature make it so. Remember that.
Big Government = Titanic.
Want proof? Look at what is happening right now to the EU.
‘Bank of England Governor Mark Carney signaled a potential cut in interest rates within months in response to Brexit, while the European Central Bank is said to consider loosing rules for bond purchases in order to find enough debt to purchase.’
http://finance.yahoo.com/video/boes-carney-signals-rate-cuts-170742941.html
Now that’s the positive attitude we’ve come to know. Hitler is poised to take London, but it can all be fixed with lower interest rates! And notice the EU can’t find enough bonds to buy, but they can squeeze Greece into permanent depression over a few billions.
The US Reserve Yellen promised more liquidity, or basically QE4…All of the banks reacted exactly how most thought, promising more cash.
And notice the EU can’t find enough bonds to buy,”
Can’t find enough workers to borrow money and do real work to pay it back.
Mailbox money
I love the way he takes people down. He would never make it in the US though, as people here don’t know what most of the words he uses mean.
Wrong. Most would understand what he is saying.
That you believe otherwise tells me a great deal about you.
I don’t think you understand where people unlike you currently reside philosophically and economically.
I don’t think you’ve spent much time around lower middle class and below people. They might be able to sound out the words to his tirades given time, but they can’t listen to the guy and follow what he’s saying.
Average IQ is pretty dumb. Add to that the glorification of ignorance we have and you get a LOT of functional stupid people.
I loved it when he told them that none had ever had a real job.
Also loved it when he accused them of imposing poverty on the Mediterranean members and when he said that Britain wouldn’t be the last member to quit the EU.
He really was in full savage mode. The EU diplomats did not appreciate being called useless non-producers who haven’t had areal job. Haha.
He said something like, “For years you laughed at me. Well you’re not laughing now!”
I haven’t seen the youtube, but from the sound of it, this guy would have a better shot against Hillary than Trump will.
He said something like, “For years you laughed at me. Well you’re not laughing now!” ??
Yes but we don’t know who may have the “last laugh”…
Merkel is fuming hot….Other leaders are also…We shall see…
“Merkel is fuming…”
It’s the mark of an abuser. When the victim says no more, the abuse and anger ratchets up. It will only serve to convince the Brits they are headed in the right direction.
Have to love Farage, the guy has got stones.
+ he’s on the right side of history.
Stones are common. Intellect to back them up isn’t.
lolz. Remember who you’re talking to.
EU MKP get 400,000 pounds yr for poncing around in brussels
rampant.housing.fraud
Bigger than Saudi Arabia: Florida economy headed for $1 trillion mark
June 29, 2016 | Filed in: bnblogs, Florida economy.
Port Evergaldes claims to create 201,000 jobs, a sum one economist calls “excessively large.” Photo courtesy Port Everglades.
Photo courtesy Port Everglades.
Florida’s economy is set to cross the $1 trillion mark in 2018, University of Central Florida economist Sean Snaith predicts.
He sees Florida’s “nominal gross state product” hitting $980 billion in 2017, $1.03 trillion in 2018 and $1.07 trillion in 2019.
Snaith notes that Florida’s economy was bigger than that of many nations in 2014, including The Netherlands, Indonesia, Turkey and Saudi Arabia.
Do fishing charters, happy hour, and Disney world really bring in that much?
Snaith embraces the essential roles that propaganda and celebrity play in economics today. If it wasn’t for mosquito repellent and air conditioning this state wouldn’t be worth a #%*).
“If it wasn’t for mosquito repellent and air conditioning this state wouldn’t be worth a #%*).”
Ain’t it da trute. Most of Florida south of Gainesville is swamp with some areas of higher ground. If the grid ever went out, the state would empty out fast.
Don’t forget to take away FSU/UF/Miami football. Pretty sad when college football is a major draw, if not, more than the professional leagues.
Not really. Just like in other southern states, in Florida, college football, for decades, was the only thing going besides stock car racing. We didn’t have professional football in this state until 1966, when the Miami Dolphins entered the AFL. UF has played football since 1906 and FSU since 1947, when it became co-ed. Contrast that with the Tampa Bay Buccaneers, who started playing in 1976, and the Jacksonville Jaguars, whose first year was 1995.
There are other factors, too: we have a large population of transplants who retain their pre-existing pro team loyalties. And a lot of people here would prefer to watch a dominant college team rather than a mediocre pro franchise. I don’t blame them.
I’m sure the meeting between Bill Clinton and Lorretta Lynch was totally above-board. I mean, it’s not like we’re a crony capitalist kleptocracy where the .1% are literally above the law, is it?
http://www.zerohedge.com/news/2016-06-30/bill-clinton-holds-private-meeting-loretta-lynch-fbi-probes-hillary
Seems Legit
I know that little confab makes people uncomfortable, but I think she was paying him a courtesy call to let him know things are not looking so good for Hillary. My guess is she said it via an indirect, but pointed comment and followed it up with “So, how’s the family?”.
I actually expect an indictment to be handed down.
“I actually expect an indictment to be handed down.”
Keep dreaming.
While I think what happened would probably have resulted in an indictment for you or me, I think HRC will get a stern lecture about security…and that’s about it.
I hope I’m proven wrong.
“I hope I’m proven wrong.”
You will be. She will never, ever be prez of the US. That’s the last thing Obama wants. You have no idea how much Obama and Clinton loathe each other.
Watching Obama and Hillary is like watching two snakes in a dance.
And it won’t be Bernie against Trump, either. It’ll be a Biden-Warren ticket. And that, my friends, will be THE main political event.
Obama is one smooth, cool customer. I’ve never seen anything like him. I’m guessing he’s playing with Hillary right now and drawing this out until the last minute (just before or after the Dem convention). Even better, all that money she raised, why not let it be spent chipping away at Trump and laying the groundwork for smokin’ Joe?
Just when the prize is within sight, BAM! Here comes the indictment. He’ll give the crowning speech of his entire terms of office and it’ll be a doozie. I expect to hear that no one is above the law, justice and fairness must be served, it is with great regret, etc. etc. It’ll go down in history. Because Obama MUST be the center of attention, even on his way out. “ME! ME! ME!” Can’t let Trump steal his thunder. And that will handle it, believe me. The grand finale.
And he will ride off into the sunset, “moral authority” intact and head held high.
I actually expect an indictment to be handed down.
Keep dreaming, Pollyanna.
Comment by CalifoH20
2016-06-29 13:43:54
Who is voting for Trump?
Who is voting Hillary?
Who is staying home?
\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\
White House Watch: Trump 43%, Clinton 39%
Thursday, June 30, 2016
The tables have turned in this week’s White House Watch. After trailing Hillary Clinton by five points for the prior two weeks, Donald Trump has now taken a four-point lead.
The latest Rasmussen Reports national telephone and online survey of Likely U.S. Voters finds Trump with 43% of the vote, while Clinton earns 39%. Twelve percent (12%) still like another candidate, and five percent (5%) are undecided. (To see survey question wording, click here.)
* If the 2016 presidential election were held today, would you vote for Republican Donald Trump or Democrat Hillary Clinton?
“Who is voting for Trump?”
If you are it’s probably not safe to confirm it in public.
ABC on San Jose chaos: ‘Pure attacks’ by anti-Trump protesters …
https://www.youtube.com/watch?v=PpI-HhHLbaw - 200k - Cached - Similar pages
Jun 3, 2016
Ridicule ensues, at the very least.
[BRUTAL] trump supporters terrorized and beaten in san jose protest …
https://www.youtube.com/watch?v=tI2IteYiKcI - 278k -
How come it is called “staying home” when Election Day is a workday? I am not voting, I am going to my office and working, instead.
And miss your chance to chose between the blustering psychopathic liar or the calculating psychopathic liar?
Your country needs you!
How come it is called “staying home” when Election Day is a workday? I am not voting, I am going to my office and working, instead.
In many countries election day is on a Sunday. I suppose it was originally set on Tuesday in the USA because in the early days the serfs didn’t get to vote.
And which psychopathic liar to choose? Decisions, decisions …
Another possible reason is that people are less likely to be drunk on Tuesday. The kids book Black Beauty devotes an entire chapter to describing an election day in 1840’s London. Drunkards on both sides beating on each other and on the (of course) horse-drawn cabs who drove them to the polls.
Back when the History Channel had shows pertaining to history, a show ran on the Hatfield-McCoy feud. A historian talked about one incident arising on an election day, and he recounted that a number of individuals were hanging around the polls drinking, which he described as “common in the upper South” of the time.
LMAO! What a choice, eh?
ruh roh!
Disneyland is too crowded any how, might as well deport a million or two. Just don’t forget the cheating Chinese.
Fauxahontus Warren will never go after the biggest swindlers of all: the Federal Reserve.
http://www.businessinsider.com/elizabeth-warren-attacks-apple-google-amazon-over-antitrust-democracy-consolidation-competition-2016-6
‘The subletters didn’t pay rent and barricaded themselves within the unit. The Sunday Times joined the property manager in an inspection of the building after the eviction this week which revealed the apartment had been trashed with food left to rot, furniture dissembled and carpets stained beyond repair.’
‘It is believed about five people had been living in the unit. ‘I know people are people, but I don’t understand how someone can think it’s OK to do that to a half-a-million-dollar apartment,’ Ms Luxton said.’
Look at the bright side Judy. It’s a write-off. Of course this box of air in Perth will probably be worth a lot less than 500,000 AU pesos before it’s all over.
Half a million apartment? So that means its really a $100,000 apartment right, in a normal financial world?
Sheez look what happens every semester in college dorms. People just don’t care when its not really their money.
This set of quotes from the always prescient Jesse at the Cafe Americain.
Could not summarize this sleaze show better than the comment at the end.
“You go into these small towns in Pennsylvania and, like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing’s replaced them. And they fell through the Clinton administration, and the Bush administration, and each successive administration has said that somehow these communities are gonna regenerate and they have not.
And it’s not surprising then they get bitter, they cling to guns or religion or antipathy toward people who aren’t like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations.”
Barack H. Obama, San Francisco Fundraiser, April 11, 2008
(My comment: Barry no longer lives in the utopian paradise of Chicago - so….he can gripe all he wants about Bibles and guns - buuuuuuut…uhhhhh…..this is not, uhhhh…….who we are as Murikans - Really Barry? Really?)
“The problem of the last three decades is not the ‘vicissitudes of the marketplace,’ but rather deliberate actions by the government to redistribute income from the rest of us to the one percent. This pattern of government action shows up in all areas of government policy.”
Dean Baker
“If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.”
Simon Johnson, The Quiet Coup
Today was a double-header of discouragement in how quickly the pampered plutocrats are dismissing any possible lessons they might have taken from the Brexit.
The Three (Stooges) Amigos at the North American Leaders Summit, Barry, Pena, and Justin, were talking up free trade, globalization, and the benefits of corporatism for the ignorant masses.
(My comment: The three smelly turds actually started off their little talk with trannies and global warming - this while the airport in Istanbul was blown up).
And on the other hand, the profound thinkers of modern finance returned to Aspen today to celebrate the Aspen Art museum, a monument to the nouveau riche with a ‘broad base of community support of one million dollar donations from 28 individuals.’
(My comment: You can add Boulder CO to that list as well)
The interviews with the very serious people there were surreal, almost otherworldly and profoundly discouraging in their lack of understanding of what is happening all around them, and any sense of context and self-examination. Well, that is why people go to Aspen and all the other enclaves of unreality these days.
I fear that this is going to get much uglier before it gets better.
I read the account of the leadership summit in my paper this morning. Truly, Obama can be tone deaf sometimes. Did he not draw any lesson from what just happened? When he comes out in support of trade agreements and more integration, Americans see their manufacturing jobs going to Mexico, and Mexicans losing their agricultural livelihoods and coming here, often illegally.
I visit Jesse’s website almost every day. I agree that we are witnessing a complete absence of any kind of self-critical analysis.
The hubris of the dems is pretty astounding. The republicans are still in a state of confusion after their smackdown, too soon to say whether they’ll learn anything from it.
When the trumplings trumple into the whitehouse, it’ll be the dems turn to take that lesson.
The Republicans don’t exist anymore, for the most part. We’ll see how well the hostile takeover worked after the convention.
If nothing else, he took out the Bush dynasty. And I’m more than grateful for that. There was a great (vulgar, but spot on) 4-chan quote from the Kevin Hess AMA on Reddit.
“I have never in my life seen a blowing the f–k out like this. This is a combo blown the f–k out that started on Friday and Trump made a tweet talking s–t about George W and Jeb took the bait. And from that now several days later here we are. Trump blows Jeb the f–k out on Twitter first, media picks up the Twitter fight and Trump blows Jeb the f–k out on prime time Fox, next day article comes out linking Jeb Bush to 9/11 same day Trump’s immigration would have prevented 9/11 and there’s one more I forgot about just on this. And now this where Trump predicted 9/11 and said Osama bin Laden would do it. This wasn’t an accident. We’re dealing with transcendental levels of sh–posting possible time travel involved. It’s extra dimensional s–tposting that all started from just a pinprick to bait Jeb into coming after him. We watched Trump just kill Jeb Sunday and ever since then he’s just been beating Jeb’s corpse and pissing all over it. Is Trump even human? What are we dealing with here? Trump said he’s smart but this just goes above and beyond smart. I don’t know where we’re dealing with here.”—Anonymous, 4chan, 10/20/15″
My grandparents town was an immigrant town built off coal mining and mills in northeastern PA. It was a good living through the mid 80s. But that’s a similar story all around the US.
Nowadays a lot of the kids are stuck with a couple of options, 1) go into debt in college , 2) work at a grocery store/Walmart, 3)join the military.
Even with Option 1, they would still have to relocate out of the state or at least move into Philly or Pittsburg, which aren’t the bets options.
My grandfather’s town in northwestern Indiana was similar. Through the mid 1980s, very pleasant, almost Norman Rockwell in some ways, although the industries that supported it had started their decline. Now it’s pretty rough.
ALWAYS examine the geographic distribution of money. Which individual or which corporation has X is not nearly as important as where the money pools. Follow The Money. WHERE is it?
Then, just as vital, examine the voting patterns of the geographic area/s where that money pools.
The District of Columbia routinely votes 85%+ Democrat. Washington DC is the wealthiest metropolitan area of the country.
Look at London. Did they vote pro-Brexit or anti-Brexit?
Never forget that.
Ok - As I was looking at my email this morning - I occassionaly get these job alerts from various sites I subscribe to as part of my work - this……
Based in Denver but…….
“Reporting to the Vice President, Redevelopment, the Director of Redevelopment will oversee many aspects of the redevelopment and repositioning of large multi-family properties in the local key target markets with a special focus on the Philadelphia market. In collaboration with the Vice President, this individual will have responsibility for the planning, pro-forma modeling, and project management of redevelopment projects for a portfolio of multi-family properties that includes garden-style, mid-rise and high-rise properties. Projects will include a range of project types including smaller scale kitchen and bath remodels, large-scale renovations of existing assets, and may include ground up development on existing sites.”
So given the comments on the HBB lately of large multi family (apartments) redevelopment / rehab - you too can get in on the action!!!
Wait, so people in Denver are project-managing apartment rehabs in Philly?
Well yeah, you wouldn’t want professionals living in Philly right?
See? Black Lives Don’t Matter.
Salaries are probably lower in Denver. Much lower.
+1
Gentrification? Do the new rebuilt high rises at least a brewery/craft beer bar in the basement?
The newest thing in Maryland: craft brew farms, just like a winery. Buy a little farmland, grow your own hops, wheat, and barley, and brew and sell locally. In a couple cases where the zoning allows it, there is a taproom/restaurant right on the farm.
Donk,
They’re just manifestations of YellenBucks looking for a place to die. No different than grossly inflated housing prices.
I want to see the profit. I don’t believe it.
Growth in income lags very far behind rises in rent: report
Household income grew by 18% in the past 50 years, while rents soared by 60%
June 29, 2016 11:53AM
http://therealdeal.com/2016/06/29/growth-in-income-lags-very-far-behind-rises-in-rent-report/
I won my battle with the California Franchise Tax Board! Instead of paying them additional plus penalty I will get the refund I originally calculated!
I still call bull$hit on their excuse that they did not receive my schedule S. I have filed e same way with Turbo Tax for about ten years. They can do whatever they want. They are screwing people over and over who expect refunds by making lies and merely stall the refunds by months. The crime of the IRS and the FTB besides stealing our money in the first place is that if you are wrong they charge high interest. If they are wrong they do not pay you with interest. They. Are. Criminals.
Always good to beat the California Govt., or Govt in general I suppose.
This on a potential Italexit from the EU…..
Hmmm….
I have a special place in my heart for Italy - having been there many times the country has a great sense of how to live well on a daily basis - paying its debts - not so much. A joy to visit - not sure I would want to live there given the economics of the place.
http://dimartinobooth.com/the-italian-job/
http://wwwtheworldandeverythinginit.blogspot.com/2016/06/terror-show-at-gaza-kindergarten.html
‘A lot of smaller investors were left high and dry,’ he said in the report. ‘(The Moranbah median price) was very high at one stage ($469,000 in 2011, $160,000 in 2016)’
The big Chinese QE strikes again.
Jingle won’t like this:
‘ The loans were made against the value of the asset, not the borrowers capacity to repay the debt, he noted’
‘These funds were targeting foreign buyers looking to borrow 60-70 per cent of the purchase price. They were charging between 8 and 12 per cent, he said. ‘I don’t want to name the funds as they are already being overwhelmed by demand from largely Chinese and other Asian investors’
Jeebus, what a train wreck. Recall that a utility study determined that 20% of the air boxes in downtown Melbourne weren’t using water. There’s tens of thousands of units on the way in all these capital cities. Most are already sold, but will be unfunded when it’s time to close.
It’s always dumb.borrowed.money that drives manias.
Look out when it dries up as it always does historically.
They were charging between 8 and 12 per cent
Holy smokes. This is in the zero interest rate era of fiat money. Wow, unheard of. This is the edge of the abyss for the value of their shacks down under.
Follow on to yesterday’s question from I think it was Oxie regarding house prices and property tax increase effect in ILLANNOY……
https://www.illinoispolicy.org/illinoisans-revolt-against-nations-highest-property-taxes/
First Puerto Rico, next Illinois?
‘Tis a shame that Illinois isn’t a territory or some other holding of the USA rather than a state. It could get a bailout quite easily it seems.
Are you in Castle Rock yet?
Nope - end of July - one month to go.
closed on the house a couple of weeks ago however - so I have a place to go.
IL will get bail if folks get sleepy
Sorry Ben et al for clogging the HBB stream today - yet these are the sorts of things that resonate with me and I assume with others herewith……
http://upstream-ideas.com/upstream-ideas/ideas/illinois-cartel-economy
Obamacare Insurers Are Looking for a Taxpayer Bailout
By Edward Morrissey
June 30, 2016
Insurers helped cheerlead the creation of Obamacare, with plenty of encouragement – and pressure – from Democrats and the Obama administration. As long as the Affordable Care Act included an individual mandate that forced Americans to buy its product, insurers offered political cover for the government takeover of the individual-plan marketplaces. With the prospect of tens of millions of new customers forced into the market for comprehensive health-insurance plans, whether they needed that coverage or not, underwriters saw potential for a massive windfall of profits.
Six years later, those dreams have failed to materialize. Now some insurers want taxpayers to provide them the profits to which they feel entitled — not through superior products and services, but through lawsuits.
Related: Get Ready for Huge Obamacare Premium Hikes in 2017
Earlier this month, Blue Cross Blue Shield of North Carolina joined a growing list of insurers suing the Department of Health and Human Services for more subsidies from the risk-corridor program. Congress set up the program to indemnify insurers who took losses in the first three years of Obamacare with funds generated from taxes on “excess profits” from some insurers. The point of the program was to allow insurers to use the first few years to grasp the utilization cycle and to scale premiums accordingly.
As with most of the ACA’s plans, this soon went awry. Utilization rates went off the charts, in large part because younger and healthier consumers balked at buying comprehensive coverage with deductibles so high as to guarantee that they would see no benefit from them. The predicted large windfall from “excess profit” taxes never materialized, but the losses requiring indemnification went far beyond expectations.
In response, HHS started shifting funds appropriated by Congress to the risk-corridor program, which would have resulted in an almost-unlimited bailout of the insurers. Senator Marco Rubio led a fight in Congress to bar use of any appropriated funds for risk-corridor subsidies, which the White House was forced to accept as part of a budget deal. As a result, HHS can only divvy up the revenues from taxes received through the ACA, and that leaves insurers holding the bag.
Related: Obamacare: Costs Go Up, Insurers Drop Out and Consumers Get Screwed
They now are suing HHS to recoup the promised subsidies, but HHS has its hands tied, and courts are highly unlikely to have authority to force Congress to appropriate more funds. In fact, the Centers for Medicare and Medicaid Services formally responded by telling insurers that they have no requirement to offer payment until the fall of 2017, at the end of the risk-corridor program.
That response highlights the existential issue for both insurers and Obamacare. The volatility and risk was supposed to have receded by now. After three full years of utilization and risk-pool management, ACA advocates insisted that the markets would stabilize, and premiums would come under control. Instead, premiums look set for another round of big hikes for the fourth year of the program.
Consumers seeking to comply with the individual mandate will see premiums increase on some plans from large insurers by as much as 30 percent in Oregon, 32 percent in New Mexico, 38 percent in Pennsylvania, and 65 percent in Georgia.
Thus far, insurers still claim to have confidence in the ACA model – at least, those who have not pulled out of their markets altogether. However, massive annual premium increases four years into the program demonstrate the instability and unpredictability of the Obamacare model, and a new study from Mercatus explains why.
The claims costs for qualified health plans (QHPs) within the Obamacare markets far outstripped those from non-QHP individual plan customers grandfathered on their existing plans – by 93 percent. They also outstripped costs in group QHP plans by 24 percent. In order to break even without reinsurance subsidies (separate from the risk-corridor indemnification funds), premiums would need to have been 31 percent higher on average for individual QHPs.
The main problem was that younger and healthier people opted out of the markets, skewing the risk pools toward consumers with much higher utilization rates – as Obamacare opponents predicted all along. With another round of sky-high premium increases coming, that problem will only get worse, the study predicts.
“[H]igher premiums will further reduce the attractiveness of individual QHPs to younger and healthier enrollees, resulting in a market that will appeal primarily to lower-income individuals who receive large subsidies and to people with expensive health conditions,” it concludes. “To avoid such an outcome, it is increasingly likely that the individual insurance market changes made by the ACA will have to be revised or reversed.”
Related: It’s Time to Blame Obamacare for Losing So Many Full-Time Jobs
Red flags have flown all over the Obamacare model for six years. Instead of suing the federal government for losses created by a system for which they bear more than a little responsibility, insurers should finally admit out loud that the ACA is anything but affordable – not for insurers, and certainly not for consumers or taxpayers. When that finally happens, we can then start working on a viable solution based on reality rather than fealty to a failed central-planning policy.
You knew it would be a problem when 1) It was 1000 pages and no one wanted to read it, and 2) the website cost almost $1 billion and still didn’t work. For more salt in the wound, I recall a group of Silicon Valley nerds creating the exact functioning website for the Obamacare Exchange in their spare weekend, for free.
Typical Liberal Idealism. Sure sounds good but doesn’t work at all.
I’d more attribute it to Cronyism
I don’t think splitting full time jobs into part time ones is the problem. This just means more people have job, which is good, because as automation takes over, there just isn’t going to be more work. The government picks up the healthcare costs for these people, so it’s not like they’re going without, and it takes that burden off of businesses.
If most people are working part time jobs, not making much, that drives deflation, and ultimately things settle out. You have people working, so that other people working who are miserable at their jobs get the satisfaction of seeing others suffer equally, and their basic needs are taken care of. The only fly in the ointment is cheap debt, which prevents things from being truly valued.
There’s still motivation for the strivers to work harder and rise above it all, but the whole thing doesn’t collapse into a mega slum. It’s looks like a transitional thing, between an industrial civilization and an automated one.
What the heck is this, “the government picks up the healthcare costs”?????
Where does the government get its money?
Thin air of course. The federal income tax is merely the debt servicing costs for thin air paper money
Exactly. There are an infinite number of future citizens to borrow from.
Put your money in an HSA. It’s the only sensible option.
Tax-free going in, tax-free growth, tax-free on the way out. Upon reaching age 65, it is treated as an IRA.
If non-participation in ObamaCare means a $695 tax hit, your HSA contribution will blunt that hit (again, it is tax-free going in).
HSAs are in the individual’s name, fully portable from company to company. You can add to it for years without having to spend any of it. (There is no use it, or lose it like there is with an FSA).
The answer to extortion is always to refuse to play - whenever circumstances dictate and whenever/however you can.
AHA! So all the whining about the supposed unprofitability
of Obamacare plans (by insurance companie) is really propaganda about something else:
1. avoiding paying excess profits into the indemnification fund
2. trying to get their piece of the pie from the indemnification fund
I had a feeling that something was going on…
F*** you, Obama Zombies. F*** you, Democrats. F*** you, insurance companies.
how many people are working and how productive are they? How complicated can u make this people?
Wall street wants your retirement b@tchez! they want you renting and eating alpo. Serfs are not suppose to own sh@t.
Well labor force participation is at historical lows, so the answer is not many, and I believe productivity has tapered off, according to BLS reports.
“they want you renting ”
no they don’t. They want you being a debt slave on some shack worth three times what it should be.
renting from them basically.
Precisely.
Instead, rent for half the monthly cost.
Chicago taxes excluding property tax……
Full article here….
https://www.illinoispolicy.org/chicagoans-the-most-taxed-residents-in-illinois-paying-more-than-30-city-taxes/
Excerpt here…..
The difference in those tax rates is driven by the more than 30 different city-imposed taxes (and a host of other fees), as of October 2015, which Chicagoans must pay besides the property tax.
Amusement tax (5 percent or 9 percent of charges for amusement)
Amusement tax – subscribers to paid television programming (9 percent of television programming costs)
Boat-mooring tax (7 percent docking or mooring fees)
Bottled-water tax (5 cents per bottle)
Chicago share of the state income tax (distributed by the state)
Cigarette tax ($1.18 per pack)
Electricity infrastructure maintenance fee (usage schedule starting with 0.53 cents per kilowatt hour)
Electricity use tax (usage schedule starting with 0.61 cents per kilowatt hour)
Emergency telephone system surcharge – landline ($3.90 per month)
Emergency telephone system surcharge – wireless ($3.90 per month)
Foreign fire-insurance tax (2 percent of taxable premiums)
Fountain-soft-drink tax (9 percent of syrup price)
Gas use tax (6.2 cents per therm on businesses that purchase gas from sellers not subject to either distributor or reseller occupation taxes)
Ground-transportation tax (varies, including $78 per month for city cabs, $3 per day for noncity cabs)
Home-rule retailers’ occupation (sales) tax (1 percent on food and drugs; 2.25 percent on general items)
Hotel-accommodations tax (5.58 percent of gross rental charge, includes municipal-level tax)
Liquor tax ($0.29 per gallon of beer, $0.36 to $2.68 per gallon of liquor depending on alcohol content)
Motor-vehicle lessor tax ($2.75 per vehicle per rental period)
Nonretail transfer-of-motor-vehicles tax (based on schedule of age of vehicle, from $10 to $80)
Occupation tax – natural-gas distributor and reseller (8 percent of receipts)
Off-track-betting tax (1 percent of wagers plus $1 on off-track-betting admissions)
Parking tax (22 percent for daily parking, 20 percent for daily parking on weekends, 20 percent valet parking)
Personal-property-lease transaction tax (9 percent of receipts or charges)
Personal-property replacement tax (distributed by state, 2.5 percent on corporate income, 1.5 percent on partnerships, trusts and S corporations)
Real-property transfer tax ($5.25 per each $500 of transfer price)
Restaurant tax (0.25 percent of retail price in addition to sales tax)
Soft-drink tax (3 percent of price)
Telecommunications tax (7 percent of receipts or charges)
Tire fee ($1 for each new tire sold)
Use tax for nontitled personal property (1 percent, except for first $2,500 each year)
Use tax for titled personal property (1.25 percent)
Vehicle fuel tax (5 cents per gallon)
Wheel tax ($85.97 annually for small passenger automobile; $136.54 annually for large passenger vehicle)
And Commander in Chief is soon to retire to a beautiful historic DC mansion, but don’t worry it’s a lease, only $8,000/mo. Weird how he isn’t going back to his hometown, cant Michelle get that mysterious $350,000/yr job again?
Supposedly the Obamas are hanging around Washington so one of the daughters can complete school.
I’m sure there are many collective groans over this, even from his own party. The guy is so insufferable and Washington is still going to have to endure his finger wagging and butting in after he leaves office. Lol, couldn’t happen to a nicer city.
Id head straight for Maui and do the book circuit. DC and the East coast is nasty.
Boston Metro Housing Prices Dive 4% As Statewide Median Declines YoY
http://www.zillow.com/ma/home-values/
money printers never go broke, they make u go broke by using the printing press at will!
Seattle, WA Housing Prices Plunge 5% YoY As Rental Rates Slip Lower
http://www.zillow.com/seattle-wa-98102/home-values/
http://money.cnn.com/2016/06/28/news/economy/americans-believe-economy-is-rigged/
“71% of Americans believe economy is ‘rigged’ “
Yet 95% will vote for the crony capitalist status quo. You can’t fix stupid.
Toxic Algae Coats Florida Beaches; State Of Emergency Declared
http://www.nydailynews.com/news/national/toxic-algae-forces-florida-declare-state-emergency-article-1.2694559
Why can’t we declare a state of emergency when stupid people flood voting booths?
how do u like centrally planned prices? WTF happened to price discovery?
Governor Voldemort to the rescue!! just add bleach
Manhattan apartment sales, condo prices plunge.
http://wolfstreet.com/2016/06/30/manhattan-apartment-sales-condo-prices-plunge/
Real estate is local. And so housing bubbles are local. When enough of them happen, they coagulate into a national phenomenon. This has already happened. In March 2013, we started calling this phenomenon Housing Bubble 2, and we’ve watched in awe how it bloomed, nurtured by ultra-low mortgage rates, government subsidies, the Fed that is relentlessly “healing” the housing market, yield-desperate investors, private equity firms, Wall Street, a surge of foreign buyers who want to get their money – however they’d obtained it – out of harm’s way, and a million other factors. All of it has been accompanied by a national boom in hype.
Now there are signs that our awe-inspiring Housing Bubble 2, like all housing bubbles, is beginning to unravel. This too is local, here and there, while still booming in other places. It shows up in some key markets. Then it spreads. When it spreads far enough, the unraveling of Housing Bubble 2 becomes a national phenomenon.
It has now started to unravel in some markets that were among the hottest and craziest until last year: Miami, San Francisco, and Manhattan. All three are bogged down in a condo glut.
MarketWatch dot com
This economist thinks China is headed for a 1929-style depression
By Sue Chang
Published: June 30, 2016 2:23 p.m. ET
Andy Xie is among the loudest voices warning of an inevitable implosion
Andy Xie isn’t known for tepid opinions.
The provocative Xie, who was a top economist at the World Bank and Morgan Stanley, found notoriety a decade ago when he left the Wall Street bank after a controversial internal report went public. Today, he is among the loudest voices warning of an inevitable implosion in China, the world’s second-largest economy.
…
what if the gov halts selling again? Quick! take the fake Yuan in trade for real property in CA, before it all unravels.
Let them eat EBT cards!
That was an excellent article, in a most unlikely source: Marketwatch, usually permabull cheerleaders and touts.
Not to worry, as the Chinese economy clearly is too big to fail. LOLZ!
Any news on the queen creek front?
I wish I had made some videos of the chaos out there in 2004. They built all these new homes and the roads were basically old farm roads.
Wall Street water carrier and cuckservative Mitt Romney, encouraged by the abject stupidity of the ‘tards who voted for him in 2012, is talking about running again for President. And ‘Muricans are probably stupid enough to elect him.
http://www.breitbart.com/2016-presidential-race/2016/06/30/mitt-romney-my-family-still-wants-me-to-run/
“A centrally planned economy is an economic system in which economic decisions are made by the state or government rather than by the interaction between consumers and businesses.”
When social engineering and political correctness are more important than a warrior ethos, this is what you get: cringing, incompetent little pussies.
http://nypost.com/2016/06/30/navy-says-american-sailors-blabbed-to-iranian-captors/
what we have here is an orgy of cheap money!
Democrats groan after Bill Clinton meets Loretta Lynch
The private meeting rekindles concerns about a possible conflict of interest while his wife is under federal investigation.
By Louis Nelson, Burgess Everett and Nick Gass
06/30/16 09:04 AM EDT
Attorney General Loretta Lynch described her Monday meeting with Bill Clinton aboard a private plane as “primarily social,” but some Democrats are struggling to stomach the optics of the attorney general’s meeting with the former president while his wife is under federal investigation — while others are fiercely defending her integrity.
Lynch said she and Clinton talked only of grandchildren, golf, and their respective travels, but the fact that the two spoke privately at all was enough to rekindle concerns about a possible conflict of interest. Republicans have long called into question the ability of a Democratic-led Department of Justice to conduct an independent investigation into Hillary Clinton’s use of a private email server, based inside her Chappaqua, New York, home, during her tenure as secretary of state.
Once news of their meeting on the tarmac at Phoenix Sky Harbor International Airport broke, Democrats made clear that while the meeting was likely as innocent as Lynch described, it did not give the Justice Department the appearance of independence.
“I do agree with you that it doesn’t send the right signal,” Sen. Chris Coons (D-Del.) said Thursday in response to a question about the meeting from CNN “New Day” host Alisyn Camerota. “She has generally shown excellent judgment and strong leadership of the department, and I’m convinced that she’s an independent attorney general. But I do think that this meeting sends the wrong signal and I don’t think it sends the right signal. I think she should have steered clear, even of a brief, casual social meeting with the former president.”
Coons, through his office, later walked back his assessment.
Read more: http://www.politico.com/story/2016/06/bill-clinton-loretta-lynch-224972#ixzz4D7DQ0iQT
Follow us: @politico on Twitter | Politico on Facebook
State Department Won’t Release Clinton Foundation Emails for 27 Months
If court permits delay, public won’t be able to read communications until October 2018, about 22 months into prospective first term…
Richard Pollock | Daily Caller - June 30, 2016
Department of Justice officials filed a motion in federal court late Wednesday seeking a 27-month delay in producing correspondence between former Secretary of State Hillary Clinton’s four top aides and officials with the Clinton Foundation and Teneo Holdings, a closely allied public relations firm that Bill Clinton helped launch.
If the court permits the delay, the public won’t be able to read the communications until October 2018, about 22 months into her prospective first term as President. The four senior Clinton aides involved were Deputy Assistant Secretary of State Michael Fuchs, Ambassador-At-Large Melanne Verveer, Chief of Staff Cheryl Mills, and Deputy Chief of Staff Huma Abedin.
The State Department originally estimated that 6,000 emails and other documents were exchanged by the aides with the Clinton Foundation. But a series of “errors” the department told the court about Wednesday evening now mean the total has grown to “34,116 potentially responsive documents.”
During Clinton’s four years as America’s chief foreign diplomat, her aides communicated with officials at the Clinton Foundation and Teneo Holdings where Bill Clinton was formerly both a client and paid consultant, on the average of 700 times each month, according to the Justice Department filing.
David N. Bossie, president of Citizens United, which requested the documents under the Freedom of Information Act, called the delay “totally unacceptable” and charged that “the State Department is using taxpayer dollars to protect their candidate, Hillary Clinton.”
“The American people have a right to see these emails before the election,” Bossie told the Daily Caller News Foundation.
“The American people have a right to see these emails before the election,” Bossie told the Daily Caller News Foundation.
The American sheeple are too stupid and amoral to care about corruption in high places.
http://www.zerohedge.com/news/2016-06-30/judicial-watch-demands-doj-inspector-general-probe-scandalous-lynch-clinton-meeting
“its all based on hype, hope and confidence”
Yes it is. And look at the result:
Driver in fatal Tesla crash previously had posted video of autopilot saving him
Published: June 30, 2016 6:46 p.m. ET
Feds investigating after first fatal crash of driver using Tesla’s autonomous feature
In an image from an online video posted by Joshua Brown, he is seen driving his Tesla Model S
By Jeremy C. Owens
Technology Editor
The driver killed in a crash in Florida while using his Tesla Model S’s autopilot feature previously posted video of that same autonomous driving feature helping to save him from a collision.
Joshua Brown died May 7 in a motor vehicle accident, according to an online obituary. The same picture used with that obituary was used on the YouTube account that posted the near miss in April, and a Florida coroner confirmed Thursday that the driver killed in the crash there was named Joshua Brown.
…